Full Press Release Details
CytoSorbents Reports Third Quarter 2018
Achieved record $19.1M in trailing 12-month
product sales, up 63% from a year ago
N.J., November 6, 2018 - 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, reports
financial and operational results for the quarter ending September 30, 2018.
2018 Financial Highlights:
2018 Operational Highlights:
Dr. Phillip Chan, Chief Executive Officer
of CytoSorbents stated, "We grew significantly with $19.1 million in trailing 12-month product sales, up 63% from a year
ago, and healthy blended gross margins of 72%. Quarterly product sales were up 48% from last year, driven by record CytoSorb shipments,
and if not for a decline in the Euro during the quarter, Q3 2018 product sales would have been slightly higher than those achieved
from an already strong Q2 2018. That said, our track record of 25 consecutive quarters of year-over-year sales increases remains
"We believe our Q3 2018 results could
have been even stronger. For many companies with European exposure, the third quarter is often challenging as workers and customers
go on extended summer vacations during July and August, and business slows down in Europe. This was the first quarter that we have
seen this slowdown in our financial results. However, this was countered by increases in distributor sales, which were at an all-time
Dr. Chan continued, "Turning to our
clinical programs, I am pleased that our REFRESH 2-AKI pivotal trial has been making excellent progress. As we discussed in the
prior earnings call, at the recommendation of our key clinical advisors, we submitted a protocol amendment to facilitate enrollment
and to broaden the applicable market for CytoSorb, if approved. As we waited for FDA and ethics committee approvals at trial sites
of the amendment, our clinical team worked diligently to bring on-board 14 active clinical sites to drive a "step-function"
increase in enrollment. With good feedback from trial sites on the ability to enroll patients under the revised inclusion criteria,
we have now enrolled 20 patients in a relatively short period of time and expect enrollment to further accelerate as we bring on-board
a total of 25 active trial sites in the near future.
"The REMOVE endocarditis trial is
also moving forward, adding an additional 22 patients since the last earnings call, currently with 62 patients enrolled out of
a 250-patient target. An interim analysis on inflammatory mediators such as cytokines will be conducted on the first 50 patients,
planned in the next several months. Meanwhile, we continue to work with NHLBI to help fund and prepare our HemoDefend-RBC pivotal
study in the U.S. that is designed to support U.S. FDA approval, with the goal of starting this trial in early 2019."
"Going forward, we believe we are
at the beginning of a significant multi-year growth opportunity, targeting billion dollar markets in sepsis, cardiac surgery, liver
disease, trauma, and many other conditions. Heading into what is traditionally a strong quarter, we have refined our guidance that
we expect Q4 2018 product sales to be higher than Q3 2018 product sales. In addition, we continue to target achievement of quarterly
operating profitability (which excludes non-cash expenses and clinical trial costs) in Q4 2018."
on our previously announced earnings call today at 4:45PM EST where we will review our progress. We will also respond to questions
from the audience during our live Q&A session. The investor presentation and a written transcript of the conference call will
be available within a week of the webcast.
Conference Call Details:
Date: Tuesday, November 6, 2018
Time: 4:45 PM Eastern Time
Participant Dial-In: 323-794-2423
Conference ID: 7183362
Live Presentation Webcast: http://public.viavid.com/index.php?id=131998
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=131998
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/.
Results of Operations
Comparison for the three months ended
September 30, 2018 and 2017:
Revenue from product sales was approximately
$5,103,000 in the three months ended September 30, 2018, as compared to approximately $3,449,000 in the three months ended September
30, 2017, an increase of approximately $1,654,000, or 48%. This increase was primarily driven by an increase in direct sales from
both new customers and repeat orders from existing customers and an increase in distributor sales.
Grant income was approximately $640,000
for the three months ended September 30, 2018 as compared to approximately $376,000 for the three months ended September 30, 2017,
an increase of approximately $264,000. This increase was a result of timing of certain grant revenue and income recognized from
Total revenues were approximately $5,743,000
for the three months ended September 30, 2018, as compared to total revenues of approximately $3,824,000 for the three months ended
September 30, 2017, an increase of approximately $1,919,000, or 50%.
For the three months ended September 30,
2018 and 2017, cost of revenue was approximately $2,053,000 and $1,517,000, respectively, an increase of approximately $536,000.
Product cost of revenues increased approximately $339,000 during the three months ended September 30, 2018 as compared to the three
months ended September 30, 2017 due to increased sales. Product gross margins were approximately 72% for the three months ended
September 30, 2018, as compared to approximately 69% for the three months ended September 30, 2017. This increase in gross
margin of 3% was due to a year over year reduction in the cost of devices manufactured as a result of production efficiencies achieved.
Research and Development Expenses:
For the three months ended September 30,
2018, research and development expenses were approximately $1,943,000 as compared to research and development expenses of approximately
$643,000 for the three months ended September 30, 2017. The increase of approximately $1,300,000 was due to increase in costs related
to our clinical studies and trials of approximately $922,000, an increase in our clinical related salaries and related expenses
of approximately $104,000, an increase in non-clinical research and development salaries of approximately $89,000, an increase
in new product development costs of approximately $28,000, an increase in lab supplies of approximately $35,000, an increase in
patent costs of approximately $34,000 and an increase in non-grant related research and development costs of approximately $88,000.
Legal, Financial and Other Consulting
Legal, financial and other consulting expenses
were approximately $417,000 for the three months ended September 30, 2018, as compared to approximately $238,000 for the three
months ended September 30, 2017. The increase of approximately $179,000 was due to an increase in legal fees of approximately $150,000
related to certain corporate initiatives, an increase in accounting and auditing fees of approximately $26,000, and an increase
in other professional fees of approximately $3,000.
Selling, General and Administrative
Selling, general and administrative expenses
were approximately $4,041,000 for the three months ended September 30, 2018, as compared to approximately $3,575,000 for the three
months ending September 30, 2017. The increase of $466,000 was due to an increase in salaries, commissions and related costs of
approximately $582,000 related to headcount additions and increased sales, an increase in restricted stock expense of approximately
$64,000 related to restricted stock units granted to the Company executive officers, an increase in royalty expense of approximately
$135,000 due to increased sales, an increase in travel and entertainment costs of approximately $150,000, an increase in investor
outreach and public relations expense of approximately $15,000 and an increase in office related expenses and other general and
administrative costs, which include office supplies, rent, utilities and commercial insurance of approximately $156,000. These
increases were offset by a decrease in non-cash stock based compensation expense of approximately $610,000 related to progress
related to the attainment of the Company's 2018 operating milestones and a decrease in sales and marketing costs (which includes
advertising and conferences) of approximately $26,000.
Interest Expense, net:
For the three months ended September 30,
2018, interest expense was approximately $185,000, as compared to interest expense of approximately $254,000 for the three months
ended September 30, 2017. This decrease in interest expense of approximately $69,000 is due to the increase in interest earned
on our cash balances during the three months ended September 30, 2018 which were significantly higher than cash on hand during