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In the third quarter of 2021, total revenue was 9.8 million U.S. dollars, of which product sales were 8.9 million U.S. dollars. Sales of core non-COVID-19 products increased by 3% year-on-year to approximately US$7.8 million.
MONMOUTH JUNCTION, New Jersey, November 4, 2021 /PRNewswire/ - CytoSorbents Corporation (NASDAQ: CTSO) uses blood purification through its proprietary polymer adsorption technology to treat intensive care units and heart surgery The leader in life-threatening diseases in China, reports complete financial and operating results for the quarter ended September 30, 2021.
CytoSorbents reports complete financial and operating results for the third quarter of 2021
Product revenue guidance for the fourth quarter and full year of 2021
Dr. Phillip Chan, CEO of CytoSorbents, said: “As previously communicated in mid-October, product sales in the third quarter were negatively affected by the resurgence of COVID-19 cases in Germany in August and the reversal of the initially encouraging trend we saw. The impact is at the beginning of the quarter. The increase in hospital restrictions has resulted in CytoSorb’s core non-COVID-19 sales being lower than expected, with fewer elective surgical procedures (complications such as sepsis are usually treated with CytoSorb), and ICU patients due to ICU reduction of COVID- 19 ICU staff shortages caused by allocated capacity constraints and burnout of medical staff, as well as reduced visitor visits-affected our sales team’s ability to generate sales. At the same time, in this historic seasonal quarter, severe hospitalization due to European holiday arrangements The prevalence of COVID-19 patients and the number of deaths are unexpectedly low, leading to a decrease in COVID-related CytoSorb sales."
Dr. Chen continued: “As a result, product sales in the third quarter of 2021 are US$8.9 million, which reflects the decline in sales in Germany and the expected decline in international sales related to COVID, while taking into account the continuous evolution and migration. The epidemic and the increase in global vaccination. Sales of core non-COVID-19 products accounted for approximately 88% of our overall product sales. The gross profit margin of hybrid products in the third quarter was approximately 82%, a significant improvement from approximately 74% in the same period last year , And is driven by strong performance through manufacturing efficiency. Today, the German macro environment is still full of challenges, but we are actively working to find creative ways to increase interaction with new and existing customers, and improve CytoSorb In COVID-19 and core applications. We expect the macro environment to improve over time, but time is difficult to predict."
Dr. Chan added: "At the same time, we are pleased with the latest success of our U.S. clinical development program in pursuit of U.S. commercialization. We recently recruited our first patient in the pivotal STAR-T trial, The trial evaluated the use of DrugSorb-ATR for intraoperative ticagrelor removal during emergency cardiothoracic surgery and is increasing the number of active sites. In addition, in about three months, we obtained FDA approval The second DrugSorb-ATR breakthrough device designation, this time is to remove the direct oral anticoagulants apixaban and rivaroxaban during treatment for emergency cardiothoracic surgery, submitted the relevant IDE, and obtained the FDA’s approval Fully approved and started the key STAR-D trial for this application. The successful execution of these activities in such a short period of time proves that the strength of our clinical and regulatory talent has been recruited in the past 18 months. By the end of this year, we expect There will be seven active company-sponsored studies in progress that are designed to generate strong clinical data to support our growth goals. We continue to have a healthy balance sheet, with approximately $61 million in cash and no debt , We expect to continue to fund activities to drive growth, including clinical development, sales and marketing infrastructure, and our newly expanded manufacturing plant, which is under construction and will be online by the end of 2022."
Dr. Chen concluded: “Although COVID-19 is very complicated for our business, we believe that by using this excellent therapy CytoSorb on the right patient at the right time, we are ready for long-term growth. Right. Dosage of, helps save lives. We are boldly trying to solve some of the most complex medical problems in today’s medicine, which claim millions of lives every year. It’s not simple. But with every study, we In addition, we believe that we have an excellent business model, thanks to strong product gross profit margin, extensive support from international doctors and partners, more and more clinical data, and reliable safety. More than 152,000 treatments have been used in 70 countries. We remain confident in our core business in Germany and internationally, and are excited about our key U.S. trials that have the potential to open up important U.S. markets and enable Our therapy is available for him to use LP and even more people."
