MONMOUTH JUNCTION, N.J.,
Jan. 18, 2022 /PRNewswire/ --
CytoSorbents Corporation (NASDAQ: CTSO), a leader in the
treatment of life-threatening conditions in the intensive care unit
and cardiac surgery using blood purification, issues a stockholder
letter from its Chief Executive Officer, Dr. Phillip Chan, and announces preliminary
unaudited fourth quarter 2021 and full year 2021 results ahead of
filing its Form 10-K.
Preliminary Unaudited Full Year 2021 Results
- Cumulative CytoSorb treatments delivered exceeded 162,000, up
34% from approximately 121,000 at the end of 2020
- Preliminary 2021 unaudited Total Revenue, which includes
product sales and grant revenue, was approximately $43.2 million versus $41.0
million in 2020
- Preliminary 2021 unaudited Product Sales were approximately
$40.1 million compared to
$39.5 million in 2020
- Core (non-COVID-19) product revenue in 2021 was approximately
$33.8 million, an approximate 13%
increase from $30.1 million in 2020,
and accounting for approximately 84% of product sales
- Blended product gross margins, including higher margin direct
and lower margin distributor and partner sales, are expected to be
at least 80% for 2021, compared to 76% in 2020
- Strong cash balance at the end of 2021 of approximately
$54 million
Preliminary Unaudited Q4 2021 Results
- Q4 2021 Total Revenue was approximately $10.8 million versus $12.0
million in Q4 2020
- Q4 2021 Product Sales of approximately $9.7 million were ahead of our prior guidance,
and rose 9% sequentially from Q3 2021, versus approximately
$11.5 million in Q4 2020
- Core (non-COVID-19) product sales in Q4 2021 were approximately
$8.0 million, or 82% of product sales
versus approximately $8.9 million, or
77% of product sales in Q4 2020
- Direct sales from Germany in
Q4 2021 increased 45% to $5.3 million
compared to $3.7 million in Q3 2021,
versus approximately $6.0 million in
Q4 2020
- Preliminary blended product gross margins are expected to be
approximately 80% for Q4 2021, mixing higher margin direct and
lower margin distributor and partner sales
CytoSorbents Issues Shareholder Letter from CEO and Reports
Preliminary Fourth Quarter and Full Year 2021 Revenue
The Company expects to report fully-audited financial results
for Q4 2021 and full year 2021 and its 2022 outlook on Tuesday, March 8, 2022, with a conference call
held at 4:30PM ET. Further
details for the earnings call will be provided at a later date.
CytoSorbents 2022: Focus and Disciplined
Execution
Dear Stockholders and Friends,
After an exceptionally strong year in 2020 where CytoSorb sales
rose 73% and roughly a quarter of our sales were COVID-19 related,
we had a good year in 2021 with total revenue of $43.2 million and product sales of $40.1 million, both slightly ahead of our record
results in 2020, despite headwinds from the COVID-19
pandemic. Importantly, our business in Germany rebounded in the fourth quarter, with
sales increasing by a healthy 45% compared to the third quarter of
2021. For the year, Germany
sales were up 4% from strong 2020 sales in the country. We also
grew core (non-COVID-19) sales by a respectable 13%
year-over-year. Over the past five years, our compounded
annual growth rate has been a strong 37% and we continue to
generate robust product gross margins of at least 80%.
Finally, we have a solid cash position of nearly $54 million at year-end and no near-term need or
intent to raise capital. In the first quarter of 2022, we
plan to renew our $15 million term
loan agreement with Bridge Bank, ensuring continued financial
flexibility.
We achieved these results in a period of great uncertainty,
where COVID continues to impact businesses in every industry around
the world. We have already discussed at great length
the complicated dynamics related to the pandemic and our business,
with benefits related to COVID-19 usage - generating an estimated
$6.3 million in 2021 CytoSorb sales -
and the halo effect on usage in other critical care therapy
applications. However, the pandemic created two headwinds in
2021.
- First, in anticipation of renewed COVID demands on the ICU,
hospitals restricted non-COVID admissions, cancelled elective
surgeries (whose complications normally fuel CytoSorb usage),
reduced regular ICU capacity to reserve critical care beds for
COVID, and restricted outsider access (including sales
representatives), making it that much harder to sell.
