CytoSorbents(CTSO) - 2025 Q1 - Earnings Call Transcript

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]