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Delcath Systems - Oversold & Undervalued

|Includes: Delcath Systems, Inc. (DCTH)
We believe that DCTH (Delcath Systems, Inc.) is a biotech to keep an eye on. Delcath recently released top-line (basically an overview of the trial) results of their phase 3 trial using the Delcath PHP System in melanoma metastases in the liver. The trial surpassed primary endpoint expectations. The day after the positive trial results were released (April 22), Roth Capital initiated coverage with a "Buy" rating and a $15 target -- four days later (April 26), Roth Capital upped their target to $20, saying:

"Last week co. reported positive data on its PHP System. Analyst Matthew Pommer tells salesforce, based on his feedback from the field, came away content that data from the phase III study will lead to significant conversion of patients to therapy with the PHP System for both cutaneous and ocular melanoma that is metastatic to the liver (i.e., the "on-label" population). Says, in particular, he expects most high-volume academic cancer centers in US to convert the bulk of these patients to PHP therapy. Ups $15 target to $20, reiterates buy./B.Brodie."

Full, detailed data will be released at ASCO this June, which could lead to a runup in anticipation of the presentation.

In the past week, Delcath shares have gone from the $15 range into the $12 range, and we plan to open a position sometime in the near future.

Delcath can also be a good growth story, in our opinion. Due to the positive results of this phase 3 trial, and if the PHP System is approved, Delcath should be able to expand the product label into other liver cancers.

Of course, this is all in our opinion. Please read our disclaimer in our bio before investing in any stock that we do a write-up on.

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Disclosure: No positions