Delcath Systems, Inc. Q2 FY2024 Earnings Call

Greetings, and welcome to Delcath Systems' Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Hoffman, Delcath General Counsel. Thank you. Mr. Hoffman, you may begin.

Thank you. And once again, welcome to Delcath Systems second quarter 2024 earnings and business highlights call. With me on the call are Gerard Michel, Chief Executive Officer; Sandra Pennell, Senior Vice President of Finance; Kevin Muir, General Manager, Interventional Oncology; Vojislav Vukovic, Chief Medical Officer; and Martha Rook, Chief Operating Officer. I'd like to begin the call by reading the safe harbor statement. This statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurance that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, those contained in subsequently filed quarterly reports on Form 10-Q, as well as in other reports that the company files from time to time with the Securities and Exchange Commission. Any forward-looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events or circumstances. Our press release with our second quarter 2024 results is available on our website, www.delcath.com, under the Investors section, and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website. Now I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you, everyone for joining. During today's call, we will review Delcath's second quarter financial results, our ongoing commercial activities, including projections for both site activation and average treatment rates for the balance of the year, as well as some important medical and clinical updates. In the second quarter, Delcath reported $7.8 million in total revenue, including $6.6 million in U.S. revenue from HEPZATO and $1.2 million in European revenue for CHEMOSAT. As we have previously described, the key drivers of our revenue ramp in the U.S. are center activation, and once activated, the average number of treatments per center. From a high level, we are thrilled with our overall progress in terms of our ramp, and we're very, very encouraged about what the coming quarters will bring. Now to be specific, in terms of site activation, we ended the second quarter with seven active sites and as of today, we have eight active sites. While this fell just below the number we projected in our last call, the treatment rate of just under two per month per center is well ahead of our previously communicated projected rate. I'd like to dig a little deeper into both metrics and turn first to center activation. While activation has been a bit slower at some centers than anticipated, there is no systemic reason for the increase in time for center activation, but instead it's simply a function of the complexity of activating a center given the number of stakeholders involved. It's important to note that we haven't seen any center in the activation process halt the process. From our ongoing conversations with the centers, we are confident that all of the centers that are in process, which today stands at over 20 centers beyond our currently active sites, will be active in 2025. The eight active centers include Moffitt Cancer Center, Stanford University Cancer Center, Thomas Jefferson University, University of Wisconsin, Regional One Health or University of Tennessee, UCLA Cancer Center, the University of North Carolina Hospital and HonorHealth Scottsdale. Two additional centers have completed all the required preceptorships and have each scheduled their first treatment this month. Assuming no cancellations, we should end August with 10 treatment centers. An additional four centers have completed the necessary steps to conduct their first commercial treatment under the guidance of a proctor and are currently in the process of identifying and scheduling a patient for proctor treatment with HEPZATO KIT. As I've mentioned in the past, that can be a complex scheduling algorithm given all the proctors that need to arrive as well as that fit with the patients' needs as well. A further eight centers are currently completing a portion of the preceptorship requirements. To date, we have had over 130 perfusionists, anesthesiologists and interventional radiologists attend preceptorships, representing over 20 institutions in the U.S., with some institutions sending multiple health care providers. We are confident that the 12 centers that are currently in the process of activating will successfully activate within the next six months. Now I'd like to dig a little into a second metric, average treatments per center, which has been higher than we projected during our last call. Adjusting for the date of center activation, the average treatment by center was just under two per month in the second quarter. Not surprisingly, some centers have notably greater volumes than others. But given the commitment required to become a REMS-certified active treating center, we believe that the vast majority of treatment centers either currently active or undergoing the activation process will become meaningful revenue contributors. We started the third quarter with seven active sites, with eight active sites present today. As I mentioned before, we anticipate we can end the third quarter with 12 active sites. We expect to reach 15 early in the fourth quarter and anticipate having 20 centers by the end of 2024 or shortly thereafter. While HEPZATO treatments in the second quarter averaged just under two treatments per month for the active treating centers, adjusted for when the center started treating patients, we estimate treatments will average between 1.5 to 2 treatments per center for the balance of the year, somewhat under the second quarter average, but above what we projected in our last call. This is based in part on a pattern we are seeing where some centers treat an initial group of patients and then pause for a month or more before treating additional patients. Besides assessing patient outcomes, the pause provides an opportunity for our centers to evaluate the explanation of benefits from payers before approving a steady flow of patients. As many of