Operating results for the quarter ended September 30, 2021
Revenue Revenue from product sales for the three months ended September 30, 2020 was approximately US$8,902,000, while revenue for the three months ended September 30, 2020 was approximately US$10,246,000, a decrease of approximately US$1,344,000 or 13% . The reason for this decline was a decrease in direct sales of approximately US$1,264,000, mainly due to the decline in sales in Germany due to market conditions driven by the COVID-19 pandemic. This was driven by a wave of new COVID-19 cases related to the Delta variant in Germany, which accelerated in August and continues to this day. This has prompted many hospitals across Germany to reduce elective surgical procedures, retain ICU beds, and maintain or re-enact restrictions, such as visitation rights for non-essential visitors, in preparation for COVID-19 hospitalization. However, unlike the previous wave in Germany, the morbidity and mortality rate of severe COVID-19 disease requiring ICU care is very low. This is partly attributable to the high vaccination rate, which is related to reduced disease severity, reduced hospitalization requirements, and risk of death. These factors have led to a decline in sales of COVID-19 and core non-COVID-19 CytoSorb in Germany. For the three months ended September 30, 2021, according to the EUA granted by the FDA, sales to US hospitals were approximately US$577,000. Although difficult to quantify, we estimate that total product sales in the third quarter of 2021 will be approximately US$1.1 million. Because CytoSorb is needed to treat COVID-19 patients. In addition, compared with the three months ended September 30, 2020, the change in the average exchange rate of the euro against the US dollar did not have a significant impact on product sales for the three months ended September 30, 2021.
Grant income for the three months ended September 30, 2021 was approximately US$859,000, while grant income for the three months ended September 30, 2020 was approximately US$301,000, an increase of approximately US$558,000 or 185%. This increase is due to the relief of the COVID-19 pandemic in the United States during the three months ending September 30, 2021, and the corresponding increase in grant-related work. During the three months ending September 30, 2020, our R&D employees were either deployed to work from home or reassigned to assist in activities related to increasing CytoSorb production.
The total revenue for the three months ended September 30, 2021 was approximately US$9,760,000, while the total revenue for the three months ended September 30, 2020 was approximately US$10,547,000, a decrease of approximately US$787,000 or 7%.
Cost of Revenue As of September 30, 2021 and the three months of 2020, the cost of revenue was approximately US$2,463,000 and US$2,890,000, respectively, a decrease of approximately US$427,000. The cost of product revenue for the three months ended September 30, 2021 and 2020 was approximately US$1,642,000 and US$2,622,000, a decrease of approximately US$980,000. The decrease was due to the decrease in sales and certain costs associated with the rapid increase in production during the three months ended September 30, 2020, which did not occur during the three months ended September 30, 2021. Product gross profit margin was approximately 82% for the three months ended September 30, 2021, compared to approximately 74% for the three months ended September 30, 2020. The increase in gross profit margin in 2021 is due to the manufacturing efficiency achieved during the three-month period ending September 30, 2021 and the impact of acceleration costs incurred during the three-month period ending September 30, 2020 that did not occur in 2021.
Research and development expenses for the three months ended September 30, 2021, research and development expenses were approximately US$4,262,000, while research and development expenses for the three months ended September 30, 2020 were approximately US$1,753,000, an increase of approximately US$2,509,000. This increase was due to increased costs related to our clinical trial activities, including increased staff costs for establishing our clinical team, and increased rental expenses.
Sales, general and administrative expenses for the three months ended September 30, 2021 7,282,000 USD, an increase of 495,000 USD. This increase is related to increases in salaries, commissions, and sales and marketing costs, increases in travel and entertainment expenses, and increases in non-cash restricted stock expenses related to restricted stock units granted to company executives. These increases were partially offset by the decrease in non-cash stock option compensation expenses, the decrease in royalties due to the decrease in sales, and the decrease in other general and administrative expenses.
Net interest income/(expenses) for the three months ended September 30, 2021, net interest income was approximately US$13,000, while net interest expense for the three months ended September 30, 2020 was approximately US$261,000. The decrease in net interest expense was due to our repayment of Bridge Bank's outstanding term loan in December 2020.
Liquidity and capital resources Since its establishment, our business has mainly obtained funds through the issuance of debt and equity securities. As of September 30, 2021, our current assets were approximately US$72,752,000, including approximately US$61,043,000 in cash on hand and approximately US$11,070,000 in current liabilities. Between January 1, 2020 and July 15, 2020, we used our ATM facilities to raise approximately US$26,427,000 by working with partner agents Jefferies LLC and B. Riley FBR. In addition, we received approximately US$53,800,000 in net proceeds from the underwriting public sale that ended on July 24, 2020. In addition, we received approximately US$1,127,000 in cash from the NSW approved sale of net operating losses and R&D credit. Jersey in the nine months ending September 30, 2021.
We believe that we have enough cash to fund our future operations.
Product revenue guidance for the fourth quarter and full year of 2021
The macro environment of the global COVID-19 pandemic continues to add uncertainty to the company’s sales prospects, especially because we cannot predict the course of the pandemic or predict what impact (if any) the COVID-19 pandemic might have on global sales For the rest of the year.
The company maintains its guidance that product revenue in the fourth quarter of 2021 will be similar to that of US$8.9 million in the third quarter of 2021.
The company maintains its expectation of at least US$39.3 million in product revenue for the full year of 2021, roughly the same as 2020 product revenue of US$39.5 million. Although it is difficult to predict, sales of non-COVID-19 core products in 2021 are expected to be approximately US$33-34 million, compared to US$30.1 million in 2020.
For more information, please refer to the company's Form 10-Q for the period ending September 30, 2021, filed at http://www.sec.gov on November 4, 2021.
