MONMOUTH JUNCTION, N.J.,
Nov. 13, 2015 /PRNewswire/ --
CytoSorbents Corporation (NASDAQ: CTSO), a leader in critical care
immunotherapy commercializing its CytoSorb® blood
purification technology to reduce deadly uncontrolled inflammation
in hospitalized patients around the world, today reported financial
and operating results for the three and nine months ended
September 30, 2015.
CytoSorbents achieved strong product revenue of
approximately $1.1 million in Q3
2015, its best quarterly sales performance, and a 38% increase over
Q2 2015
Recent Financial Highlights:
- Total sales for Q3 2015 were $1.3M, which includes both product sales and
grant income
- Q3 2015 product revenues were approximately $1.1M, the Company's best quarterly sales
performance, and a 38% increase over Q2 2015, driven by strength in
reorders in both direct and distributor sales. Disregarding
the decline in the Euro to U.S. Dollar exchange rate, product sales
for Q3 2015 would have been approximately $1.2M, a 19% increase compared to Q3 2014
- Product gross margins for Q3 2015 were approximately 63%
- Trailing 12-month CytoSorb® sales were $3.4M at the end of Q3 2015, compared to
$2.6M for the same period a year ago,
an increase of 31%
- Strong working capital position, with cash and short term
investments totaling $9.3M at the end
of Q3 2015
Recent Operational Highlights:
- Submitted an Expedited Access Pathway (EAP) application to the
FDA to request EAP Designation status for the treatment of sepsis
with CytoSorb®. EAP Designation is equivalent to
"Breakthrough" designation for drugs and biologics, but for medical
devices that address major unmet medical needs
- One clinical site has begun screening patients for enrollment
in the U.S. REFRESH I cardiac surgery trial, with 6 of 8 sites
expected to be at this stage before the end of November.
These are leading U.S. cardiac surgery centers including
Baylor College of Medicine, Baystate
Medical, Columbia University, Cooper
University Hospital, University of
Kentucky, University of
Maryland, University of
Pennsylvania, and University of
Pittsburgh Medical Center
- Were awarded a $1.5 million Phase II Small Business Innovation
Research contract from the National Heart, Lung, And Blood
Institute (NHLBI), a division of the National Institutes of Health
(NIH), to advance Hemodefend™ toward commercialization to improve
the quality and safety of the blood supply. The two-year project
provides incremental, non-dilutive funding to the Company and
begins immediately
- Conducted an extremely successful 2nd International CytoSorb
Users Meeting in Berlin, Germany
in early October that brought together 110 clinicians, distributors
and strategic partners from 18 countries. To date, CytoSorb®
has been safely administered in more than 8,000 human
treatments and is growing steadily in adoption and usage
- Currently working with Fresenius in the initial marketing to
key opinion leaders in multiple countries with a formal launch
expected in the next several months
- Supported global awareness of the dangers of sepsis through
sponsorship of numerous sepsis related initiatives including
the SepsisUpdate 2015 Congress, the Hugo Schottmuller Prize, and
the Sepsis Alliance Sepsis Heroes Ceremony
Dr. Phillip Chan, Chief Executive
Officer of CytoSorbents stated, "CytoSorbents achieved strong
organic growth across the board in both direct and
distributor/partner sales, delivering our best quarterly product
sales to date. This speaks to the success of our recently
expanded direct sales team and international distribution network,
as well as to the increasing awareness and traction CytoSorb® is
achieving in the marketplace."
"In early October we held the 2nd International
CytoSorb Users Meeting in Berlin,
which was one of the largest and most successful gatherings of
worldwide CytoSorb® users, distributors and partners in the
Company's history. We were excited to learn about the many
treatment successes credited to CytoSorb®, and were pleased that
the quality of the data being reported from around the world
continues to grow from case reports, to case series, and now to
small completed randomized controlled studies. We hope to
capture even more data from the more than 8,000 human treatments
that have taken place to date, in our International CytoSorb®
Registry, where more than 80 medical centers are registered and in
the process of submitting treatment data."
