CytoSorbents Secures $20 Million Credit Facility
CytoSorbents (NASDAQ: CTSO) has secured a $20 million credit facility from Avenue Capital Group, including Avenue Venture Opportunities Fund, L.P. and Avenue Venture Opportunities Fund II, L.P. The facility aims to support the ongoing global commercialization of CytoSorb® and the potential U.S. and Canadian commercialization of DrugSorb™-ATR.
The credit agreement, effective June 28, 2024, provides up to $20 million in total term loan capital. An initial tranche of $15 million includes $10 million available immediately and an additional $5 million contingent upon FDA acceptance of the Company's De Novo application for DrugSorb-ATR. A second tranche of $5 million is slated for the second half of 2025, dependent on FDA marketing clearance.
Proceeds are designated for supporting CytoSorbents' critical care and cardiac surgery products, marketing applications to regulatory bodies, and refinancing existing debt. The company reported $32.2 million in trailing 12-month sales as of March 31, 2024.
- $20 million credit facility secured from Avenue Capital Group.
- Immediate availability of $10 million to support ongoing projects.
- FDA acceptance of De Novo application could unlock an additional $5 million.
- Potential $5 million more with FDA marketing clearance in 2025.
- Funds to support global commercialization and regulatory submissions.
- Company's trailing 12-month sales at $32.2 million as of March 31, 2024.
- Additional $5 million contingent on FDA acceptance, which is uncertain.
- Second tranche of $5 million dependent on FDA marketing clearance, introducing further uncertainty.
Insights
The $20 million credit facility secured by CytoSorbents Corporation is a non-dilutive capital infusion, meaning it does not immediately dilute existing shareholders' equity. This is strategically beneficial as it maintains the current ownership structure while providing critical funds. The facility's structure offers flexibility, with an initial
From a financial standpoint, the credit facility supports multiple objectives: ongoing global commercialization efforts for CytoSorb®, preparation for FDA and Health Canada submissions for DrugSorb™-ATR and refinancing of existing debt. This diversification of fund usage reflects sound financial planning aimed at sustaining growth while reducing liquidity risk.
Furthermore, the mentioned $32.2 million in trailing 12-month sales suggests a solid revenue stream, which can reassure investors about the company's cash flow capabilities. However, the terms and conditions of the credit agreement, such as interest rates and covenants, weren't disclosed, which could be critical for assessing the financial impact fully.
CytoSorbents Corporation's focus on blood purification technology through its proprietary polymer adsorption platform has significant implications for critical care and cardiac surgery. The potential applications of DrugSorb™-ATR target a high unmet need, specifically reducing bleeding risks in patients on Brilinta® undergoing coronary artery bypass graft surgery. This aligns well with the FDA Breakthrough Device designation, indicative of the product’s significant clinical promise.
The prospect of tapping into an addressable market exceeding $0.5 billion in the U.S. and Canada is noteworthy. Regulatory submissions to the U.S. FDA and Health Canada reflect a strategic push towards expanding market access. If approved, this could substantially increase the company’s revenue base and market penetration.
However, it is important to remain cautious until regulatory clearances are obtained. The timelines for FDA and Health Canada approvals are critical milestones that could influence market sentiment and the stock price significantly in the short to medium term.
The strategic partnership with Avenue Capital Group and securing a $20 million credit facility illustrates a strong endorsement from a reputable financial institution. This partnership potentially opens doors for further strategic investments, easing the pathway for CytoSorbents' expansion in North America.
The key takeaway for market participants is the company's firm footing in both critical care and cardiac surgery markets. With significant sales already generated from CytoSorb®, the company demonstrates its ability to commercialize innovative medical technologies.
Investors should note the potential impact of upcoming regulatory decisions. Positive outcomes can lead to substantial market expansion and conversely, any delays or negative decisions could pose risks. The firm’s ability to manage regulatory timelines and execute its commercialization strategy efficiently will be a important determinant of future performance.
