MONMOUTH JUNCTION, N.J.,
Aug. 13, 2015 /PRNewswire/ --
CytoSorbents Corporation (NASDAQ: CTSO), a critical care
immunotherapy leader commercializing its CytoSorb® blood
purification technology to reduce deadly uncontrolled inflammation
in hospitalized patients around the world, reported financial and
operational results for the three and six months ended June 30, 2015.
Highlights Potential Catalysts for Accelerated Growth in
the Second Half of 2015
Recent Financial Highlights:
- Product revenues for the second quarter of 2015 grew to
$773K, a 17% increase over product
revenues of $663K for the same period
in 2014. Disregarding the decline in the Euro to U.S. Dollar
exchange rate, product sales for Q2 2015 would have been
$920K, or a 39% increase versus a
year ago
- Product gross margins for Q2 2015 were approximately 63%
- Trailing 12-month CytoSorb® sales were $3.4M, an increase of 89% over the trailing
12-month period ended June 30,
2014
- Strong balance sheet, with cash and short term investments
totaling $11.2M
Recent Operational Highlights:
- Received Saudi Food and Drug Authority (SFDA) approval and
Medical Device Marketing Authorization of CytoSorb® in Saudi
Arabia. This enables the initiation of sales of CytoSorb® in
the country and potentially opens many doors to the Middle East
- Entered into a multi-year exclusive distribution agreement with
TekMed Pty Ltd, a leading provider of dialysis equipment, vascular
access devices, and disposables, to distribute CytoSorb throughout
Australia and New Zealand for all critical care and cardiac
surgery applications. CytoSorb is already registered in these
countries, enabling TekMed to sell immediately
- Established an exclusive agreement with AlphaMedix Ltd to
distribute CytoSorb® in Israel for
all critical care and cardiac surgery applications. AlphaMedix
has begun the process of seeking Israeli Ministry of Health
approval for CytoSorb® and registration with AMAR, the Ministry's
Medical Device division
- Appointed Michael G. Bator to the Board of Directors, former
Managing Director of Healthcare Research at Jennison Associates, a
U.S. mutual and pension fund management company with $188 billion in assets
- Added to the Russell Microcap® Index on
June 26, 2015, a significant
corporate achievement that increases the visibility and exposure of
the company and its life-saving technology to the broader
investment community
Dr. Phillip Chan, Chief Executive
Officer of CytoSorbents stated, "We achieved solid growth in
CytoSorb® sales in the second quarter of 2015, driven by increases
in new accounts and reorders in our direct sales territories by our
core four person sales team. In fact, on a pro-forma basis, if we
exclude the impact of the decline in the Euro, our product revenues
would have been $920K, our second
best quarter for CytoSorb® sales in our history. More
recently, there have been a number of developments and near term
catalysts that should begin to accelerate growth in the second half
of this year. These include:
- Expansion of the direct sales team in early Q3 to 7 people,
including 2 new full-time sales people and a contract sales
representative. With the planned addition of 2 more sales
people and a medical science liaison before the end of the year, we
believe we will be well-positioned to meet the interest and demand
for CytoSorb® in our direct sales territories
- Recent approval of CytoSorb® in Saudi
Arabia and signing of TekMed in Australia and New
Zealand, which immediately opened markets representing 57
million people
- Nearing initial marketing with partner Fresenius Medical Care
in France, Poland, Denmark, Norway, Finland and Sweden, which would unlock additional markets
covering more than 127 million people
- Completion of, and near-term availability of clinical data from
two randomized, controlled investigator-initiated studies from
University of Hamburg-Eppendorf and Medical University of
Vienna, evaluating the safety and
ability of CytoSorb®, when used intra-operatively during cardiac
surgery, to reduce cytokines and post-operative inflammation
- The planned completion of an evaluation of CytoSorb® when used
intra-operatively during cardiac surgery by one of the leading
global cardiac surgery companies. CytoSorb® has now been used
safely, without complications, intra-operatively in more than 300
cardiac surgeries to-date in Germany and Austria
- Hosting the 2nd International CytoSorb® Users
Meeting in Berlin, Germany on
October 2, 2015, just before our
major presence at the 28th European Society of Intensive
Care Medicine Congress in Berlin
(ESICM, Oct 3-7) and the
29th European Association for Cardio-Thoracic Surgery
Meeting in Amsterdam, Netherlands
(EACTS, October 3-7). These events represent great exposure
for the Company and CytoSorb®, and put us directly in the mindshare
of our current and future customers."