"As we continue to expand our commercialization efforts, we
remain on track in pursuing a dual path to potential U.S. approval
for CytoSorb®, including the use of CytoSorb® intra-operatively in
a heart-lung machine during complex cardiac surgery in our REFRESH
Trial, as well as for the treatment of sepsis, one of the top ten
killers around the world for which there are no effective
therapies. To that end, we have submitted an application with the
FDA to request Expedited Access Pathway (EAP) designation for the
treatment of sepsis and will have an update in the future as
warranted."
"As we plan for a strong 2016, we are encouraged by the
convergence of many key drivers of our business. These
include the:
- Increasing momentum in clinical usage and data for
CytoSorb®
- Growing number of CytoSorb® treatment successes in many
different clinical applications
- Continued progress in geographic expansion with key countries
turning on in 2016
- Expected contributions of major existing partners and
distributors such as Fresenius and Biocon
- Keen interest from many industry players in different
verticals
- Greater awareness of investors to our story
- Ability to fund more aggressive growth and attract non-dilutive
grant funding
Together, with our dedicated team and network of thought leaders
and users from around the world, we believe we have the formula to
take our business to the next level."
Dr. Chan concluded, "Please join us on the earnings call today
at 11:00AM EST 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: Friday, November 13,
2015
Time: 11:00 AM Eastern
Participant Dial-In: 719-457-2731
Live Presentation
Webcast: http://public.viavid.com/index.php?id=116936
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 Third Quarter Ended September 30, 2015
Revenues:
The Company generated total revenues of approximately
$1,343,000 and $1,162,000 for the three months ending
September 30, 2015 and September 30, 2014, respectively. Product
revenues were approximately $1,071,000 for the quarter ended September 30, 2015, as compared to product
revenues of $1,032,000 for the
quarter ended September 30, 2014.
Product sales were 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 $150,000, or 14% of sales, for the three months
ended September 30, 2015.
Additionally, grant revenue and other income was approximately
$272,000 and $128,000 for the three month periods ended
September 30, 2015 and 2014,
respectively.
Cost of Revenues:
For the three months ended September 30,
2015 and 2014, cost of revenue was approximately
$639,000 and $476,000, respectively. The increase in cost of
revenues is directly related to an increase of direct labor and
other costs being deployed toward grant-funded activities, which
has the effect of increasing the amount of costs allocated to cost
of revenue. Product gross margins were approximately 63% for
each of the three month periods ended September 30, 2015 and 2014, respectively.
Research and Development Expenses:
For the three months ending September 30,
2015, research and development costs were approximately
$865,000, as compared to research and
development costs of approximately $880,000 for the three months ended September 30, 2014, a decrease of approximately
$14,000 or 2%. This decrease
was primarily due to an increase of approximately $234,000 of direct labor and other costs being
deployed toward grant-funded activities in the three months ended
September 30, 2015 as compared to the
three months ended September 30,
2014, which had the effect of decreasing the amount of our
non-reimbursable research and development costs. Also,
materials and supplies related to our various research and
development activities decreased approximately $157,000 during the three months ended
September 30, 2015 as compared to the
three months ended September 30,
2014. These decreases were offset by increases in
salaries and other costs related to our various clinical and
investigator initiated studies of approximately $295,000 and salaries related to non-clinical
research and development activities increased approximately
$43,000 during the three months ended
September 30, 2015 as compared to the
three months ended September 30,
2014.
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting costs were approximately
$289,000 for the three months ending
September 30, 2015, as compared to
legal financial and other consulting costs of approximately
$49,000 for the three months ended
September 30, 2014. This increase of
approximately $240,000 was primarily
due to legal fees of approximately $118,000 that were related to general corporate
and governance matters and an increase in consulting fees of
approximately $93,000 primarily
related to Sarbanes-Oxley compliance, marketing activities, and
other matters.
Selling, General and Administrative Expense:
Selling, general and administrative expenses were approximately
$1,700,000 for the three months ended
September 30, 2015, compared to
approximately $1,240,000 for the
three months ended September 30,
2014, an increase of approximately $460,000. This was primarily due to increases in
payroll related costs of approximately $336,000, increased royalties and license fees of
approximately $12,000 due to
increases in product sales, additional sales and marketing costs,
which include advertising and conferences of approximately
$166,000 and an increase in stock
transfer, filing and stock exchange fees of approximately
$31,000 due to costs associated with
our listing on the NASDAQ Capital Market and our first annual
meeting of stockholders in 2015, and an increase in travel-related
expenses of approximately $45,000.
