CytoSorbents Reports Record Second Quarter 2020 Financial Results
CytoSorbents Corporation (CTSO) reported Q2 2020 revenue of approximately $9.8 million, marking a 58% increase year-over-year. Product revenues were around $9.5 million, up 61% from Q2 2019. The company generated about $667,000 in sales tied to COVID-19 treatments following FDA Emergency Use Authorization. Cash reserves grew to approximately $89 million after a July equity financing, which enhances growth capital for clinical trials and production. CytoSorbents achieved over 100,000 treatments globally and expanded distribution to 65 countries.
- Q2 2020 revenue increased by 58% YoY to approximately $9.8 million.
- Product revenues grew by 61% year-over-year to around $9.5 million.
- Cash balance reached approximately $89 million after a successful public offering.
- Achievement of FDA Emergency Use Authorization for CytoSorb in COVID-19 patients.
- Expanded distribution of CytoSorb to 65 countries.
- Gross margins decreased to approximately 70% from 76% YoY, impacted by lower margin distributor sales.
- Research and development expenses decreased due to the COVID-19 pandemic's impact on clinical trials.
- Grant income declined by 28% YoY due to COVID-19-related delays.
MONMOUTH JUNCTION, N.J., Aug. 4, 2020 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader using its CytoSorb® blood purification technology to treat deadly inflammation in critically-ill and cardiac surgery patients around the world, reports its full financial and operational results for the quarter ending June 30, 2020.
Second Quarter 2020 Financial Results:
- Total revenue for Q2 2020 was approximately
$9.8 million , a58% increase from$6.2 million in Q2 2019 - Q2 2020 product revenues were approximately
$9.5 million , an increase of61% from$5.9 million for Q2 2019, and up16% sequentially from$8.2 million in Q1 2020 - Trailing twelve-month product sales were approximately
$30.0 million (ending Q2 2020) - CytoSorbents generated approximately
$667,000 in COVID-19 U.S. hospital sales during the second quarter, following the mid-April 2020 U.S. Food and Drug Administration (FDA) Emergency Use Authorization of CytoSorb for critically-ill COVID-19 patients - Blended product gross margins were approximately
70% , compared to76% for Q2 2019, impacted by an increase in percent contribution of lower margin distributor sales and increased costs of an expedited ramp in production in response to COVID-19 demand - Cash balances increased to approximately
$35.1 million at June 30, 2020, compared to approximately$26.4 million at the end of Q1 2020, and subsequently have risen to approximately$89.0 million as a result of the July 24, 2020 equity financing
Second Quarter 2020 Operational Highlights:
- More than 100,000 CytoSorb treatments have been delivered to date, up approximately
50% from a year ago - U.S. FDA granted Emergency Use Authorization (EUA) to CytoSorb for use in adult, critically-ill COVID-19 patients with imminent or confirmed respiratory failure, enabling commercial sales to all hospitals in the U.S. for this application
- CytoSorb is either directly or indirectly (e.g. cytokine adsorption) mentioned, recommended, and/or approved in multiple other countries
- China – Handbook of COVID-19 Prevention and Treatment (indirect)
- Columbia – Expert consensus – Colombian Journal of Nephrology (direct)
- Great Britain – Medtech Innovation Briefing published by NICE (direct)
- Germany – Treatment of severe COVID-19 courses in ICU medicine (direct)
- India – Drugs Controller General of India (DCGI) approval of CytoSorb for COVID-19; Cytokine storm in COVID-19 Expert Management Considerations (direct)
- Israel – Ministry of Health of Israel Medical Devices (AMAR) approval of CytoSorb for COVID-19 (direct)
- Italy – Brescia Renal COVID-19 Task Force recommendations (direct)
- Panama – National Guidelines on adult COVID-19 patients (direct)
- Presentation of the usage and first CytoSorb data in COVID-19 patients in multiple webinars:
- CytoSorb Therapy in COVID-19 Patients
- Joint Perfusion COVID 19 Task Force: COVID-19 in Practice Third Webinar (~34:00)
- Joint Perfusion COVID-19 Task Force: COVID-19 Patient Transport, Treatment and CytoSorb Filter Use: A Care Team's Perspective
- The Trinity of COVID-19: Immunity, Inflammation, and Intervention
- Cytokine Adsorption in Severely Ill COVID-19 Patients
- EURO-ELSO Congress: Combination of ECMO and CytoSorb Hemoadsorption in COVID-19 patients
- Achievement of FDA Breakthrough Designation for CytoSorb to remove ticagrelor during cardiopulmonary bypass in emergent and urgent cardiothoracic surgery
- Appointment of Dr. Efthymios "Makis" Deliargyris as Chief Medical Officer
- Received
$1.1M in non-dilutive funding from the New Jersey Technology Business Tax Certificate Transfer Program - CytoSorb received E.U. approval to remove rivaroxaban, a leading Factor Xa inhibitor and novel oral anticoagulant, during on-pump cardiothoracic surgery
- Vincent J. Capponi, was promoted to President and Chief Operating Officer
- Awarded a
$2.9 million Phase III Small Business Technology Transfer (STTR) contract to advance the HemoDefend-BGA plasma and whole blood adsorber to clinical trials - Expanded distribution of CytoSorb to a total of 65 countries, with the latest expansion adding 9 Latin American countries including Colombia, Argentina, Perú, Guatemala, Ecuador, Bolivia, the Dominican Republic, El Salvador, and Costa Rica
Dr. Phillip Chan, MD, PhD, Chief Executive Officer of CytoSorbents Corporation, stated, "As discussed in further detail in our preliminary Q2 2020 financial results and corporate update, our record quarterly financial results reflected strong CytoSorb sales in our underlying critical care business, further augmented by demand from the COVID-19 pandemic. We have now surpassed a major milestone, with more than 100,000 treatments delivered cumulatively worldwide, with distribution in 65 countries globally."
