Full Press Release Details
Reports Fourth Quarter and Full Year 2023 Results
| STAR-T trial results selected for a Breakout Presentation at the American Association of Thoracic Surgery Annual Meeting in late-April 2024 | ||
| CytoSorbents intends to submit DrugSorb-ATR for regulatory approval to U.S. Food & Drug Administration (FDA) and Health Canada this year | ||
| CytoSorb core sales increased approximately 10% year-over-year | ||
| 2023 Product gross margins increased to 72% | ||
| Cumulative CytoSorb treatments surpassed 228,000 |
PRINCETON, N.J., March 14, 2024 - 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, today reported financial and operating results for the quarter
and year ended December 31, 2023 and provides its 2024 outlook.
Full Year 2023 Financial Results
| 2023 Total Revenue, which includes Product Sales and Grant Income, was $36.3 million versus $34.7 million in 2022, an increase of approximately $1.7 million or 5% | ||
| Total product sales were $31.1 million in 2023 versus $29.4 million in 2022, an increase of approximately $1.7 million or 6%. 2022 product sales benefitted from an additional approximately $0.7 million in Other non-CytoSorb product sales and $0.3 million in COVID-19 related sales compared to 2023 | ||
| Core (non-COVID-19 related) CytoSorb sales grew 10% to $31.0 million in 2023, versus $28.3 million in 2022 | ||
| The increase in the average Euro to U.S. dollar exchange rate positively impacted 2023 product sales by approximately $0.8 million. The average Euro to dollar exchange rate was 1.08 in 2023 versus 1.05 in 2022 | ||
| 2023 Product Gross Margin increased to approximately 72%, from approximately 70% in 2022 |
Fourth Quarter 2023 Financial Results
| Q4 2023 Total Revenue, which includes Product Sales and Grant Income, was $8.7 million versus $9.4 million in Q4 2022, a decrease of approximately $0.7 million or 8% | ||
| Total Product Sales were $7.3 million in 2023 versus $7.6 million in 2022, a decrease of approximately $0.3 million or 4% | ||
| Core CytoSorb sales in Q4 2023 were $7.3 million compared to $7.4 million in Q4 2022, a decrease of approximately $0.1 million or 1% | ||
| The increase in the average Euro to U.S. dollar exchange rate favorably impacted Q4 2023 product sales by approximately $0.4 million. The average Euro to dollar exchange rate was 1.08 in Q4 2023 versus 1.02 in Q4 2022 |
Recent Operating Highlights
| Cumulative CytoSorb treatments delivered exceeded 228,000 at the end of 2023, up 17% from the end of 2022 | ||
| The 140-patient, double-blinded, multicenter, pivotal STAR-T randomized, controlled trial was selected for a Breakout Presentation at the American Association of Thoracic Surgery (AATS) Annual Meeting being held April 27-30, 2024 in Toronto, Canada. We expect to follow this event with an Analyst and Investor Day and provide a review of the data by an esteemed thought leader panel | ||
| We plan to submit for regulatory approval of DrugSorb -ATR to the FDA and Health Canada in the second half of 2024 to reduce the severity of bleeding in patients undergoing isolated coronary artery bypass graft (CABG) surgery on the blood thinner, Brilinta . This follows the prior discussion of topline study results in December 2023 , and subsequent additional data analysis from the STAR-T Trial | ||
| Our European Union CE Mark for CytoSorb was extended under the Medical Devices Directive (MDD) to the earlier of either December 2028 or when we achieve E.U. Medical Device Regulation (MDR) certification, which effort is currently ongoing | ||
| Entered into a new strategic partnership and temporary distribution agreement in India for CytoSorb with the publicly-traded Indian pharmaceutical company, Eris Lifesciences, following its definitive agreement with Biocon Biologics to acquire Biocon's Nephrology branded formulations business unit, and with it, Biocon's key leadership and field force of these businesses, including the personnel commercializing CytoSorb in India | ||
| Expecting to launch our new PuriFi stand-alone hemoperfusion pump later this year following the expiration of our previously disclosed distribution agreement with Nikkiso Europe GmbH for its PureAdjust hemoperfusion pump in September 2023 |
Dr. Phillip Chan, Chief Executive Officer of CytoSorbents
stated, "In 2024, we are intent on providing clarity to investors on the key factors that will determine the near-term and future
success of this Company. These include visibility on submission of DrugSorb-ATR for regulatory approval to U.S. FDA and Health Canada
this year, returning to significant growth in our core existing CytoSorb business outside the U.S. and Canada, continued improvements
in product gross margins coupled with a right-sized operating expense structure, and adequately financing CytoSorbents for success."
