Full Press Release Details
CytoSorbents Reports Record Second Quarter
2020 Financial Results
CytoSorbents posts record Q2 2020 Total
Revenue of $9.8 million, including a 61% increase in Product Sales to $9.5 million, with $30 million in trailing 12-month Product
N.J., August 4, 2020 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care
immunotherapy leader using its CytoSorb blood purification technology to treat deadly
inflammation in critically-ill and cardiac surgery patients around the world, reports its full financial and operational results
for the quarter ending June 30, 2020.
Second Quarter 2020 Financial Results:
Second Quarter 2020 Operational Highlights:
Dr. Phillip Chan, MD, PhD, Chief Executive
Officer of CytoSorbents Corporation, stated, "As discussed in further detail in our preliminary
Q2 2020 financial results and corporate update, our record quarterly financial results reflected strong CytoSorb sales in
our underlying critical care business, further augmented by demand from the COVID-19 pandemic. We have now surpassed a major milestone,
with more than 100,000 treatments delivered cumulatively worldwide, with distribution in 65 countries globally."
"The second quarter of 2020 also
brought some of the most exciting progress in our recent history, including bringing CytoSorb to the American public under FDA
Emergency Use Authorization (EUA) for use in critically-ill COVID-19 patients with imminent or confirmed respiratory failure, FDA
Breakthrough Designation to remove ticagrelor (Brilinta , AstraZeneca) during cardiac surgery, and E.U. CytoSorb approval to
remove rivaroxaban (Xarelto , Bayer/Jannsen) during cardiothoracic surgery, complementing E.U. approval to remove ticagrelor
obtained in January for the same application."
"On July 24, 2020, we completed a
landmark public offering of $57.5 million of our common stock, with net proceeds to the Company of approximately $54.0 million.
A solid core of well-regarded, long-term, healthcare-focused institutional investors participated in the financing, which was co-led
by Cowen and SVB Leerink acting as joint-book running managers and B. Riley FBR acting as co-manager. The financing has augmented
our institutional ownership - a major goal of the financing, and also brings our current cash balance to approximately $89.0
million, our strongest capital position ever. Importantly, the financing gives us the growth capital to drive sales, clinical trials,
and manufacturing expansion, while financing the company to expected GAAP (Generally Accepted Accounting Principles) profitability,
and providing financial stability to weather these uncertain times. As part of the financing, we have contractually agreed to not
raise additional equity capital (e.g. ATM facility, secondary public offering, etc.) for the next 90 days and have no current plans
to raise additional funds."
"One of the major reasons we did
this fundraise now is to aggressively unlock the immediate U.S. opportunity to create potentially significant value for shareholders."
"In the first half of 2020, the COVID-19
pandemic certainly had a net positive effect on our business, and as it continues to evolve, we have been proactively advancing
many of our pre-COVID-19 growth initiatives in the background. When the pandemic eventually ends, we expect to get back to business
as usual,' where the impact of these efforts should become more apparent. For example:
Dr. Chan concluded, "The COVID-19
pandemic is now aggressively attacking the Americas, India, South Africa, and the Middle East, with second waves well underway
in Eastern Europe, Southeast Asia, Japan, and other countries. Without a COVID-19 vaccine, the future is uncertain, with most expecting
a second wave starting this fall. That said, we have not historically given specific financial guidance on quarterly results until
the quarter has been completed. However, notwithstanding uncertainty related to the COVID-19 pandemic, based upon current order
patterns, we expect that Q3 2020 will be one of the company's strongest quarters in terms of product sales."
"Please join us on our earnings conference call today,
details for which are below."
Conference Call Details:
Date: Tuesday, August 4, 2020
Time: 4:45 PM Eastern Time
Participant Dial-In: 877-451-6152
Conference ID: 13705996
Live Presentation Webcast: http://public.viavid.com/index.php?id=140426
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=140426
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/.
Results of Operations
Comparison for the three months ended
June 30, 2020 and 2019:
Revenue from product sales was approximately
$9,520,000 in the three months ended June 30, 2020, as compared to approximately $5,850,000 in the three months ended June 30,
2019, an increase of approximately $3,670,000, or 63%. This increase was driven by an increase in direct sales of approximately
$1,715,000 resulting from sales to both new customers and repeat orders from existing customers and an increase in distributor
sales of approximately $1,955,000. Sales to hospitals in the United States under the EUA granted by the FDA amounted to approximately
$667,000 for the three months ended June 30, 2020. Though difficult to quantitate, we estimate that approximately $2.4 to $2.6
million of total product sales in the second quarter of 2020 was due to the demand for CytoSorb to treat COVID-19 patients. In
addition, sales were negatively impacted by approximately $156,000 as a result of the decrease in the average exchange rate of
the Euro to the U.S. dollar. For the three months ended June 30, 2020, the average exchange rate of the Euro to the U.S. dollar
was $1.10 as compared to an average exchange rate of $1.12 for the three months ended June 30, 2019.
Grant income was approximately $275,000
for the three months ended June 30, 2020 as compared to approximately $382,000 for the three months ended June 30, 2019, a decrease
of approximately $107,000 or 28%. This decrease was a result of delays in grant related work caused by the COVID-19 pandemic as
our research and development employees have either been deployed to work-from-home status or reassigned to assist in activities
related to increasing the production of CytoSorb.
Total revenues were approximately $9,795,000
for the three months ended June 30, 2020, as compared to total revenues of approximately $6,233,000 for the three months ended
June 30, 2019, an increase of approximately $3,562,000, or 57%.
For the three months ended June 30, 2020
and 2019, cost of revenue was approximately $3,250,000 and $1,834,000, respectively, an increase of approximately $1,416,000. Product
cost of revenues increased approximately $1,490,000 during the three months ended June 30, 2020 as compared to the three months
ended June 30, 2019 primarily as a result of increased sales. Product gross margins were approximately 70% for the three months
ended June 30, 2020 and approximately 76% for the three months ended June 30, 2019. The decrease in gross margin was due to an
increase in percent contribution of lower margin distributor sales and certain costs associated with the rapid ramp-up of production
during the three months ended June 30, 2020.
Research and Development Expenses:
For the three months ended June 30, 2020,
research and development expenses were approximately $2,406,000 as compared to research and development expenses of approximately
$2,930,000 for the three months ended June 30, 2019. The decrease of approximately $524,000 was due to a decrease in our clinical
trial costs of approximately $602,000, which is due primarily to the pause in our Company-sponsored clinical trials as a result
of hospital restrictions due to the COVID-19 pandemic and a decrease in non-grant related research and development costs of approximately
$40,000. These decreases were offset by a decrease in direct labor and other costs being deployed toward grant-funded activities
of approximately $74,000, which had the effect of increasing the amount of our non-reimbursable research and development costs,
and an increase in non-clinical research and development salary related costs of approximately $44,000.
Legal, Financial and Other Consulting
Legal, financial and other consulting expenses
were approximately $846,000 for the three months ended June 30, 2020, as compared to approximately $592,000 for the three months
ended June 30, 2019. The increase of approximately $254,000 was due to an increase in employment agency fees of approximately $71,000
related to the hiring of senior level personnel, an increase in legal fees of approximately $177,000 related certain corporate
initiatives and an increase in accounting fees of approximately $25,000. These increases were offset by a decrease in consulting
fees of approximately $19,000.