"The second quarter of 2020 also brought some of the most exciting progress in our recent history, including bringing CytoSorb to the American public under FDA Emergency Use Authorization (EUA) for use in critically-ill COVID-19 patients with imminent or confirmed respiratory failure, FDA Breakthrough Designation to remove ticagrelor (Brilinta®, AstraZeneca) during cardiac surgery, and E.U. CytoSorb approval to remove rivaroxaban (Xarelto®, Bayer/Jannsen) during cardiothoracic surgery, complementing E.U. approval to remove ticagrelor obtained in January for the same application."
"On July 24, 2020, we completed a landmark public offering of
"One of the major reasons we did this fundraise now is to aggressively unlock the immediate U.S. opportunity to create potentially significant value for shareholders."
- COVID-19: The COVID-19 pandemic and our FDA EUA has created a unique situation where we can help patients in the U.S., while generating clinical data, sales, and importantly, awareness in the U.S. medical community of CytoSorb. We believe that our clinical and commercial activities in the world's largest medical device market, if successful, will have a long-term positive impact on the rate of acceptance and usage of CytoSorb for future FDA approved applications. We are now aggressively expanding distribution of CytoSorb into key hotspots of the U.S. with the goal of having full coverage in the U.S. by what is expected to be a dangerous COVID-19 and flu winter season.
- REFRESH 2-AKI Pivotal Trial: The recent recommendation of the Data Monitoring Committee (DMC) to continue the REFRESH 2-AKI trial following a favorable review of safety data, was the key to getting this study, intended to support U.S. FDA approval of CytoSorb, back on track and moving to the scheduled interim analysis upon completing enrollment of 200 patients.
- FDA Breakthrough Designation of CytoSorb: Leveraging FDA Breakthrough Designation to remove ticagrelor during urgent or emergent cardiothoracic surgery is our second path to potential U.S. regulatory approval for CytoSorb. Perioperative bleeding complications in patients on blood thinners that need to be rushed to surgery are frequent, costly, and can be fatal. To fully understand the clinical problem and opportunity, we highly recommend that investors view our recent webinar, CytoSorb Antithrombotic Removal. With potential U.S. approval, we would open an estimated initial total addressable market of
$250 million , based upon the estimated annual number of urgent and emergent cardiac surgery cases in patients on ticagrelor. This market is expected to grow, as ticagrelor becomes generic in 2024, and if ticagrelor gains market share as the only reversible anti-platelet agent of the three drugs commonly prescribed for acute coronary syndrome (i.e. clopidogrel (Plavix®, BMS/Sanofi, generic) and prasugrel (Effient®, Lilly). Our new Chief Medical Officer, Dr. Efthymios "Makis" Deliargyris, an interventional cardiologist and subject matter expert in antithrombotics and anticoagulants who was heavily involved in the clinical development of closely-related cangrelor for The Medicines Company, is now leading discussions with the FDA, and we hope to have a definitive regulatory path for potential U.S. approval from the FDA very soon."
"In the first half of 2020, the COVID-19 pandemic certainly had a net positive effect on our business, and as it continues to evolve, we have been proactively advancing many of our pre-COVID-19 growth initiatives in the background. When the pandemic eventually ends, we expect to get back to 'business as usual,' where the impact of these efforts should become more apparent. For example:
- Since late 2019, we significantly increased our sales force in Germany to 19 sales representatives and specialists. The purpose was to optimize our sales coverage and drive hospital usage in Germany that has historically averaged about
65% of our product sales, with full dedicated reimbursement for CytoSorb treatment. However, COVID-19 has forced hospitals to restrict access to non-essential personnel including sales reps. Because of this, our Q2 2020 results do not fully reflect this investment in resources. - Although we obtained E.U. approval for CytoSorb to reduce the blood thinning medications, ticagrelor and rivaroxaban during cardiac surgery earlier this year, because of COVID-19 restrictions, we have not yet had the opportunity to capitalize on these promising growth applications.
