MONMOUTH JUNCTION, N.J., Aug. 7, 2017 /PRNewswire/
-- CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader commercializing its flagship CytoSorb®
blood filter to prevent or treat deadly inflammation and organ failure in critically-ill and cardiac surgery patients around the
world, reports financial and operational results for the quarter ending June 30, 2017.
Second Quarter 2017 Financial Highlights:
- Total Q2 2017 revenues increased 60% to $3.6 million, which includes both product sales and
grant income, up from $2.2 million in Q2 2016
- Q2 2017 product sales were $3.0 million, an increase of 64% or $1.2
million, compared to $1.9 million in Q2 2016, driven by record unit sales
- Product gross margins for Q2 2017 were approximately 65% in Q2 2017 as compared to 68% for Q2 2016, a result of the mix of
direct and distributor sales
- Trailing twelve-month product sales for the period ending June 30, 2017 were $10.4 million, compared to $6.0 million for the period ending June 30, 2016
- As of June 30, 2017, the Company had $16.4 million in cash and
cash equivalents, which is expected to provide sufficient working capital to fund our operations and clinical trials through
2018
Second Quarter 2017 Operational Highlights:
- More than 27,000 CytoSorb treatments have been delivered worldwide for critical care illnesses and cardiac surgery, an
increase from 14,000 a year ago
- CytoSorb reimbursement rates in Germany have increased significantly in a survey of many
key accounts, after achieving a dedicated procedural code for CytoSorb therapy last year
- Appointed Eric Mortensen, M.D., Ph.D., former Vice President & Therapeutic Area Clinical
Head for Inflammation and Immunology at Pfizer, as Chief Medical Officer to lead the U.S. REFRESH 2 cardiac surgery trial and
international clinical development
- Presented positive REFRESH I trial data on safety and reduction of both plasma free hemoglobin and activated complement
during complex cardiac surgery at the American Association for Thoracic Surgery conference in Boston,
MA
- Extended an exclusive partnership with Aferetica to distribute CytoSorb in Italy through
2021 that may lead to more than $10 million in sales during that period
- Further strengthened our working capital position by closing upon the remaining $5 million in
a term loan with Bridge Bank
- Engaged with LifeSci Advisors as our Investor Relations firm, with the goal of leveraging their broad IR platform to expand
our investor network, both here in the U.S. and internationally
"We are pleased to report our first $3 million quarter in CytoSorb sales, driven by both record
direct and distributor sales, and the continuation of our solid trajectory of growth. Based upon our outlook, we continue
to expect an expansion of sales and achievement of operating profitability in 2018," said Dr. Phillip
Chan, Chief Executive Officer of CytoSorbents.
"Meanwhile, we have delivered over 27,000 CytoSorb treatments to date, with ongoing success in treating many of the most
complicated patients in medicine with diseases such as sepsis, trauma, liver failure, complications from cardiac surgery, and
many others, with new potential areas such as cancer immunotherapy. These are markets that continue to proliferate, due to
the aging population and lack of effective treatments. Sepsis, for example, has been officially recognized by the World
Health Organization (WHO) as a Global Health
Priority afflicting an estimated 30 million people worldwide each year, killing 6 million despite the use of
antibiotics. A recent Bloomberg feature declared, "America has a $27
billion sepsis crisis", citing a new brief from the Agency for Healthcare Research and Quality (AHRQ), a federal agency that
studies clinical practices, which found that sepsis was the second most common reason for hospital stays. Sepsis is a
complicated disease that has defied either simple or complex solutions for decades and it is clear that multiple strategies will
be required to conquer it. We believe that CytoSorb, with its multi-modal attack on sepsis, is at the forefront of
treatment."
