CytoSorbents Reports Second Quarter 2022 Financial and Operational Results
CytoSorbents Corporation (CTSO) reported a significant decrease in Q2 2022 revenue of $8.5 million, a 29% decline from Q2 2021, largely due to reduced product sales and negligible COVID-related sales. Product gross margins fell from 82% to 67%, impacted by production inefficiencies from relocating to a new facility. Despite challenges, the company maintains a strong balance sheet with $31.9 million in cash and no debt, and has entered new agreements with Fresenius Medical Care and Asklepios Group to enhance market access.
- Healthy balance sheet with $31.9 million in cash and no debt.
- Expanded global marketing agreement with Fresenius Medical Care.
- New preferred supplier agreement with Asklepios Group in Germany.
- Improvements in sales representative access to hospitals, 40% increase in visits.
- Q2 2022 revenue decreased by 29% year-over-year.
- Product sales fell by 36% compared to Q2 2021.
- Gross margins dropped from 82% to 67% due to production inefficiencies.
- Loss on foreign currency transactions was approximately $2.5 million.
PRINCETON, N.J., Aug. 2, 2022 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery using blood purification via its proprietary polymer adsorption technology, today reported unaudited financial and operating results for the quarter ended June 30, 2022.
Second Quarter 2022 Financial Results
- Total Q2 2022 revenue, including product sales and grant income, was
$8.5 million versus$12.0 million in Q2 2021, a decrease of29% - Q2 2022 product sales were
$7.3 million (negligible COVID-related sales) versus$11.4 million (includes$1.7 million in COVID-related sales) in Q2 2021. The decrease in the average Euro to U.S. dollar exchange rate lowered Q2 2022 product sales by approximately$840,000 . On a constant currency basis, Q2 2022 core non-COVID sales would have been approximately$8.2 million , which represents a15% decrease from approximately$9.7 million in core non-COVID sales a year ago, but comparable to the average currency adjusted core non-COVID sales over the prior three quarters - As expected, COVID-19 related sales during the quarter were negligible reflecting the low severity of current COVID-19 illness resulting from high rates of vaccination and natural immunity
- Product gross margins were approximately
67% in Q2 2022, versus82% in Q2 2021. The decrease in the gross margin percentage was due primarily to manufacturing inefficiencies from a scheduled 4-week production hiatus as we relocated to our new production facility during the quarter - The Company maintains a healthy balance sheet with cash and cash equivalents of
$31.9 million (which includes$1.7 million in restricted cash) as of June 30, 2022, and no debt
Recent Operating Highlights:
- More than 179,000 cumulative CytoSorb devices have been utilized worldwide as of June 30, 2022, compared to more than 143,000 devices utilized cumulatively a year ago
- Announced today the signing of an expanded global marketing agreement with Fresenius Medical Care where CytoSorb® will become a featured blood purification therapy on Fresenius Medical Care Critical Care platforms
- Entered into a 3-year preferred supplier agreement with Asklepios Group, one of the largest private hospital operators in Germany
- Partnered with Nikkiso to distribute the PureAdjust® hemoperfusion blood pump and supplies in a total of 14 countries, a key part of CytoSorbents' standalone device and machine strategy to expand the market for its products
- Hosted the 2022 CytoSorb World Users' Meeting that highlighted the broad market potential of CytoSorb as an interdisciplinary therapeutic approach for a wide range of life-threatening illnesses
- Multiple scientific papers were published on the positive use of CytoSorb in the areas of antithrombotic drug removal during acute aortic dissection and in vitro whole blood removal, Ex vivo lung perfusion for lung transplantation, Normothermic regional perfusion of Donation after Circulatory Death (DCD) human liver and kidney donors for organ transplant, Severe acute pancreatitis (PACIFIC study), Treatment of hyperbilirubinemia in acute liver dysfunction patients, A reduction in sepsis-associated mortality in left-sided acute infective endocarditis, and many others.