- We saw a similar effect from decreased elective surgeries in Q2 2020, including many cases of complex elective cardiac surgery where CytoSorb is often used, where cases have dropped significantly as hospitals prioritized resources, beds, and space for expected COVID-19 patients, and as patients avoided hospitals for fear of contracting coronavirus infection."
Dr. Chan concluded, "The COVID-19 pandemic is now aggressively attacking the Americas, India, South Africa, and the Middle East, with second waves well underway in Eastern Europe, Southeast Asia, Japan, and other countries. Without a COVID-19 vaccine, the future is uncertain, with most expecting a second wave starting this fall. That said, we have not historically given specific financial guidance on quarterly results until the quarter has been completed. However, notwithstanding uncertainty related to the COVID-19 pandemic, based upon current order patterns, we expect that Q3 2020 will be one of the company's strongest quarters in terms of product sales."
"Please join us on our earnings conference call today, details for which are below."
Conference Call Details:
Date: Tuesday, August 4, 2020
Time: 4:45 PM Eastern Time
Participant Dial-In: 877-451-6152
Conference ID: 13705996
Live Presentation Webcast: http://public.viavid.com/index.php?id=140426
It is recommended that participants dial in approximately 10 minutes prior to the start of the call. There will also be a simultaneous live webcast of the conference call that can be accessed through the following audio feed link: http://public.viavid.com/index.php?id=140426
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/.
Results of Operations
Comparison for the three months ended June 30, 2020 and 2019:
Revenues:
Revenue from product sales was approximately
Grant income was approximately
Total revenues were approximately
Cost of Revenues:
For the three months ended June 30, 2020 and 2019, cost of revenue was approximately
Research and Development Expenses:
For the three months ended June 30, 2020, research and development expenses were approximately
Legal, Financial and Other Consulting Expenses:
Legal, financial and other consulting expenses were approximately
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were approximately
Interest Expense, net:
For the three months ended June 30, 2020, interest expense was approximately
Gain (Loss) on Foreign Currency Transactions:
For the three months ended June 30, 2020, the gain on foreign currency transactions was approximately
Comparison for the six months ended June 30, 2020 and 2019:
Revenues:
Revenue from product sales was approximately
Grant income was approximately
Total revenues were approximately
Cost of Revenues:
For the six months ended June 30, 2020 and 2019, cost of revenue was approximately
Research and Development Expenses:
For the six months ended June 30, 2020, research and development expenses were approximately
Legal, Financial and Other Consulting Expenses:
Legal, financial and other consulting expenses were approximately
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were approximately
Interest Expense, net:
For the six months ended June 30, 2020, interest expense was approximately
Liquidity and Capital Resources
Since inception, our operations have been primarily financed through the issuance of debt and equity securities. At June 30, 2020, we had current assets of approximately
In early July 2020, the Company received approximately
On July 31, 2019, the Company executed an Amendment to its Loan Agreement with Bridge Bank and, simultaneous with this Amendment, received
We believe that we have sufficient cash to fund our operations well into the future.
2020 Third Quarter Revenue Guidance
CytoSorbents has not historically given specific financial guidance on quarterly results until the quarter has been completed. However, notwithstanding uncertainty related to the COVID-19 pandemic, based upon current order patterns, we expect that Q3 2020 will be one of the company's strongest quarters to date in terms of product sales.
For additional information, please see the Company's Form 10-Q for the period ended June 30, 2020 filed with the Securities Exchange Commission on August 4, 2020 and available at http://www.sec.gov.
About CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorbents Corporation is a leader in critical care immunotherapy, specializing in blood purification. Its flagship product, CytoSorb® is approved in the European Union with distribution in 65 countries around the world, as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause massive inflammation, organ failure, and death in common critical illnesses. These are conditions where the risk of death is extremely high, yet no effective treatments exist. More than 100,000 CytoSorb® treatments have been delivered to date. CytoSorb has received CE-Mark label expansions for the removal of bilirubin (liver disease), myoglobin (trauma), and both ticagrelor and rivaroxaban during cardiothoracic surgery. CytoSorb has also received FDA Emergency Use Authorization in the United States for use in critically-ill COVID-19 patients with imminent or confirmed respiratory failure, in defined circumstances. CytoSorb has also been granted U.S. FDA Breakthrough Designation for the removal of ticagrelor in a cardiopulmonary bypass circuit during emergent and urgent cardiothoracic surgery.
