Delcath Systems, Inc. Clears Important FDA Hurdle

Published: Oct 17, 2012

The Business Review by Barbara Pinckney, Reporter

Delcath Systems Inc. is calling the U.S. Food and Drug Administration’s acceptance of its new drug application a “significant milestone,” although it came with some disappointment.

The New York City-based medical device company, which has research and manufacturing operations in Queensbury, New York, submitted the NDA in mid-August, seeking approval to sell Chemosat, its liver chemotherapy system, in the United States. The company had hoped for priority review, meaning FDA approval in six months and sales by early next year. Instead, it was granted standard review, meaning the process could take up to 10 months.

Still, “it is great news, no ifs, ands or buts,” said CEO Eamonn Hobbs.

Hobbs said the FDA told Delcath (Nasdaq: DCTH) that it believed the application for Chemostat and the drug it delivers—melphalan hydrochloride, or Alkeran—would take longer than six months to review.

“They said it was really in our best interest, as well as theirs', that they do a full review and not rush it,” he said. “The net is, we are thrilled they accepted the application. It is a huge hurdle.”

Delcath’s first attempt at an NDA for Chemostat received a “Refusal to File” notice from the FDA in February 2011. Hobbs said the agency wanted additional hospital data that had not been collected during trials. Fortunately, the information was attainable but delayed the filing for more than a year.

“We added more than 1.4 million new data points,” Hobbs said. “It was a big job.”

Investors were disappointed with the idea of another, four-month delay, sending Delcath stock down 17 percent Oct. 15, the day the FDA’s decision was announced. It closed at $1.70 a share. As of 1 p.m. Oct. 16, the stock was at $1.66 a share.

Hobbs expects FDA approval in mid-June, meaning U.S. sales of Chemostat, which targets inoperable metastic melanoma, could begin by summer. This should result in more jobs in Queensbury, where the company currently employs 60 people.

Hobbs has estimated the domestic market for metastic melanoma chemotherapy at $500 million. The company plans to conduct clinical research to support using Chemosat to treat other diseases, including primary liver cancer and colon cancer, that would increase the potential U.S. market to $2 billion.

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