Full Press Release Details
Announces 2019 Financial and Operational Results
was $24.9 million, with 2019 Product Sales of $22.8M, and blended product gross margins of 80% for Q4 2019
MONMOUTH JUNCTION, N.J., March 5, 2020
- CytoSorbents Corporation (NASDAQ: CTSO) a critical care immunotherapy leader commercializing its CytoSorb blood
purification technology to treat deadly inflammation in critically-ill and cardiac surgery patients around the world, achieves
record total revenue, CytoSorb sales, and product gross margins in 2019.
2019 Financial Highlights:
2019 and Recent Operational Highlights:
Dr. Phillip Chan, Chief Executive Officer
of CytoSorbents stated, "As discussed in our January 14, 2020 stockholder letter, 2019 was a year of progress, though not
without its fair share of growing pains. That said, we believe the significant investments and efforts made last year to strengthen
our commercialization infrastructure have solidly positioned the company for future potential successes. I recommend that you read
this letter if you have interest."
Dr. Chan continued, "That said,
2020 has started with a burst of important achievements and new opportunity, but also a very deep sense of responsibility to investigate
the use of CytoSorb as a possible adjunctive treatment in critically-ill patients infected with either COVID-19 coronavirus or
influenza. In the U.S. alone, the Centers for Disease Control and Prevention (CDC) has estimated that influenza has infected 30
million people this season, killing 18,000. There have been more than 90,000 documented cases of COVID-19 coronavirus infection
worldwide, with more than 3,000 deaths. In the U.S., there have been 162 cases across 18 states, and 11 deaths. We predict that
as the coronavirus test becomes more available, and more people are tested, the number of documented cases in the U.S. will increase
dramatically. We want to be in a position to help as many people here in the U.S. and worldwide as possible."
"As we have discussed in the past
couple of weeks, our partnership with China Medical System Holding Ltd, a publicly-traded $800+ million in revenue specialty pharma
company in China, has led to the rapid introduction of donated CytoSorb devices into key hospitals in the Wuhan, China region,
the epicenter of the COVID-19 pandemic, announced last Friday," stated Dr. Chan.
"We have now learned that multiple
COVID-19 infected patients at multiple hospitals have been undergoing CytoSorb treatment. Although too soon to report on clinical
outcomes, we expect information to begin to be available in the near future. Physicians from hospitals in Beijing (Peking), Shanghai,
and other cities throughout China, have generously come to Wuhan to assist in treating those infected with COVID-19. In particular,
physicians working in Wuhan from Peking Union Medical College Hospital, one of the most prestigious medical institutions in China,
have registered a clinical study entitled, Cytosorb adsorption therapy combined with standard therapy for new coronavirus
pneumonia in adult severe patients' in order to have a mechanism to collect ongoing safety and efficacy data from patients
they are treating, and to publish these data."
Dr. Chan continued, "We are also
pleased that on March 3, 2020, the National Health Commission in China issued the official, updated "Diagnosis and Treatment
of New Coronavirus Pneumonia (7th Version)" guidelines, which now includes the following translated statement
as a treatment recommendation, "For severe and critically ill patients with cytokine storms, in order to remove inflammatory
factors, block "cytokine storms" and increase "blood purification treatment".
"Meanwhile, CytoSorb is already being sold in many countries around the world where COVID-19 cases have surged, including
Italy, Iran, Germany, France, Spain, Hong Kong, and others. Meanwhile, here in the U.S., we have submitted our documentation to
the multi-agency coronavirus task force, led by the Biomedical Advanced Research and Development Authority (BARDA), had a preliminary
conversation with the agency, and await further feedback. There are many cases in the published literature where the use of CytoSorb,
in conjunction with standard of care, has been successful in helping to treat the severe complications of influenza and coronavirus
infection. These include the "cytokine storm" that triggers an overwhelming systemic inflammatory response syndrome
that can then lead to acute respiratory distress syndrome (ARDS), shock, multiple organ failure, and sepsis from secondary bacterial
pneumonia. If we observe the similar ability to treat these complications in patients afflicted with COVID-19, it would represent
a major advance in the treatment of this deadly illness."