These increases were offset by a decrease in consulting expenses of
approximately $143,000.
Net Loss:
Our loss from operations for the three months ending
September 30, 2015 was approximately
$2,150,000, as compared to a net loss
from operations of approximately $1,484,000 for the three months ended
September 30, 2014.
Financial Results for the Nine Months Ended September 30, 2015
Revenues:
Revenue from product sales was approximately $2,548,000 in the nine months ended September 30, 2015, as compared to approximately
$2,264,000 in the nine months ended
September 30, 2014, an increase of
approximately $284,000, or 13%. 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
$410,000, or 16% of sales, for the
nine months ended September 30,
2015. Adjusted for the impact of the Euro, product sales for
the nine months ended September 30,
2015 would have been approximately $3.0 million.
Grant income was approximately $471,000 for the nine months ended September 30, 2015 as compared to approximately
$978,000 for the nine months ended
September 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 nine months
ended September 30, 2015, we
generated total revenues of approximately $3,031,000, as compared to total revenue of
approximately $3,249,000, for the
nine months ended September 30, 2014,
a decrease of approximately $218,000,
or 7%.
Cost of Revenues:
For the nine months ended September 30,
2015 and 2014, cost of revenue was approximately
$1,409,000 and $1,805,000, 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 $139,000 during the nine months ended
September 30, 2015 as compared to the
nine months ended September 30, 2014
due to increased sales. Product gross margins were
approximately 62% for the nine months ended September 30, 2015, as compared to approximately
63% for the nine months ended September 30,
2014.
Research and Development Expenses:
For the nine months ended September 30,
2015, research and development expenses were approximately
$2,619,000 as compared to research
and development expenses of approximately $1,464,000 for the nine months ended September 30, 2014. The increase of approximately
$1,155,000 in research and
development expenses was primarily due to a decrease of
approximately $451,000 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 and
investigator-initiated studies increased approximately $735,000 and salaries related to non-clinical
research and development activities increased approximately
$128,000 during the nine months ended
September 30, 2015 as compared to the
nine months ended September 30,
2014.
Legal, Financial and Other Consulting Expense:
Legal, financial and other consulting expenses were
approximately $802,000 for the nine
months ended September 30, 2015, as
compared to approximately $452,000
for the nine months ended September 30,
2014. The increase of approximately $350,000 was due to an increase in legal fees
related to general corporate and governance matters of
approximately $182,000, an increase
in employment agency fees of approximately $68,000 related to the hiring of certain
highly-qualified personnel and an increase in consulting fees of
approximately $80,000 related to
marketing and compliance activities.
Selling, General and Administrative Expense:
Selling, general and administrative expenses were approximately
$4,842,000 for the nine months ended
September 30, 2015, as compared to
approximately $3,518,000 for the nine
months ending September 30, 2014. The
increase of approximately $1,324,000
in selling, general, and administrative expenses was due to
increases in salaries, commissions and related costs of
approximately $659,000 due to the
impact of headcount additions and an additional approximately
$110,000 of salary increases for
named executive officers; additional sales and marketing costs;
which include advertising and conferences of approximately
$302,000; an increase in stock
transfer, filing and stock exchange fees of approximately
$131,000 due to costs associated with
our listing on the NASDAQ Capital Market and our first annual
meeting of stockholders in 2015; an increase in royalty and license
expenses of approximately $49,000 due
to higher sales in 2015 and an increase in travel and entertainment
costs of approximately $73,000.
Net Loss:
Our net loss for the nine months ended September 30, 2015 was approximately $6,130,000, as compared to a net loss of
approximately $4,327,000 for the nine
months ended September 30, 2014.
Liquidity and Capital Resources:
Since inception, our operations have been primarily financed
through the private placement of its debt and equity securities. At
September 30, 2015, we had current
assets of approximately $11,591,000
including cash on hand and short-term investments of approximately
$9,329,000 and current liabilities of
approximately $3,447,000. We believe
we have sufficient cash to fund our operations into 2016; however,
we may need to raise additional capital to fully fund pivotal
trials in the U.S. and/or Germany.
