MONMOUTH JUNCTION, N.J.,
Aug. 9, 2016 /PRNewswire/
-- CytoSorbents Corporation (NASDAQ: CTSO), a critical care
immunotherapy leader commercializing its flagship CytoSorb® blood
filter to prevent or treat deadly inflammation and organ failure in
critically-ill and cardiac surgery patients around the world,
reports financial and operational results for the quarter ending
June 30, 2016.
Second Quarter 2016 Financial Highlights:
- CytoSorb® product sales for Q2 2016 were a record $1.9 million. This represents an increase of
approximately 140% over Q2 2015 product sales of $0.8 million, as a result of strong increases in
both direct and distributor sales
- Second quarter 2016 annualized product sales run rate was
approximately $7.4 million, as
compared to an annualized product sales run rate of approximately
$3.1 million in the second quarter of
2015
- Total revenue for the second quarter of 2016 was $2.2 million, which includes both product sales
and grant revenue
- Overall gross margins rose to approximately $1.3 million in Q2 2016, representing an increase
of approximately $0.8 million as
compared to approximately $0.5
million in Q2 2015
- Product gross margins for Q2 2016 increased to 68% compared to
approximately 63% for Q2 2015
- This represents the fourth consecutive quarter of record
CytoSorb® sales, and the fifth consecutive quarter of quarterly
growth in CytoSorb® sales
Second Quarter 2016 Operational Highlights:
- CytoSorb® adoption and usage increased to more than 14,000
human treatments performed worldwide as of Q2 2016
- The REFRESH I cardiac surgery trial is nearing completion with
44 patients enrolled toward the target of 40 patients who have
completed all aspects of the trial. We are targeting the release of
top-line data of this trial during the European Association for
Cardio-Thoracic Surgery (EACTS) conference in Barcelona, Spain from October 1-5, 2016
- Strategic distribution partner Fresenius Medical Care, the
world's largest dialysis company, officially launched CytoSorb® in
France, Poland, Denmark, Norway, Finland, and Sweden in late May
- Strategic distribution partner Biocon Ltd, India's largest biopharmaceutical company,
established a standalone internal division specifically focused on
CytoSorb® product marketing, clinical studies, and sales in
India and Sri Lanka
- Received $650K in two non-dilutive Small Business Innovation
Research (SBIR) grant contracts to fund continued development of
novel potassium binding polymers, a new product category for the
company
- Received a $150K SBIR contract to expand the HemoDefend™
platform to enable the production of universal plasma
- Strengthened the Company's balance sheet, ending Q2 2016 with
approximately $9 million in cash and
short-term investments, after closing a term loan facility with
Bridge Bank, a division of Western Alliance Bancorp
- Achieved final CytoSorb® product registration and initial sales
in Russia
- Expanded CytoSorb® to 37 countries including the addition of
Spain and Portugal (through a distribution agreement
with Palex Medical SA), Hungary
(through a distribution agreement with Medial, Ltd) and
Czech Republic and Slovakia (through a distribution agreement
with Meditrade, Ltd), with 28 of these countries now positioned to
contribute to revenue
- Established CytoSorbents Switzerland GmbH, a wholly-owned
subsidiary of CytoSorbents Europe GmbH
- Presented at the Cantor Fitzgerald Healthcare Investor
Conference and exhibited at multiple international scientific
conferences, including EURO-ELSO in Glasgow, Poland, the Spanish Intensive Care Congress in
Valencia, Spain, and others
- Investor analyst coverage initiated by Maxim Group
Dr. Phillip P. Chan, President
and Chief Executive Officer of CytoSorbents, stated "Momentum
continues to build in our core CytoSorb® business, enabling us to
post our fourth consecutive quarter of record product sales.
Reorders from existing direct customers and distributors continue
to make up the bulk of our revenue, resulting in healthy organic
growth for the quarter."
Dr. Chan continued, "We also continue to make excellent progress
in our broader business. In the last earnings report, we laid
out many of our 2016 objectives. We are pleased to report
solid execution against that plan, including achieving continued
sales growth of CytoSorb®, strengthening our balance sheet at an
attractive cost of capital, receiving substantial new grants that
have enabled new product categories, driving REFRESH I towards
completion, transitioning to more revenue generating countries,
securing new analyst coverage with greater market awareness, and
publication of more clinical data. We anticipate an even
stronger second half of 2016."