- Relocated and established our Company headquarters and state of the art manufacturing facility in our new Princeton, New Jersey mixed-use facility
Dr. Phillip Chan, Chief Executive Officer of CytoSorbents stated, "Our second quarter core non-COVID product sales on a constant currency basis were
"Like most international companies, including those in the medical device and blood purification industries, we are dealing with not only fallout from the COVID pandemic, but also a storm of global macroeconomic and geopolitical uncertainty. That said, although our numbers do not yet reflect it, we are seeing some early but encouraging signs of improvement in key markets:
- Continued strong and positive feedback from customers in both our direct and international territories, highlighted by the success of our recent in-person CytoSorb World User's meeting, with nearly 300 of the world's leading critical care physicians and research scientists from 40 countries participating
- Marked improvement in sales representative access to hospitals in Germany, with
40% more sales visits during the quarter as compared to the prior quarter, though still down from pre-pandemic levels - Increasing levels of activity, interest, and in-person attendance of healthcare professionals at medical congresses in Europe and Latin America, and specific countries such as India, Spain, and Portugal
- Strong pipeline of positive data being submitted and published by the international user community on CytoSorb use in a wide variety of areas
- Though early, the Nikkiso expansion has triggered broad interest by customers in our stand-alone hemoperfusion pump offering, with initial placements, pump evaluations underway, and scheduled demonstrations at a number of hospitals
- Growing synergy with our sales and medical affairs teams, and internal therapy area vertical leadership in critical care, cardiac surgery, and liver and kidney applications with a prioritization on sales support and clinical data
- Recent preferred supplier agreement with Asklepios Group, one of the largest private hospital networks in Germany, making CytoSorb available without restrictions to all hospitals in the network
- The potential for future sales acceleration, particularly in Germany, based upon the expansion of the Fresenius Medical Care global marketing partnership announced today, as further discussed below
Dr. Chan continued, "As we work to restore sales growth, we continue to advance our other key initiatives.
- U.S. STAR-T and STAR-D clinical trials – These trials remain our top clinical priority with each trial now having a critical mass of more than 20 centers active and screening for enrollment. As we expand to 30 sites for each trial, recently approved by the FDA, the majority of our operational plans, resources, and focus have shifted from study start-up activities (Phase I) to activities driving enrollment (Phase II). For our lead study STAR-T, enrollment continues and we are targeting the first Data Safety Monitoring Board (DSMB) review at 40 patients enrolled, expected to be achieved with a slight delay in the next few months. STAR-D is underway also, with the rapid activation of trial sites
- U.S. Manufacturing - Buildout of our new Princeton, NJ manufacturing facility is now complete with production of commercial devices split between our older production facility and our new facility, and final certification expected before the end of this year. Product gross margins dropped from
82% to67% , driven mainly by production inefficiencies incurred by a scheduled 4- week production hiatus as we transitioned from our old to new manufacturing facilities, and lower sales volumes. We expect gross margins to return to previous levels as we complete the relocation to the new facility, eliminate the costs of the Monmouth Junction, NJ facility later this year, and begin to capture manufacturing efficiencies driven by an expected improvement in market conditions and increased product demand
- Partnerships - Today we are pleased to announce an expanded global marketing agreement with long-time partner, Fresenius Medical Care ("Fresenius"), the world's leading provider of products and services for patients with renal diseases with headquarters and a strong sales and marketing footprint in Germany. Under the terms of the agreement, CytoSorb will become a featured blood purification therapy on Fresenius Medical Care's critical care blood purification platforms for the removal of cytokines, bilirubin, and myoglobin in critically ill patients, helping to expand the dimensions of blood purification beyond hemodialysis. Fresenius will be responsible for the specific worldwide marketing and combined promotion of CytoSorb with its critical care products across Fresenius-led in-person, virtual, social media, and web-based marketing programs and events during the term of the collaboration. In addition to strengthening and expanding the global marketing of CytoSorb, we plan to work together to bring new innovative solutions to the market. To help support the increased marketing and promotional efforts of the expanded collaboration, CytoSorbents has agreed to subsidize a portion of the marketing costs through a royalty payment to Fresenius Medical Care, with the royalty rate being based on certain assumptions regarding CytoSorb sales in the intensive care unit on Fresenius Medical Care platforms, excluding the United States, and subject to further adjustment should these assumptions change. Additional information can be found in the Form 8-K filed today.