you know, this is a common dynamic for the rollout of premium innovative new procedures and therapies within hospitals, even in situations such as ours, where the product has the benefit of a product-specific J code, which greatly reduces the risk of underpayment. Some of you may have seen this morning's press release in which we shared that on August 1 we were informed by CMS that we were granted New Technology Add-on Payment status for HEPZATO, effective for starting October 1, 2024. This additional payment under NTAP designation will help cover the costs associated with the treatment for the small percentage of Medicare patients that might require inpatient stays. As a reminder, most patients do not end up being billed as inpatient. And thus, for those Medicare billed patients on an outpatient basis, the product is reimbursed to the hospital under J-code at ASP plus 6%. Given the pace of revenue ramp, we continue to expect that we will achieve $10 million in quarterly U.S. revenue by the fourth quarter of this year, which is expected to trigger approximately $25 million in cash proceeds from the exercise of the remaining tranche of warrants that were issued as part of our financing in March 2023. CHEMOSAT sales in Europe have increased over 100% over the same period last year. The majority of the growth is from Germany and is a result of having a dedicated commercial presence in the market for over a year. We're in the process of submitting for reimbursement in the U.K., and we now understand that the review will take place next year. While we estimate approximately 40% of all metastatic uveal melanoma patients in the Netherlands are being treated with CHEMOSAT, those patients are almost all being treated as part of the ongoing CHOPIN trial. We have started commercial sales in Sweden but expect most patients to enroll in an IIT we are sponsoring there looking at sequencing IPI+NIVO with CHEMOSAT, which I will describe in greater detail in a moment. We are early in the process of identifying and opening commercial centers in France, Italy and Spain. We believe it is important to have multiple treating centers in all major European markets. But as I've mentioned before, we are being measured in our investment given the low price point in Europe and have chosen to manage the EU market on a breakeven basis. Recall that CHEMOSAT has a broader pan-solid tumor device label and some of our European sites have over a decade's worth of experience with CHEMOSAT. The value of Europe in the short to medium term is as trial sites and a source of publications, both in metastatic uveal melanoma and other tumor types. These activities can support both EU and U.S. adoption. In addition to the significant commercial activity, we continue to support both internal and external efforts to add to the growing body of evidence that the PHP procedure, whether utilizing melphalan delivered by Delcath CHEMOSAT or the HEPZATO KIT, is an important treatment option for patients with liver-dominant uveal melanoma as well as potentially other liver-dominant cancers. In the second quarter, we announced the publication of key results from the pivotal Phase III FOCUS trial of HEPZATO in patients with unresectable metastatic uveal melanoma in the journal Annals of Surgical Oncology. We expect additional results from the FOCUS study to be presented and published in the coming months. For example, an efficacy analysis in clinically important subgroups of patients in the FOCUS study has been accepted as a poster presentation at the upcoming ESMO conference in September. As we continue to roll out commercial use of HEPZATO in the U.S., we are also engaging medical oncologists in the U.S. and EU to discuss the integration of HEPZATO into treatment algorithms and combination sequencing with available treatment options in metastatic uveal melanoma. There is significant interest in the medical community to evaluate HEPZATO in different treatment settings. As an example, I would like to point to a recent single-case publication published in Frontiers in Oncology on the successful treatment of a metastatic uveal melanoma patient with CHEMOSAT following failure on immune checkpoint inhibitors and tebentafusp. As I mentioned a moment ago, we're expecting a new IIT to enroll and start treatments of patients in Sweden this quarter. This IIT will evaluate the sequencing of immune checkpoint inhibitors, ipilimumab and nivolumab or Ipi/Nivo followed by CHEMOSAT treatment, and compare against therapy with Ipi/Nivo as the control. This IIT is the second IIT, the first being CHOPIN, which evaluates Ipi/Nivo first in sequence with CHEMOSAT, with CHEMOSAT as a control. In discussions with medical oncologists, we are aware that physicians and patients are very interested in exploring HEPZATO or CHEMOSAT in combination with immunotherapy based on a body of published evidence of possible synergies between chemotherapy and immune therapy in solid tumors. We have heard multiple anecdotal reports of physicians utilizing CHEMOSAT and immunotherapy in combination or sequence without waiting for the completion and publication of the CHOPIN study results. On that note, the CHOPIN study continues to progress with 70 of the total planned 76 patients enrolled. Currently, the investigators are anticipating final analysis of the primary endpoint to occur in mid-2025, with presentation of results in the second half of 2025. As a reminder, the primary endpoint of the CHOPIN trial is progression-free survival at one year. This analysis depends on collecting the appropriate number of events so the timelines for data readout are somewhat uncertain. We continue to plan to initiate one or more clinical studies of HEPZATO and CHEMOSAT in additional indications over the next six months and recently conducted two scientific advisory boards focused on colorectal and breast cancer to better define the development path. We will provide updates on our clinical development plan later this year. I will now hand the call over to Sandra to share some details on our financial position.