"Please join us on our previously announced earnings call today
at 4:45PM ET where we will cover
our progress in more detail. 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, August 9,
2016
Time: 4:45 PM Eastern
Participant Dial-In: 1-719-457-2714
Live Presentation Webcast:
http://public.viavid.com/index.php?id=120613
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=120613
An archived recording of the conference call will be available
within a week under the Investor Relations section of the Company's
website at http://www.cytosorbents.com/invest.htm
Financial results for the second quarter ended
June 30, 2016:
Revenues:
Revenue from product sales was approximately $1,853,000 in the three months ended June 30, 2016, as compared to approximately
$773,000 in the three months ended
June 30, 2015, an increase of
approximately $1,080,000, or
140%. This increase was largely driven by an increase in
direct sales from both new customers and repeat orders from
existing customers, along with an increase in distributor
sales.
Grant income was approximately $370,000 for the three months ended June 30, 2016 as compared to approximately
$180,000 for the three months ended
June 30, 2015, an increase of
approximately $190,000, or
106%. This increase was a result of revenue recognized from
new grants.
As a result of the increases in both product sales and grant
income, for the three months ended June 30,
2016, we generated total revenue of approximately
$2,222,000, as compared to total
revenue of approximately $964,000 for
the three months ended June 30, 2015,
an increase of approximately $1,258,000, or 130%.
Cost of Revenues:
For the three months ended June 30,
2016 and 2015, cost of revenue was approximately
$873,000 and $465,000, respectively, an increase of
approximately $408,000. Product
cost of revenues increased approximately $313,000 during the three months ended
June 30, 2016 as compared to the
three months ended June 30, 2015 due
to increased sales. Product gross margins increased to
approximately 68% for the three months ended June 30, 2016, as compared to approximately 63%
for the three months ended June 30,
2015, due to a favorable mix of sales prices. Grant
income related expenses increased due to direct labor and other
costs being deployed toward grant-funded activities, an increase of
approximately $95,000 during the
three months ended June 30, 2016 as
compared to the three months ended June 30,
2015.
Research and Development Expenses:
For the three months ended June 30,
2016, research and development expenses were approximately
$1,092,000, as compared to research
and development expenses of approximately $802,000 for the three months ended June 30, 2015, an increase of approximately
$290,000. This increase was due
to an increase in costs related to the various clinical studies of
approximately $353,000, and increases
in salaries and other research and development costs of
approximately $32,000. The
increase was offset by an increase in direct labor and other costs
being deployed toward grant-funded activities of approximately
$95,000, which had the effect of
decreasing the amount of our non-reimbursable research and
development costs.
Legal, Financial and Other Consulting
Expenses:
Legal, financial and other consulting expenses were
approximately $319,000 for the three
months ended June 30, 2016, as
compared to approximately $298,000
for the three months ended June 30,
2015, an increase of approximately $21,000. This increase was due to an
increase in accounting fees of approximately $13,000 due to fees incurred related to the audit
of our internal controls as required by the Sarbanes-Oxley Act of
2002 and an increase in legal and other consulting fees of
approximately $8,000.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were approximately
$2,625,000 for the three months ended
June 30, 2016, as compared to
approximately $1,626,000 for the
three months ending June 30, 2015, an
increase of approximately $999,000. This increase was due to an
increase in salaries, commissions and related costs of
approximately $506,000 due to
headcount additions and increases in product sales, an increase in
royalty expenses of approximately $77,000 due to the increase in sales, additional
sales and marketing costs, which include advertising, and
conferences of approximately $43,000,
an increase in travel and entertainment costs and other expenses of
approximately $29,000 due to the
increased volume, and an increase in stock-based compensation of
approximately $366,000 due to 2015
milestone options awarded to the Company's employees and restricted
stock units awarded to the Company's executive staff during the
three months ended June 30,
2016. These increases were offset by a decrease in stock
exchange listing and transfer fees of approximately $13,000 as a result of fees incurred related to
our public offering in 2015 that did not recur in 2016 and
decreases in other general and administrative costs of
approximately $9,000.