"Under the leadership of our new Chief Medical Officer, Dr. Eric Mortensen, we have refined our
clinical trial strategy, optimizing the design of the U.S. REFRESH 2 cardiac surgery trial, expected to start later this year,
and that of other company-sponsored randomized controlled trials. These initiatives will be supplemented by the
approximately 60 investigator-initiated studies in various stages of process, external grant-funded and company-funded research,
and new product development. In addition, there has been a tremendous amount of reported clinical activity highlighting the
benefit of CytoSorb treatment, with two dozen scientific and medical journal publications in the past year, an interim analysis
on nearly 200 patients from the CytoSorb International Registry accepted for publication, more than 50 Case of the Week synopses, and many
presentations and posters given at major international scientific congresses. We expect the level of clinical activity and
reporting to remain strong in the future as we drive adoption of CytoSorb throughout the world."
Results of Operations
Comparison for the three months ended June 30, 2017 and 2016:
Revenues:
Revenue from product sales was approximately $3,041,000 in the three months ended June 30, 2017, as compared to approximately $1,853,000 in the three months ended
June 30, 2016, an increase of approximately $1,188,000, or 64%. This
increase was largely driven by an increase in direct sales from both new customers and repeat orders from existing customers,
along with an increase in distributor sales.
Grant income was approximately $525,000 for the three months ended June
30, 2017 as compared to approximately $370,000 for the three months ended June 30, 2016, an increase of approximately $155,000. This increase was a
result of revenue recognized from new grants.
As a result of the increases in both product sales and grant income, for the three months ended June
30, 2017, we generated total revenue of approximately $3,566,000, as compared to total
revenues of approximately $2,222,000, for the three months ended June 30,
2016, an increase of approximately $1,344,000 or 60%.
Cost of Revenues:
For the three months ended June 30, 2017 and 2016, cost of revenue was approximately
$1,482,000 and $873,000, respectively, an increase of approximately
$609,000. Product cost of revenues increased approximately $458,000
during the three months ended June 30, 2017 as compared to the three months ended June 30, 2016 due to increased sales. Product gross margins were approximately 65% for the three months
ended June 30, 2017, as compared to approximately 68% for the three months ended June 30, 2016. This decrease in gross margin was primarily due to the mix of direct sales and
distributor sales.
Research and Development Expenses :
For the three months ended June 30, 2017, research and development expenses were approximately
$488,000 as compared to research and development expenses of approximately $1,092,000 for the three months ended June 30, 2016. This decrease of
approximately $604,000 was primarily due to a decrease in costs related to our various clinical
studies and trials.
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting expenses were approximately $443,000 for the three months
ended June 30, 2017, as compared to approximately $319,000 for the
three months ended June 30, 2016.
Selling, General and Administrative Expense:
Selling, general and administrative expenses were approximately $3,484,000 for the three months
ended June 30, 2017, as compared to approximately $2,625,000 for the
three months ending June 30, 2016. The largest contributors to this change were an increase
in non-cash stock-based compensation expense primarily based upon management's progress toward meeting the 2017 operating
milestones, an increase in royalty expenses due to growth in product sales, and an increase in salaries and commissions due to
headcount additions and personnel-related costs.
Interest Income (Expense):
For the three months ended June 30, 2017, interest expense was approximately $123,000, as compared to interest income of approximately $2,000 for the three
months ended June 30, 2016. This increase in interest expense of approximately $125,000 is directly related to interest expense incurred and amortization of loan acquisition costs related to
the Company's financing facility with Bridge Bank on which $5,000,000 was drawn on June 30, 2016 and was outstanding for the three months ended June 30, 2017.
Gain (Loss) on Foreign Currency Transactions:
For the three months ended June 30, 2017, the gain on foreign currency transactions was
approximately $720,000 as compared to a loss of approximately $129,000 for the three months ended June 30, 2016. The 2017 gain is directly
related to the $0.07 increase in the exchange rate of the Euro into U.S. dollars at June 30, 2017 as compared to March 31, 2017.
