CTSO: Strengthened Balance Sheet Supports Growth Initiatives As Demand For CytoSorb Continues to Surge

By M. Marin



Several Milestones Reached, Including Record Quarterly Revenue & Global Delivery of 110,000+ CytoSorb Cartridges To-Date

Cytosorbents (NASDAQ:CTSO) reported 3Q20 revenue of $10.5 million last week, up 73% y/y and a quarterly record. The majority of this (97%) was product revenue, which we believe underscores growing demand for CytoSorb as the company continues to generate data supporting its efficacy for a growing number of indications, including to treat COVID-19.

CTSO has had to increase manufacturing to meet demand. The company has accomplished this by adding a production line and adding labor and work shifts. These measures have pressured quarterly gross margins. Product gross margins in 3Q20 of about 74% were below the 77% margin in 3Q19, but rebounded somewhat from about 70% in 2Q20.

Rising demand supports the need for CTSO to expand production capacity. CTSO has delivered more than 110,000 CytoSorb cartridges globally to-date and has treated tens of thousands of patients and trailing 12 month (TTM) revenue has reached a record $34.5 million.

The company is well-capitalized to support its growth and also continues to strengthen its balance sheet. CTSO ended 3Q20 with a cash balance of about $88.0 million, up from about $35.1 million at the end of 2Q20 following an equity offering during the quarter.

Patient Enrollment in CytoSorb Therapy- COVID-19 ICU Registry Begins

After obtaining FDA EUA approval for CytoSorb for use in patients with COVID-19 in April, an estimated roughly $2.7 million of 3Q20 product sales came from demand for CytoSorb to treat COVID-19 patients. CTSO began enrolling patients in its CytoSorb Therapy in COVID-19 ICU Patient (CTC) Registry. New data on the use of CytoSorb in treating critically-ill COVID-19 patients on mechanical ventilation indicates overall positive outcomes.

Concurrently Advancing Other CTSO Products, Studies & Goals

The company also continues to move forward to resume its REFRESH 2-AKI study and to advance research on the HemoDefend adsorber in order to create universal plasma that can be administered to a trauma patient regardless of blood type. CTSO is receiving funding from the U.S. Army Medical Research and Development Command to further this research. We believe the addressable market for HemoDefend could be sizable.

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