"For further updates on our existing
business, we invite you to join us on our earnings conference call, details below."
Conference Call Details:
Date: Thursday, March 5, 2020
Time: 4:45 PM Eastern Time
Participant Dial-In: 1-201-389-0879
Conference ID: 13699145
Live Presentation Webcast http://public.viavid.com/index.php?id=138111
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=138111
An archived recording and written transcript
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/
Fiscal Year 2019 Financial Results:
ended December 31, 2019, we generated total revenue, which includes product revenue and grant income, of approximately $24,949,000
as compared to revenues of approximately $22,504,000 for the year ended December 31, 2018, an increase of approximately $2,445,000,
or 11%. Revenue from product sales was approximately $22,766,000 for the year ended December 31, 2019, as compared to approximately
$20,252,000 in the year ended December 31, 2018, an increase of approximately $2,514,000 or 12%. This increase was primarily driven
by an increase in direct sales of approximately $3,194,000 resulting from both new customers and repeat orders from existing customers.
This increase was offset by a decrease in distributor sales of approximately $680,000. In addition, sales were negatively impacted
by approximately $1,201,000 as a result of the decrease in the average exchange rate of the Euro to the U.S. dollar. For the year
ended December 31, 2019, the average exchange rate of the Euro to the U.S. dollar was $1.12 as compared to an average exchange
rate of $1.18 for the year ended December 31, 2018.
December 31, 2019 and 2018, cost of revenue was approximately $7,364,000 and $7,489,000, respectively, a decrease of approximately
$125,000. Product cost of revenues decreased approximately $63,000 during the year ended December 31, 2019 as compared to the year
ended December 31, 2018 as a result of achieved production efficiencies. Product gross margins were approximately 77% for the year
ended December 31, 2019 and approximately 74% for the year ended December 31, 2018.
Gross profit was approximately
$17,586,000 for the year ended December 31, 2019, an increase of approximately $2,571,000 or 17%, over gross profit of $15,015,000
in 2018. This increase is attributed to an increase in CytoSorb product sales during 2019 as well as achieved production efficiencies.
Research and Development Expenses:
Our research and development
costs were approximately $12,092,000 and $7,723,000 for the years ended December 31, 2019 and 2018, respectively, an increase of
approximately $4,369,000, or 57%. This increase was due to an increase in clinical trial and related costs of approximately $3,890,000,
which include expenditures related to our REFRESH 2-AKI study and our TISORB study, an increase in non-clinical research and development
salary related costs of approximately $223,000, decreases in direct labor and other costs being deployed toward grant-funded activities
of approximately $62,000, which had the effect of increasing the amount of our non-reimbursable research and development costs
and an increase in our non-grant related research and development costs of approximately $194,000.
Legal, Financial and Other Consulting
Our legal, financial
and other consulting costs were approximately $2,462,000 and $2,002,000 for the years ended December 31, 2019 and 2018, respectively,
an increase of approximately $460,000, or 23%. This increase was due to an increase in legal fees of approximately $334,000 related
to patent matters and certain corporate initiatives, an increase in employment agency fees of approximately $88,000 related to
the hiring of senior level personnel, an increase in accounting and auditing fees of approximately $24,000 and an increase in consulting
fees of approximately $14,000.
Selling, General and Administrative
Our selling, general
and administrative expenses were approximately $22,006,000 and $20,874,000 for the years ended December 31, 2019 and 2018, respectively,
an increase of approximately $1,132,000, or 5%. This increase was due to an increase in salaries, commissions and related costs
of approximately $2,323,000, additional sales and marketing costs, which include advertising and conference attendance of approximately
$863,000, an increase in royalty expenses of approximately $198,000 due to the increase in product sales, and an increase in restricted
stock expense of approximately $226,000 related to restricted stock units granted to the Company's executive officers, an
increase in public relations cost of approximately $78,000 and increase in other general and administrative costs of approximately