The company will hold a third quarter operations and financial results conference call today at 4:30 pm Eastern time. It will be archived for replay after the conference call.
Conference call details: Toll free: 1-877-521-4127 International: 1-212-231-2900 Conference ID: 21998483
It is recommended that participants dial in approximately 10 minutes before the start of the call. The synchronized webcast of the conference call can be accessed through the following audio source link: https://viavid.webcasts.com/starthere.jsp?ei=1505348&tp_key=fc4e9855a2
The archived recording of the conference call will be available in 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 use of blood purification to treat life-threatening diseases in intensive care and cardiac surgery. Its flagship product, CytoSorb®, has been approved in the European Union and is sold in more than 70 countries/regions as an in vitro cytokine adsorbent, aiming to reduce the "cytokine storm" or "cytokine release syndrome" that occurs in common critical diseases. The disease can result in massive inflammation, organ failure, and patient death. In these cases, the risk of death may be very high, but there are few effective treatments. CytoSorb is also used during and after cardiothoracic surgery to remove inflammatory mediators that may cause post-operative complications including multiple organ failure. So far, more than 152,000 CytoSorb devices have been used cumulatively. CytoSorb was originally introduced into the European Union under the CE mark and is a cytokine adsorbent of the same kind. Obtained additional CE-Mark label extensions for the removal of bilirubin and myoglobin in clinical conditions such as liver disease and trauma, as well as ticagrelor and rivaroxaban during cardiothoracic surgery. CytoSorb has also received emergency use authorization from the US FDA and can be used for adults with severe COVID-19 who are about to develop or have confirmed respiratory failure. The DrugSorb-ATR™ anti-thrombotic removal system is based on the same polymer technology as CytoSorb, and has also received FDA breakthrough designation to remove ticagrelor and FDA breakthrough designation for apixaban to remove direct oral anticoagulant (DOAC) And rivaroxaban, used in cardiopulmonary bypass during emergency cardiothoracic surgery. The company is launching two key FDA-approved trials to support the US marketing approval of DrugSorb-ATR. The first is a STAR-T (Safe and Timely Antithrombotic Removal-Ticagrelor) randomized controlled trial with 120 patients and 20 centers to evaluate the intraoperative use of DrugSorb-ATR to reduce the circumference of patients undergoing ticagrelor undergoing cardiothoracic surgery. Ability to risk bleeding during surgery. The second is a STAR-D (safe and timely antithrombotic removal-direct oral anticoagulant) randomized controlled trial in 120 patients and 25 centers to evaluate the intraoperative use of DrugSorb-ATR to reduce the circumference of patients undergoing direct oral cardiothoracic surgery. Anticoagulants at risk of bleeding during surgery include apixaban and rivaroxaban.
CytoSorbents' purification technology is based on biocompatible, highly porous polymer beads that can actively remove toxic substances in blood and other body fluids through pore capture and surface adsorption. Its technology has received more than $39.5 million in non-dilutable grants, contracts and other funding from DARPA, the U.S. Department of Health and Human Services (HHS), the National Institutes of Health (NIH), the National Heart, Lung, and Blood Center (NHLBI), US Army, US Air Force, US Special Operations Command (SOCOM), Air Force Material Command (USAF/AFMC), etc. The company has many products on the market and products under development based on this unique blood purification technology, protected by a number of US and international patents and registered trademarks, and a number of patent applications are pending, including ECOS-300CY®, CytoSorb-XL™ , HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, Kontrol™, DrugSorb™, DrugSorb-ATR™, ContrastSorb, etc. For more information, please visit the company websites www.cytosorbents.com and www.cytosorb.com or follow us on Facebook and Twitter.
Forward-Looking Statements This press release includes forward-looking statements that are intended to comply with the non-liability safe harbor requirements of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, goals, statements, and controversies. They are not historical facts. They are usually used such as "may", "should", "may", "expect", "plan", "anticipate" "," "believe", "estimate" and other terms to identify, "forecast", "potential", "continue" and similar words, although some forward-looking statements are expressed in different ways. You should be aware that the forward-looking statements in this press release represent management’s current judgments and expectations, but our actual results, events and performance may differ materially from those in the forward-looking statements. Factors that may cause or contribute to such discrepancies include, but are not limited to, the risks discussed in our annual report on Form 10-K filed with the US Securities and Exchange Commission on March 9, 2021, and are based on the risks reported in our quarterly report. It is updated in Form 10-Q, as well as our press releases and other communications to shareholders from time to time, which attempt to provide stakeholders with risks and factors that may affect our business. We remind you not to rely too much on any such forward-looking statements. We assume no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events, or other reasons, except as required by federal securities laws.
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Investor Relations Contact: Terri Anne Powers, Vice President, Investor Relations and Corporate Communications (732) 482-9984 [email protected]
US Public Relations Contact: Eric Kim Rubenstein Public Relations 212-805-3052 [email protected]
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