Dr. Chan continued, "In addition to our commercialization
efforts abroad, we are heavily focused on bringing CytoSorb® to the
U.S. market through two main paths.
- Cardiac Surgery: We are seeking approval to use
CytoSorb® intra-operatively during complex cardiac surgery and
extended cardiopulmonary bypass. These open heart surgeries
are very common and can result in the production of large amounts
of toxic plasma free hemoglobin, cytokines, activated complement
and other factors that can lead to post-operative complications
such as kidney and respiratory failure.
- The FDA has approved an amendment to our REFRESH (REduction in
FREe Hemoglobin) trial, to convert it into a 40-patient, 8-center,
randomized controlled feasibility study. In doing so, we have
consolidated the original 20 patient, single arm, 3 center study
together with the larger non-interventional study that we had
previously discussed. Led by our Chief Medical Officer, Dr.
Robert Bartlett, MD, we are in the
final contract negotiation and Institutional Review Board (IRB)
approval stage at 8 major U.S. heart centers and are on schedule to
begin the study in September.
- We welcome Steven Sisk, Director
of Clinical Operations, from Medtronic, who will oversee the
day-to-day operations of this trial and our other U.S.
trials. He replaces Dr. Greg Di
Russo, who stepped down for personal reasons.
- Sepsis and Critical Care: Sepsis is the overzealous
immune response to a severe infection and a top ten cause of death
worldwide for which there is no effective therapy. We are
preparing an Expedited Access Pathway (EAP) application, and look
to submit the application to the FDA in the coming weeks to seek
EAP Designation, similar to "Breakthrough Designation" for drugs
and biologics. The EAP pathway was developed by the FDA to help
expedite market approval of safe medical devices that address major
unmet medical needs. We believe that CytoSorb® is well-suited for
the EAP program."
Dr. Chan concluded, "Finally, we continue to be excited about
the regular flow of successful case report studies and ongoing
larger studies that are coming in from around the world. The
upcoming 2nd International CytoSorb® User's Meeting will
report on many of these, and we will give an overview of several of
these cases during today's earnings call."
"Please join us on the earnings call today at 4:45PM EDT where we will cover our progress in
greater detail. In addition, we will address questions from
analysts and investors during the live question and answer
period. The investor presentation and a written transcript of
the conference call will be available within a week of the webcast
on our website."
Conference Call
Details:
|
|
Date:
|
Thursday,
August 13, 2015
|
Time:
|
4:45 PM
Eastern
|
Participant
Dial-In:
|
719-325-4744
|
Live Presentation
Webcast: http://public.viavid.com/index.php?id=115295
|
An archived recording of the conference call will be available
under the Investor Relations section of the Company's website
at http://www.cytosorbents.com/invest.htm
Financial Results for the Second Quarter Ended
June 30, 2015
Revenues:
The Company generated total revenues of approximately
$964,000 and $1,025,000 for the three months ending
June 30, 2015 and June 30, 2014, respectively. Product revenues
were approximately $773,000 for the
quarter ended June 30, 2015, as
compared to product revenues of $663,000 for the quarter ended June 30, 2014. This $110,000 or approximately 17% increase in product
revenues was a result continued growth of direct sales as well as
expansion of sales to our growing distributor network. Product
sales were also negatively impacted by the decline in the exchange
rate of the Euro. The impact of the decline in the exchange rate of
the Euro was approximately $147,000,
or 19% of sales, for the three months ended June 30, 2015. Additionally, grant revenue
and other income was approximately $191,000 and $361,000 for the three month periods ended
June 30, 2015 and 2014, respectively,
as a result of the conclusion during 2014 of several significant
grants.
