Press Releases
CytoSorbents Reports First Quarter 2022 Results and Revises 2022 Outlook
Q1 2022 total revenue was
First Quarter 2022 Financial Results
- Total revenue, including product sales and grant income, for Q1 2022 was
$8.7 million , a decrease of 18% compared to$10.6 million in Q1 2021. - Q1 2022 product sales were
$7.9 million (including an estimated$7.6 million core non-COVID-19 sales and$0.3 million COVID-19 related sales) versus$10.1 million ($8.3 million core and$1.8 million COVID-related) in Q1 2021, a decrease of 22%. This decrease was driven primarily by a reduction in German direct sales, which were hampered by the impact of unprecedented rates of new COVID-19 infection in the country that persisted throughout Q1 2022, and to a lesser extent a weaker Euro.Germany sales were$3.8 million in Q1 2022 versus$5.9 million a year ago, a decline of 36%. Q1 2022 product sales were also lower by$0.6 million due to the stronger dollar compared to the euro. - On a constant currency basis, core product sales in Q1 2022 would have been
$8.2 million , and were comparable to core product sales of$8.3 million a year ago. - As expected, COVID-19 related sales during the quarter were low, reflecting the low severity of current COVID-19 illness resulting from high rates of vaccination and natural immunity.
- Product gross margins improved to approximately 80% in Q1 2022, versus 77% in Q1 2021.
- The Company continues to have a solid balance sheet with cash and cash equivalents of
$44.7 million (which includes$1.7 million in restricted cash) atMarch 31, 2022 , and no debt.
Recent Operating Highlights
- More than 170,000 cumulative CytoSorb devices have been utilized worldwide as of
March 31, 2022 , an increase of 30% compared to more than 131,000 devices utilized as of the end of the first quarter of 2021. CytoSorbents continues to make progress in its company-sponsored clinical trials, most importantly announcing that the first patient was enrolled inApril 2022 in theU.S. STAR-D (Safe and Timely Antithrombotic Removal – Direct Oral Anticoagulants) pivotal trial evaluating the DrugSorb™-ATR Antithrombotic Removal System to remove apixaban and rivaroxaban during cardiothoracic surgery.- The first patient was enrolled in
February 2022 in the PROCYSS Multicenter randomized controlled trial evaluating CytoSorb® to restore hemodynamic stability in patients experiencing refractory septic shock. - Buildout of the Company's new manufacturing facility in
Princeton, New Jersey is approximately 95% complete. In April, the Company successfully completed its E.U. Notified Body audit of the manufacturing plant, with no major findings. Based on the positive audit, the Company is beginning the transition from its existing facility to the new manufacturing site. Management expects to receive full certification from its Notified Body in the coming months, which will allow device manufacturing and product shipments to begin from the new manufacturing facility. CytoSorbents recently appointedJiny Kim , MBA to the Board of Directors. She brings an extensive background in the medical device industry, with significant experience inU.S. and international commercialization, sales, marketing and business development to support the Company's growth initiatives, in particular the eventual commercialization of DrugSorb™-ATR inthe United States .- The Company is establishing a direct sales presence in the
UK , the sixth largest medical device market in the world, andIreland , part of its strategy to expand more territories in which CytoSorb is sold directly to customers. - Multiple recent scientific publications and presentations highlighting the use of CytoSorb in critical care and cardiac surgery (see "Clinical Studies and Data Publications Update" below). In particular, new data from an expanded analysis of the
U.S. CTC (CytoSorb Therapy in COVID-19) Registry on 56 critically ill COVID-19 patients with acute respiratory distress syndrome on life support with ECMO and treated with CytoSorb under FDA Emergency Use Authorization, continue to demonstrate high survival and improved clinical benefits with early intervention. These data were presented in an abstract at the 41st International Symposium on Intensive Care and Emergency Medicine inBrussels, Belgium , and will be presented this week at the 10thEuroELSO Congress inLondon, UK , along with multiple presentations at the CytoSorbents Lunch Symposium.
Dr.
"During Q1 2022, CytoSorb sales in
"Meanwhile, we are not just waiting for conditions to improve. Rather, we are focused on building this company and solidifying our leadership as the treatment pioneer of life-threatening conditions using blood purification. We are laser-focused on four essential objectives that we believe are the key to driving sustainable, long-term value for shareholders:
- Open the U.S. market by obtaining FDA Marketing approval for DrugSorb™-ATR to remove blood thinning drugs during cardiothoracic surgery (see "Clinical update" below)
- Restore growth of core CytoSorb sales, driven by numerous initiatives (see below).
