All that worrying, mostly for nothing. Mostly.
Monday Delcath Systems (Nasdaq: DCTH ) said that it would take an additional three months to resubmit its chemotherapy system, Chemostat, to the Food and Drug Administration. I worried that it was a sign of more bad things to come and wondered if management had it together.
A little over 24 hours later, it's earned back a little confidence announcing that the Chemostat has gained CE Mark approval in Europe.
The Chemostat is a drug device to treat tumors in the liver. The liver is separated from the body and saturated with chemotherapy at higher levels than would be possible if the chemotherapy was run through the entire body.
What's interesting is that the European regulatory authority classifies the Chemostat as a medical device while the U.S. Food and Drug Administration classifies it as a drug. So while it's certainly good news -- the company turned in the right paperwork and secured an approval from a regulatory body -- it's not necessarily a sign that the FDA will approve the Chemostat.
In fact, the European CE Mark is notoriously easy to get with very little data. Medtronic (NYSE: MDT ) , for example, gained CE Mark approval for its Endeavor drug-eluting stent in 2005, but didn't gain FDA approval until 2008. It doesn't always take quite that long to gather the necessary extra data to get approved stateside; Boston Scientific (NYSE: BSX ) is looking at a year between CE Mark and FDA approvals for its Taxus Element stent. But medical-device companies almost always go after the CE Mark approval first because it's so much easier to get.
Even after CE Mark approval, Delcath still has to convince someone to pay for the procedure. In Europe, that's often government single-payer systems that tend to be slow-moving and penny-pinching.
I like Delcath better today than I did earlier in the week, but it's still a risky play. Between getting the Chemostat paid for in Europe and approved stateside, there's still plenty to be worried about.