872912--3/12/2008--DELCATH_SYSTEMS

related topics

{product, candidate, development}

{stock, price, share}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, operating}

{loss, insurance, financial}

{control, financial, internal}

{personnel, key, retain}

{provision, law, control}

{condition, economic, financial}

{acquisition, growth, future}

Risks Related to Our Business and Financial Condition If we are not successful in the development and commercialization of the Delcath System, or if we are unable to market and sell the product, we will not generate operating revenue or become profitable. Continuing losses may exhaust our capital resources. We have had no revenue to date, a substantial accumulated deficit, recurring operating losses and negative cash flow. If we do not raise any additional capital that may be required to commercialize the Delcath System, our potential to generate future revenues will be significantly limited even if we receive FDA premarket approval. If we are unable to obtain additional funding, our general business operations will be harmed. There are risks associated with forward-looking statements made by us and actual results may differ. Risks Related to FDA and Foreign Regulatory Approval Even if the FDA grants premarket approval for use of the Delcath System for the treatment of melanoma that has metastasized to the liver with melphalan, our ability to market the device would be limited to that use. If we do not obtain FDA premarket approval, we may not be able to export the Delcath System to foreign markets, which will limit our sales opportunities. Because of our limited experience, conduct of clinical trials and obtaining FDA premarket approval could be delayed. The FDA could temporarily or permanently halt the conduct of our clinical trials. Third-party reimbursement may not be available to purchasers of the Delcath System or may be inadequate, resulting in lower sales even if FDA premarket approval is granted. Risks Related to Manufacturing, Commercialization and Market Acceptance of the Delcath System We obtain necessary components for the Delcath System from sole-source suppliers. Because manufacturers must demonstrate compliance with FDA requirements, if our present suppliers fail to meet such requirements or if we change any supplier, the successful completion of the clinical trials and/or the commercialization of the Delcath System could be jeopardized. We do not have any contracts with suppliers for the manufacture of components for the Delcath System. If we are unable to obtain an adequate supply of the necessary components, we may not be able timely to complete our clinical trials. Because of our limited experience in marketing products and our lack of adequate personnel to market and sell products, we may not be successful in marketing and selling the Delcath System even if we receive FDA premarket approval. Market acceptance of the Delcath System will depend on substantial efforts and expenditures in an area with which we have limited experience. Rapid technological developments in treatment methods for liver cancer and competition with other forms of liver cancer treatments could result in a short product life cycle for the Delcath System. The loss of key personnel could adversely affect our business. Risks Related to Patents, Trade Secrets and Proprietary Rights Our success depends in large part on our ability to obtain patents, maintain trade secret protection and operate without infringing on the proprietary rights of third parties. Risks Related to Products Liability We do not currently carry products liability insurance and we may not be able to acquire sufficient coverage in the future to cover large claims. Risks Related to an Investment in Our Securities Our stock price and trading volume may be volatile, which could result in losses for our stockholders. Future sales of our common stock may cause our stock price to decline. Our insiders beneficially own a significant portion of our stock. Anti-takeover provisions in our Certificate of Incorporation and By-laws and under our stockholder rights agreement may reduce the likelihood of a potential change of control, and certain provisions of our Certificate of Incorporation and By-laws and of our stockholders rights plan could make it more difficult for our stockholders to replace management. Our Common Stock is listed on the NASDAQ Capital Market. If we fail to meet the requirements of the NASDAQ Capital Market for continued listing, our Common Stock could be delisted. If our common stock is delisted from the NASDAQ Capital Market, we may be subject to the risks relating to penny stocks. We do not expect to pay dividends in the foreseeable future. As a result, holders of our common stock must rely on stock appreciation for any return on their investment.

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872912--3/12/2008--DELCATH_SYSTEMS_INC