NASDAQ:CTSO Cytosorbents Q1 2025 Earnings Report $0.84 0.00 (-0.47%) Closing price 05/23/2025 04:00 PM EasternExtended Trading$0.86 +0.01 (+1.30%) As of 05/23/2025 04:08 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Cytosorbents EPS ResultsActual EPS-$0.06Consensus EPS -$0.08Beat/MissBeat by +$0.02One Year Ago EPSN/ACytosorbents Revenue ResultsActual Revenue$8.73 millionExpected Revenue$9.01 millionBeat/MissMissed by -$280.00 thousandYoY Revenue GrowthN/ACytosorbents Announcement DetailsQuarterQ1 2025Date5/14/2025TimeAfter Market ClosesConference Call DateWednesday, May 14, 2025Conference Call Time4:30PM ETUpcoming EarningsCytosorbents' Q2 2025 earnings is scheduled for Tuesday, August 12, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Cytosorbents Q1 2025 Earnings Call TranscriptProvided by QuartrMay 14, 2025 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00call is being recorded on Thursday, 05/08/2025. I would now like to turn the conference over to Ms. Operator00:00:05Adana Alexander. Please go ahead. Speaker 100:00:08Thank you, Constantine, good afternoon, everyone. Welcome to CytoSorbents First Quarter twenty twenty five Financial Results and Recent Business Highlights Conference Call. Joining me today from the company for prepared remarks are Doctor. Philip Chan, Chief Executive Micas Delia Guerreras, Chief Medical Officer and Pete Mariani, Chief Financial Officer. Speaker 100:00:29Before I turn the call over to Doctor. Chan, I'd like to remind listeners that during the call management's prepared remarks may contain forward looking statements, are subject to risks and uncertainties. Management may make additional forward looking statements in response to your questions today. Therefore, the company claims protection under the Safe Harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today. Speaker 100:00:56The forward looking statements we make reflect our views and estimates as of today 05/14/2025 and we assume no obligation to update these projections in the future as market conditions change. During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter twenty twenty five. Following the presentation, we will open the line to analysts for their questions. And now, it is my pleasure to turn the call over to Doctor. Philip Chan. Speaker 100:01:21Phil? Speaker 200:01:23Thank you very much, Adana. Good afternoon, and welcome, everyone, to our first quarter twenty twenty five earnings call. As a quick summary for those who are new to the company, CytoSorbents is a leader in the treatment of life threatening conditions in the intensive care unit in cardiac surgery through blood purification and the removal of harmful substances from blood with our proprietary sorbent bead technology. Cartridges filled with these beads are high margin single use disposables that are plug and play compatible with existing blood pump machines in a hospital, such as dialysis, ECMO, and heart lung machines. Our technologies are used in a broad number of blood purification applications. Speaker 200:02:01Specifically, CytoSorb, our flagship product, which is approved in the European Union, is used primarily to treat life threatening conditions in the ICU and cardiac surgery, such as sepsis, acute respiratory distress syndrome, liver failure, blood thinner removal, and infective endocarditis. CytoSorb is the anchor of our core international business, with over 270,000 devices utilized to date in more than 70 countries worldwide, and drove $35,600,000 in core product sales in 2024. Our second product, DrugSorb ATR, is an investigational FDA breakthrough designated medical device intended to reduce the severity of perioperative bleeding in patients undergoing cardiac surgery due to blood thinning drugs. We are focused initially on the blood thinner Brilinta in patients undergoing coronary artery bypass grafting or CABG surgery. And in September and November of twenty twenty four, we submitted marketing applications to both FDA and Health Canada, respectively. Speaker 200:03:01Micas will have some updates on the status of these applications later. Given that we just had a broader update on the company in our end of year earnings call a month and a half ago, today's agenda will just focus on the three main areas where we are concentrating our efforts. I will discuss our core CytoSorb business and highlight key catalysts for growth. Micas and I will then cover the regulatory status and activity of DrugSorb ATR in The U. S. Speaker 200:03:27And Canada to outline our plans going forward. And then Pete will go over our progress in our goal to have our core business near breakeven by the end of this year with sufficient cash to fund our company initiatives. Let's turn to CytoSorb. In the first quarter of twenty twenty five, we reported product sales of $8,700,000 representing a 3% year over year