- Second, as vaccines reduced the severity of COVID-19 illness,
fewer COVID cases progressed to a critical stage requiring
CytoSorb.
Overall, the tidal wave of new, highly contagious Delta and
Omicron infections may in fact be heralding the beginning of the
end of COVID, as the unvaccinated masses unfortunately get
naturally immunized the hard way, and vaccinated people get
naturally boosted with mild disease, inching us closer to the
elusive "herd immunity." If this happens, COVID and its
variants may still be with us for years to come, but as a milder
seasonal respiratory illness like influenza.
While we wait for COVID to run its course, we have been actively
implementing our core business strategy emphasizing Focus and
Disciplined Execution. During 2021, we strategically used
our substantial cash position to strengthen the organization from
all aspects.
- We leveraged our two FDA Breakthrough Device Designations to
rapidly begin the pivotal U.S. randomized, controlled trials:
STAR-T and STAR-D. These studies are designed to support
CytoSorbents' first U.S. FDA marketing approval of DrugSorb™-ATR to
reduce bleeding risk in patients on antithrombotic medications (aka
"blood thinners") undergoing cardiothoracic surgery and to open up
access to the U.S. market. To date, we are pleased with the pace of
enrollment of the STAR-T trial and continue to forecast enrollment
completion of the study in 2022. We also expect the STAR-D trial to
enroll its first patient shortly, trailing STAR-T by only a few
months.
- We made significant investments in both people and
infrastructure across the Company, particularly optimizing and more
closely aligning our international sales, marketing, and medical
affairs teams to ensure synergy and focus on key critical care and
cardiac surgery applications that have the potential to drive rapid
growth and profitability.
- We expanded our clinical team and are investing in important
Company-sponsored clinical studies and registries to generate data
that are intended to drive faster adoption and sales of CytoSorb.
These include, for example, the PROCYSS refractory septic shock
randomized controlled trial, the Hep-on-Fire trial in alcoholic
liver disease, the U.S. multicenter CTC (CytoSorb
Therapy in COVID-19) registry and recent publication
highlighting the high 73% survival in the most critically ill
COVID-19 patients on CytoSorb and extracorporeal membrane
oxygenation (ECMO), and the international COSMOS
(CytOSorb TreatMent of Critically Ill
PatientS) critical care registry.
- We are making excellent progress in building out and scaling up
our new manufacturing facility and the Company's expected future
headquarters in Princeton, New
Jersey that is expected to expand our production capacity
from what is currently $80 million,
to $350-400 million in sales, and to
drive our already outstanding product gross margins even higher.
This facility is on track to be completed and validated by this
summer, and to begin manufacturing product in the second half of
this year.
- As long as the pandemic continues, we will work to help
critically ill COVID-19 patients with CytoSorb. To date,
CytoSorb has been used to treat more than an estimated 7,600
COVID-19 patients worldwide. Our continued focus and investments on
making the published data on this usage widely available has also
helped to accelerate adoption of CytoSorb for core (non-COVID-19)
applications in many countries around the world. As more data
are released from the CTC registry this year, we expect this trend
will continue. The pandemic has been a valuable global marketing
opportunity to elevate the CytoSorb brand and to emphasize to
physicians how CytoSorb is easily implemented and used to treat
many of the most common and complex complications in the ICU, such
as shock and lung failure, whether or not related to COVID-19.