Cost of Revenues:
For the three months ended June 30,
2015 and 2014, cost of revenue was approximately
$465,000 and $666,000, respectively. The decrease in cost of
revenues is directly related to a decrease of direct labor and
other costs being deployed toward grant-funded activities, which
has the effect of decreasing the amount of costs allocated to cost
of revenue. Product gross margins were approximately 63% for
the three months ended June 30, 2015,
as compared to approximately 65% for the three months ended
June 30, 2014.
Research and Development Expenses:
For the three months ending June 30,
2015, research and development costs were approximately
$802,000, as compared to research and
development costs of approximately $347,000 for the three months ended June 30, 2014, an increase of approximately
$455,000 or 131%. This increase
was primarily due to a decrease of approximately $254,000 of direct labor and other costs being
deployed toward grant-funded activities in the three months ended
June 30, 2015 as compared to the
three months ended June 30, 2014,
which had the effect of increasing the amount of our
non-reimbursable research and development costs. In addition,
salaries and other costs related to our various clinical studies
increased approximately $155,000
during the three months ended June 30,
2015 as compared to the three months ended June 30, 2014.
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting costs were approximately
$298,000 for the three months ending
June 30, 2015, as compared to legal
financial and other consulting costs of approximately $166,000 for the three months ended June 30, 2014. This increase of approximately
$132,000 was primarily due to legal
fees related to general corporate and governance matters as well as
consulting fees related to Sarbanes-Oxley compliance.
Selling, General and Administrative Expense:
Selling, general and administrative expenses were approximately
$1,626,000 for the three months ended
June 30, 2015, compared to
approximately $1,209,000 for the
three months ended June 30, 2013, an
increase of approximately $417,000.
This was primarily due to increases in payroll related costs of
approximately $171,000, increased
royalties and license fees of approximately $20,000 due to increases in product sales,
additional sales and marketing costs, which include advertising and
conferences of approximately $73,000
and an increase in stock transfer, filing and stock exchange fees
of approximately $76,000 due to
associated with our listing on the NASDAQ Capital Market and our
first annual shareholders meeting in 2015.
Net Income (Loss):
Our net income for the three months ended June 30, 2015 was approximately $1,434,000, as compared to a net loss of
approximately $1,854,000 for the
three months ended June 30,
2014. Net income for 2015 included an approximately
$3,597,000 reduction in the warrant
liability which is a non-cash component of other
income/expense.
Cash and Short-Term Investments:
On June 30, 2015 our cash and
short-term investments were approximately $11,205,000, as compared to cash balances of
approximately $5,550,000 as of
December 31, 2014. This increase
in cash is a direct result of our January
2015 registered offering of our Common Stock from which we
received approximately $9,409,000 in
net proceeds.
Financial Results for the First Six Months Ended
June 30, 2015
Revenues:
Revenue from product sales was approximately $1,477,000 in the six months ended June 30, 2015, as compared to approximately
$1,232,000 in the six months ended
June 30, 2014, an increase of
approximately $245,000, or 20%. This
increase was driven by the continued growth in direct sales as well
as the expansion of sales to our growing distributor network, which
was offset by the negative impact of the decline in the exchange
rate of the Euro relative to the U.S. dollar. The impact of
the decline in the exchange rate of the Euro was approximately
$259,000, or 19% of sales, for the
six months ended June 30,
2015.
Grant income was approximately $198,000 for the six months ended June 30, 2015 as compared to approximately
$850,000 for the six months ended
June 30, 2014 as a result of the
conclusion during 2014 of several significant grants.
As a result of the decrease in grant income, for the six months
ended June 30, 2015, we generated
total revenue of approximately $1,687,000, as compared to revenues of
approximately $2,087,000, for the six
months ended June 30, 2014, a
decrease of approximately $400,000,
or 19%.
Cost of Revenues:
For the six months ended June 30,
2015 and 2014, cost of revenue was approximately
$770,000 and $1,329,000, respectively. The decrease is
directly related to a decrease of approximately $676,000 of direct labor and other costs being
deployed toward grant-funded activities, which has the effect of
decreasing the amount of costs allocated to cost of
revenue. Product cost of revenues increased approximately
$117,000 during the six months ended
June 30, 2015 as compared to the six
months ended June, 2014 due to increased sales. Product gross
margins were approximately 61% for the six months ended
June 30, 2015, as compared to
approximately 63% for the six months ended June 30, 2014.
