Financial Data and Key Metrics Changes - In Q2 2025, the company reported product sales of $9.6 million, representing a 9% year-over-year increase and a 4% increase on a constant currency basis compared to the same period last year [8][28] - Gross margin performance remained solid at approximately 71% [9][29] - The operating loss for Q2 was approximately $3.6 million, flat year-over-year, with a net income of $1.9 million compared to a net loss of $4.3 million in the prior year [30][31] Business Line Data and Key Metrics Changes - The German commercial team saw a 22% year-over-year growth, contributing to overall positive performance [8][28] - Distributor sales were among the best ever, second only to a record second quarter last year [9][28] Market Data and Key Metrics Changes - CytoSorb, the flagship product, has been utilized in nearly 300,000 devices across more than 70 countries, driving significant sales [6] - The company is navigating the regulatory process for DrugSorb ATR, with final decisions expected this year [6][18] Company Strategy and Development Direction - The company aims to drive its core business towards near breakeven by the end of 2025 while preparing for the North American commercial launch of DrugSorb ATR [8][32] - The strategic realignment of the German commercial team is expected to lead to stronger execution and improved performance [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the appeals process for DrugSorb ATR, highlighting the strengths of their application and external expert support [39][40] - The company remains optimistic about final regulatory decisions from both the FDA and Health Canada, expected before the end of 2025 [17][18] Other Important Information - The company is actively preparing for a potential North American commercial launch of DrugSorb ATR later this year and into 2026 [32][34] - September is designated as Sepsis Awareness Month, with the company participating in initiatives to highlight the treatment of sepsis and septic shock [21][22] Q&A Session Summary Question: Can you provide more confidence regarding the regulatory submissions? - Management highlighted the positive aspects of the appeals process and the support from external cardiac surgery experts, expressing hope for a favorable FDA response soon [39] Question: Update on Germany's performance and organizational changes? - Management noted a 22% increase in the second quarter and emphasized that the reorganization is a work in progress aimed at improving efficiency [41][43] Question: Clarification on the reconsideration request in Canada? - The company clarified that the request for reconsideration is part of a formal appeals process similar to that with the FDA [48] Question: What is the rollout strategy for DrugSorb ATR in the U.S.? - The rollout will be purposeful, focusing on clinical accounts that participated in the study and a few others, with an emphasis on understanding the pace of adoption [50] Question: How does the sepsis and septic shock data affect the business model? - Management indicated that sepsis and septic shock are core applications for CytoSorb, accounting for a significant portion of critical care revenue, and emphasized the need for effective treatment strategies [51][52] Question: Expectations for gross margins in Q3 and Q4? - Management expressed that while gross margins have been stable, there are opportunities to improve efficiencies and potentially increase margins with the approval of DrugSorb ATR [55]

Summary of CytoSorbents Conference Call Company Overview - **Company**: CytoSorbents - **Industry**: Medical Supplies and Devices - **Key Products**: - **CytoSorb**: Blood purification technology for critical care and cardiac surgery - **DrugSorb ATR**: Investigational product for reducing perioperative bleeding during CABG surgery Core Points and Arguments 1. **CytoSorb Product Performance**: - Achieved record core non-COVID product sales of $35.6 million in 2024, growing 15% year-over-year [3] - Over 270,000 human treatments in more than 70 countries [3] - High gross margins of 71% [27] 2. **DrugSorb ATR Development**: - Designed to address bleeding complications in patients on blood thinners during surgery [11] - Received two FDA breakthrough device designations [14] - Aimed at a significant unmet medical need in the US and Canadian markets [3] 3. **Technology and Mechanism**: - Utilizes a patented polymer bead technology that effectively removes a broad range of harmful substances from blood [4] - CytoSorb targets severe inflammation, which affects up to 60% of ICU patients [7] 4. **Clinical Research and Efficacy**: - Recent studies show significant reductions in mortality and shock reversal in patients treated with CytoSorb [8][10] - Meta-analysis indicated a 50% reduction in 28-day all-cause mortality in patients treated with CytoSorb [10] 5. **Regulatory Updates**: - FDA denial letter received on April 25, 2025, but the company plans to file a formal appeal [23][24] - Health Canada submission is under advanced review, with expectations for decisions in 2023 [25] 6. **Market Potential**: - Total addressable market estimated at $300 million initially, potentially growing to over $1 billion with additional indications [26] 7. **Financial Position**: - Cash position of $13.1 million at the end of Q1, with a quarterly burn rate of $2.5 million to $3 million [46] - Aiming for cash flow breakeven by the second half of 2025 [28] 8. **Sales Strategy**: - Plans for a controlled market release in clinical trial centers post-approval, followed by a broader launch in 2026 [36] - Predominantly direct sales force in the US, complemented by perfusionist distributors [37] 9. **Challenges in Germany**: - Germany accounts for about 40% of revenue but has seen flat growth due to macroeconomic factors [52] - Organizational changes are being made to drive deeper into accounts and improve sales effectiveness [53] Additional Important Information - **Cost Savings for Hospitals**: - Using DrugSorb can save hospitals $18,000 to $30,000 per patient by reducing the need for prolonged ICU stays to wash out blood thinners [43] - **Clinical Trial Insights**: - The STAR T trial showed that DrugSorb ATR significantly reduced bleeding severity in CABG patients [19] - **Market Preparation**: - The company is actively preparing for market entry while awaiting regulatory decisions [31] This summary encapsulates the key points discussed during the conference call, highlighting the company's product performance, regulatory challenges, market potential, and strategic direction.