DrugSorb-ATR U.S. STAR-T and STAR-D Pivotal Studies:
The Potential Tipping Point of Substantial Growth
The DrugSorb™-ATR antithrombotic removal system can efficiently
remove antithrombotic drugs, often called "blood thinners," such as
apixaban (Eliquis®; Pfizer, Bristol Myers Squibb), rivaroxaban
(Xarelto®, Janssen and Bayer), and ticagrelor (Brilinta®; Astra
Zeneca). DrugSorb-ATR is being evaluated in the U.S. under
two FDA Breakthrough Device Designations (BDD) for the potential to
remove these agents and reduce perioperative bleeding in the
U.S.-based randomized, controlled pivotal trials: STAR-T and STAR-D
(Safe and Timely Antithrombotic Removal
of Ticagrelor [i.e. Brilinta®], and Direct Oral
Anticoagulants [DOACs; e.g. Eliquis® and Xarelto®]),
respectively. Both multicenter trials are designed to
independently support U.S. FDA marketing approval and are
relatively modest in size, with each enrolling up to 120
patients. As mentioned previously, we are pleased with the
pace of enrollment of the STAR-T trial since the first patient was
enrolled last October, even with the holidays, COVID surge, and
nationwide hospital staffing shortages, and continue to project
enrollment completion this year, assuming a return to
relatively normal clinical trial activity at participating
centers. We expect STAR-D to follow quickly, with first
patient enrollment expected shortly. We plan to submit
rapidly for U.S. FDA marketing approval after study completion.
As a reminder, these blockbuster medications are prescribed to
millions of patients around the world to "thin the blood" and
prevent blood clots from forming that could lead to a heart attack,
stroke, or other ischemic event. Currently, the only recommended
intervention to reverse the anti-clotting effect of these drugs is
to allow the drug to be eliminated naturally over time. When
patients on these medications need to undergo urgent or emergent
cardiothoracic surgery (e.g. coronary artery bypass graft surgery
or aortic dissection repair), there is often no time to wait for
the drug to washout of the body. Currently, there are two
approved reversal agents for DOACs.
- Andexxa® (AstraZeneca) for apixaban (Eliquis®; Pfizer, Bristol
Myers Squibb) and rivaroxaban (Xarelto®, Janssen and Bayer),
and
- Praxbind® (Boehringer Ingelheim) for dabigatran reversal
(Pradaxa®; Boehringer Ingelheim)
Neither reversal agent is recommended nor used in current
clinical practice during cardiothoracic surgery due to a multitude
of concerns that include:
- Interactions with heparin (routinely used in all on-pump
cardiac surgeries)
- Excess risk for post-administration thrombotic events (such as
myocardial infarction and stroke) as detailed in a Prescribing
Information black box warning for Andexxa® and a warning for
Praxbind®
- Very high treatment costs
Bentracimab (PhaseBio) is currently in Phase 3 development as a
reversal agent for ticagrelor and recently reported single arm,
non-randomized data that showed pre-operative platelet inhibition
reversal, but also occurrence of similar serious
post-administration thrombotic events as observed with the other
DOAC reversal agents.
We believe the large reduction in bleeding and excellent safety
already demonstrated with real world use of our blood purification
technology under CE Mark approval in Europe will make intraoperative antithrombotic
drug removal the preferred approach over preoperative drug reversal
in cardiac surgery. Furthermore, we anticipate that our
device will represent a very attractive value proposition for
cardiac surgery centers as a "one-stop shop" for managing patients
on multiple antithrombotic drugs. Finally, the randomized,
double-blind, controlled U.S. STAR-T and STAR-D pivotal studies are
designed to provide definitive clinical and health economic data
and set the gold standard for supportive evidence that none of our
competitors have.
Overall, we believe the STAR-T and STAR-D studies are the
fastest, highest visibility, and lowest risk path to potential U.S.
FDA marketing approval of DrugSorb-ATR to remove antithrombotic
agents during cardiothoracic surgery. If successful, we believe
this approval will be a core driver of substantial growth for our
company.
- First, it will open up access to the important U.S. market -
the largest medical device market in the world – to us for the
first time and is expected to drive significant growth and improved
profitability. DrugSorb-ATR is expected to address an immediate
$500 million combined total
addressable market that could expand to $1
billion over time. Based on our diligence, cardiac surgeons
need and want DrugSorb-ATR, potentially creating a "market pull"
application in the U.S. that may rapidly develop into yet another
major revenue stream for the Company to complement our
international core growth opportunities for CytoSorb in critical
care and other cardiac surgery applications.
- Second, the data from these randomized, controlled trials
are expected to help establish DrugSorb-ATR as an easy-to-use,
"one-stop shop" standard of care throughout the world for
antithrombotic removal during cardiothoracic surgery. These data
should accelerate our sales for this application, and potentially
help open new markets such as Japan – the second largest medical device
market globally - and others.