Thank you, Gerard. Revenue from our sales of HEPZATO was $6.6 million, and CHEMOSAT was $1.2 million for the three months ended June 30, 2024, compared to $0.5 million for CHEMOSAT during the same period in 2023. Our gross margins were 80% in the second quarter. For the three months ended June 30, 2024, research and development expenses were $3.4 million, compared to $3.6 million for the three months ended June 30, 2023. The change in research and development expenses is primarily due to a decrease in clinical trial activities, offset by an increase in personnel-related expenses in medical affairs and regulatory costs associated with an improved product. For the three months ended June 30 this year compared to the same period in 2023, selling, general and administrative expenses increased to $6.8 million from $4.8 million. The increase is due to activity for commercial launch, including marketing-related expenses and additional personnel on the commercial team. We ended Q2 with $19.9 million in cash and investments, and cash used in operations was approximately $4.5 million in the second quarter. On August 1, the loan with Avenue fully matured and the final payment was made. We believe that our current financial resources are adequate to fund operations until the company achieves $10 million in U.S. quarterly revenue, which would likely trigger a warrant exercise resulting in $25 million of proceeds. This $25 million should be sufficient to fund the company until we become cash-flow positive under current levels of research and development expenses. As Gerard previously mentioned, we remain confident we will achieve $10 million in U.S. quarterly revenues by the fourth quarter of this year. That concludes our prepared remarks, and I'd ask the operator to open the phone lines for Q&A. Can you please check for questions?

Thank you. We will now be conducting a question-and-answer session. The first question comes from the line of John Newman with Canaccord Genuity. Please go ahead.

Hi, there. Congratulations on the quarter, and thank you for taking my question. I know it's still a bit early in the launch, but could you comment on what you're seeing in terms of the mean number of treatments for HEPZATO, and just curious as to how you would expect that trend to progress over the next, say, 12 to 24 months. Thanks.

Sure. So it's anecdotal at best given we're really getting this from the reps and the clinical support specialists who are in most of the procedures. But it seems like most patients are progressing on to two, three, four, or five or more. It's too early now to say whether or not they'll match what we saw in the trial, which was 4.1 on average. But I suspect we'll do at least that well over time. But no indication that it will be lower than that at this point.

Okay. Great. If I could sneak in one additional question. It seems like there's a lot of potential for HEPZATO beyond the additional approval. You spoke a bit about additional trials beyond CHOPIN. Just curious, do you expect that those trials would be sort of smaller single-arm studies or would you expect that maybe some of those studies might also have controls? Thanks.

Yeah. I think we’re going to do a mix of things. So Voji right now is working with both advisory committees to think through larger randomized studies with control arms, as well as single and multicenter investigator-initiated trials. And those would probably be more likely to be single-arm, although some of those may have controls as well. So I think you’ll see a mix of things from us, ranging from sponsored trials that are randomized and have a control arm. We might think some trials, we have some trials in mind that would look at historical data. So a single arm with a control arm to increase specified sort of like a registry data, for example. So it will be a mix of things. And the goal, again, will be a mix as well. The goal will be ranging from giving adequate data, so physicians can make an informed judgment for certain patients whether or not they want to treat and try to get reimbursed for the patients, to informing potential guidelines down the road, all the way to trying to expand the label. So it will be a mix.