Comparison for the six months ended June 30, 2017 and 2016:
Revenues:
Revenue from product sales was approximately $5,637,000 in the six months ended June 30, 2017, as compared to approximately $3,450,000 in the six months ended
June 30, 2016, an increase of approximately $2,187,000, or 63%.
This increase was largely driven by an increase in direct sales from both new customers and repeat orders from existing
customers, along with an increase in distributor sales.
Grant income was approximately $1,043,000 for the six months ended June
30, 2017, as compared to approximately $582,000 for the six months ended June 30, 2016, an increase of approximately $461,000, or 79%. This increase
was a result of revenue recognized from new grants.
As a result of the increases in both product sales and grant income for the six months ended June 30,
2017, we generated total revenue of approximately $6,680,000, as compared to total revenue
for the six months ended June 30, 2016 of approximately $4,032,000,
an increase of approximately $2,648,000, or 66%.
Cost of Revenues:
For the six months ended June 30, 2017 and 2016, cost of revenue was approximately $2,736,000 and $1,693,000, respectively, an increase of approximately
$1,043,000. Product cost of revenues increased approximately $687,000
during the six months ended June 30, 2017 as compared to the six months ended June 30, 2016 due to increased sales. Product gross margins were approximately 66% for the six months
ended June 30, 2017, as compared to approximately 65% for the six months ended June 30, 2016 primarily due to the mix of direct and distributor sales.
Research and Development Expenses :
For the six months ended June 30, 2017, research and development expenses were approximately
$957,000, as compared to research and development expenses of approximately $1,948,000 for the six months ended June 30, 2016, a decrease of approximately
$991,000. This decrease was due to a reduction in costs related to various clinical studies
of approximately $672,000 and an increase in direct labor and other costs being deployed toward
grant-funded activities of approximately $356,000, which had the effect of decreasing the amount of
our non-reimbursable research and development costs.
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting expenses were approximately $723,000 for the six months
ended June 30, 2017, as compared to approximately $574,000 for the
six months ended June 30, 2016.
Selling, General and Administrative Expense:
Selling, general and administrative expenses were approximately $6,151,000 for the six months
ended June 30, 2017, as compared to approximately $4,595,000 for the
six months ending June 30, 2016, an increase of $1,556,000. The
increase in selling, general, and administrative expenses was primarily due to an increase in non-cash stock compensation expense
based upon progress toward meeting the 2017 milestones, an increase in salaries and commissions due to headcount additions and
increases in product sales, and an increase in royalty expenses due to growth of product sales.
Interest Income (Expense):
For the six months ended June 30, 2017, interest expense was approximately $244,000, as compared to interest income of approximately $5,000 for the six
months ended June 30, 2016. This increase in interest expense of approximately $249,000 is directly related to interest expense incurred and amortization of loan acquisition costs related to
the Company's financing facility with Bridge Bank on which $5,000,000 was drawn on June 30, 2016 and was outstanding for the six months ended June 30, 2017.
Gain (Loss) on Foreign Currency Transactions:
For the six months ended June 30, 2017, the gain on foreign currency transactions was
approximately $873,000, as compared to approximately $103,000 for the
six months ended June 30, 2016. The 2017 gain is directly related to the $0.09 increase in the exchange rate of the Euro at June 30, 2017, as compared to
December 31, 2016.
Liquidity and Capital Resources
On June 30, 2016, the Company and its wholly-owned subsidiary, CytoSorbents Medical, Inc.,
entered into a Loan and Security Agreement with Bridge Bank, a division of Western Alliance Bank, pursuant to which the Bank
agreed to loan up to an aggregate of $10 million to the Company, to be disbursed in two equal
tranches of $5 million. We received the proceeds from the first tranche on June 30, 2016 and from the second tranche on June 30, 2017.