- Transition CytoSorb production to our new manufacturing facility and headquarters in
Princeton, New Jersey this year (See "Operational Update" above) - Forge and expand new and existing strategic partnerships to maximize the synergy between our technology and those of our partners, while creating new global opportunities for growth.
To provide more color on our growth strategy, we highlight several examples of important initiatives that we have been executing upon during the pandemic that are expected to drive improved results as the pandemic abates, as well as future, longer-term growth.
Near-term growth drivers
- Resume in-person sales from a strong customer base: Our active customer base accounts for the majority of our direct sales and grew by 20-25% at the start of the pandemic and has remained stable since. We are in close contact with these accounts and have confirmed that COVID-19 related issues, including its effect on staffing and numbers of ICU patients, are the primary issue for volatility in ordering. We believe a return to in-person selling will reinvigorate growth.
- New therapeutic area divisions: We have established three distinct therapy divisions within our commercial operations including Critical Care, Cardiovascular, and Liver/Kidney/other to develop these markets internationally under the leadership of dedicated medical and commercial subject matter experts, who will work closely with our sales teams and best serve the needs and interests of our customers. We have already seen our efforts bear fruit with now more than 150 cardiac surgery centers internationally who have begun to use CytoSorb to remove antithrombotic drugs during cardiac surgery, for example. We believe this infrastructure will yield many more similar successes across a broad array of applications.
- New exclusive private hospital chain partnerships: We are now the preferred supplier of hemoadsorption technology to the three largest hospital chains in
Germany , including, as announced yesterday,Asklepios Group . A number of these hospitals are already current customers and our agreements facilitate access and sales of CytoSorb to these and all other relevant institutions within these hospital networks. - Rise of Existing and New Applications: Among the many applications, we highlight:
Shock: Many studies have highlighted the ability of CytoSorb to remove inflammatory mediators and help to stabilize shock, a potentially fatal drop in blood pressure, in a wide range of patients. A recent 2019 meta-analysis, found that approximately 10% of ICU patients have septic shock at admission and an additional 8% of patients admitted to the ICU develop septic shock at some point in their hospital stay, with a high mortality of 38%. CytoSorb is being used around the world as a treatment of shock and we are conducting the PROCYSS RCT to formally evaluate CytoSorb as a treatment of this common and major unmet medical need.
Liver disease: In the treatment of acute liver disease, CytoSorb outperforms the market leading MARS® platform (Baxter) in the in vitro removal of many liver toxins, but has the added benefit of removing cytokines and inflammatory mediators, while being much easier to use. In real-world practice, CytoSorb has replaced MARS at many accounts. One in 11 people worldwide have chronic liver disease that may deteriorate and require hospitalization and blood purification. Through our Liver/Kidney division, we aim to drive CytoSorb as a therapy of choice in these patients.
Lung injury: OurU.S. CTC registry highlights the high survival of critically ill COVID-19 patients with acute respiratory distress syndrome (ARDS) treated with CytoSorb and ECMO under FDA Emergency Use Authorization. We believe these data demonstrate a therapeutic strategy of "enhanced lung rest" using the combined therapies that can be extrapolated to the treatment of ARDS in non-COVID patients, a very large market.
Longer-term growth drivers
- Stand-alone blood pump business model: There are many applications where a simple-to-use, low-cost hemoperfusion pump is adequate to implement our CytoSorb blood purification technology. This approach enables our customers to deliver CytoSorb without the complexity of a full-scale dialysis or continuous renal replacement therapy (CRRT) machine, without the need for a dialysis technician, and in clinical situations where the patient has not developed kidney failure. By improving access to care and simplifying treatment with CytoSorb in the ICU, we are potentially enabling more frequent and earlier use on more patients while supporting new "hospital-wide" applications in the emergency room, surgery suites, and elsewhere. CytoSorbents has partnered with a major international dialysis company to distribute a high-quality hemoperfusion machine and accessories, and to provide field support to customers in
Germany ,Austria , and Luxembourg, and are currently in the midst of a pilot launch. While early, the initial results and feedback from this pilot have been promising. Pending continued success, we plan a broader rollout in these countries, and may pursue expansion of the program to more countries in the future. We believe this can be a potentially important supplementary business model going forward that can significantly expand our total addressable markets and contribute meaningfully to CytoSorb sales growth. - Expansion of direct sales territories: Although opening new countries with a direct sales force requires time, cost, and resources, it also allows us to directly lead the effort, drive results, and benefit from more profitable sales. With the announcement of expansion of direct sales into the
U.K. andIreland , we now sell direct in two of the E.U.'s Big 5 Economies –Germany and theU.K. – and a total of 15 countries direct overall, while working with distributors or partners in the other three Big 5 Economies:France ,Italy , and Spain. - Investment in important clinical studies in shock, liver failure, cardiac surgery, ATR, etc: We are committed to funding Company-sponsored studies, such as the STAR-T, STAR-D, and PROCYSS RCTs, in key areas that we believe will drive international adoption and usage of our technologies, with the goal of becoming a standard of care for those applications (See "Clinical Studies and Data Publications Update" below).