Great. Thank you.

Thank you. Next question comes from the line of Marie Thibault with BTIG. Please go ahead.

Hi, Gerard. Hi, Sandra. Very nice quarter, this quarter. Wanted to dig a little bit on the average treatment per center metric. Thank you for giving us that detail. If we were to strip out the highest volume center, I don't know if it's still Moffitt, I know it was last quarter. Is there a way to think about the average for kind of that remaining group? And you mentioned that they are pausing just to check on billing and things. Is everything going smoothly on that front? I know with the J code going into effect, that was, of course, supposed to help quite a bit.

Let me address the second question first. I have not encountered any significant issues with hospital reimbursements when they follow the correct procedures. There have been a few instances where mistakes were made, requiring corrections before payment was received. However, if they do things properly, they generally get reimbursed. If they make errors, they have the chance to rectify them, although this may take additional time. Overall, I've seen everything as quite positive. Regarding average treatment rates, I'm hesitant to provide specific breakdowns. I can say that if we exclude Moffitt and Thomas Jefferson, the average treatments per week would decrease. Nonetheless, I believe most centers will eventually achieve at least two treatments a month, with many exceeding that. Moffitt and Thomas Jefferson are certainly raising the averages. Additionally, as new centers begin operations, not all of them will get off to a quick start, but many will initially see a few patients before ramping up. Therefore, while those new centers may exert downward pressure on the average, established centers will help maintain stability. Ultimately, I believe the average will fall between 1.5 to 2 for the remainder of the year.

Okay. That's really helpful. For a follow-up here, I wanted to underscore how good your margins were this quarter, both gross margins and OpEx control. Help us think about the sustainability of some of that. Are you needing to add more sales reps to kind of keep up with your launch plans? Was there a reason the control is so good on the operating spend side? Just any more detail you can give us there. And thanks for taking the questions.

Sure. I think we're fairly disciplined on the OpEx side. A lot of the players here have come from another similar company who kind of know to spend money wisely. We don't need a huge sales force to reach all the centers. This is going to be a specialty product that has a small number of centers. I think in the past, I talked about maybe getting to 25 to 30. Our thinking is evolving there. We might decide to get to more like 35 or 40, that might have a marginal increase on SG&A relative to where we are now, but not a huge increase. In terms of cost of goods, we're great for three to four years before we have to do any meaningful tie-up of CapEx, I believe. So we’re in good shape there. So I think the biggest variable really is – and I might be preempting a question, is R&D spend. How much do we decide that we want to invest in R&D? And we’re going to be very thoughtful about that. But there’s no doubt we will increase R&D at some point for some additional trials. It would just be – we’d be remiss if we didn’t because this product has tremendous potential in many other much larger indications. But I’m not going to forecast what that’s going to be 1.5 years out from now. I’ll just say, look, we’re going to try to be very prudent. And we understand there’s an E in EPS, and I mean – and that’s in EPS, excuse me, in terms of number of shares. So we’re going to be very prudent to try to keep the cost down so we really don’t have to raise much more money going forward.

Very good. Thank you.

Thank you. Next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Please go ahead.

Good afternoon. With eight centers now activated and nearly ten by the end of this month, what insights have you gained from this process? How is it aiding your internal education as well as supporting the preceptors to ensure that the upcoming activations proceed smoothly?

Yeah. I don't think there's any dramatic learnings aside from we need to address project stakeholders kind of in parallel and really help try to educate some of the stakeholders in the hospitals and get ahead of kind of the various committee approvals and stuff. The preceptorship training stuff is really just a Rubik's cube of scheduling. As we get further along and we have more proctors available and people who can do preceptorships, it will get a bit easier. But right now, it's just difficulty in scheduling. Kevin, I don't know if you want to chime in about any learnings in terms of site activation, preceptorship or anything like that.

Sure. Thanks, Gerard. I appreciate the analogy about the scheduling challenges. With more active sites and procedures, we create more opportunities for mentorships and guidance. This should make the account activation cycle somewhat easier. Additionally, the eight to ten centers we are collaborating with facilitate informal peer-to-peer discussions. Physicians and hospitals reach out to each other to check on reimbursement processes and setup details. Overall, having these centers active will assist us and help to streamline the activation process as we move into the second half of the year.