The pivotal, U.S. and Canadian STAR-T (Safe
and Timely Antithrombotic Removal - Ticagrelor) randomized controlled trial was designed to support
FDA and Health Canada marketing approval for DrugSorb -ATR to reduce the risk of perioperative bleeding in patients undergoing cardiothoracic
surgery potentially caused by Brilinta (ticagrelor, AstraZeneca). Our technology has received FDA Breakthrough Device Designation
for this application, highlighting the major unmet medical need and lack of approved or cleared therapies for this problem.
Following the completion of the STAR-T trial
last year, we announced topline data from the study in December 2023 as follows:
| The independent STAR-T Data and Safety Monitoring Board (DSMB) conducted a review of unblinded data on all 140 patients in the trial and concluded there were no issues with device safety, meeting the primary safety endpoint of the study | ||
| Following initial data analysis from STAR-T, the primary effectiveness endpoint in the overall patient population that underwent different types of cardiac surgeries was not met. However, in the pre-specified subpopulation of patients undergoing isolated coronary artery bypass graft (CABG) surgery that accounted for more than 90% of patients enrolled in the STAR-T trial and also represent the main use case for DrugSorb -ATR, we observed evidence of reduced bleeding complications, including serious bleeding events. |
We have since performed additional analyses of
our trial data in the isolated CABG population and believe the results further support the favorable benefit-to-risk profile of DrugSorb-ATR
in these patients who represent the overwhelming majority facing this clinical unmet need.
We are pleased at the selection of the STAR-T
trial for a breakout presentation at the 104th Annual Meeting of the American Association of Thoracic Surgery, described
as the world's most prestigious cardiothoracic surgery event. This year, the meeting will be in collaboration with the Society
of Cardiovascular Anesthesiologists (SCA), who are often managing blood product usage due to intraoperative bleeding during surgical
procedures. In general, this conference is targeted towards cardiothoracic surgeons and physicians in related specialties; perfusionists;
non-physician health care providers involved in the care of cardiothoracic surgical patients; as well as fellows, residents, and medical
students in cardiothoracic surgery. These are the stakeholders who directly witness and need to manage the perioperative bleeding complications
of their patients on blood thinners and who would use DrugSorb-ATR in clinical practice.
after AATS, we plan to host an Analyst and Investor Day to share these data with participants, who will then be able to evaluate the
benefit-risk proposition of DrugSorb-ATR. Our data give us confidence in our decision to submit for regulatory approval to U.S.
FDA and Health Canada, estimated in the second-half of 2024. For an interesting discussion on therapies seeking FDA approval in our situation,
see page 3 of this report from Zacks Research.
Although we cannot predict the outcome of a regulatory
submission, should DrugSorb-ATR be approved in both the U.S. and Canada only for patients undergoing isolated CABG, we believe the initial
total addressable market opportunity remains relatively intact at approximately $325 million initially, and may expand significantly as
ticagrelor (aka Brilinta , AstraZeneca) becomes generic this year and potentially displaces generic clopidogrel (aka Plavix ,
BMS/Sanofi) in the market as the preferred P2Y12 inhibitor in patients with acute coronary syndromes based on both the superior efficacy
data over clopidogrel and the ability to be removed in cases where urgent CABG is required (due to DrugSorb-ATR).
2023 Sales Highlights
2023 was a reasonable recovery year of progress
and growth, where core (non-COVID-19) CytoSorb sales grew roughly 10% over the prior year. This was particularly true coming off of a
challenging 2022 that we described last year as a "perfect storm" of geopolitical, economic, post-pandemic, and company-specific
factors. That said, the results understate some of the excellent progress we are making to grow and diversify our revenue base, based
upon our long-term growth strategy and investment commitments to support our hybrid sales model.