Research and Development Expenses:
For the six months ended June 30,
2015, research and development expenses were approximately
$1,753,000 as compared to research
and development expenses of approximately $584,000 for the six months ended June 30, 2014. The increase of approximately
$1,169,000 in research and
development expenses was primarily due to a decrease of
approximately $676,000 of direct
labor and other costs being deployed toward grant-funded
activities, which had the effect of increasing the amount of our
non-reimbursable research and development costs. In addition,
salaries and other costs related to our various clinical studies
increased approximately $413,000
during the six months ended June 30,
2015 as compared to the six months ended June 30, 2014.
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting expenses were
approximately $513,000 for the six
months ended June 30, 2015, as
compared to approximately $403,000
for the six months ended June 30,
2014. The increase of approximately $110,000 was due to an increase in legal fees
related to general corporate and governance matters of
approximately $64,000 and an increase
in employment agency fees of approximately $53,000 related to the hiring of certain
highly-qualified personnel.
Selling, General and Administrative Expense:
Selling, general and administrative expenses were approximately
$3,142,000 for the six months ended
June 30, 2015, as compared to
approximately $2,278,000 for the six
months ending June 30, 2014. The
increase of approximately $864,000 in
selling, general, and administrative expenses was due to increases
in salaries, commissions and related costs of approximately
$322,000 due to the impact headcount
additions and an additional approximately $73,000 of salary increases for named executive
officers, additional sales and marketing costs, which include
advertising and conferences of approximately $139,000, an increase in stock transfer, filing
and stock exchange fees of approximately $100,000 due to costs associated with our listing
on the NASDAQ Capital Market and our first annual shareholders
meeting in 2015, an increase in royalty and license expenses of
approximately $37,000 due to higher
sales in 2015, an increase in travel and entertainment costs of
approximately $28,000 and an increase
in costs associated with the operations in Europe of approximately $71,000 primarily attributable to increases in
other operating expenses associated with the ramp up of the
business in Germany.
Net Loss:
Our net loss for the six months ended June 30, 2015 was approximately $3,283,000, as compared to a net loss of
approximately $2,829,000 for the six
months ended June 30, 2014.
2015 Third Quarter Outlook
CytoSorbents has not historically given financial guidance on
quarterly results until the quarter has been
completed. However, we continue to expect our 2015 product
sales to meet or exceed that achieved in 2014.
For additional information please see the Company's 10-Q report
for the period ended June 30, 2015
filed on August 13, 2014 on
http://www.sec.gov.
About CytoSorbents Corporation
CytoSorbents Corporation is a critical care focused
immunotherapy company using blood purification to control severe
inflammation -- with the goal of preventing or treating multiple
organ failure in life-threatening illnesses. Organ failure is
the cause of nearly half of all deaths in the intensive care unit,
with little to improve clinical outcome. CytoSorb®, the
Company's flagship product, is approved in the European Union with
distribution in 31 countries around the world, as a safe and
effective extracorporeal cytokine adsorber, designed to reduce the
"cytokine storm" that could otherwise cause massive inflammation,
organ failure and death in common critical illnesses such as
sepsis, burn injury, trauma, lung injury, and pancreatitis. 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' 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. CytoSorbents has numerous products
under development based upon this unique blood purification
technology, protected by 32 issued US patents and multiple
applications pending, including HemoDefend™, ContrastSorb,
DrugSorb, and others. Additional information is available for
download on the Company's
websites: http://www.cytosorbents.com and
http://www.cytosorb.com
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 31, 2015, 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.
Please Click to Follow us on Facebook and Twitter
Cytosorbents
Contact: Amy Vogel
Investor
Relations
(732) 329-8885 ext.