decline. However, when adjusted for constant currency, sales were approximately the same compared to the same period last year. Speaker 200:04:00International distribution and other direct sales markets delivered strong performances, helping to offset temporary disruptions in our German direct sales segment. These disruptions were anticipated as they stem from the strategic reorganization and realignment of our German sales team and the go to market approach, initiatives we believe are essential for positioning this critical market for renewed growth. Our goal is to return Germany to growth in the second half of twenty twenty five following two years of flat annual performance. We are confident that the changes underway will yield long term benefits. Meanwhile, gross margin performance remains solid, holding steady at 71%, blending higher margin direct sales with lower margin distributor sales, which is consistent with the 2024 average, reflecting ongoing discipline in our end user pricing and manufacturing cost controls. Speaker 200:04:52We expect gross margin expansion this year with smoother manufacturing operations and increased production volume. Importantly, as Pete will discuss later, we continue to make meaningful operational progress across the organization, moving steadily towards our goal of reaching near breakeven by the second half of twenty twenty five. CytoSorb is a powerful blood purification technology designed to remove a wide range of harmful substances that can severely damage the body. It is particularly effective in treating critically ill patients by targeting the overwhelming inflammatory response, often referred to as a cytokine storm, that drives many life threatening conditions. This uncontrolled inflammation is a major cause of patient instability, organ failure, and death, and is estimated to affect forty percent to sixty percent of ICU patients suffering from conditions that we talked about before, such as septic shock, severe infections including COVID-nineteen, flu, pneumonia, and postsurgical infections, ARDS, trauma, burns, pancreatitis, and many others. Speaker 200:05:59Caring for critically ill patients is complex with many variables influencing outcomes. However, one thing is certain, if severe inflammation is not addressed quickly and aggressively, it can spread like wildfire throughout the body, becoming nearly impossible to control. That is why CytoSorb is focused on early targeted intervention, what we call treating the right patient at the right time with the right dose. By intervening early in patients with signs of severe inflammation, CytoSorb helps break the vicious cycle of runaway immune activation, stabilizes patients in shock, supports organ function, and removes other harmful substances from the blood. This proactive approach offers a powerful tool in the fight against some of the most challenging and deadly conditions in the intensive care unit. Speaker 200:06:47In fact, the use of CytoSorb in treating critical illness closely parallels treatment guidelines for antibiotics. For the best clinical outcomes, CytoSorb must be used early, aggressively, and consistently, just like antibiotics. Even if a patient shows signs of improvement, it's crucial to continue therapy until the full course is complete. The objective is not just to control inflammation, but to reduce it to a safe level, much like extinguishing a wildfire which can take days to fully subside. We believe strongly this new simplified messaging will help drive broader adoption of CytoSorb by driving more effective patient treatment. Speaker 200:07:27This is expected to strengthen physician confidence, generate more positive word-of-mouth in clinical publications, and ultimately support the development of standard treatment guidelines and broad global uptake. There are clearly many catalysts for future growth, but some of the ones that we are focused on now are, one, publicizing compelling new data in core applications. New clinical and real world data strengthens our value proposition, drives adoption, and supports guideline inclusion, positioning us for accelerated growth in key markets. In particular, in the near future, we will be discussing a number of powerful studies highlighting the successful use of CytoSorb in one of our largest markets, the treatment of septic shock. Second is simplified, impactful customer messaging. Speaker 200:08:16As stated just before, easy to remember, impactful guidance to users can yield many benefits, including better patient outcomes, greater physician confidence, and broader adoption. Third is returning German sales to growth. Germany is the largest medical device market in the European Union with high strategic importance and accounts for approximately 40% of our sales. At flat growth over the past several years, this has held back our growth overall despite