CytoSorbents' purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption. Its technologies have received non-dilutive grant, contract, and other funding of more than
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, representations and contentions and are not historical facts and typically are identified by use of terms such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements in this press release, including statements about our expected revenues and the impact of the COVID-19 pandemic on the Company, its operations and use of CytoSorb internationally, represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks discussed in our Annual Report on Form 10-K, filed with the SEC on March 5, 2020, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under the Federal securities laws.
CYTOSORBENTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share data) | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Revenue: | ||||||||||||||||
CytoSorb sales | $ | 9,451 | $ | 5,850 | $ | 17,607 | $ | 10,360 | ||||||||
Other sales | 69 | -- | 69 | 67 | ||||||||||||
Total product sales | 9,520 | 5,850 | 17,676 | 10,427 | ||||||||||||
Grant income | 275 | 382 | 826 | 997 | ||||||||||||
Total revenue | 9,795 | 6,232 | 18,502 | 11,424 | ||||||||||||
Cost of revenue | 3,250 | 1,834 | 5,635 | 3,573 | ||||||||||||
Gross profit | 6,545 | 4,398 | 12,867 | 7,851 | ||||||||||||
Other Expenses: | ||||||||||||||||
Research and development | 2,406 | 2,930 | 4,371 | 5,348 | ||||||||||||
Legal, financial and other consulting | 846 | 592 | 1,365 | 1,153 | ||||||||||||
Selling, general and administrative | 6,591 | 4,506 | 12,908 | 9,265 | ||||||||||||
Total expenses | 9,843 | 8,028 | 18,644 | 15,766 | ||||||||||||
Loss from operations | (3,298) | (3,630) | (5,777) | (7,915) | ||||||||||||
Other income/(expense): | ||||||||||||||||
Interest expense, net | (274) | (214) | (579) | (420) | ||||||||||||
Gain (loss) on foreign currency transactions | 705 | 297 | 36 | (96) | ||||||||||||
Total other income(expense), net | 431 | 83 | (543) | (516) | ||||||||||||
Loss before benefit from income taxes | (2,867) | (3,547) | (6,320) | (8,431) | ||||||||||||
Benefit from income taxes | -- | -- | -- | -- | ||||||||||||
Net loss | $ | (2,867) | $ | (3,547) | $ | (6,320) | $ | (8,431) | ||||||||
Basic and diluted net loss per common share | $ | (0.08) | $ | (0.11) | $ | (0.18) | $ | (0.26) | ||||||||
Weighted average number of shares of common stock outstanding | 36,483,355 | 32,266,861 | 35,232,308 | 32,099,834 | ||||||||||||
Net loss | $ | (2 ,867) | $ | (3,547) | $ | (6,320) | $ | (8,431) | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Currency translation adjustment | (605) | (250 0) | 5 | 57 | ||||||||||||
Comprehensive income (loss) | $ | (3,472) | $ | (3,797) | $ | (6,315) | $ | (8,374) | ||||||||
CYTOSORBENTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) | ||||||
June 30, | December 31, | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 35,114 | $ | 12,233 | ||
Grants and accounts receivable, net | 3,890 | 4,467 | ||||
Inventories | 1,987 | 2,114 | ||||
Prepaid expenses and other current assets | 957 | 2,088 | ||||
Total current assets | 41,948 | 20,902 | ||||
Property and equipment, net | 1,952 | 1,925 | ||||
Right of use asset | 1,233 | 1,071 | ||||
Other assets | 4,126 | 3,485 | ||||
TOTAL ASSETS | $ | 49,259 | $ | 27,383 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 2,726 | $ | 2,039 | ||
Current maturities of long-term debt | 6,667 | 1,667 | ||||
Lease liability – current portion | 418 | 428 | ||||
Accrued expenses and other current liabilities | 5,854 | 5,802 | ||||
Total current liabilities | 15,665 | 9,936 | ||||
Long-term debt, net of current maturities and debt issuance costs | 8,457 | 13,386 | ||||
Lease liability, net of current portion | 815 | 643 | ||||
TOTAL LIABILITIES | 24,937 | 23,965 | ||||
Total stockholders' equity | 24,322 | 3,418 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 49,259 | $ | 27,383 | ||
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Cytosorbents Contact:
Amy Vogel
Investor Relations
(732) 398-5394
avogel@cytosorbents.com
Investor Relations Contact:
Jeremy Feffer
LifeSci Advisors
917-749-1494
jeremy@lifesciadvisors.com
U.S. Public Relations Contact:
Eric Kim
Rubenstein Public Relations
212-805-3052
ekim@rubensteinpr.com
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SOURCE CytoSorbents Corporation
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