Dr. Chan concluded, "We are excited about the many opportunities that we have to drive our business forward, but are proceeding conservatively, recognizing there is a seasonality to European business in general in the third quarter, driven by a lull in business activity as much of Europe takes vacation in July and August. Because of this, we are focused on executing our game plan, while controlling costs and conserving cash. We believe the high cash burn in Q2 2022 was an anomaly with a number of non-recurrent expenditures. These include, for example, the final
'In addition, we have
Results of Operations
Comparison for the three months ended June 30, 2022 and 2021:
Revenues:
Total revenue, including product revenue and grant income, for the second quarter of 2022 was
Cost of Revenues:
For the three months ended June 30, 2022 and 2021, cost of revenue was approximately
Operating Expenses:
For the three months ended June 30, 2022, operating expenses were approximately
Gain (Loss) on Foreign Currency Transactions:
For the three months ended June 30, 2022, the loss on foreign currency transactions was approximately
Comparison for the six months ended June 30, 2022 and 2021:
Revenues:
Total revenues were approximately
Cost of Revenues:
For the six months ended June 30, 2022 and 2021, cost of revenue was approximately
Operating Expenses:
For the six months ended June 30, 2022, operating expenses were approximately
Gain (Loss) on Foreign Currency Transactions:
For the six months ended June 30, 2022, the loss on foreign currency transactions was approximately
Liquidity and Capital Resources
Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of June 30, 2022, we had current assets of approximately
We are also managing our resources proactively, continuing to invest in key areas such as our U.S. pivotal STAR-T and STAR-D trials. In April 2022, we began instituting tighter cost controls which are expected to reduce our planned cash burn by an additional
We believe that we have sufficient cash to fund the Company's operations beyond twelve months from the issuance of these financial statements.
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 Russia-Ukraine war, inflation, foreign currency exchange rate volatility, and other factors that are not under our direct control. Because of this, we expect that our business, and in particular product sales, may continue to see challenges for the remainder of 2022. However, we expect a gradual recovery of normalized hospital activity and sales access in Germany and other key countries in the coming quarters. With improved access and other growth initiatives, we expect a resumption of growth in our core non-COVID-19 product sales.
For additional information, please see the Company's Form 10-Q for the period ended June 30, 2022 filed on August 2, 2022 on http://www.sec.gov.
Conference Call
The Company will conduct its second quarter 2022 results call today at 4:30 p.m. Eastern time.
Conference Call Details:
Date: Tuesday, August 2, 2022
Time: 4:30 PM Eastern Time
Toll free: 1-877-451-6152
International: 1-201-389-0879
Conference ID: 13731826
Live Presentation Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1561029&tp_key=ddc6a4af76
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: https://viavid.webcasts.com/starthere.jsp?ei=1561029&tp_key=ddc6a4af76
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 CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorbents Corporation is a leader in the treatment of life-threatening conditions in intensive care and cardiac surgery using blood purification. Its flagship product, CytoSorb®, is approved in the European Union with distribution in more than 70 countries around the world as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" seen in common critical illnesses that may result in massive inflammation, organ failure and patient death. These are conditions where the risk of death can be extremely high, yet few to no effective treatments exist. CytoSorb is also being used during and after cardiothoracic surgery to remove inflammatory mediators that can lead to post-operative complications, including multiple organ failure. More than 179,000 cumulative CytoSorb devices have been utilized as of June 30, 2022. CytoSorb was originally introduced into the European Union under CE-Mark as a first-in-kind cytokine adsorber. Additional CE-Mark label expansions were received for the removal of bilirubin and myoglobin in clinical conditions such as liver disease and trauma, respectively, and both ticagrelor and rivaroxaban during cardiothoracic surgery. CytoSorb has also received FDA Emergency Use Authorization in the United States for use in adult critically ill COVID-19 patients with imminent or confirmed respiratory failure. The DrugSorb™-ATR Antithrombotic Removal System, which is based on the same polymer technology as CytoSorb, has also been granted FDA Breakthrough Designation for the removal of ticagrelor, as well as FDA Breakthrough Designation for the removal of the direct oral anticoagulant (DOAC) drugs, apixaban and rivaroxaban, in a cardiopulmonary bypass circuit during urgent cardiothoracic surgery. The Company has initiated two FDA approved pivotal trials designed to support U.S. marketing approval of DrugSorb-ATR. The first is the 120-patient, 30 center STAR-T (Safe and Timely Antithrombotic Removal-Ticagrelor) randomized, controlled trial evaluating the ability of intraoperative DrugSorb-ATR use to reduce perioperative bleeding risk in patients on ticagrelor undergoing cardiothoracic surgery. The second is the 120-patient, 30 center STAR-D (Safe and Timely Antithrombotic Removal-Direct Oral Anticoagulants) randomized, controlled trial, evaluating the intraoperative use of DrugSorb-ATR to reduce perioperative bleeding risk in patients undergoing cardiothoracic surgery on direct oral anticoagulants, including apixaban and rivaroxaban.