strong gains in other parts of our business. Although there are a number of macro factors that have impacted this market since the pandemic, we believe our efforts to better optimize our German sales team, our sales strategy and our medical messaging is under our direct control and can reinvigorate sales in the country to contribute to our growth overall. Speaker 200:09:05And lastly, expansion via our Dubai subsidiary. Dubai is a vibrant epicenter of healthcare business in The Middle East. Establishing this hub is expected to accelerate access to high growth markets in The Middle East and Africa, enabling faster market entry, stronger partnerships, and regional revenue diversification. With that, I would like to transition now to discuss DrugServe ATR. Acute heart attack patients are routinely treated with blood thinners like Brilinta, also known as ticagrelor, to improve clinical outcomes. Speaker 200:09:42However, while these medications save lives, they also present a significant challenge when patients require urgent CABG surgery. Brilinta can lead to serious and potentially life threatening bleeding complications during and after surgery. The only current solution is a drug washout period of three to five days to reduce bleeding risk. Unfortunately, time is a luxury many of these patients do not have. Rushing to surgery can lead to major bleeding if performed too soon, while delayed surgery can result in devastating complications such as sudden death if the procedure is postponed while the patient is still experiencing a heart attack. Speaker 200:10:17These delays are also costly and strain hospital resources. To address this critical and widespread clinical problem, we have developed DrugSorb ATR, an FDA breakthrough designated device. DrugSorb ATR is specifically designed to remove blood thinners like Brilinta from the bloodstream, enabling safer, timely surgeries. This innovation targets a serious unmet medical need affecting tens of thousands of patients each year in The United States and Canada, representing an initial market opportunity of over 300,000,000, 1 we estimate could grow to more than a billion if approved and used in different indications. To give you an update on the regulatory status of DrugSorb in The United States and Canada, I've asked our chief medical officer, Doctor. Speaker 200:11:04Micas Delagiris, to provide additional clarity on the strength and status of our application and path moving forward. Micas? Speaker 300:11:13Thank you, Phil, and good afternoon to everyone on the call. As most of you know, in the second half of last year, we submitted a de novo application to FDA and a medical device license application to Health Canada supported by the STAR T randomized clinical trial data and real world evidence from the STAR registry. The FDA review process has been interactive with many issues discussed and resolved. However, on 04/25/2025, the FDA issued a denial letter citing remaining open issues. Following the issuance of the letter, we met with the FDA and had the opportunity to discuss these remaining issues and gain better clarity. Speaker 300:12:01We continue to believe that our submission package and data are strong and that the remaining issues can be resolved. After consulting with our regulatory council, we concluded that the most direct path forward is the filing of a formal appeal, which needs to happen within sixty days of receipt of the FDA letter. Once the appeal is filed, the process is prescribed and includes a formal hearing that will be attended by the company and our regulatory counsel Duval and Associates, the FDA review team, additional FDA senior officials, and external clinical experts, such as cardiac surgeons, to provide expert testimony. The appeal decision is estimated approximately sixty days after the filing date, and there are three potential outcomes. First, the original decision is upheld and the de novo authorization is denied. Speaker 300:13:03Second, the original decision is reversed and the de novo authorization is granted. And finally, a third option where the original decision is reversed and the de novo authorization is granted, but under certain conditions that will need to be satisfied. Switching out to Canada, our medical device license application remains in advanced review. Health Canada recently indicated that they're experiencing delays and the review times are extending beyond their target timelines. They did reaffirm, however, the commitment to issue a decision to our application as soon as possible. Speaker 300:13:44We therefore continue to expect final regulatory decisions both in The U. S. And Canada in 2025. The evidence based on blood thinner removal during cardiac surgery continues to grow. Our international STAR registry now has 28 heart centers actively recruiting in six countries, including Germany, The United