Full Press Release Details
CytoSorbents Corporation (NASDAQ CM:
2014 Year End Earnings and Operating
Results Conference Call
March 31, 2015 @ 4:15 pm Eastern
This official company transcript has been edited for clarity
and does not differ materially from the actual conference call except where noted. Slide numbers have been inserted to allow readers
to follow along with the associated presentation.
Good day, everyone and welcome to the CytoSorbents
2014 Financial and Operating Results Conference Call. Today's call is being recorded and at this time I'd like to turn
the conference over to our moderator, Lee Roth from The Ruth Group. Please go ahead, Lee.
Lee Roth - Moderator:
Thank you operator and good afternoon. Welcome to CytoSorbents
2014 Operating and Financial Results Conference Call. With us today are:
Before I turn the call over to Dr. Chan,
I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking statements which
are subject to risks and uncertainties. Management may make additional forward-looking statements in response to your questions
today. Therefore, the Company claims protection under Safe Harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Actual results may differ from results discussed today and therefore, we refer you to a more detailed
discussion of these risks and uncertainties in the Company's filings with the SEC. Any projections as to the Company's future performance
represented by management include estimates today as of March 31, 2015 and the Company assumes no obligation to update these projections
in the future as market conditions change.
During today's conference call, we
will first have an overview presentation covering the financial and operational highlights for 2014 by Dr. Chan and Ms. Bloch.
We again have taken everyone's submitted questions and will do our best to address them in the presentation, and also in
the Q&A session with management to follow. Thanks everyone again for participating.
At this time, I would like to turn the
call over to Dr. Phillip Chan. Dr. Chan, go ahead, please.
Thank you very much Lee and thank you everyone
for joining the call today. It is a pleasure to be here and welcome.
I'd like to encourage all new investors
to review the presentation on our website which provides detailed background information about the company. 2014 was a fantastic
year for our company. For today's call I will highlight our accomplishments and what we view as drivers of our business
in 2015. Then Kathy will go over our financial progress for 2014 and then we will further discuss near term issues and provide
guidance on Q1 2015, which ends today. Then the rest of the management team will have remarks that incorporate answers to many
of the questions that we received from our analysts and shareholders. An official transcript of today's call will be available
in the next few days on our website at www.cytosorbents.com.
Slide 3: Turning to the presentation,
CytoSorbents is well-positioned as a leader in critical care immunotherapy. We are leading the prevention or treatment of life
threatening inflammation in the ICU and cardiac surgery, using CytoSorb blood purification.
Slide 4: 2014 was an exceptionally
strong year of growth.
Slide 5: First of all, we achieved
2014 CytoSorb sales of $3.1 million which was driven by a growing combination of direct sales, independent distributor sales as
well as strategic partner sales with distribution in 29 countries around the world.
Slide 6: This is just a sampling
of some photos taken from our 2nd CytoSorb Germany Users Meeting in December of 2014 and a sampling of some of the key
opinion leaders who attended this conference and gave their CytoSorb treatment experiences through a number of presentations and
Slide 7: More recently, this is
a snapshot of attendees at the first International CytoSorb Users Meeting conducted prior to the ISICEM conference just a couple
of weeks ago in Brussels, Belgium. Here we have many key opinion leaders and users with a smattering of distributors and people
from our company. As you can see there was a tremendous amount of interest at this meeting.
Slide 8: And here are some pictures
from the 2015 ISICEM conference. During this conference, not only did we have our International Users Meeting, but CytoSorb was
featured in a couple of presentations in a morning research session on extracorporeal therapies to treat sepsis, and we also held
a company-sponsored research symposium during lunchtime. These are just some pictures of our lunch research symposium. It was standing
room only. In fact, people were continuing to walk in the door and had to leave because there was just no room for them to sit
Slide 9: But this interest is also
being reflected in the numerous published case reports and studies that have been coming out on a regular basis in peer review
journals. These are just some of the titles of the journal articles that have been appearing in literature. These cover a range
of illnesses such as severe sepsis and septic shock, liver failure, pancreatitis, complications of cardiac surgery and many others.
Slide 10: Also driving interest
in our technology is the fact that we have launched an International CytoSorb Registry being managed and monitored by the University
of Jena. This is a GCP, or good clinical practice, registry that is collecting data from all over the world from physicians treating
different diseases with CytoSorb. The registry was just launched recently and has garnered a lot of positive enthusiasm by potential
users and current users.
Slide 11: And, last but not least,
we have also launched our new CytoSorb website. I would encourage everyone to visit www.cytosorb.com
to view the website that centralizes much of the current thinking about CytoSorb and CytoSorb treatment. For those
who would like to know more about the therapy and how it's being used to help critically-ill patients, it would make a very
interesting read, hopefully.
Slide 12: Another factor driving
our success in 2014 was our partnerships with global leaders.
Slide 13: First of all, most of
you know that we have partnered with Biocon, India's largest biotechnology company, more than a year and a half ago. According
to Biocon, hundreds of patients have benefitted from CytoSorb therapy and re-orders continue to increase. Biocon continues to market
CytoSorb with their critical care antibiotics as the most comprehensive treatment of sepsis. In late 2014, we expanded our agreement
beyond sepsis to now include all critical care applications and cardiac surgery that are complicated by a Systemic Inflammatory
Response Syndrome (SIRS), in India and select emerging countries. We also negotiated a co-development agreement where Biocon has
committed to conduct, fund, and publish results from multiple investigator initiated studies and patient case studies. They have
also agreed to an increase in annual minimum purchases which should significantly increase sales over the life of the agreement.
Slide 14: We were also pleased to
announce a partnership with Fresenius Medical Care. Fresenius Medical Care is the world's largest dialysis company and in
December 2014 we entered into a six country partnership with Fresenius for the territories of France, Sweden, Norway, Finland,
Denmark and Poland to distribute CytoSorb for critical care applications. The exciting part about this partnership is that Fresenius
is the number one or number two leader in placement of dialysis machines in the ICU throughout the world and they view CytoSorb
as a key part of their growth strategy in critical care medicine. They have a strong sales force and distribution. And to date,
CytoSorb has been used on the Fresenius multiFiltrate thousands of times. What this initial partnership also represents is an opportunity
for much broader synergy and expansion of this relationship in the future.
Slide 15: In late 2014, we also
announced an initial partnership with one of the top four global medical device cardiac surgery companies to use CytoSorb intra-operatively
during cardiac surgery initially in France. When we talk about the top four cardiac surgery device companies in the world, we refer
to either Medtronic, Sorin, Maquet and Terumo. The initial evaluation of this phase is expected to be completed in the second quarter
of 2015 and following a successful evaluation, both parties plan to jointly determine how to potentially expand upon both the size
and geographic footprint of this partnership. France is the second largest medical device market and one of the highest volume
cardiac surgery markets in the European Union.
Slide 16: Another driver for growth
in 2015 and beyond will be our focus on clinical data.
Slide 17: As we have recently discussed, the FDA has recently approved our IDE (investigational device exemption) protocol
for the REFRESH study. REFRESH stands for the "Reduction in FREe Hemoglobin" study and is a 20 patient multi-center
feasibility study evaluating the safety of CytoSorb used intra-operatively in a bypass circuit in a heart lung machine during complex