DCTH: CHOPIN Data Expected To Drive Stronger Uptake Despite Near-Term Guidance Reset

Analysts have trimmed their fair value estimate for Delcath Systems to $18.00 from $21.00, reflecting lower near term revenue growth assumptions after soft preliminary guidance. This comes despite sustained confidence in Hepzato uptake driven by positive CHOPIN trial data and improving profit margin expectations.

Analyst Commentary

Street research updates following Delcath's preliminary guidance and CHOPIN data have been mixed, with several bearish analysts trimming price targets even as they maintain constructive long term views on Hepzato. The prevailing tone reflects confidence in the clinical profile but greater caution around execution, pacing of adoption, and the near term revenue ramp.

Bearish analysts have generally reiterated positive stances on the underlying technology while acknowledging that weaker Q3 trends and reduced 2025 guidance could delay the path to scale. As a result, valuation frameworks are being recalibrated to reflect a slower build in utilization and more conservative assumptions on pricing and new patient starts.

Bearish Takeaways

• Lowered price targets across recent notes underscore concerns that softer Q3 performance and reduced 2025 revenue guidance may signal a more gradual adoption curve than previously modeled, which in turn could pressure near term valuation multiples.
• Guidance implying Q3 revenue of about $20.5M and 2025 revenue of $83M to $85M is being interpreted as a reset that heightens execution risk, particularly around commercial rollout efficiency and the consistency of new patient onboarding.
• While CHOPIN data are viewed as clinically compelling, some bearish analysts see the benefit as more weighted to 2026 and beyond. This creates a timing mismatch between long term growth potential and current financial visibility.
• Revisions to discounted cash flow and risk adjusted revenue scenarios now incorporate more conservative assumptions on pricing dynamics and market penetration. This shift could limit multiple expansion until the company demonstrates sustained acceleration in Hepzato demand.

Even with these more cautious revisions, Street commentary highlights that successful integration of CHOPIN insights into U.S. treatment sequencing and evidence of steadier quarterly growth could lead to renewed multiple support. For now, however, the bias of recent estimate and target changes is skewed to the downside, emphasizing the need for clearer execution against updated guidance.

What's in the News

• A retrospective 10-year single center study from Asklepios Hospital Barmbek in Hamburg reported a median overall survival of 29.1 months for liver dominant metastatic uveal melanoma patients treated with CHEMOSAT percutaneous hepatic perfusion, with no treatment related deaths and improved outcomes with additional treatment cycles (Key Developments).
• Results from the investigator initiated randomized Phase 2 CHOPIN trial comparing CHEMOSAT PHP alone versus in combination with ipilimumab and nivolumab in metastatic uveal melanoma were presented at the 2025 ESMO Congress. The findings underscore the potential of HEPZATO KIT as part of combination immunotherapy strategies (Key Developments).
• Delcath updated 2025 guidance, projecting $83 million to $85 million in CHEMOSAT and HEPZATO KIT revenue, implying roughly 150% growth in treatment volume versus 2024 (Key Developments).
• The Board of Directors authorized a share repurchase plan that allows Delcath to buy back up to $25 million of its common stock as part of a newly announced capital return program (Key Developments).

Valuation Changes

• Fair value estimate was reduced from $21.00 to $18.00, reflecting a moderate downward revision in intrinsic value assumptions.
• The discount rate increased slightly from 7.46 percent to 7.68 percent, indicating a modestly higher perceived risk profile in discounted cash flow models.
• Revenue growth was cut significantly from approximately 30.2 percent to 22.7 percent, indicating a more conservative outlook on the pace of Hepzato and CHEMOSAT adoption.
• The net profit margin was raised from about 15.1 percent to 18.4 percent, incorporating expectations for improved operating leverage and unit economics over time.
• The future P/E was lowered from roughly 46.6x to 34.0x, indicating a more restrained multiple on forward earnings due to tempered growth assumptions despite better margin projections.