Credit facility provides timely non-dilutive capital to support ongoing global commercialization of CytoSorb® as well as regulatory submissions and potential commercialization plans for DrugSorb™-ATR in the U.S. and Canada
PRINCETON, N.J., July 02, 2024 (GLOBE NEWSWIRE) -- 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, announced that on June 28, 2024, the Company entered into a new
The credit agreement, which has an initial term of three years, provides up to
Ms. Kathleen Bloch, Chief Financial Officer of CytoSorbents stated, “We are pleased to enter into this relationship with Avenue Capital Group to strengthen our financial position, expand our working capital, and to enable us to confidently pursue our regulatory and commercialization objectives. We believe the planned marketing applications of DrugSorb-ATR to U.S. FDA and Health Canada this summer and the prospects of opening an estimated total addressable market in the U.S. and Canada in excess of
Mr. Chad Norman, Senior Portfolio Manager at Avenue Capital Group stated, “We have followed the CytoSorbents story for many years and all of the exciting work the company is doing to help save lives in critical care and cardiac surgery. We are pleased to now partner with CytoSorbents to support the international growth of CytoSorb® and other products, and importantly help fund the U.S. and Canadian initiatives with DrugSorb-ATR. Many of us unfortunately know family, friends, and colleagues on blood thinners and the high bleeding risk they have, should they need surgery. We see a great opportunity to be part of a solution to address this major problem.”
About Avenue Capital Group
Avenue Capital Group is a global investment firm, founded in 1995, that is primarily focused on specialty lending, opportunistic credit, and other special situations in the United States, Europe, and Asia. The Senior Principals and the Senior Portfolio Managers have spent virtually their entire careers investing in the private and public debt markets. Headquartered in New York, with three offices across Europe, four offices throughout Asia, an office in Silicon Valley, and an office in Abu Dhabi, the firm manages assets estimated to be approximately
About CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorbents Corporation is a leader in the treatment of life-threatening conditions in the intensive care unit and in cardiac surgery through blood purification. Its lead product, CytoSorb®, is approved in the European Union and distributed in 75 countries worldwide. It is an extracorporeal cytokine adsorber that reduces “cytokine storm” or “cytokine release syndrome” in common critical illnesses that can lead to massive inflammation, organ failure and patient death. In these diseases, the risk of death can be extremely high, and there are few, if any, effective treatments. CytoSorb is also used during and after cardiothoracic surgery to remove antithrombotic drugs and inflammatory mediators that can lead to postoperative complications, including severe bleeding and multiple organ failure. As of March 31, 2024, more than 237,000 CytoSorb devices have been used cumulatively. CytoSorb was originally launched in the European Union under CE mark as the first cytokine adsorber. Additional CE mark extensions were granted for bilirubin and myoglobin removal in clinical conditions such as liver disease and trauma, respectively, and for ticagrelor and rivaroxaban removal in cardiothoracic surgery procedures. CytoSorb has also received FDA Emergency Use Authorization in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure.
The DrugSorb™-ATR antithrombotic removal system, an investigational device based on the same polymer technology as CytoSorb, has received two FDA Breakthrough Device Designations, one for the removal of ticagrelor and another for the removal of the direct oral anticoagulants (DOAC) apixaban and rivaroxaban in a cardiopulmonary bypass circuit during urgent cardiothoracic procedures. The Company has completed the FDA-approved, randomized, controlled STAR-T (Safe and Timely Antithrombotic Removal-Ticagrelor) study of 140 patients at approximately 30 centers in U.S. and Canada to evaluate whether intraoperative use of DrugSorb-ATR can reduce the perioperative risk of bleeding in patients receiving ticagrelor and undergoing cardiothoracic surgery. This pivotal study is intended to support U.S. FDA and Health Canada marketing approval for DrugSorb-ATR in this application.
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 approximately
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, statements about potential exposures resulting from our cash positions, 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 14, 2024, 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.
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U.S. Company Contact:
Kathleen Bloch, CFO
305 College Road East
Princeton, NJ 08540
+1 (732) 398-5429
kbloch@cytosorbents.com
Investor Relations Contact:
Eric Ribner
LifeSci Advisors, LLC
250 W 55th St, #3401
New York, NY 10019
+1 (646) 751-4363
ir@cytosorbents.com
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