Delcath Readies Pivotal Trial Results

Is this why Delcath's stock price is so strong?

Most likely. Delcath's stock price moved steadily higher throughout 2009, quadrupling in price to just over $5. Since then, the stock has traded between $5 and $6 a share. Delcath shares closed Monday at $5.27.

As a mea culpa of sorts, I last wrote about Delcath in December 2008 when the stock was around $1. At that time, I said it was too early to get involved in the stock because the results of the phase III study were too far off. I never followed up on Delcath in 2009, which was my mistake because I clearly missed the stock's big run.

Will the stock move even higher if the PHP study is a success?

I think so, if solely on pure momentum and the giddy joy that comes from a headline about a positive phase III study. Press me for a prediction and I'd say the stock has another buck or two in it for positive PHP study news, although I won't be surprised at all to see significant profit-taking kick in at some point.

What's Delcath worth if PHP is ultimately approved?

That's a tough call because the PHP system is somewhat unique, which makes it tough to find a comparable. Delcath says about 14,000 patients will be covered under its proposed label indication and it expects to charge about $15,000 per procedure. That's an addressable commercial market of $210 million in the U.S. If patients are treated more than once, which is happening in the phase III study, the overall market opportunity could double or triple.

What percentage of those 14,000 patients can Delcath expect to treat?

Again, it's hard to forecast since the PHP system is unique, but let's assume three years post launch the company can capture 20% of patients with liver metastases and treat each patient twice. That's $84 million in annual sales.