CytoSorbents(CTSO) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Q3 2024 product sales were $8.6 million, exceeding the guided range of$8.3 million to $8.5 million, representing an 11$2.7 million compared to $5 million in Q2 2024 [14] - Adjusted EBITDA loss improved to$3.5 million from $5.6 million in the prior year, driven by reduced operating expenses [41] - Net loss for the quarter was$2.3 million compared to $9.2 million in the prior year [41] Business Line Performance - CytoSorb, the flagship product, generated$34 million in trailing 12-month sales, with over 0.25 million devices used cumulatively across 76 countries [9] - DrugSorb ATR, an investigational device, has received FDA breakthrough device designation and is under regulatory review in the U.S. and Canada, with decisions expected in 2025 [10][22] - The PuriFi hemoperfusion pump, launched last quarter, has received positive feedback and is expected to drive increased demand for CytoSorb cartridges [33] Market Performance - CytoSorb sales showed strength in international direct sales channels, particularly in Germany, and growing interest in distributor-served geographies [12] - Brilinta, the blood thinner targeted by DrugSorb ATR, enjoys a dominant market share in Canada and a growing 50% share in the U.S. for acute coronary syndrome treatment [17] Strategic Direction and Industry Competition - The company is focused on expanding its international critical care and cardiac surgery business, improving operational efficiencies, and preparing for the potential launch of DrugSorb ATR in North America [34] - DrugSorb ATR has the potential to address a $300 million TAM initially, which could grow to over$1 billion with label expansion to other blood thinner categories [30] - The company is leveraging its manufacturing and commercialization experience from international markets for the expected North American launch [30] Management Commentary on Operating Environment and Future Outlook - Management highlighted the progress in regulatory submissions for DrugSorb ATR and the potential to transform the standard of care for patients with acute coronary syndromes [27][29] - The company expects to return to normalized production levels and product gross margins in Q4 2024 [13] - Management is optimistic about the future growth opportunities, particularly with the potential FDA and Health Canada approvals in 2025 [34] Other Important Information - The company received MDSAP certification, a significant regulatory milestone, enabling compliance with quality management standards in multiple countries, including the U.S. and Canada [23] - The STAR-T trial data showed a favorable benefit-to-risk profile for DrugSorb ATR in patients undergoing CABG surgery within 2 days of Brilinta discontinuation [19][25] - The company has $12.2 million in cash, including$6.5 million in restricted cash, and access to additional milestone-based liquidity through a loan agreement [42][43] Q&A Session Summary Question: FDA submission review process - The FDA review process for DrugSorb ATR is ongoing, with a decision expected in 2025. The company is eligible for priority review due to its breakthrough device designation, which may expedite the process [46][47] Question: Taiwan launch update - Regulatory approval in Taiwan was recently obtained, and the company anticipates accelerated market entry in the coming year [48] Question: Loan proceeds and restricted cash - The $5 million in restricted cash will be released upon FDA acceptance of the marketing application and raising$5 million in new equity, potentially unlocking $10 million in liquidity [49] Question: PuriFi pump program - The PuriFi pump is designed to expand CytoSorb usage globally, particularly in regions without dialysis infrastructure. It is currently in trial phases and has received positive feedback [51][54] Question: Gross margin normalization - The company expects to return to normalized gross margins in Q4 2024, with a long-term goal of achieving 75% to 80% margins for CytoSorb [56][57]