Regarding the NTAP that you received, that HEPZATO KIT received just earlier this month, how does that benefit in terms of adoption? And would that help in any way in terms of increasing the number of procedures per center?

I don't believe that obtaining NTAP will significantly impact uptake. It is beneficial for hospitals with occasional inpatients as it reduces their financial strain. The formulary is complex, requiring specific loss amounts and coverage percentages, but I don't find it crucial to elaborate on those details. What truly matters is that this reflects the innovation behind the therapy. People see it as just melphalan and a device, but achieving new technology add-on payment is challenging. You must demonstrate that your therapy offers something unique. It's great that we received it, and the feedback from radiologists and oncologists using the product has been overwhelmingly positive. This underscores that while the treatment is based on traditional chemotherapy, it represents a significant advancement that makes a genuine difference for patients. Thus, securing NTAP is a modest advantage, but it's not essential for us.

Thank you. One last question for me. On the U.K. reimbursement, since there are a couple of hospitals, if I remember correctly, from the U.K. that have used CHEMOSAT for a longer time than others, how is that going to play into the reimbursement review when it comes time?

I am confident we will secure reimbursement. They shifted from a semiannual to an annual review unexpectedly, which has delayed things until next year. This change in the review frequency just happened recently. However, I firmly believe we will obtain reimbursement, though I am not optimistic it will be significantly better than our current situation. As I mentioned earlier, we plan to manage Europe approximately at breakeven, but we will continue to invest there in a measured way because it serves as a crucial strategic asset for the company, particularly in terms of clinical sites and generating publications.

Perfect. Thank you very much, Gerard.

Thank you. Next question comes from the line of Sudan Loganathan with Stephens, Inc. Please go ahead.

Hi, Gerard, Sandra and Delcath team, congrats on a great quarter. I have two questions. My first one is regarding the marketing strategy. Is the main focus geared towards selling the kit to hospitals to bring on more additional sites, or trying to focus them more towards the patient and physician awareness? And then as you go into next year and progress this launch, will there be any changes to that marketing strategy? And then secondly, what quarterly and yearly revenue run rate in OpEx range do you anticipate you need to be at to achieve a breakeven or positive EPS? I understand you might also have aspirations of other indications for the HEPZATO, but is getting to breakeven or cash flow positive, or at least a track towards that, a potential goal to achieve prior to taking on new clinical endeavors?

Sure. I think, Sandra, why don't you pick up where you think we need to be at to hit breakeven, okay, on a quarterly basis, under current R&D spend?

Yes. Currently, probably around the 60 to 80 kits, just depending, a quarter in order to be breakeven or cash flow positive, and we obviously dependent on additional SG&A, marketing spend and R&D that will be incurred the rest of this year. But I think we're well on the course of becoming cash flow positive, hopefully, by Q1 of 2025.

And that's about $30 million a quarter in revenue.

Yes.

All right. Now in terms of the focus market, I mean right now, I think, Kevin, chime in if you disagree, we're probably focusing 80% on site activation, 20% on trying to get patients to the sites. That will switch over time. But all elements of the marketing mix are important at the moment. Kevin, maybe I don't know if you want to give a couple of sentences about our priorities now and how that might evolve over the next year, 1.5 years.

Sure. And I think with the patient population that we have right now, one of our main goals is to that 20% is to drive awareness and increase patient access to what we think is a wonderful option for these patients. And while opening sites is important, it's not our main goal. Our main goal is not to open as many sites as we can. As Gerard pointed out in his remarks, we've started with a goal of 20 and with our ultimate goal of probably roughly around 40 sites. And it’s more about the quality of sites. Are we going to the correct sites? Are we giving patients access at these sites? So that’s been our focus, opening the right sites and getting patients access to those sites.

Thanks. Appreciate it.

Thank you. Next question comes from the line of Chase Knickerbocker with Craig-Hallum Capital Group. Please go ahead.