- Third, it would also establish a U.S. beachhead of demonstrated
safety and efficacy of our technology that could potentially speed
new label expansions or marketing approvals in other applications,
further broadening the U.S. market opportunity.
- Our two FDA Breakthrough Device Designations may not only
potentially help to accelerate the FDA review process of our
marketing application and shorten our time to market, but may also
aid in reimbursement by Centers for Medicare and Medicaid Services
(CMS) if the reimbursement initiative for Breakthrough Devices is
passed within the CARES 2.0 Act. The FDA has granted less than an
estimated 500 Breakthrough Device Designations since the program
began with the approval of the 21st Century Cures Act in
2016, and we have two of them.
- Finally, attainment of U.S. FDA Marketing Approval is expected
to dramatically increase the appeal of CytoSorbents as a U.S.
medical device company, with U.S. FDA marketing approval, and U.S.
sales - key criteria that are highly valued by strategic partners
and investors.
Streamlining our Clinical Priorities
Given the
importance of the STAR-T and STAR-D trials to our overall strategy,
we have decided to streamline our clinical activities to ensure the
focus of our financial and personnel resources to execute upon
these two lead programs and to prepare for potential U.S.
commercialization. Because of this, we have made the
difficult, but appropriate decision to voluntarily end the
400-patient multicenter U.S. REFRESH 2-AKI pivotal study, which
remains blinded. Importantly, there were no safety issues in the
REFRESH 2-AKI trial. This decision was made strictly for business
reasons to ensure focus on the vital U.S. STAR-T and STAR-D
clinical programs. We have also taken into account the costs of the
remaining portion of the REFRESH 2-AKI trial, the expected timing
of completing the trial, delays caused by COVID, the evolution of
the change and perceived importance of acute kidney injury after
cardiothoracic surgery, and the expensive and lengthy path to PMA
(pre-market approval) approval in the absence of Breakthrough
Device Designation for this application. We believe the
antithrombotic removal program is superior to the REFRESH 2-AKI
application in all of these aspects. This decision is
expected to save in excess of $5
million over the planned duration of REFRESH 2-AKI. Over the
years, we have learned a lot from this program, including
generation of high quality good clinical practice (GCP) – level
randomized, controlled data supporting the safety of CytoSorb use
during cardiothoracic surgery that we have already reported to the
FDA for STAR-T and STAR-D, while also demonstrating the ability of
CytoSorb to reduce both plasma free hemoglobin and activated
complement, two important clinical targets. We plan to work
with our CRO to close out the trial, unblind the study, and do a
full analysis of the data in order to glean additional
insights.
In addition, we have decided to end the single arm CYTATION
trial, a pharmacodynamic study on ticagrelor removal during
cardiothoracic surgery in Germany.
The U.S. STAR-T randomized, controlled trial is a superior design
and makes CYTATION redundant. We will redirect those resources to
our active pipeline of important ongoing studies like the German
PROCYSS and Hep-on-Fire trials, as well as execution of new
clinical studies when the STAR-T and STAR-D trials near
completion.
We remain confident in CytoSorbents' potential
In summary, despite the depressed share price, we firmly believe
this is the most exciting time in the Company's history given the
potentially game-changing opportunities that lie ahead. COVID has
led to some bumps in the road without question and has decreased
our forecasting ability in the short-term. But we have made
tremendous progress and created significant value, and now sit on
the verge of multiple potential catalysts.
Our results demonstrate that our core business is stable with
the potential for rapid growth addressing substantial markets and
unmet medical needs. We have:
- An excellent high margin razorblade business model
- Strong validation of our technology amongst users and
world-class partners
- A solid balance sheet to fund our growth
- A new manufacturing facility under construction that is
expected to drive further product gross margin expansion while
supplying product for years to come, and most importantly,
- Two pivotal, randomized, controlled clinical studies, the U.S.