Kingdom, Belgium, Austria, Sweden, and Switzerland, and has enrolled over 600 subjects to date. Speaker 300:14:21The registry includes many types of surgeries, but we have focused our initial analysis on CABG. Last year, we presented data at EuroPCR on one hundred and two CABG patients on ticagrelor and showed that device use resulted in fewer severe bleeding events compared with what would be expected according to historical benchmarks. These results were published earlier this year and the paper is available online and with open access so anyone can download it for free. This year, again at EuroPCR, which is taking place in Paris next week, we are presenting another real world analysis, this time comparing bleeding rates after CABG between patients on ticagrelor operated with a device and patients on ticagrelor operated without the device. Details of the data are embargoed until the time of presentation, but what we can say is that we are very excited that we now have very compelling evidence of the device's effectiveness in reducing ticagrelor related CABG bleeding in the real world. Speaker 300:15:29We also have a new publication this year on the removal of direct oral anticoagulants or DOACs for short during CABG that also showed lower than expected bleeding rates. This paper is also available online with open access, so anyone can download it for free. Overall, our real world results consistently show that the device is effective in reducing severe bleeding complications in patients on blood thinners undergoing CABG. Importantly, the device is also safe for patients and easy to use by surgical teams. To date, we have zero device related adverse events and zero device deficiencies reported in the STAR registry, results that echo the clean safety we observed in STAR T to everyday use in the real world. Speaker 300:16:25We continue to believe that our technology that enables blood thinner removal during cardiac surgery has a powerful value proposition for patients, surgeons and hospitals. And we are very encouraged by the growing adoption of the device as part of standard care at heart centers around the world. With that, I would like to turn it back to Phil now. Speaker 200:16:47Thanks, Micas. As we await regulatory decisions from both the FDA and Health Canada, we're proactively preparing for the potential commercial launch of DrugServe ATR in The U. S. And Canada. With the FDA's breakthrough device designation, DrugServe ATR is uniquely positioned to help address the critical challenge of perioperative bleeding in patients on blood thinners like Brilinta undergoing CABG surgery. Speaker 200:17:11Upon potential approval or authorization, our initial focus will be a controlled market introduction at select clinical trial centers. This phased approach will enable us to gather real world data and valuable insights, confirm key assumptions, and optimize our commercialization strategy ahead of a broader national rollout. We remain deeply committed to bringing DrugSurb ATR to the North American market, where it represents a meaningful advance in the care of CABG patients facing life threatening bleeding while on Brilinta. Momentum continues to build on the technology with growing awareness of DrugSorb ATR's potential and compelling new European data emerging in 2025. As Micas has highlighted, these real world findings consistently demonstrate reduced bleeding and highlight the device's promise in helping surgeons address a significant and persistent clinical challenge. Speaker 200:18:07We are thrilled to welcome Tom Shannon to the CytoSorbents team as Vice President of Marketing for North America, a big move as the company gears up for the potential launch of Drozorb ATR in The United States and Canada pending market authorization. Tom is a global strategic marketing executive with over twenty five years of experience bringing cutting edge cardiovascular and critical care technologies to market and knows how to build momentum around major product launches. Tom has held leadership roles at multinational corporations like Medtronic, Fresenius, and Gedinga, as well as Genesee Biomedical where he helped launch dozens of products and drove consistent growth. For example, he helped launch the market leading cardio help ECMO platform used around the world at gettinga in patients with refractory lung failure that was also used routinely with CytoSorb during the pandemic to salvage patients who otherwise would have died of COVID-nineteen. Tom also brings hands on clinical experience, having worked for over a decade as a cardiovascular perfusionist. Speaker 200:19:09Tom will be leading the marketing strategy for DrugSorb ATR, which is designed to help reduce serious bleeding risks in heart surgery patients taking Brilinta. In the very short time he has been with the company, we have already been impressed with