| Strong performance from our International Direct sales division (representing 14 countries, excluding Germany) resulted in 27% sales growth year-over-year to approximately $6.0 million, or 19% of 2023 product sales | ||
| Distributor and Partner sales (representing more than 60 countries) grew 18% (excluding U.S. dsitributor sales in 2022) in the first three quarters of 2023 over the prior year. Based on our stand-alone pump initiative that is expected to catalyze sales of CytoSorb in countries with less developed dialysis capabilities, we had budgeted higher growth in Q4 for this division. For a number of different reasons, it became clear that Nikkiso's PureAdjust hemoperfusion machine was not the long-term solution for our stand-alone pump initiative and we mutually agreed to not renew our distributor agreement in September 2023. We pivoted to an alternative strategy, focused on the launch of our own hemoperfusion machine called Purifi that we expect to launch later this year. Anticipation of this machine, however, led to some order slippage from distributors to the new year, resulting in lower than expected Q4 2023 sales overall. For the year, Distributor and Partner sales grew 9% (excluding U.S. distributor sales in 2022) to $12.1 million, or 39% of 2023 product sales | ||
| Direct Sales Germany was flat at 3% growth to $13.0 million for the year, or 42% of 2023 product sales. German hospitals are still working through the aftermath of the COVID-19 pandemic with staff shortages, decreased hospital beds, fewer patients, and fewer revenue generating procedures, and economic stressors such as inflation, labor, energy, and other unexpected costs. Notwithstanding this market backdrop, the costs and challenges that physicians and healthcare workers continue to face in the management of critical illness and cardiac surgery are real. Given the numerous applications, both old and new, that our products can help to address, and other initiatives such as our preferred supplier agreement with the largest private hospital networks in Germany, we believe there are many opportunities to return to significant growth in the country. |
That said, we are currently
tracking a proposal for healthcare reform of Germany's hospital system. In July 2023, Germany's federal and state
governments issued a consensus white paper that could result in new laws that change how
hospitals are funded. Government payments to hospitals would de-emphasize the DRG (diagnosis-related group) "lump
sum" payment system that incentivizes revenue generation through more patients treated and procedures performed, and instead
emphasize base payments focused on quality measures and appropriate patient care. This is expected to favor a shift of routine
operations and procedures to outpatient centers, consolidation of smaller hospitals into larger ones, and importantly, an
increased focus of remaining hospitals on sicker patients, more complex operations such as cardiothoracic surgery and organ
transplant, and on therapies that help reduce the severity of illness and help patients recover faster. Given that the goal of
our therapies is to improve clinical outcomes while reducing the costs of critical care and cardiac surgery by controlling deadly
inflammation and other life-threatening conditions, while reducing the need for expensive life support measures that keep patients
in the hospital, we believe such reform may favor our business in the longer-term. Hospital administrators expect such change will
take careful planning and time, potentially years, to implement. We continue to track these developments with interest.
As we discussed in the last earnings release,
we believe we can return to and potentially even exceed our historic compound annual growth rate (CAGR) of approximately 25%. We outlined
a number of macro trends in healthcare that favor our therapies, such as the aging population that is prone to critical illness, the
use of blood thinners by millions of people worldwide to reduce the risk of stroke and heart attack, and the epidemic of chronic liver
disease that afflicts one in every five people globally. Meanwhile, we also discussed our numerous growth initiatives, like our stand-alone
pump intiative with the pending launch of our own PuriFi machine, the impact that supportive data from STAR-T may have on the blood thinner
opportunity worldwide, our global marketing agreement with Fresenius Medical Care where CytoSorb is the featured solution for cytokine,
bilirubin, and myoglobin removal on its critical care platforms worldwide, our new E.U. trademark of "Expanding the Dimension of
Blood Purification " that highlights the up to 40-50% of patients in the ICU where our therapies could be beneficial, and relatively
"new" applications with exciting recently published clinical data in fields such as artificial liver support, fluid
balance in septic shock, infective endocarditis, heart transplant, ex vivo organ perfusion -
particularly lung transplant, acute respiratory distress syndrome (ARDS), and the effect of CytoSorb on gram negative endotoxin-induced
cytokine storm - a major cause of septic shock.
Reduced Cash Burn with Tight Control Over
Following our equity financing in December, we
ended the year with $15.6 million in cash, including $1.5 million in restricted cash, and $5 million in debt. We have implemented significant
cost cutting measures to significantly reduce our cash burn, including a 15% reduction-in-force, termination of non-core R&D programs,
termination of the STAR-D trial to focus on STAR-T, and a third consecutive year of salary freezes for executive management. The benefit
of these cost cuts on operating expenses, particularly our headcount reductions, will become more apparent with time as notice periods
and severance payments are completed. Finally, we have worked diligently to optimize our manufacturing efficiencies and expect CytoSorb
product gross margins to be in the 75-80% range on a quarterly basis this year, after averaging 72% in 2023.
Dr. Chan concluded, "We believe the successful
execution of our strategy will form the basis of a strong turnaround of our business and position us well for strong growth and profitability
in the next several years. We thank you for your continued support."
Conference Call Details:
Date: Thursday, March 14th, 2024
Time: 4:30 PM Eastern Time
Participant Dial-In: (888) 596-4144
Conference ID: 5329219
Live Presentation Webcast: https://edge.media-server.com/mmc/p/tgivev9a
Participants are recommended to dial in approximately 10 minutes prior
to the start of the call.
An archived recording 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/.