CytoSorbents(CTSO) - 2025 Q1 - Earnings Call Transcript

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]