Is Delcath Systems, Inc. (NASDAQ:DCTH) A Buy Or A Sell?

Is Delcath Systems, Inc. (NASDAQ:DCTH)

Yesterday, shares of Delcath Systems, Inc. (NASDAQ:DCTH) rallied by 27.8% to end the day at $0.18. Regulatory approvals and commercial progress in Europe for the company’s proprietary products continues to strengthen investor’s sentiments on the stock. Fueling demand for DCTH shares is talk that the company remains undervalued at current trading levels.

Delcath Systems, Inc. (NASDAQ:DCTH)
Candle graph of Decalth share pricing

Liver Cancer Treatment Focus

Delcath Systems, Inc. (NASDAQ:DCTH) is a medical device company with great interest in the treatment of various types of cancers. The company boasts of proprietary medical technologies that are currently being used to deliver high dose chemotherapy to the liver. Its lead product is Melphalan Hydrochloride used in combination with the Delcath Hepatic Delivery System.

Delcath Systems, Inc. (NASDAQ:DCTH) technology targets a wide variety of cancers that affect the liver. Nearly 700,000 people are diagnosed with liver cancer every year presenting a target market worth about $700 million in revenues.

Chemosat Treatment Factor

Delcath Systems, Inc. (NASDAQ:DCTH) has had its share of challenges on the clinical trial front as its percutaneous hepatic perfusion system failed to meet FDA threshold for approval. However, things are starting to look up after the company posted positive results for patients who received CHEMOSAT treatment for metastatic melanoma.

Impressive sales of the CHEMOSAT delivery system continues to affirm talk why Delcath Systems remains an exciting pick at current trading levels. Expansion in Europe has allowed the company to complete over 250 treatments on the road to validating its effectiveness.

Immediate Risks

In addition, the company is also in the process of determining the safety and efficacy of its proprietary technology in a number of ongoing clinical trials. One of the trials is targeting Ocular Melanoma as well as Hepatocellular carcinoma. The release of FOCUS Phase 3 interim safety analysis could have a significant impact on the stock price.

A major concern with Delcath Systems, Inc. (NASDAQ:DCTH) stock is the fact that it has lost a significant amount of value over the past few years. The NASDAQ Capital Market is poised to rule on its exchange listing on August 14, 2017 as the stock price has gone below the $1 a share minimum bid requirement.

The management could seek a 180-day extension to allow it sort out the mess. The company may pursue a reverse stock split to shore up the share price.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Ocera Therapeutics (Nasdaq: OCRX) Phase 2b Results Disappoint

Ocera Therapeutics, Inc. – Nasdaq: OCRX

Shares of Ocera Therapeutics are down over 70% after it announced top-line results from its phase 2b study that suggested no statistical improvements from its product candidate versus the placebo. Ocera shares are traded on the Nasdaq under ticker OCRX. Ocera still intends to pursue development of the drug.

“Initial analysis shows that a higher percentage of patients respond as the dose of OCR-002 increases, notwithstanding that the clinical endpoints did not reach statistical significance,” said Stan Bukofzer, M.D., Chief Medical Officer of Ocera. “This dose-response direction was also observed for the highly statistically significant ammonia reduction. Moreover, the safety profile shows no safety signal for OCR-002 compared to placebo. At the highest drug doses, there were favorable differences compared to placebo in the frequency of deaths and serious life threatening safety events. We expect further exploratory analyses will provide additional clarity for our goal of advancing intravenous OCR-002 into Phase 3 development.”

Hepatic encephalopathy is a debilitating and progressive complication of liver cirrhosis or liver failure, marked by increasing ammonia levels, mental changes including confusion, impaired motor skills, disorientation, and in its more severe form, stupor, coma and even death. It is estimated that HE-related hospitalization costs exceed $7 billion1 annually in the U.S. alone.

OCRX shares have experienced narrowing EPS losses over the last five years and in 2015 a loss of $1.33 was posted. OCRX sales have been weak and in 2015 posted $100k. Five firms follow Ocera and all rate OCRX shares as a “Strong Buy” with a consensus price target of $10.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

1/30/2017
Ticker Symbol OCRX
Last Price a/o 12:06 PM EST  $                      0.60
Average Volume 312,000
Market Cap (mlns)  $                    47.40
Sales (mlns) $0.10
Shares Outstanding (mlns) 23.12
Share Float (mlns) 22.68
Shortable Yes
Optionable Yes
Inside Ownership 0.30%
Short Float 1.08%
Short Interest Ratio 0.79
Quarterly Return -15.46%
YTD Return -2.38%
Year Return -24.91%

Conatus Pharmaceuticals Inc. (Nasdaq: CNAT) Signs Deal with Novartis AG

Conatus Pharmaceuticals, Nasdaq: CNAT

Shares of Conatus Pharmaceuticals Inc. rocketed in after-hours trading. CNAT, traded on the Nasdaq, closed the regular session at $1.96, but rose to $5.90 (150%+) after Conatus Pharmaceuticals announced a licensing and collaboration agreement with Novartis AG for a liver disease treatment. Conatus said it will receive $50 million upfront from Novartis in addition to other payments for an exclusive option, collaboration, and licensing agreement for its liver disease drug Emricasan. Novartis will also pay 50% of development costs for the drug after the exercise of options.

Six Wall St. firms cover CNAT and all rate the shares as a “Strong Buy”. The consensus target price is $8 but that is certain to be reviewed by analysts after tonight’s announcement.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Ticker Symbol CNAT
Last Price a/o 6:00 PM EST  $               4.10
Average Volume 497,500
Market Cap $53.5 million
Sales
Shares Outstanding 27.28 million
Share Float 25.28 million
Shortable Yes
Optionable Yes
Inside Ownership 0.10%
Short Float 2.70%
Short Interest Ratio 1.43
Quarterly Return -6.22%
YTD Return -31.94%
Year Return -34.45%