Clinical Studies and Data Publications Update
Cardiac Surgery
U.S. STAR-T pivotal RCT: Enrollment and site activation continues to progress. Barring the potential of another surge inU.S. COVID cases, we expect the study to reach its first scheduled milestone of 33% patient enrollment that will trigger the first Data Safety Monitoring Board (DSMB) meeting this summer, with overall study enrollment to be complete in the first quarter of 2023.U.S. STAR-D pivotal RCT: Site activation is ongoing with the first patient enrolled inApril 2022 . Pending the continuing uncertainty from the ongoing COVID-19 pandemic, we expect the study to complete enrollment in 12-18 months.- International Safe and Timely Antithrombotic Removal (STAR) Registry continues to actively enroll patients in the
U.K. ,Germany , andAustria , with expansion into additional EU countries before the end of 2022. - Recent scientific publications highlight CytoSorb use in cardiac surgery for antithrombotic removal include in the Annals of Thoracic and Cardiovascular Surgery, Expert Review of Cardiovascular Therapy,
Journal of Cardiothoracic and Vascular Anesthesia , and in endocarditis in theJournal of Cardiothoracic and Vascular Anesthesia .
Critical Care
- CytoSorb Therapy in COVID-19 (CTC) Registry: New data will be presented at the EuroELSO conference this week (see "Operational Highlights" above). The CTC Registry has completed enrollment at 100 patients and the final results will be presented at an upcoming international conference and submitted for publication.
- The German PROCYSS Refractory Septic Shock RCT: The study continues to actively enroll at multiple sites. The speed of enrollment remains uncertain due to COVID-19, however, we still expect to achieve the next important milestone of the interim analysis after 50% enrollment in 2023.
- The German Hep-On-Fire multicenter, single-arm trial in acute liver failure due to alcoholic hepatitis: We continue to expect that the first patient will be enrolled this quarter and that the study will complete enrollment in 2023.
- The International COSMOS Registry: Designed to capture ongoing, real-world outcomes using CytoSorb in critical care, the Registry is undergoing start-up activities and remains scheduled to begin enrollment this quarter with the goal of being active in multiple countries in 2023.
- Many peer-reviewed publications of new studies on sepsis in
The International Journal of Artificial Organs and in sepsis-associated acute kidney injury in Blood Purification, as well as in acute pancreatitis in Artificial Organs, and wound healing following severe burn injury in Frontiers in Surgery. Finally, cytokine reduction using CytoSorb and the successful transplant of donated kidneys and livers from deceased donors was detailed in theInternational Journal of Artificial Organs .
Results of Operations for the quarter ended
Revenues
Total revenue, including product revenue and grant income, for the first quarter of 2022 was
Cost of Revenues
Cost of revenue for the first quarter of 2022 was
Operating Expenses
Operating expenses for the first quarter of 2022 amounted to
Liquidity and Capital Resources
Since inception, our operations have been primarily financed through the private and public placement of our debt and equity securities. At
We believe that we have sufficient cash to fund the Company's operations beyond twelve months from issuance of the financial statements for the quarter ending
Revision of 2022 Outlook Guidance
The macro environment in which we operate remains difficult to predict given the complex drivers of our business, the global nature of our operations, and external factors such as the COVID-19 pandemic, the
As evidence of this, since our prior guidance on
We expect COVID-19 cases and hospitalizations worldwide to continue to decline and expect to reach a more normalized operating environment as the year progresses. Because of this, we expect continued and progressive improvement in our underlying core non-COVID-19 business and expect growth in 2022 of core product sales on a constant currency basis. However, due to our limited visibility, we are removing specific growth targets with plans to revisit this later in the year. This expectation assumes:
- A gradual recovery of normalized hospital activity and sales access in
Germany and other key countries - No major economic slowdowns or major surges in COVID-19 infections caused by new COVID-19 variants
- Little to no contribution to sales from
Russia and neighboring countries that might be impacted by the war. In 2021, sales from these geographies represented less than 4% of total product sales - No escalation of the
Russia –Ukraine war to other countries - Limited COVID-19 related product sales in 2022 due to high rates of vaccination and natural immunity that have reduced the severity of COVID-19 illness and need for hospitalization and ICU care, and with it the use of CytoSorb in these patients.
