CytoSorbents Reports Second Quarter 2021 Financial and Operational Results

Total revenue increased 23% to $12.0 million. Core non-COVID-19 product sales increased 38% Y-Y, driving overall Q2 2021 product sales to $11.4 million versus $9.5 million a year ago

MONMOUTH JUNCTION, N.J., Aug. 3, 2021 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in intensive care and cardiac surgery using blood purification via its proprietary polymer adsorption technology, reports financial and operating results for the quarter and six months ending June 30, 2021.

38% growth in record core, non-COVID-19 product sales in Q2 2021 drove 23% growth in total quarterly revenue to $12.0M 

Second Quarter 2021 Financial Highlights

• Total revenue, including product sales and grant income, for Q2 2021 was $12.0 million, up 23% compared to $9.8 million in Q2 2020.
• Q2 2021 product sales increased 19% to $11.4 million compared to Q2 2020 product sales of $9.5 million.
• Core non-COVID-19 product sales for Q2 2021 were a record $9.7 million, up 38% compared to approximately $7.0 million in Q2 2020.
• Consolidated gross profit rose to $9.3 million in Q2 2021, compared to $6.5 million in Q2 2020.
• 2Q 2021 product gross margins were approximately 82%, compared to 70% in 2Q 2020.
• As of June 30, 2021, trailing twelve months product sales rose 44% to $43.3 million versus $30.0 million for the same period ending June 30, 2020.
• The Company maintains a healthy cash balance of $65.6 million as of June 30, 2021.

Recent Operating Highlights

• In July, CytoSorbents received full FDA approval for its IDE application to conduct the pivotal STAR-T (Safe and Timely Antithrombotic Removal – Ticagrelor) double-blind, randomized, controlled trial in the United States to support marketing approval of the DrugSorb-ATR™ antithrombotic removal system for intraoperative ticagrelor removal during cardiothoracic surgery.
• More than 143,000 CytoSorb devices have been delivered to date, an increase of 43% percent compared to more than 100,000 treatments delivered as of Q2 2020, with an estimated 6,500 COVID-19 patients treated globally.
• CytoSorb was registered and became commercially available in Singapore for all equivalent European Union approved indications, including the reduction of cytokines , the reduction of bilirubin in liver disease, the reduction of myoglobin in trauma, and the removal of ticagrelor and rivaroxaban during urgent or emergent cardiothoracic surgery.
• CytoSorbents appointed Terri Anne Powers, MBA, IRC as Vice President, Investor Relations and Corporate Communications.
• The Company successfully completed its MISSION 100,000 international fundraising campaign to raise $100,000 for the global humanitarian organization CARE. Funds raised will be used to fight the spread of COVID-19 in the U.S. and abroad.

Second Half and Full Year 2021 Product Revenue Guidance

• We continue to expect strong growth in core, non-COVID-19 product sales for the remainder of the year, with at least 30% Y-Y growth in the second half of 2021, as well as at least 30% Y-Y growth in full year 2021 core, non-COVID-19 product sales.
• To be conservative, we expect COVID-19 product sales for the remainder of the year to be less than $1 million.
• Overall, we expect second half 2021 product sales to exceed first half 2021 product sales.

Dr. Phillip Chan, Chief Executive Officer of CytoSorbents stated, "We continue to prioritize the U.S. STAR-T trial as we believe it provides the lowest risk, fastest, and most likely path to U.S. marketing approval.  Following full FDA approval of our IDE application in July, we are ramping activities to begin enrollment, with the first patient enrollment expected this quarter and trial completion targeted next year.  We believe the STAR-T pivotal trial is rigorously designed to generate the highest level of evidence and capture the full clinical and economic benefits of intraoperative ticagrelor removal with our DrugSorb-ATR system in patients undergoing cardiothoracic surgery.  If obtained, FDA marketing approval of DrugSorb-ATR for this application would be the first step in a planned multi-phase growth strategy in the United States.  We expect to leverage the STAR-T trial infrastructure and trial design in future studies to secure other antithrombotic drug removal indications during cardiothoracic surgery.  Eventually, we plan to pursue the expanded use of DrugSorb-ATR as a pre-operative measure to reduce the risk of bleeding in patients on antithrombotic drugs undergoing any type of high-risk surgical procedure.  Overall, we believe the results from these randomized, controlled trials, combined with real-world evidence from the STAR registry, will eventually support the use of our technology as the new global standard of care for the acute hospital management of patients on antithrombotic drugs."