Gain (Loss) on Foreign Currency Transactions:
For the three months ended June 30,
2016, the loss on foreign currency transactions was
approximately $129,000 as compared to
a gain of approximately $62,000 for
the three months ended June 30,
2015. The loss for the three months ended June 30, 2016 is directly related to the decrease
in the exchange rate of the Euro at June 30,
2016 as compared to March 31,
2016. The exchange rate of the Euro to the U.S. dollar was
$1.12 per Euro at June 30, 2016 as compared to $1.14 per Euro at March
31, 2016. The gain for the three months ended
June 30, 2015 is directly related to
the increase in the exchange rate of the Euro at June 30, 2015 as compared to March 31, 2015. The exchange rate of the
Euro to the U.S. dollar was $1.11 per
Euro at June 30, 2015 as compared to
$1.08 per Euro at March 31, 2015.
Change in Warrant Liability:
We recognize warrants as liabilities at their fair value on the
date of the grant because of price adjustment provisions in the
warrants, then measure the fair value of the warrants on each
reporting date, and record a change to the warrant liability as
appropriate. The change in warrant liability resulted in other
expense of approximately $191,000 for
the three months ended June 30, 2016,
and other income of approximately $3,597,000 for the three months ended
June 30, 2015. The change in warrant
liability was a result of the change in the fair value of the
warrant liability from March 31, 2016
to June 30, 2016 and from
March 31, 2015 to June 30, 2015.
Net Income (Loss):
Our net loss for the three months ended June 30, 2016 was approximately $3,005,000, as compared to a net income of
approximately $1,434,000 for the
three months ended June 30,
2015. Net income for 2015 included income of approximately
$3,597,000 as a result of the
reduction in the warrant liability which is a non-cash component of
other income/expense.
Cash and Short-Term Investments:
On June 30, 2016, our cash and
short-term investments were approximately $8,919,000, as compared to cash and short-term
investments of approximately $7,508,000 as of December
31, 2015. This increase in cash is a direct result of
the $4,910,000 net proceeds received
on long-term debt, offset by cash used in operating activities.
Financial results for the six months ended June 30, 2016:
Revenues:
Revenue from product sales was approximately $3,450,000 in the six months ended June 30, 2016, as compared to approximately
$1,477,000 in the six months ended
June 30, 2015, an increase of
approximately $1,973,000, or
134%. This increase was largely driven by an increase in
direct sales from both new customers and repeat orders from
existing customers, along with an increase in distributor
sales.
Grant income was approximately $582,000 for the six months ended June 30, 2016 as compared to approximately
$198,000 for the six months ended
June 30, 2015, an increase of
approximately $384,000, or
194%. This increase was a result of revenue recognized from
new grants and billable milestones achieved on existing grants.
As a result of the increases in both product sales and grant
income, for the six months ended June 30,
2016, we generated total revenue of approximately
$4,033,000, as compared to total
revenue of approximately $1,687,000,
for the six months ended June 30,
2015, an increase of approximately $2,346,000, or 139%.
Cost of Revenues:
For the six months ended June 30,
2016 and 2015, cost of revenue was approximately
$1,693,000 and $770,000, respectively, an increase of
approximately $923,000. Product cost
of revenues increased approximately $634,000 during the six months ended June 30, 2016 as compared to the six months ended
June 30, 2015 due to increased
sales. Product gross margins were approximately 65% for the
six months ended June 30, 2016, as
compared to approximately 61% for the six months ended June 30, 2015 due to a favorable mix of sales
prices. Grant income expenses increased due to direct labor
and other costs being deployed toward grant-funded activities, an
increase of approximately $289,000
during the six months ended June 30,
2016 as compared to the six months ended June 30, 2015.
Research and Development Expenses:
For the six months ended June 30,
2016, research and development expenses were approximately
$1,948,000 as compared to research
and development expenses of approximately $1,753,000 for the six months ended June 30, 2015, an increase of approximately
$195,000. This increase was due
to an increase in costs related to the various clinical studies of
approximately $504,000. The
increase was offset by an increase in direct labor and other costs
being deployed toward grant-funded activities of approximately
$289,000, which had the effect of
decreasing the amount of our non-reimbursable research and
development costs, and decreases in other research and development
costs of approximately $20,000.