In addition, in April 2017, the Company closed on the sale of an aggregate of 2,555,555 shares
of Common Stock, including the underwriters' full exercise of an over-allotment option pursuant to the Company's existing shelf
registration statement on Form S-3. Based on a public offering price of $4.50 per share, the
Company received gross proceeds of $11.5 million, and, after deducting the underwriting discounts
and commissions and estimated expenses related to the offering, the Company received net proceeds of approximately $10.3 million.
As a result of the receipt of additional proceeds both under the Loan and Security Agreement in June
2017 and in conjunction with the closing of the equity financing in April 2017, we have
$16.4 million in cash on hand at June 30, 2017. We believe we
have sufficient liquidity to fund our operations through 2018.
2017 Third Quarter Revenue Guidance
CytoSorbents has not historically given financial guidance on quarterly results until the quarter has been completed. However,
we continue to expect our second half 2017 product sales to exceed sales reported in the first half of 2017.
For additional information please see the Company's Quarterly Report on Form 10-Q for the quarter ending June 30, 2017 filed on August 7, 2017 on http://www.sec.gov.
Conference Call Details:
Date: Monday, August 7, 2017
Time: 4:45 PM Eastern
Participant Dial-In: 719-325-4799
Conference ID: 1224745
There will also be a simultaneous live webcast of the conference call that can be accessed through the following link:
http://public.viavid.com/index.php?id=125174
An archived recording and written transcript of the conference call will be available under the Investor Relations section of
the Company's website at: http://cytosorbents.com/investorrelations/financial-results/
About CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorbents Corporation is a leader in
critical care immunotherapy, specializing in blood purification. Its flagship product, CytoSorb® is approved in the European Union with distribution in 43 countries
around the world, as a safe and effective extracorporeal cytokine adsorber, designed to reduce the "cytokine storm" or "cytokine
release syndrome" that could otherwise cause massive inflammation, organ failure and death in common critical illnesses such as
sepsis, burn injury, trauma, lung injury and pancreatitis, as well as in cancer immunotherapy. These are conditions where the
risk of death is extremely high, yet no effective treatments exist. CytoSorb® is also being used during and after cardiac surgery
to remove inflammatory mediators, such as cytokines and free hemoglobin, which can lead to post-operative complications,
including multiple organ failure. CytoSorbents has completed its REFRESH (REduction in FREe Hemoglobin) 1 trial – a multi-center,
randomized controlled study that has demonstrated the safety of intra-operative CytoSorb® use in a heart-lung machine during
complex cardiac surgery. In 2017, the company plans to initiate a pivotal REFRESH 2 trial intended to support U.S. FDA
approval. CytoSorb® has been used safely in more than 23,000 human treatments to date.
CytoSorbents' purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic
substances from blood and other bodily fluids by pore capture and surface adsorption. Its technologies have received non-dilutive
grant, contract, and other funding in excess of $18 million from DARPA, the U.S. Army, the U.S. Department of Health
and Human Services, the National Institutes of Health (NIH), National Heart, Lung, and Blood Institute (NHLBI), U.S. Special
Operations Command (SOCOM) and others. The Company has numerous products under development based upon this unique blood
purification technology, protected by 32 issued U.S. patents and multiple applications pending, including CytoSorb-XL,
HemoDefend™, VetResQ™, ContrastSorb, DrugSorb, and others. For more information, please visit the Company's websites at
www.cytosorbents.com and www.cytosorb.com or follow us on Facebook and Twitter
Forward-Looking Statements
This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by
the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to,
statements about our plans, objectives, representations and contentions and are not historical facts and typically are identified
by use of terms such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential,"
"continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the
forward-looking statements in this press release represent management's current judgment and expectations, but our actual
results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause
or contribute to such differences include, but are not limited to, the risks discussed in our Annual Report on Form 10-K, filed
with the SEC on March 3, 2017, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press
releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of
the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking
statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise, other than as required under the Federal securities laws.