Dr. Chan continued, "Turning to quarterly results, product sales in the second quarter of 2021 grew 19% to $11.4 million compared to the prior year, aided by 38% growth in core non-COVID-19 product sales.  These core sales reached a quarterly record of $9.7 million, or 85% of total product sales.  We estimate that COVID-19 related sales in the second quarter of 2021 were approximately $1.7 million.  We continue to see improved access of our direct sales force, distributors and partners to physicians and hospitals, though access is still significantly less than pre-pandemic levels.  With the increase in global vaccinations, offset by the rise of new cases and hospitalizations driven by new COVID-19 variants, including the more contagious Delta variant, we are unable to predict what impact, if any, the COVID-19 pandemic may have on sales for the remainder of the year.  Overall, we expect second half 2021 product sales to exceed first half 2021 product sales, with limited contribution from COVID-19 related sales in the second half of 2021."

"Our business remains healthy with strong sales growth and 82% product gross margins achieved in the second quarter of 2021.  We have maintained a robust cash balance, with $65.6M at June 30, 2021, providing us a long runway to support investments in operations and clinical studies worldwide to drive future growth.  We also continue to expand our clinical team and other key talent to execute our strategy and believe we are well-positioned to grow in both the short- and long-term."

Clinical Studies Update

• In July 2021, the U.S. FDA fully approved the Company's IDE application for the up to 120 patient, double-blind, randomized, controlled U.S. STAR-T pivotal trial to remove ticagrelor intraoperatively during cardiothoracic surgery with the DrugSorb-ATR antithrombotic removal system. We are working closely with our contract research organization (CRO) and are advancing operational activities rapidly, including the successful completion of the first Investigator Meeting and execution of site initiation visits. We expect to begin enrollment in the third quarter of 2021, have all study sites activated by end of the year, and complete the study in 2022.
• The U.S. REFRESH 2-AKI study continues to enroll at multiple clinical sites and based on our enrollment projections, notwithstanding potential COVID-19 related delays, we project the interim analysis milestone will be reached in 2022.
• The CTC Registry: Primary results on observed ICU mortality of COVID-19 patients with acute respiratory distress syndrome (ARDS) requiring extracorporeal membrane oxygenation (ECMO) and treated with CytoSorb according to FDA Emergency Use Authorization criteria, have been accepted for presentation at the International Symposium of Intensive Care Medicine conference at the end of August 2021 in Brussels, Belgium, and have also been submitted for journal publication.
• The CYTATION trial in patients on ticagrelor undergoing emergent cardiothoracic surgery in Germany has enrolled the first patients, but enrollment has been slower than expected due to the continuing impact of the COVID-19 pandemic.
• The PROCYSS randomized, controlled, multi-center trial in Germany to evaluate the ability of CytoSorb to restore hemodynamic stability in patients with refractory septic shock recently received Ethics Committee approval, and notwithstanding any COVID-19 associated delays, is expected to begin enrollment this year.
• The Hep-On-Fire single-arm, multi-center trial in Germany in patients suffering from acute liver failure due to alcoholic hepatitis is also scheduled to start later this year, pending any COVID-19 related delays.
• The Safe and Timely Antithrombotic Removal (STAR) Registry was designed to generate real world evidence on the antithrombotic removal application and will be ready to receive data entry from Germany and the U.K. this quarter, with plans to gradually expand to additional E.U. countries. Initial data release is planned for 2022.
• Finally, we expect the results of the German government-sponsored and investigator-initiated REMOVE endocarditis study to be reported before the end of the year.

R&D Update

Our research and development efforts are gaining momentum despite the disruption brought on by the COVID-19 pandemic.  Since the start of the year, internal and government grant funding have supported the expansion of our R&D staff by approximately 30%, and we expect to increase headcount further by the end of the year to support work associated with awarded grants and contracts. The revenue remaining to be earned on open grant contracts is $12.1 million.  To facilitate this growth, we have relocated half the team to the new facility in Princeton, New Jersey where we were able to occupy existing labs with minimal disruption to program timelines.  Overall, grant funded programs, HemoDefend-BGA™ (Universal Plasma), HemoDefend-RBC™ and K+ontrol™, continue to progress and have been the beneficiary of ~$9.6 million, $4.7 million and $7.0 million in total funding, respectively, awarded to date. 

We are pleased to report acceleration of our HemoDefend-RBC™ filter development, which is designed to remove non-infectious contaminants in transfused packed red blood cells that can cause transfusion reactions.  We are currently producing devices for the required preclinical testing that is expected to start this quarter, to support an investigational device exemption (IDE) application to run a small (