*825
avogel@cytosorbents.com
|
Investor
Contact:
Lee Roth
The Ruth
Group
646-536-7012
lroth@theruthgroup.com
Public Relations
Contact:
Melanie
Sollid-Penton
The Ruth
Group
646-536-7023
msollid@theruthgroup.com
|
CYTOSORBENTS
CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(amounts in thousands, except per share data)
|
|
|
|
|
|
Six months ended June
30,
|
|
Three months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues
|
|
|
|
|
|
|
|
Sales
|
$
1,477
|
|
$
1,233
|
|
$
773
|
|
$
663
|
Grant
income
|
198
|
|
850
|
|
180
|
|
359
|
Other
revenue
|
12
|
|
4
|
|
11
|
|
3
|
Total
revenue
|
1,687
|
|
2,087
|
|
964
|
|
1,025
|
Cost of
revenue
|
770
|
|
1,329
|
|
465
|
|
666
|
Gross
profit
|
917
|
|
758
|
|
499
|
|
359
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Research and
development
|
1,753
|
|
583
|
|
802
|
|
347
|
Legal,
financial and other consulting
|
513
|
|
403
|
|
298
|
|
166
|
Selling,
general and administrative
|
3,142
|
|
2,278
|
|
1,627
|
|
1,209
|
Total
expenses
|
5,408
|
|
3,264
|
|
2,727
|
|
1,722
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(4,491)
|
|
(2,506)
|
|
(2,228)
|
|
(1,363)
|
Other
income(expense), net
|
1,208
|
|
(322)
|
|
3,662
|
|
(490)
|
Income (loss) before
benefit from income taxes
|
(3,283)
|
|
(2,828)
|
|
1,434
|
|
(1,853)
|
Benefit from income
taxes
|
--
|
|
--
|
|
--
|
|
--
|
Net income
(loss)
|
(3,283)
|
|
(2,828)
|
|
1,434
|
|
(1,853)
|
Preferred stock
dividend
|
--
|
|
2,489
|
|
--
|
|
1,374
|
Net income (loss)
available to common shareholders
|
$ (3,283)
|
|
$ (5,317)
|
|
$ 1,434
|
|
$
(3,227)
|
Net income (loss) per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
(0.13)
|
|
$
(0.47)
|
|
$
0.06
|
|
$
(0.27)
|
Diluted
|
$
(0.13)
|
|
$
(0.47)
|
|
$
0.05
|
|
$
(0.27)
|
Weighted average
number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
Basic
|
24,582,590
|
|
11,336,984
|
|
24,768,639
|
|
12,047,838
|
Diluted
|
24,582,590
|
|
11,336,984
|
|
28,826,158
|
|
12,047,838
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ (3,283)
|
|
$ (2,828)
|
|
$ 1,434
|
|
$
(1,853)
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
Currency
translation adjustment
|
268
|
|
5
|
|
(76)
|
|
4
|
Comprehensive
loss
|
$ (3,015)
|
|
$ (2,823)
|
|
$ 1,358
|
|
$
(1,849)
|
CYTOSORBENTS
CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
|
|
|
|
|
|
|
|
June 30, 2015
(Unaudited)
|
|
December 31,
2014
|
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
8,017
|
|
$
3,605
|
Short-term
investments
|
|
3,188
|
|
1,945
|
Grants and accounts
receivable, net
|
|
501
|
|
819
|
Inventories
|
|
1,060
|
|
538
|
Prepaid expenses and
other current assets
|
|
275
|
|
700
|
Total current assets
|
|
13,041
|
|
7,607
|
|
|
|
|
|
Property and
equipment, net
|
|
403
|
|
246
|
Other
assets
|
|
655
|
|
616
|
TOTAL ASSETS
|
|
$
14,099
|
|
$
8,469
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Accounts
payable
|
|
$
418
|
|
$
698
|
Accrued expenses and
other current liabilities
|
|
718
|
|
825
|
Deferred
revenue
|
|
--
|
|
1
|
Warrant
liability
|
|
1,392
|
|
2,982
|
Total current liabilities
|
|
2,528
|
|
4,506
|
TOTAL LIABILITIES
|
|
2,528
|
|
4,506
|
|
|
|
|
|
Total stockholders'
equity
|
|
11,571
|
|
3,963
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY
|
|
$
14,099
|
|
$
8,469
|
Logo -
http://photos.prnewswire.com/prnh/20140408/MM00899LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cytosorbents-reports-steady-growth-in-q2-2015-300128357.html
SOURCE CytoSorbents Corporation