Laidlaw Reiterates Buy Rating on Delcath Systems (DCTH) with $22 Price Target

This morning, DCTH reported 2Q26 financial results and corporate updates. Key takeaways are 2Q26 achieved the highest topline thus far and supports the updated 2026 full year $104-$108MM topline guidance. Although 2H26 topline could be lower than 1H26, we believe the corporate guidance could be conservative, possibly with a positive surprise. Longer-term, we believe the major upside for DCTH shares is success of Hepzato in some hepatic-dominant metastatic cancers with substantially larger commercial potential. DCTH reported 2Q26 financial results with net earnings of $2.4MM vs. losses of ($1.4MM) for Laidlaw and ($3.5MM) for the Street. Per share it was $0.07, vs. ($0.05) for Laidlaw and ($0.09) of the Street. DCTH ended the quarter with ~$96MM cash, which we believe can support operations deep into 2028 and possibly beyond. In 2Q26, DCTH generated a total of ~$29.1MM sales (16.5% Q/Q growth), including $27.1MM from Hepzato and $2MM from Chemosat. DCTH achieved net earnings of ~$2.36MM and non-GAAP EBITDA of $7.6MM. 2Q26 showed impressive volume growth of 30% Y/Y and 16.5% Q/Q. We estimate ~155 Hepzato kits were sold in the quarter at an average unit price of $175,000. Gross margin in 2Q26 was 90%. There were 31 REMS-certified sites activated for Hepzato treatment in 1Q26 and DCTH reiterated to activate ~37 sites by YE26 with 40 expected in 1Q27. The average number of new patients per site per month is ~0.5. DCTH reported the current referrer breakdowns with one-third as static network, referring to a physician within existing institutions; and two-thirds as a just-in-time referral to a broader spectrum of physician outside of existing institutions. DCTH increased 2026 financial guidance to $104-$108MM topline with a >28% Y/Y Hepzato volume increase. DCTH also expects 86-89% gross margins and positive adjusted EBITDA in 2026. We are reiterating our Buy rating and $22 target price.

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