CTSO: Positive Implications of $2.9 Million STTR Phase III Contract

By M. Marin

NASDAQ:CTSO

READ THE FULL CTSO RESEARCH REPORT

Contract Validates Potential of HemoDefend Technology

Cytosorbents (NASDAQ:CTSO) was awarded a Defense Health Agency Small Business Technology Transfer (STTR) Phase III contract valued at up to $2.9 million over a two-year period, enabling CTSO to move HemoDefend-BGA closer to commercialization. We believe the new contract validates the potential of the HemoDefend technology. Moreover, it continues the company’s successful strategy of pursuing and winning grant income to help subsidize R&D spending.

The HemoDefend-BGA filter removes anti-A and anti-B antibodies from whole blood and plasma to enable these products to be “universal” for safe transfusion in a patient, regardless of the patient’s blood type, thereby reducing or eliminating the risk of hemolytic transfusion reactions.

We believe the opportunity is sizable. According to the World Health Organization (WHO), roughly 118.5 million blood donations are made annually on a worldwide basis. HemoDefend-BGA aims to increase the safety of transfusions.

CytoSorb Opportunity: Treating COVID-19 Cases

Separately, Cytosorbents’ CytoSorb blood purification technology has proven to be effective in treating COVID-19 patients who experience the cytokine storm syndrome, a condition where early immune response proinflammatory cytokines (tumor necrosis factor [TNF], InterLeukins (IL-6, IL-1β)) are overproduced. Persistent high cytokine concentrations lead to an increased risk of vascular hyperpermeability and multiorgan failure that results in death. Moreover, cytokine storm is associated with many other infectious diseases. Thus, if CytoSorb proves effective in combatting cytokine storm, there could be expanded opportunities for the candidate.

FDA EUA: Increased Attention on CytoSorb During Pandemic Could Facilitate & Accelerate Broader Use FDA Approval

As economies reopen, many markets are beginning to see an uptick in COVID-19 cases. In February 2020, CytoSorb was added to coronavirus treatment guidelines in Italy and Panama. Cytosorbents also signed an agreement with China Medical System Holdings Limited to treat COVID-19 patients using CytoSorb. CTSO obtained FDA approval for CytoSorb under the FDA’s EUA process in April.

The COVID crisis has thrust the company into the spotlight. In a fairly short period of time CytoSorb has garnered meaningful interest from several markets to treat COVID-19. CytoSorb s apparent early success in treating COVID-19 patients is encouraging, particularly as it may relate to CytoSorb s effective utility in other critical care illnesses that are associated with cytokine storm.

Future recommendations and potentially published manuscripts from some of these investigator-initiated studies could provide meaningful influence towards furthering adoption and approvals. We believe the growing interest in CytoSorb to treat cytokine storm could be pivotal in accelerating uptake and interest of CytoSorb for clinical use, as well as providing support for initiation of U.S. clinical studies. We view FDA s EUA authorization of CytoSorb as a meaningful milestone towards eventual approval and commencement of larger U.S. studies in support of a regulatory filing.

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