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FOR IMMEDIATE RELEASE
Company Contact: Investor Contacts:
Delcath Systems, Inc. Todd Fromer / Michael Cimini
M. S. Koly, Chief Executive Officer KCSA Worldwide
203-323-8668 (212) 896-1215 / (212) 896-1233
www.delcath.com tfromer@kcsa.com / mcimini@kcsa.com
Media Contacts:
Lewis Goldberg
KCSA Worldwide
(212) 896-1216
lgoldberg@kcsa.com
Delcath Systems Responds to Shareholder Proposal; Affirms Commitment
to Maximizing Long-term Shareholder Value
STAMFORD, Conn., June 12, 2006 -- Delcath Systems, Inc. (NASDAQ: DCTH), today
responded to a recent letter by Robert Ladd, a 10 percent holder of the
company's outstanding common stock, filed last week that advocated for his
proposal to hire an investment banking firm to be voted on at the company's
upcoming Annual Meeting of Stockholders. The Delcath Board of Directors believes
that this proposal by Mr. Ladd is shortsighted and goes against the Board's
stated objective of maximizing long-term shareholder value.
The Company's response to this shareholder is based on the Board of Director's
evaluation of Mr. Ladd, his investment record and what is in the best interest
of all shareholders. The Board believes the company will only receive its
highest valuation following approval of its drug delivery device by the U.S.
Food & Drug Administration. Phase-III trial of the Company's drug delivery
device commenced in late February 2006.
Samuel Herschkowitz, M.D., the Chairman of Delcath's Board of Directors, stated,
"In the Board's view, Mr. Ladd's letter demonstrates that his strategy all along
has been to seek to force a sale of the Company so that he can boost the
short-term performance of his own underperforming hedge fund. The Board believes
Ladd's proposal would deprive all of the Company's other shareholders of the
long-term value of their investments in Delcath. It is also now obvious to us
that Ladd's recent campaign of personal attacks on the Company's management and
Board have been nothing more than a series of tactics designed to confuse and
mislead shareholders in order to further his own selfish interests."
Shareholders who have not voted or wish to change their vote are urged to
immediately vote FOR the re-election of the current directors and AGAINST Ladd's
self-serving proposal. Shareholders can vote by TELEPHONE or by INTERNET today
by following the instructions included in the proxy card previously provided to
them by the Company. Every share and every vote counts.
Shareholders with any questions about how to vote can call MacKenzie Partners,
Inc. toll-free at (800) 322-2885 or collect at (212) 929-5500.
ANNUAL MEETING UPDATE
The company will hold its Annual Meeting of Stockholders Tuesday, June 13, 2006,
where M.S. Koly, president and chief executive officer, plans to provide an
update on the company's clinical programs.
Currently, five patients have been enrolled and treated in the Phase III study
being conducted under a recently awarded Special Protocol Assessment, a binding
agreement from the U.S. Food and Drug Administration (FDA). This is a study
delivering high dose melphalan, an approved anticancer agent, to the liver for
the treatment of metastatic melanoma in the liver. This trial, which is a
randomized comparison of isolated perfusion to "Best Available Care", allows for
control-arm patients to be crossed over and receive the Delcath treatment if
their tumors grow while on the control arm. At least one of the two patients on
control who was receiving the best available care has been crossed over to
receive the Delcath treatment and all Delcath arm patients are still receiving
the experimental therapy. Additional potential patients have been identified who
will be evaluated for inclusion into the study in the weeks ahead.
The company plans to discuss the status of Dr. Richard Alexander, Associate
Chairman of Clinical Research and Professor of Surgery at the University of
Maryland School of Medicine in Baltimore, who has requested to participate in
the study. Despite only recently joining the University, Dr. Alexander has
assembled a study team, prepared the package for IRB review and placed Delcath
in contact with the business office at the prestigious institution. Several
additional major comprehensive cancer centers have also indicated an interest in
joining the trial, which will effectively enable the company to expedite the
patient accrual process.
Mr. Koly is also expected to speak about a parallel Phase II study being
conducted utilizing melphalan against three different cancers in the liver:
hepatoma, neuroendocrine cancers and adenocarcinomas. Patient accrual in this
study is nearly one third complete. While the data in at least one arm of the
study indicates strong potential, the company stresses that any data this early
in a study is not conclusive.
"We are pleased with the progress we have achieved in our clinical studies,"
said Mr. Koly. "Our minimally invasive and repeatable form of high dose therapy
is designed to improve patient quality of life significantly. We expect to
roll-out additional clinical sites in 2006 and remain on course to receive
regulatory approval for our unique isolated perfusion technology and commence
product commercialization."
About Special Protocol Assessment and Agreement (SPA)
An SPA is a written agreement from the FDA that the Phase III trial protocol
design, clinical endpoints, and statistical analyses are acceptable to support
regulatory approval, and can only be granted prior to initiation of the clinical
trial. An SPA is binding upon the FDA unless a substantial scientific issue
essential to determining safety or efficacy is identified after testing has
begun.
About Delcath Systems, Inc.
Delcath Systems is a developer of isolated perfusion technology for organ or
region-specific delivery of therapeutic agents. The company's intellectual
property portfolio currently consists of 12 patents on a worldwide basis,
including the United States, Europe, Asia and Canada. For more information,
please visit the company's website, www.delcath.com.
This release contains "forward-looking statements" based on current expectations
but involving known and unknown risks and uncertainties. Actual results or
achievements may be materially different from those expressed or implied.
Delcath's plans and objectives are based on assumptions involving judgments with
respect to future economic, competitive and market conditions, its ability to
consummate, and the timing of, acquisitions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond its control. Therefore, there can be no assurance than any
forward-looking statement will prove to be accurate.
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