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Commitments and Contingencies
12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Litigation, Claims and Assessments
medac Matter
In April 2021, the Company’s wholly-owned subsidiary, Delcath Systems Ltd, issued to medac GmbH, a privately held, multi-national pharmaceutical company based in Germany (“medac”), an invoice for a €1 million milestone payment under a License, Supply and Marketing Agreement dated December 10, 2018 (the “medac Agreement”) between medac and the Company. The medac Agreement provided to medac the exclusive right to market and sell CHEMOSAT in certain designated countries for which the Company was entitled to a combination of upfront and success-based milestone payments as well as a fixed transfer price per unit of CHEMOSAT and specified royalties.
In response to medac’s subsequent dispute and non-payment of the invoice, on October 12, 2021, the Company notified medac in writing that it was terminating the medac Agreement due to medac’s nonpayment of the €1 million milestone payment, with the effective date of termination of the medac Agreement being April 12, 2022. On December 16, 2021, the Company initiated an arbitration proceeding pursuant to the dispute resolution procedures of the medac Agreement for the non-payment of the invoice.
On December 30, 2022, the parties reached a final settlement of the matter and the Company agreed to pay medac either (a) royalty on sales of CHEMOSAT units over a defined minimum for a period of five years or until a maximum payment has been reached, or (b) a minimum annual payment of $0.2 million in the event the annual royalty payment does not reach the agreed minimum payment amount. As of December 31, 2023, the Company has estimated the settlement to be $1.0 million and recorded $0.8 million as other liabilities, non-current and $0.2 million as accrued expenses on the Company’s condensed consolidated balance sheet.
Lachman Consulting Services, Inc
On January 24, 2023, Lachman Consultant Services, Inc. (“Lachman”) served the Company with a complaint alleging that Delcath owed Lachman approximately $0.9 million in unpaid consulting fees plus interest, costs and attorneys’ fees. The dispute arises from a July 22, 2021 agreement between Lachman and Delcath under which Lachman provided assistance to the Company in regard to preparing for a FDA inspection and good manufacturing practices, training and support. A settlement was reached on July 5, 2023, under which the Company paid Lachman $0.9 million.
Manufacturing and Supply Agreements
The Company has a License, Supply and Contract Manufacturing Agreement (the “Supply Agreement”) for the supply of melphalan provided in the HEPZATO KIT. The Supply Agreement is effective until April 30, 2024, with an option to extend its term for three additional years. The Supply Agreement does not consist of minimum purchase units per year but does require each order to contain a minimum number of vials. As of December 31, 2023, the Company has committed to purchase $2.25 million of melphalan under this Supply Agreement in 2024.