We will be better able to assess this need once the specific
protocols are finalized with appropriate regulatory bodies. In
addition, we may require additional capital to support our sales
and marketing efforts, to fund clinical studies, to expand our
production capacity, to further develop our products, and for
general working capital purposes.
2015 Fourth 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 September 30,
2015 filed on November 13,
2015 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:
Eric
Kim
The Ruth
Group
646-536-7023
ekim@theruthgroup.com
CYTOSORBENTS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(amounts in
thousands, except per share data)
|
|
|
|
|
|
Nine months ended
September 30,
|
|
Three months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues
|
|
|
|
|
|
|
|
Sales
|
$
2,548
|
|
$
2,264
|
|
$ 1,071
|
|
$
1,032
|
Grant
income
|
471
|
|
978
|
|
272
|
|
128
|
Other
revenue
|
12
|
|
7
|
|
--
|
|
2
|
Total
revenue
|
3,031
|
|
3,249
|
|
1,343
|
|
1,162
|
Cost of
revenue
|
1,409
|
|
1,805
|
|
639
|
|
476
|
Gross
profit
|
1,622
|
|
1,444
|
|
704
|
|
686
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Research and
development
|
2,619
|
|
1,464
|
|
865
|
|
880
|
Legal,
financial and other consulting
|
802
|
|
452
|
|
289
|
|
49
|
Selling,
general and administrative
|
4,842
|
|
3,518
|
|
1,700
|
|
1,241
|
Total
expenses
|
8,263
|
|
5,434
|
|
2,854
|
|
2,170
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(6,641)
|
|
(3,990)
|
|
(2,150)
|
|
(1,484)
|
Other
income(expense), net
|
511
|
|
(337)
|
|
(697)
|
|
(14)
|
Income (loss) before
benefit from income taxes
|
(6,130)
|
|
(4,327)
|
|
(2,847)
|
|
(1,498)
|
Benefit from income
taxes
|
--
|
|
--
|
|
--
|
|
--
|
Net income
(loss)
|
(6,130)
|
|
(4,327)
|
|
(2,847)
|
|
(1,498)
|
Preferred stock
dividend
|
--
|
|
3,770
|
|
--
|
|
1,281
|
Net income (loss)
available to common shareholders
|
$ (6,130)
|
|
$ (8,097)
|
|
$ (2,847)
|
|
$
(2,779)
|
Basic and diluted net
loss per
|
|
|
|
|
|
|
|
common
share
|
$
(0.25)
|
|
$
(0.69)
|
|
$ (0.11)
|
|
$
(0.22)
|
Weighted average
number of shares of common stock outstanding
|
24,812,707
|
|
11,727,573
|
|
25,037,538
|
|
12,496,014
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ (6,130)
|
|
$ (4,327)
|
|
$ (2,847)
|
|
$
(1,498)
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
Currency
translation adjustment
|
218
|
|
123
|
|
(50)
|
|
118
|
Comprehensive
loss
|
$ (5,912)
|
|
$ (4,204)
|
|
$ (2,897)
|
|
$
(1,380)
|
|
|
|
|
|
|
|
|
|
CYTOSORBENTS
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands)
|
|
|
|
|
|
September 30,
2015
(Unaudited)
|
|
December 31,
2014
|
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
7,386
|
|
$
3,605
|
Short-term
investments
|
1,943
|
|
1,945
|
Grants and accounts
receivable, net
|
553
|
|
819
|
Inventories
|
1,337
|
|
538
|
Prepaid expenses and
other current assets
|
372
|
|
700
|
Total current assets
|
11,591
|
|
7,607
|
|
|
|
|
Property and
equipment, net
|
480
|
|
246
|
Other
assets
|
731
|
|
616
|
TOTAL ASSETS
|
$
12,802
|
|
$
8,469
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Accounts
payable
|
$
527
|
|
$
698
|
Accrued expenses and
other current liabilities
|
756
|
|
825
|
Deferred
revenue
|
--
|
|
1
|
Warrant
liability
|
2,164
|
|
2,982
|
Total current liabilities
|
3,447
|
|
4,506
|
TOTAL LIABILITIES
|
3,447
|
|
4,506
|
|
|
|
|
Total stockholders'
equity
|
9,355
|
|
3,963
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY
|
$
12,802
|
|
$
8,469
|
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SOURCE CytoSorbents Corporation