Full Press Release Details
Issues Stockholder Letter with Preliminary 2018 Financial Results
CytoSorbents achieved another year of
record growth with total revenue of more than $22.3 million,
including product sales of approximately $20.2 million, a 51% increase
MONMOUTH JUNCTION, NJ - January
7, 2019 - 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, issues a stockholder letter from Dr. Phillip Chan, Chief Executive Officer of CytoSorbents, and pre-announces preliminary
unaudited fourth quarter 2018 and full-year 2018 results ahead of filing its Form 10-K.
Preliminary 2018 Financial Highlights:
The Company expects to announce record
Dear Stockholders and Friends,
By most measures, 2018 was another outstanding
year for CytoSorbents. Cumulative worldwide usage of CytoSorb grew by 60%, with CytoSorb credited in helping to save the lives
of many patients around the world in a rapidly expanding library of peer-reviewed medical journal publications. This resulted
in annual product sales growth in excess of 50%, helping to establish CytoSorb as an important therapeutic option for critically-ill
and high-risk cardiac surgery patients in many hospitals across our geographic footprint of 53 countries. Reflecting our rapid
growth, CytoSorbents was once again recognized as one of the fastest growing companies in North America across all industries,
as named by the Deloitte 2018 Fast 500
During the year, the Company achieved many
notable milestones, among them:
In addition to saving lives, an important
theme for 2018 was achieving quarterly operating breakeven, excluding non-cash expenses and clinical trial costs. This was to remind
investors how inherently profitable our high margin, disposable "razorblade" business model can be at a relatively
modest revenue number. In fact, we were very close to achieving quarterly operating breakeven, as defined, in the past several
quarters, with an operating loss of $300K and $380K in Q2 and Q3 2018, respectively, with Q4 results pending. As stated earlier,
our business model becomes even more attractive as improved manufacturing efficiencies from our new plant are expected to drive
blended product gross margins to at least 80% on a quarterly basis this year, while helping to keep the cost of CytoSorb to hospitals
and patients at a very affordable level.
Having demonstrated the growth and profit
potential of our business model, with a solid base of revenue, and strong product gross margins, we are now well-positioned to
generate significant gross profit that can be utilized to fund some combination of growth, clinical studies, and profitability.
For example, on a base of $20 million in product sales and 72% blended product gross margins, our gross profit was approximately
$14 million in 2018. But at $30 million in sales and 80% blended gross margins, gross profit would be $24 million. And at $50 million
in sales, and 82% blended gross margins, gross profit would be $41 million. If we can drive faster growth, these economics have
the potential to generate significant excess cash to not only fund all of our operating needs, but also to drive true GAAP (generally
accepted accounting principles) profitability over the next couple of years, where potentially 50 cents or more on every dollar
in sales will drop to EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization). This would solidly place our company
among an elite group of profitable companies generating significant cash flow.
To this point, in late 2018, we began to
implement an aggressive growth strategy to drive accelerated long-term growth in 2019 and beyond. We are making additional investments
in clinical studies, adding resources to better support our customers and partners, strengthening our distribution network, and
making internal organizational changes that will better align the company for future rapid growth. Though this may result in some
near-term fluctuations of our financial performance, we firmly believe these changes will result in solid 2019 year-over-year performance
and a continued multi-year growth trajectory.
As we reflect upon the meaning of the holiday
season and are energized by the New Year, on behalf of our Board of Directors and management team, let me once again thank the
broader CytoSorbents family, including patients and their families, physicians and healthcare workers, hospitals and administrators,
scientific and clinical researchers, our distributors and strategic partners, our service providers, our shareholders, and especially
our employees and their families in Europe and in the U.S. for all of your hard work and dedication, and sharing our collective
vision of saving lives, one person at a time. Best wishes to you and your families for a happy, healthy, and prosperous New Year!
Dr. Phillip Chan, MD, PhD
Chief Executive Officer
CytoSorbents Corporation
About CytoSorbents Corporation (NASDAQ: CTSO)
Corporation is a leader in critical care immunotherapy, specializing in blood purification.
Its flagship product, CytoSorb is
approved in the European Union with distribution in 53 countries around the world, as an extracorporeal cytokine
adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause
massive inflammation, organ failure and death in common critical illnesses. These are conditions where the risk of death is extremely
high, yet no effective treatments exist. CytoSorb is also being used
during and after cardiac surgery to remove inflammatory mediators that can lead to post-operative complications, including multiple
organ failure. CytoSorbents is conducting its pivotal REFRESH 2-AKI trial - a multi-center, randomized controlled, clinical
trial intended to support U.S. regulatory approval of CytoSorb for use in a heart-lung machine during complex cardiac surgery
to reduce organ injury. CytoSorb has been used in more than 56,000 human treatments to date.
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 nearly $26 million from DARPA, the U.S. Army, the U.S. Department of Health and Human Services, the National Institutes
of Health (NIH), National Heart, Lung, and Blood Institute (NHLBI), U.S. Special Operations Command (USSOCOM), and others. The
Company has numerous products under development based upon this unique patented blood purification technology including CytoSorb-XL ,
HemoDefend , VetResQ , K+ontrol , ContrastSorb, DrugSorb, and others. For
more information, please visit the Company's websites at www.cytosorbents.com and www.cytosorb.com and
Forward-Looking Statements
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, 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 8, 2018, 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.