Cytosorbents Corp Q1 FY2025 earnings call

Management Statement and Operational Highlights

• CytoSorb Business: Q1 sales of $8.7M saw a 3% Y/Y decline but were flat in constant currency. German sales were disrupted due to strategic reorganization, with the aim to return to growth in H2 2025. Gross margin was 71%, expected to expand with increased production volume.
• DrugSorb-ATR Status: Submitted de novo application to FDA and medical device license to Health Canada. FDA denial led to an appeal filing; Health Canada review delayed but committed to decide soon. Real-world data from the STAR registry demonstrated the device's effectiveness in reducing bleeding in CABG patients.
• Financial Update: Q1 operating loss improved to $3.9M, net loss was $1.5M. Successful shareholder rights offering raised $6.8M, increasing liquidity. Focus is on core business approaching near breakeven by end of 2025.

Segment Performance

• CytoSorb: In the first quarter of 2025, product sales were $8.7 million, a 3% year-over-year decline. However, adjusted for constant currency, sales were flat compared to the same period last year. International distribution and other direct sales markets performed strongly, offsetting disruptions in the German direct sales segment. Gross margin remained solid at 71%. The goal is to return Germany to growth in the second half of 2025.
• DrugSorb-ATR: An investigational device intended to reduce perioperative bleeding in cardiac surgery patients on blood thinners. Submitted applications to FDA and Health Canada; FDA denied with remaining issues, appeal filed; Health Canada review delayed but commitment to decide soon. Real-world data from the STAR registry shows effectiveness in reducing bleeding complications.

Guidance

• Core business goal to be near breakeven by the end of 2025 with sufficient cash to fund initiatives.
• Anticipate production volumes to increase throughout the year to support growth and prepare for DrugSorb-ATR launch.
• Awaiting positive regulatory decisions for DrugSorb-ATR to unlock US and Canadian market access, with initial addressable market estimated at $300M for Brilinta in CABG surgery.

Risks

• Potential denial of FDA appeal for DrugSorb-ATR, which could impede market access.
• Delays in Health Canada review for DrugSorb-ATR, prolonging market entry.
• Continued disruptions in German sales if strategic reorganization efforts do not yield expected growth.

Question and Answer

Q: Michael Sarcone from Jefferies asks about confidence in FDA appeal for DrugSorb-ATR and the worst-case scenario if denied.

A: Makis Deliargyris states confidence in the strength of the submission, mentions the appeal process and notes that a new de novo submission could be pursued if the appeal is denied.

Q: Sean Lee from H.C. Wainwright asks if registry data will help marketing/reimbursement in Europe.

A: Makis Deliargyris responds that clinical data supports reimbursement and health technology assessment (HTA) decisions in the EU.

Q: Michael Kim from Zacks Small-Capital Research asks about other European markets for CytoSorb and other products in development.

A: Phillip Chan talks about progress in Big 5 EU markets and states the focus is singularly on DrugSorb-ATR.

Q: Michael Sarcone from Jefferies follows up on Germany growth visibility.

A: Phillip Chan discusses hospital reform in Germany favoring their technology and ongoing reorganization efforts aimed at reaccelerating German sales in H2 2025