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, future targets and outlooks for our business, expectations regarding the future impacts of COVID-19 or the ongoing conflict between Russia and the Ukraine or other macroeconomic factors, 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 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 10, 2022, 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, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Revenue: | ||||||||||||||||
CytoSorb sales | $ | 7,038 | $ | 11,360 | $ | 14,905 | $ | 21,504 | ||||||||
Other sales | 293 | 5 | 350 | 5 | ||||||||||||
Total product sales | 7,331 | 11,365 | 15,255 | 21,509 | ||||||||||||
Grant income | 1,165 | 659 | 1,932 | 1,114 | ||||||||||||
Total revenue | 8,496 | 12,024 | 17,187 | 22,623 | ||||||||||||
Cost of revenue | 3,551 | 2,710 | 5,828 | 5,462 | ||||||||||||
Gross profit | 4,945 | 9,314 | 11,359 | 17,161 | ||||||||||||
Other Expenses: | ||||||||||||||||
Research and development | 4,184 | 3,699 | 8,427 | 5,981 | ||||||||||||
Legal, financial and other consulting | 679 | 718 | 1,480 | 1,426 | ||||||||||||
Selling, general and administrative | 8,439 | 9,822 | 17,600 | 17,531 | ||||||||||||
Total expenses | 13,302 | 14,239 | 27,507 | 24,938 | ||||||||||||
Loss from operations | (8,357) | (4,925) | (16,148) | (7,777) | ||||||||||||
Other income/(expense): | ||||||||||||||||
Interest income (expense), net | 24 | 13 | 32 | 3 | ||||||||||||
Gain (loss) on foreign currency transactions | (2,523) | 234 | (3,736) | (1,071) | ||||||||||||
Miscellaneous Income (Expense) | (23) | --- | 6 | |||||||||||||
Total other income (expense), net | (2,522) | 247 | (3,698) | (1,068) | ||||||||||||
Loss before benefit from income taxes | (10,879) | (4,678) | (19,846) | (8,845) | ||||||||||||
Benefit from income taxes | -- | -- | -- | -- | ||||||||||||
Net loss | $ | (10,879) | $ | (4,678) | $ | (19,846) | $ | (8,845) | ||||||||
Basic and diluted net loss per common share | $ | (0.25) | $ | (0.11) | $ | (0.46) | $ | (0.20) | ||||||||
Weighted average number of shares of | 43,560,481 | 43,317,578 | 43,524,414 | 43,280,266 | ||||||||||||
Net loss | $ | (10,879) | $ | (4,678) | $ | (19,846) | $ | (8,845) | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Currency translation adjustment | 2,053 | (264) | 3,016 | 893 | ||||||||||||
Comprehensive loss | $ | (8,826) | $ | (4,942) | $ | (16,830) | $ | (7,952) | ||||||||
CYTOSORBENTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
ASSETS: | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 30,164 | $ | 52,138 | |||||||
Grants and accounts receivable, net | 5,171 | 4,523 | |||||||||
Inventories | 4,980 | 4,766 | |||||||||
Prepaid expenses and other current assets | 1,331 | 2,872 | |||||||||
Total current assets | 41,646 | 64,299 | |||||||||
Property and equipment, net | 10,220 | 5,151 | |||||||||
Restricted Cash | 1,687 | 1,687 | |||||||||
Right of use asset | 12,982 | 13,423 | |||||||||
Other assets | 4,670 | 4,959 | |||||||||
TOTAL ASSETS | $ | 71,205 | $ | 89,519 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 2,129 | $ | 2,805 | |||||||
Lease liability - current portion | 417 | 571 | |||||||||
Accrued expenses and other current liabilities | 8,007 | 10,314 | |||||||||
Total current liabilities | 10,553 | 13,690 | |||||||||
Lease liability, net of current portion | 13,092 | 13,251 | |||||||||
TOTAL LIABILITIES | 23,645 | 26,941 | |||||||||
Total stockholders' equity | 47,560 | 62,578 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 71,205 | $ | 89,519 | |||||||
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U.S. Company Contact:
Amy Vogel
305 College Road East
Princeton, NJ 08540
+1 (732) 329-8885
avogel@cytosorbents.com
European Company Contact:
Josephine Kraus
+49 30 765 84 66 23
josephine.kraus@cytosorbents.com
Public Relations Europe:
Marcus Schult
commponists
+49 69 13823 ext. 960
+49 172 4238938
marcus.schult@die-kommponisten.com
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SOURCE CytoSorbents Corporation
FAQ
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