Good afternoon, everyone. Thanks for taking the questions. Just first from me, are there any other high-end early adopters in the pipeline kind of like Moffitt or Thomas Jefferson? Or should we think of kind of everyone else from here as those that maybe pause a bit after a couple of patients and kind of generally drag down that average kits per center per month number over the first quarter or so of them being active?

I believe there are a few more surprise centers that might be on the verge of reaching that high level due to recent developments. I expect several others will eventually hit that mark. Some of the centers we are opening may not currently have the same volume of business, but once they implement our treatment, they will likely become preferred destinations for many patients. While I don't foresee a large number of centers averaging six treatments a week, I do believe we will have several centers doing about one a week, and quite a few that will exceed four or five. Analyzing the centers, the larger ones you've mentioned are certainly significant, but I think many centers that adopt our therapy might also begin treating patients who aren’t ideal candidates for it, leading them to attract more patients over time.

Should we think of kind of a max level kind of per week treatments that some of those high adopters could do? I mean any way for us to kind of think about that of kind of what the constraint is on the high end? And then second, of the centers that are kind of awaiting that initial commercial treatment scheduling, do we get a sense of kind of how long it takes to activate those patients? I know we kind of gave a lot of numbers on the call, so forgive me if I'm making you repeat yourselves. But just kind of those four, for example, that were just kind of awaiting the schedules to line up, do we have a kind of a general kind of feel for how long that takes?

No, it's been inconsistent. That's why I adjusted my projections. I anticipated we'd reach 10 by the end of last quarter, but we ended up with seven and are currently at eight. In about two or three weeks, we should have clarity. If no patients miss their scheduled calls, we can expect all the proctors to participate. It's really unpredictable. Regarding maximum capacity, we have a few centers in Europe that perform consistently on a weekly basis when it's not summer vacation. This seems to represent a natural high-volume rate for the centers. We had one center recently handle three procedures in a single day, which is quite impressive. This could potentially lead that center to achieve six or seven procedures a month. As people become accustomed to this process or are willing to train additional teams, they may also reach six or seven a month. For now, I believe four months might represent the upper limit for some locations, while others are likely to manage one or two per month. Over time, we might see a few sites that consistently handle one to two per week, but that will take some time. Recently, a center managed to complete three procedures in one day, illustrating that they can indeed handle higher volume when conditions align.

Got it. That's helpful information. Just one last thing for me. Could you discuss the progress you're making in the community regarding referrals to some of these centers? Also, what is your early perspective on how your therapy will interact with patients eligible for tebentafusp? Are those eligible patients receiving tebentafusp first, or are physicians considering it as part of their treatment plan? I'd appreciate your insights on that.

We've had patients before and after tebentafusp. The decision about whether to prioritize liver-directed therapy often depends on the physician's judgment, as these liver treatments are crucial since patients typically succumb to liver-related issues. If treatment is prioritized, some doctors choose to focus on liver-directed therapy first. This situation varies widely, and it will likely clarify over time. However, most patients live long enough to receive more than one line of therapy. Whether tebentafusp or our treatment is administered first, HLA2 positive patients should ideally receive both, as that seems to be in their best interest. Regarding referrals, we are still in the early stages. Both Voji's medical affairs team and Kevin's commercial team are working to establish referral patterns. We have received a number of referrals so far, mainly through peer-to-peer interactions. Often, we get referrals from centers that are completing their preceptorships or approval processes. These centers may refer patients to us, knowing they will eventually return to them once approvals are finalized. We have also sent patients directly based on outreach to around 100 treatment sites. We are currently establishing a more efficient referral process, which will become increasingly essential. We are confident in our ability to develop this system, as many direct patient interactions will stem from advocacy centers that are enthusiastic about the product. We have data about which centers are treating these patients and how many they have. We are implementing a strategy that includes emails, phone calls, and even surprise visits to inform these doctors about HEPZATO KIT. Given the value of each patient, it's important for us to focus on individuals. We recognize this importance and are developing programs that allow patients to connect directly with third parties we collaborate with for assistance with copays, travel, and more. Through these efforts, we anticipate engaging with doctors who see fewer patients, which will enhance our referral network. It’s still too early to determine the effectiveness of this approach, but we are committed to making it happen.

Got it. Thanks, Gerard, and congrats again on the great early progress here.

Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.