For additional information, please see the Company's Form 10-Q for the period ended
Conference Call
The company will conduct its first quarter 2022 results call today at
Conference Call Details:
Toll free: 1-877-451-6152
International: 1-201-389-0879
Conference ID: 13728663
It is recommended that participants dial in approximately 10 minutes prior to the start of the call. There will be a simultaneous live webcast of the conference call that can be accessed through the following audio feed link: https://viavid.webcasts.com/starthere.jsp?ei=1541445&tp_key=979468cd12
An archived recording of the conference call will be available under the Investor Relations section of the Company's website at http://cytosorbents.com/investor-relations/financial-results/.
About
Forward-Looking Statements
This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, future targets and outlooks for our business, expectations regarding the future impacts of COVID-19 or the ongoing conflict between
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||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||
(amounts in thousands, except per share data) |
||||||
For the Three Months Ended |
||||||
|
|
|||||
Revenue: |
||||||
CytoSorb sales |
$ |
7,867 |
$ |
10,143 |
||
Other sales |
58 |
— |
||||
Total product sales |
7,925 |
10,143 |
||||
Grant income |
767 |
456 |
||||
Total revenue |
8,692 |
10,599 |
||||
Cost of revenue |
2,278 |
2,751 |
||||
Gross profit |
6,414 |
7,848 |
||||
Expenses: |
||||||
Research and development |
4,243 |
2,282 |
||||
Legal, financial and other consulting |
801 |
708 |
||||
Selling, general and administrative |
9,161 |
7,710 |
||||
Total operating expenses |
14,205 |
10,700 |
||||
Loss from operations |
(7,791) |
(2,852) |
||||
Other income (expense): |
||||||
Interest income (expense), net |
8 |
(10) |
||||
Loss on foreign currency transactions |
(1,213) |
(1,306) |
||||
Miscellaneous Income |
30 |
— |
||||
Total other expense, net |
(1,175) |
(1,316) |
||||
Loss before benefit from income taxes |
(8,966) |
(4,168) |
||||
Benefit from income taxes |
— |
— |
||||
Net loss |
(8,966) |
(4,168) |
||||
Earnings per share: |
||||||
Basic and diluted loss per share |
$ |
(0.21) |
$ |
(0.10) |
||
Weighted average share outstanding |
43,487,946 |
43,242,791 |
||||
Net Loss |
$ |
(8,966) |
$ |
(4,168) |
||
Other comprehensive income: |
||||||
Currency translation adjustment |
963 |
1,158 |
||||
Comprehensive loss |
$ |
(8,003) |
$ |
(3,010) |
|
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(amounts in thousands) |
||||||
|
|
|||||
ASSETS: |
||||||
Current Assets: |
||||||
Cash and cash equivalents |
$ |
43,023 |
$ |
52,138 |
||
Grants and accounts receivable, net |
4,577 |
4,523 |
||||
Inventories |
5,445 |
4,766 |
||||
Prepaid expenses and other current assets |
2,809 |
2,872 |
||||
Total current assets |
55,854 |
64,299 |
||||
Property and equipment, net |
7,849 |
5,151 |
||||
Right of use asset |
13,197 |
13,423 |
||||
Restricted cash |
1,687 |
1,687 |
||||
Other assets |
4,685 |
4,959 |
||||
TOTAL ASSETS |
$ |
83,272 |
$ |
89,519 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY: |
||||||
Current Liabilities: |
||||||
Accounts payable |
$ |
4,826 |
$ |
2,805 |
||
Lease liability – current portion |
487 |
571 |
||||
Accrued expenses and other current liabilities |
9,359 |
10,314 |
||||
Total current liabilities |
14,672 |
13,690 |
||||
Lease liability, net of current portion |
13,172 |
13,251 |
||||
TOTAL LIABILITIES |
27,844 |
26,941 |
||||
Total stockholders' equity |
55,428 |
62,578 |
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
83,272 |
$ |
89,519 |
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Investor Relations Contact:
and Corporate Communications
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[email protected]
212-805-3052
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