Legal, Financial and Other Consulting
Expenses:
Legal, financial and other consulting expenses were
approximately $574,000 for the six
months ended June 30, 2016, as
compared to approximately $513,000
for the six months ended June 30,
2015. The increase of approximately $61,000 was due to an increase in accounting and
auditing fees of approximately $61,000 due to fees incurred related to the audit
of our internal controls as required by The Sarbanes-Oxley Act of
2002 and increases in legal fees of approximately $26,000 and consulting fees of approximately
$25,000. These increases were
offset by a decrease in employment agency fees of approximately
$51,000 related to fees incurred in
2015 related to the hiring of senior level personnel that did not
recur in 2016.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were approximately
$4,595,000 for the six months ended
June 30, 2016, as compared to
approximately $3,142,000 for the six
months ending June 30, 2015, an
increase of $1,453,000. The
increase in selling, general, and administrative expenses was due
to an increase in salaries, commissions and related costs of
approximately $747,000 due to
headcount additions and increases in product sales, an increase in
royalty expenses of approximately $138,000 due to the increase in sales, additional
sales and marketing costs, which include advertising, and
conferences of approximately $129,000
and an increase in travel and entertainment costs and other
expenses of approximately $43,000 due
to the increased volume and an increase in stock-based compensation
of approximately $396,000 due to 2015
milestone options awarded to the Company's employees and restricted
stock units awarded to the Company's executive staff during the six
months ended June 30, 2016.
Gain (Loss) on Foreign Currency Transactions:
For the six months ended June 30,
2016, the gain on foreign currency transactions was
approximately $103,000 as compared to
a loss of approximately $387,000 for
the six months ended June 30,
2015. The 2016 gain is directly related to the increase in
the exchange rate of the Euro at June 30,
2016 as compared to December
31, 2015. The exchange rate of the Euro to the U.S.
dollar was $1.12 per Euro at
June 30, 2016 as compared to
$1.08 per Euro at December 31, 2015. The 2015 loss is
directly related to the decrease in the exchange rate of the Euro
at June 30, 2015 as compared to
December 31, 2014. The exchange
rate of the Euro to the U.S. dollar was $1.11 per Euro at June 30,
2015 as compared to $1.22 per
Euro at December 31, 2014.
Change in Warrant Liability:
We recognize warrants as liabilities at their fair value on the
date of the grant because of price adjustment provisions in the
warrants, then measure the fair value of the warrants on each
reporting date, and record a change to the warrant liability as
appropriate. The change in warrant liability resulted in other
expense of approximately $172,000 for
the six months ended June 30, 2016,
and other income of approximately $1,589,000 for the six months ended June 30, 2015. The change in warrant liability
was a result of the change in the fair value of the warrant
liability from December 31, 2015 to
June 30, 2016 and from December 31, 2014 to June
30, 2015.
Net Loss:
Our net loss for the six months ended June 30, 2016 was approximately $4,842,000, as compared to a net loss of
approximately $3,283,000 for the six
months ended June 30, 2015. Net
income for the six months ended June 30,
2015 included income of approximately $1,589,000 as a result of the reduction in the
warrant liability which is a non-cash component of other
income/expense.
2016 Third Quarter Revenue Guidance
CytoSorbents has not historically given financial guidance on
quarterly results until the quarter has been completed. However, we
expect that sales for the second half of 2016 will exceed the first
half of 2016.
For additional information please see the Company's Annual
Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and
Exchange Commission (the "SEC") on March 9,
2016 which is available at http://www.sec.gov.
About CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorb® is approved in the European Union with distribution in
37 countries around the world, as a safe and effective
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 such as sepsis, burn injury, trauma, lung injury, and
pancreatitis, as well as in cancer immunotherapy. 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,
such as cytokines and free hemoglobin, which can lead to
post-operative complications, including multiple organ
failure. CytoSorbents is currently conducting its REFRESH
(REduction in FREe Hemoglobin) I trial, a multi-center, randomized
controlled study evaluating the safety of intra-operative CytoSorb®
use in a heart-lung machine during complex cardiac surgery.
CytoSorb® has been used safely in more than 14,000 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. The Company has numerous products
under development based upon this unique blood purification
technology, protected by 32 issued U.S. patents and multiple
applications pending, including HemoDefend™, ContrastSorb,
DrugSorb, and others. Additional information is available for
download on the Company's websites:
http://www.cytosorbents.com and http://www.cytosorb.com
Forward-Looking Statements
This 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 9, 2016, 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.
