Delcath Systems Inc (DCTH)

[dave86]

Our global Phase 2 clinical program in HCC and ICC continues to move forward. As we have discussed, the HCC portion of this study is enrolling at a slower pace than the ICC portion due to the stringent HCC inclusion criteria, the small target patient population and competition from other trials seeking to recruit similar patients. We are near completion of the 11-patient cohort of ICC patients and expect to report top-line results by the end of this year. In addition, European Investigators have undertaken a retrospective data collection for patients with ICC in Europe. These promising outcomes and observations were discussed with our KOLs at a Delcath-organized Medical Advisory Panel Meeting and led to the agreement that the CHEMOSAT treatment does, indeed, demonstrate an efficacy signal and is worthy of immediate full clinical investigation. As a consequence, we are focusing our resources on advancing the ICC indication, an area where we have strong KOL support, an established efficacy signal and a development program ready to be discussed with the FDA.

Last October we were pleased to report that the German Institute for the Hospital Remuneration System (InEK) issued a ZE diagnostic-related group (DRG) code for CHEMOSAT. The application for nationwide coverage under the ZE scheme was made by the German Radiology Society and was widely supported by major German cancer hospitals, which speaks to the confidence the German clinical community has in CHEMOSAT. Since then we have been working with hospitals to support their negotiation for German reimbursement levels. We are pleased with our progress and with the rates we have been securing. These positive negotiations are expected to support our efforts for payment in other markets where we are leveraging this German experience, such as the Netherlands.

We have a number of important milestones before year end and we look forward to providing ongoing updates on our clinical and commercial progress.

Sincerely,

Jennifer K. Simpson, Ph.D., MSN, CRNP President and Chief Executive Officer