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $8,700,000, a 3% decrease compared to $9,000,000 in Q1 2024, but flat on a constant currency basis [31][32] - Gross margin for the quarter was 71%, consistent with the full year 2024, but lower than 76% in Q1 2024 due to a 23% reduction in units produced [32] - Operating loss improved by 17% to $3,900,000 compared to $4,700,000 in 2024, driven by a 12% reduction in operating expenses [32][33] - Net loss for the quarter was $1,500,000 or $0.02 per share, compared to $6,100,000 or $0.11 per share in the prior year [33] Business Line Data and Key Metrics Changes - Core product sales for CytoSorb in Q1 2025 were $8,700,000, representing a 3% year-over-year decline, but constant currency sales were approximately the same as the previous year [9][10] - International distribution and other direct sales markets showed strong performance, offsetting temporary disruptions in the German direct sales segment [10] Market Data and Key Metrics Changes - Germany accounts for approximately 40% of the company's sales, and efforts are underway to return to growth in this critical market after two years of flat performance [16] - The company is focusing on expanding its presence in Dubai to access high-growth markets in the Middle East and Africa [17] Company Strategy and Development Direction - The company aims to achieve near breakeven by the end of 2025 while preparing for the anticipated launch of DrugSorb ATR in the U.S. and Canada [35][39] - Key growth catalysts include publicizing new clinical data, simplifying customer messaging, and returning German sales to growth [14][16] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of their submission for DrugSorb ATR and the potential for a positive outcome from the FDA appeal process [46][47] - The company is actively preparing for the potential commercial launch of DrugSorb ATR, emphasizing the importance of real-world data and clinical evidence [27][39] Other Important Information - The company raised $6,800,000 through a shareholder rights offering, which increased available liquidity and allowed for the release of $5,000,000 of restricted cash [33][34] - The company welcomed a new Vice President of Marketing for North America to lead the strategy for DrugSorb ATR [29][30] Q&A Session Summary Question: Can you talk about your level of confidence in getting clearance for DrugSorb ATR? - Management expressed strong confidence in the strength of their submission and the compelling data from the STAR T trial, believing the chances during the appeal process are good [46][47] Question: What happens if the appeal is denied? - Management indicated that if the appeal is unsuccessful, they could continue with a new de novo submission using a large portion of the original submission, which would result in a shorter review time [47][48] Question: Will the clinical data help with marketing or reimbursement in Europe? - Management confirmed that strong clinical data is crucial for supporting reimbursement and health technology assessment decisions in the EU [51] Question: Are there any updates on other products in development besides CytoSorb and DrugSorb ATR? - Management stated that the primary focus is currently on DrugSorb ATR, with other technologies like HemoDefend VGA being discussed for the future [60] Question: What is the visibility into the conditions in Germany for growth? - Management acknowledged the unique challenges in Germany but expressed optimism about the changes being implemented to drive operational efficiency and expected benefits in the second half of the year [66]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $8,700,000, a 3% year-over-year decline, but flat on a constant currency basis compared to $9,000,000 in Q1 2024 [31][34] - Gross margin for the quarter was 71%, consistent with the full year 2024, but lower than 76% in Q1 2024, primarily due to a 23% reduction in units produced [33] - The operating loss improved by 17% to $3,900,000 compared to $4,700,000 in 2024, driven by a 12% reduction in operating expenses [34] Business Line Data and Key Metrics Changes - Core product sales for CytoSorb were $8,700,000 in Q1 2025, representing a 3% year-over-year decline, with strong performances in international distribution offsetting disruptions in the German market [8][10] - The company aims to return German sales to growth in the second half of 2025 after two years of flat performance [10][15] Market Data and Key Metrics Changes - Germany accounts for approximately 40% of the company's sales, and the company is focusing on optimizing its sales strategy in this critical market [15] - The company is also expanding its presence in the Middle East and Africa through its Dubai subsidiary, which is expected to enhance market access [16] Company Strategy and Development Direction - The company is focused on generating new clinical data to guide physicians in optimizing CytoSorb use, which is expected to drive broader adoption and revenue growth [39] - The strategic initiative includes a realignment of the German sales team and approach to improve execution and results [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential for growth in the second half of 2025, particularly in Germany, despite challenges from hospital reforms and pandemic-related issues [67] - The company is preparing for the potential commercial launch of DrugSorb ATR in the U.S. and Canada, with an initial market opportunity estimated at over $300,000,000 [27][41] Other Important Information - The company successfully executed a shareholder rights offering, raising $6,800,000, which strengthened its balance sheet and increased liquidity [34][36] - The company welcomed a new Vice President of Marketing for North America to lead the strategy for DrugSorb ATR [29] Q&A Session Summary Question: Confidence in FDA appeal and next steps if denied - Management expressed strong confidence in the strength of their submission and the compelling data from the STAR T trial, believing the chances during the appeal process are good [47][48] - If the appeal is unsuccessful, the company could pursue a new de novo submission using much of the original data, potentially shortening the review time [49] Question: Impact of clinical data on marketing and reimbursement in Europe - Management confirmed that strong clinical data will be leveraged to support reimbursement and health technology assessments across Europe [53] Question: Updates on European markets beyond Germany - The company is making good progress in major European markets, including the UK, and is seeing momentum in other EU countries [58][60] Question: Focus on other products in development - Currently, the primary focus is on DrugSorb ATR, with other technologies like HemoDefend VGA being considered for future discussions [62] Question: Visibility and confidence in reaccelerating growth in Germany - Management acknowledged the unique challenges in Germany but expressed optimism about the changes being implemented and early positive developments in Q2 [68]