CYTOSORBENTS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME/LOSS
|
(amounts in
thousands, except per share data)
|
|
|
Six months ended June
30,
|
|
Three months ended
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Revenues
|
|
|
|
|
|
|
|
|
Sales
|
$
3,450
|
|
$
1,477
|
|
$
1,852
|
|
$
773
|
|
Grant
income
|
583
|
|
198
|
|
370
|
|
180
|
|
Other
revenue
|
-
|
|
12
|
|
-
|
|
11
|
|
Total
revenue
|
4,033
|
|
1,687
|
|
2,222
|
|
964
|
|
Cost of
revenue
|
1,693
|
|
770
|
|
873
|
|
465
|
|
Gross
profit
|
2,340
|
|
917
|
|
1,349
|
|
499
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
1,948
|
|
1,753
|
|
1,092
|
|
802
|
|
Legal,
financial and other consulting
|
574
|
|
513
|
|
319
|
|
298
|
|
Selling,
general and administrative
|
4,595
|
|
3,142
|
|
2,625
|
|
1,627
|
|
Total
expenses
|
7,117
|
|
5,408
|
|
4,036
|
|
2,727
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(4,777)
|
|
(4,491)
|
|
(2,687)
|
|
(2,228)
|
|
Other
income(expense), net
|
(64)
|
|
1,208
|
|
(318)
|
|
3,662
|
|
Income (loss) before
benefit from income taxes
|
(4,841)
|
|
(3,283)
|
|
(3,005)
|
|
1,434
|
|
Benefit from income
taxes
|
-
|
|
-
|
|
-
|
|
-
|
|
Net income (loss)
available to common shareholders
|
$
(4,841)
|
|
$
(3,283)
|
|
$
(3,005)
|
|
$
1,434
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.19)
|
|
$
(0.13)
|
|
$
(0.12)
|
|
$
0.06
|
|
Diluted
|
$
(0.19)
|
|
$
(0.13)
|
|
$
(0.12)
|
|
$
0.05
|
|
Weighted average
number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
25,408,599
|
|
24,582,590
|
|
25,416,077
|
|
24,768,639
|
|
Diluted
|
25,408,599
|
|
24,582,590
|
|
25,416,077
|
|
28,826,158
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(4,841)
|
|
$
(3,283)
|
|
$
(3,005)
|
|
$
1,434
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Currency
translation adjustment
|
(101)
|
|
268
|
|
145
|
|
(76)
|
Comprehensive income
(loss)
|
$
(4,942)
|
|
$
(3,015)
|
|
$
( 2,860)
|
|
$
1,358
|
|
CYTOSORBENTS
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands)
|
|
|
June 30, 2016
(Unaudited)
|
|
December 31,
2015
|
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
8,670
|
|
$
5,316
|
Short-term
investments
|
249
|
|
2,192
|
Grants and accounts
receivable, net
|
945
|
|
649
|
Inventories
|
1,048
|
|
1,191
|
Prepaid expenses and
other current assets
|
162
|
|
512
|
Total current assets
|
11,074
|
|
9,860
|
|
|
|
|
Property and
equipment, net
|
600
|
|
557
|
Other
assets
|
1,037
|
|
837
|
TOTAL ASSETS
|
$
12,711
|
|
$
11,254
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Accounts
payable
|
$
1,022
|
|
$
685
|
Accrued expenses and
other current liabilities
|
1,103
|
|
723
|
Warrant
liability
|
1,808
|
|
1,636
|
Total current liabilities
|
3,933
|
|
3,044
|
Long-term debt,
net
|
4,881
|
|
--
|
TOTAL
LIABILITIES
|
8,814
|
|
3,044
|
|
|
|
|
Total stockholders'
equity
|
3,897
|
|
8,210
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY
|
$
12,711
|
|
$
11,254
|
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Cytosorbents Contact:
Amy
Vogel
Investor Relations
(732) 329-8885 ext. *825
avogel@cytosorbents.com
Public Relations Contact:
Amy Phillips
Pascale Communications
412-327-9499
amy@pascalecommunications.com
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SOURCE CytoSorbents Corporation