STAR-T and STAR-D trials, expected to complete enrollment in the
next 12-18 months. These studies are intended to support U.S. FDA
marketing approval and open the expansive U.S. markets – a
potential watershed event for our Company
Many of us at the Company have recently purchased shares of
CytoSorbents in the open market at higher prices than where we sit
today, including myself (20,000 shares), Kathleen Bloch, our Chief Financial Officer
(4,000 shares), and many non-reporting employees, because of our
conviction of the strength of our business.
Many thanks to all of you who have supported and invested in
CytoSorbents and who continue to share our vision of the future as
a highly successful leader in treating serious life-threatening
conditions with blood purification. We wish all of you a happy,
healthy, and prosperous 2022!
Dr. Phillip Chan, MD,
PhD
Chief Executive Officer
CytoSorbents Corporation
About CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorbents Corporation is a leader in the treatment of
life-threatening conditions in intensive care and cardiac surgery
using blood purification. Its flagship
product, CytoSorb®, is approved in the European Union with
distribution in more than 70 countries around the world as an
extracorporeal cytokine adsorber designed to reduce the "cytokine
storm" or "cytokine release syndrome" seen in common critical
illnesses that may result in massive inflammation, organ failure
and patient death. These are conditions where the risk of death can
be extremely high, yet few to no effective treatments exist.
CytoSorb is also being used during and after cardiothoracic surgery
to remove inflammatory mediators that can lead to post-operative
complications, including multiple organ failure. More than 162,000
cumulative CytoSorb devices have been utilized to date. CytoSorb
was originally introduced into the European Union under CE-Mark as
a first-in-kind cytokine adsorber. Additional CE-Mark label
expansions were received for the removal of bilirubin and myoglobin
in clinical conditions such as liver disease and trauma,
respectively, and both ticagrelor and rivaroxaban during
cardiothoracic surgery. CytoSorb has also received FDA Emergency
Use Authorization in the United
States for use in adult critically ill COVID-19 patients
with imminent or confirmed respiratory failure. The DrugSorb™-ATR
Antithrombotic Removal System, which is based on the same polymer
technology as CytoSorb, has also been granted FDA Breakthrough
Designation for the removal of ticagrelor, as well as FDA
Breakthrough Designation for the removal of the direct oral
anticoagulant (DOAC) drugs, apixaban and rivaroxaban, in a
cardiopulmonary bypass circuit during urgent cardiothoracic
surgery. The Company has initiated two FDA approved pivotal trials
designed to support U.S. marketing approval of DrugSorb-ATR.
The first is the 120-patient, 20 center
STAR-T (Safe
and Timely Antithrombotic Removal-Ticagrelor)
randomized, controlled trial evaluating the ability of
intraoperative DrugSorb-ATR use to reduce perioperative bleeding
risk in patients on ticagrelor undergoing cardiothoracic surgery.
The second is the 120-patient, 25 center
STAR–D (Safe
and Timely Antithrombotic Removal
- Direct Oral Anticoagulants) randomized, controlled trial,
evaluating the intraoperative use of DrugSorb–ATR to reduce
perioperative bleeding risk in patients undergoing cardiothoracic
surgery on direct oral anticoagulants, including apixaban and
rivaroxaban.
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 more than $39.5 million from DARPA, the U.S. Department of
Health and Human Services (HHS), the National Institutes of Health
(NIH), National Heart, Lung, and Blood Institute (NHLBI), the U.S.
Army, the U.S. Air Force, U.S. Special Operations Command (SOCOM),
Air Force Material Command (USAF/AFMC), and others. The Company has
numerous marketed products and products under development based
upon this unique blood purification technology protected by many
issued U.S. and international patents and registered trademarks,
and multiple patent applications pending, including ECOS-300CY®,
CytoSorb-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®,
K+ontrol™, DrugSorb™, DrugSorb™-ATR, ContrastSorb, and
others. For more information, please visit the Company's websites
at
www.cytosorbents.com and www.cytosorb.com or follow
us on Facebook and Twitter.
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, 2021, 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.
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Investor Relations Contact:
Terri Anne Powers
Vice President, Investor Relations
and Corporate Communications
(732) 482-9984
tpowers@cytosorbents.com
U.S. Public Relations Contact:
Eric Kim
Rubenstein Public Relations
212-805-3052
ekim@rubensteinpr.com
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