CYTOSORBENTS CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME/LOSS
|
(amounts in thousands, except per share data)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Revenues
|
|
|
|
|
|
|
|
|
Sales
|
$ 3,041
|
|
$ 1,852
|
|
$ 5,637
|
|
$ 3,450
|
|
Grant income
|
525
|
|
370
|
|
1,043
|
|
583
|
|
Total revenue
|
3,566
|
|
2,222
|
|
6,680
|
|
4,033
|
|
Cost of revenue
|
1,482
|
|
873
|
|
2,737
|
|
1,693
|
|
Gross profit
|
2,084
|
|
1,349
|
|
3,943
|
|
2,340
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Research and development
|
488
|
|
1,092
|
|
957
|
|
1,948
|
|
Legal, financial and other consulting
|
443
|
|
319
|
|
723
|
|
574
|
|
Selling, general and administrative
|
3,484
|
|
2,625
|
|
6,151
|
|
4,595
|
|
Total expenses
|
4,415
|
|
4,036
|
|
7,831
|
|
7,117
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
(2,331)
|
|
(2,687)
|
|
(3,888)
|
|
(4,777)
|
|
Other income(expense), net
|
1,215
|
|
(318)
|
|
1,394
|
|
(64)
|
|
Income (loss) before benefit from income taxes
|
(1,116)
|
|
(3,005)
|
|
(2,494)
|
|
(4,841)
|
|
Benefit from income taxes
|
-
|
|
-
|
|
-
|
|
-
|
|
Net income (loss) available to common shareholders
|
$ (1,116)
|
|
$ (3,005)
|
|
$ (2,494)
|
|
$ (4,841)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
$ (0.04)
|
|
$ (0.12)
|
|
$ (0.09)
|
|
$ (0.19)
|
|
Weighted average number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
27,953,542
|
|
25,416,077
|
|
26,735,416
|
|
25,408,599
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$ (1,116)
|
|
$ (3,005)
|
|
$ (2,494)
|
|
$ (4,841)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Currency translation adjustment
|
(610)
|
|
145
|
|
(742)
|
|
(101)
|
Comprehensive income (loss)
|
$ (1,726)
|
|
$ (2,860)
|
|
$ ( 3,236)
|
|
$ (4,942)
|
|
CYTOSORBENTS CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(amounts in thousands)
|
|
|
June 30, 2017 (Unaudited)
|
|
December 31, 2016
|
ASSETS:
|
|
|
|
Cash and cash equivalents
|
$ 16,402
|
|
$ 5,245
|
Grants and accounts receivable, net
|
2,059
|
|
1,433
|
Inventories
|
890
|
|
834
|
Prepaid expenses and other current assets
|
390
|
|
316
|
Total current assets
|
19,741
|
|
7,828
|
|
|
|
|
Property and equipment, net
|
725
|
|
570
|
Other assets
|
1,620
|
|
1,296
|
TOTAL ASSETS
|
$ 22,086
|
|
$ 9,694
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
|
|
|
|
Accounts payable
|
$ 1,581
|
|
$ 1,330
|
Current maturities of long-term debt
|
2,000
|
|
833
|
Accrued expenses and other current liabilities
|
1,602
|
|
2,115
|
Warrant liability
|
1,047
|
|
1,812
|
Total current liabilities
|
6,230
|
|
6,090
|
Long-term debt, net
|
7,940
|
|
4,078
|
TOTAL LIABILITIES
|
14,170
|
|
10,168
|
|
|
|
|
Total stockholders' equity/(deficit)
|
7,916
|
|
(474)
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY/(DEFICIT)
|
$ 22,086
|
|
$ 9,694
|
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CytoSorbents Contact:
Amy Vogel
Investor Relations
732-398-5394
avogel@cytosorbents.com
Investor Relations Contact:
Bob Yedid
LifeSci Advisors
646-597-6989
bob@lifesciadvisors.com
Public Relations Contact:
Amy Phillips
Pascale Communications
412-327-9499
amy@pascalecommunications.com
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SOURCE CytoSorbents Corporation