Delcath Systems (DCTH) risk factors, FY2024 10-K

Risks Related to Our Business and Financial Condition

1. 01We have incurred significant losses since inception and continuing losses may exhaust our capital resources
2. 02future product development, if any, including clinical trials for new product candidates or for HEPZATO or CHEMOSAT in additional indications for which we do not currently have regulatory approval
3. 03Raising additional capital, or the exercise or conversion of securities exercisable or convertible into shares of common stock, may cause dilution to our existing stockholders and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights
4. 04We have in the past, and may in the future, become subject to litigation or claims arising in or outside the ordinary course of business that could negatively affect our business operations and financial condition
5. 05We may be the subject of product liability claims or product recalls, and we may be unable to maintain insurance adequate to cover potential liabilities

Risks Related to Manufacturing, Commercialization and Market Acceptance of CHEMOSAT and HEPZATO

1. 06We have limited experience as a commercial company and generating revenue from product sales. If the continued commercialization of HEPZATO is unsuccessful or any future approved products are unsuccessful, we may never be profitable
2. 07We currently have an agreement with one supplier of melphalan and, with the goal of minimizing the risk of a supply interruption, are in discussions with several melphalan abbreviated NDA holders who have indicated interest in supplying melphalan to us
3. 08If we cannot successfully manufacture CHEMOSAT and HEPZATO, our ability to develop and commercialize the system would be impaired
4. 09We do not have written contracts with all of our suppliers for the manufacture of components for CHEMOSAT and HEPZATO
5. 10We may be unsuccessful in commercializing CHEMOSAT and HEPZATO because of inadequate infrastructure or an ineffective commercialization strategy
6. 11capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel
7. 12We may need to enter into collaborative arrangements with third parties to help market and sell CHEMOSAT and HEPZATO, but it may not be successful
8. 13If we fail to overcome the challenges inherent in international operations, our business and results of operations may be materially adversely affected
9. 14Rapid technological developments in treatment methods for liver cancer and competition with other forms of liver cancer treatments could affect our ability to achieve meaningful revenues or profit
10. 15We may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for the commercial success of CHEMOSAT or HEPZATO, in which case we may not generate significant revenue for the foreseeable future

Risks Related to FDA and Foreign Regulatory Approvals and Regulatory Matters

1. 16The development and approval process in the United States and abroad could take many years, require substantial resources and may never lead to the approval of our product candidates by the FDA for use in the United States or by foreign regulators in their respective jurisdictions
2. 17Our ability to market HEPZATO is limited to those uses that are approved
3. 18HEPZATO is now approved for the treatment of adult patients with unresectable hepatic-dominant mUM. The approval was based primarily on the results of the FOCUS Trial, a Phase 3, single arm, multicenter, open label study
4. 19We are subject to significant ongoing regulatory obligations and oversight in the EU and the United States and will be in any other country where we receive marketing authorization or approval
5. 20The FDA has granted us six orphan drug designations and we may seek additional orphan drug designations in the future
6. 21Purchasers of CHEMOSAT in Europe may not receive third-party reimbursement or such reimbursement may be inadequate. Without adequate reimbursement, commercialization of CHEMOSAT in Europe may not be successful
7. 22The success of our products may be harmed if the government, private health insurers or other third-party payors do not provide sufficient coverage or reimbursement
8. 23CHEMOSAT and HEPZATO may not achieve sufficient acceptance by the medical community to sustain our business
9. 24We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties
10. 25becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions
11. 26Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor cost-containment initiatives, may have a material adverse effect on us
12. 27Consolidation in the healthcare industry could lead to demands for price concessions

Risks Related to our Intellectual Property

1. 28Intellectual property rights may not provide adequate protection, which may permit third parties to compete against us more effectively
2. 29We have not and may not be able to adequately protect our intellectual property rights throughout the world
3. 30Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
4. 31Our success depends in part on our ability to obtain patents, which can be an expensive, time consuming, and uncertain process, and the value of the patents is dependent in part on the breadth of coverage and the relationship between the coverage and the commercial product
5. 32Our success depends in part on our ability to commercialize CHEMOSAT and HEPZATO prior to the expiration of our patent protection
6. 33We may in the future become involved in lawsuits to protect or enforce our intellectual property, or to defend our products against assertion of intellectual property rights by a third party, which could be expensive, time consuming and unsuccessful
7. 34hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could cause the price of our common stock to decline
8. 35Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product and our technologies
9. 36Our trademarks may be infringed or successfully challenged, resulting in harm to our business
10. 37We may rely primarily on trade secret protection for important proprietary technologies
11. 38We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors
12. 39Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations
13. 40Our ability to use net operating loss carryforwards and certain other tax attributes to offset future taxable income or taxes may be limited
14. 41Tax authorities could reallocate our taxable income among our subsidiaries, which could increase our overall tax liability

Risks Related to Our Common Stock

1. 42The market price of our common stock has been, and may continue to be volatile and fluctuate significantly, which could result in substantial losses for investors
2. 43Because of volatility in our trading price and trading volume, we may incur significant costs from class action securities litigation
3. 44As of December 31, 2024, 33,061,002 shares of common stock are issued and outstanding, and we have reserved 13,539,532 shares of our common stock for future issuance pursuant to our stock option and equity incentive plans, outstanding warrants and preferred stock
4. 45Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and By-laws may reduce the likelihood of a potential change of control or make it more difficult for our stockholders to replace management
5. 46We have never declared or paid any dividends to the holders of our common stock and we do not expect to pay cash dividends in the foreseeable future
6. 47If we engage in acquisitions, reorganizations or business combinations, we will incur a variety of risks that could adversely affect our business operations or our stockholders
7. 48If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline
8. 49The loss of key personnel could adversely affect our business
9. 50fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences
10. 51contracted with a third party vendor to increase the cybersecurity trainings for all employees there can be no guarantee that future phishing attempts won't be successful
11. 52We will continue to incur significant costs as a result of operating as a public company, and our management will continue to devote substantial time to compliance initiatives
12. 53We are a “smaller reporting company” and have elected to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors
13. 54Further downgrades of the United States credit rating, automatic spending cuts, or a government shutdown could negatively impact our liquidity, financial condition and earnings
14. 55Environmental, social and governance matters and any related reporting obligations may impact our business