his deep expertise and operational efficiency that we believe makes him the right person to help CytoSorbents successfully enter the North American market with this important new therapy when the time comes. Now, I'll turn it over to Pete to give a financial update. Pete? Speaker 400:19:39Thank you, Phil, and good afternoon everyone. Today, I will be reviewing our Q1 financial performance, including the strengthening of our balance sheet and our outlook for 2025. Revenue was $8,700,000 a decrease of 3% and flat on a constant currency basis compared to $9,000,000 in Q1 of twenty twenty four. As Phil noted, we had strong revenue growth in our distributor and other direct European markets and that growth was offset by declines in our largest market in Germany. The realignment of our German commercial team and approach is a key strategic initiative and we are pleased with the progress we're making and expect these actions will drive improved execution and results in the second half of the year. Speaker 400:20:30Gross margin for the quarter was 71%, which is consistent with our full year 'twenty four and lower than the 76% in Q1 of twenty twenty four. The year over year decrease was primarily due to a 23% reduction in the number of units produced in Q1 of this year compared to 2024 and partially offset by an 11% reduction in production costs year over year. We expect that production volumes to increase across the year to support growth in our core business and to prepare for the anticipated launch of DrugSorb ATR in The US and Canada later this year. Q1 operating loss improved by 17% to 3,900,000 in the current year compared to 4,700,000 in 2024, driven primarily by a 12% reduction in operating expenses to 10,100,000.0 in Q1 of this year compared to 11,500,000.0 last year. The decrease was driven by a 26% reduction in R and D expenses following the completion of our STAR T trial, as well as lower spend in other clinical projects and the impact of cost cutting efforts implemented over the previous year, including a 15% reduction in headcount. Speaker 400:22:01Net loss for the quarter was 1,500,000.0 or $02 per share compared to 6,100,000.0 or $0.11 per share in the prior year. Eliminating the impact of foreign currency changes and non cash stock compensation in both periods, adjusted net loss in the quarter was 3,700,000.0 or 6¢ per share, which is consistent with an adjusted net loss of 3,700,000.0 or $07 per share in the prior year. Adjusted EBITDA loss for the quarter, which also excludes the impact of non cash stock compensation and changes in foreign currency, improved by 17% to a loss of $2,700,000 compared to adjusted net loss of $3,300,000 in the prior year driven by the reduction in operating expenses. Now we're pleased to have successively executed our shareholder rights offering inclusive of the exercise of the Series A right warrant, which raised total proceeds of 6,800,000.0 net of all related expenses including banking, legal and transfer agent fees. This raise also allowed for the release of 5,000,000 of restricted cash on our balance sheet and combined the raise increased our available liquidity by $11,800,000 And as a reminder, in early April we provided a sixty day extension of the Series B right warrant which will now expire on June tenth of this year. Speaker 400:23:42Our total cash, cash equivalents and restricted cash was $13,100,000 on March 31 compared to $9,800,000 at the end of the year. The increase reflects the net 6,800,000.0 raised in the offering and is net of cash used in the quarter of 3,700,000.0, which includes disbursements that are unique to the first quarter of approximately $900,000 Additionally, as previously announced on April 21, we received an additional $1,700,000 from the sale of our 2023 and amended 2022 NOLs and R and D credits from the technology business tax transfer program sponsored by the New Jersey Economic Development Authority. The program allows technology and biotech businesses with net operating losses to turn their tax losses and credits into cash to buy equipment or facilities or other allowable expenditures. We intend to utilize the funding to help drive ongoing growth including preparations for the anticipated launch of DrugSorb ATR in The US and Canada, scaling up manufacturing in our Princeton facility and supporting other key strategic initiatives. Additionally, our loan agreement provides for a second tranche of $5,000,000 which may be drawn at our request in the second half of twenty twenty five provided the company receives FDA marketing approval of its DrugSorb ATR applications. Speaker 400:25:28The strengthening of our balance sheet together with our initiatives to reduce cost, manage cash has provided a solid foundation where we will drive continued growth and further cost efficiencies that we believe will result in our core business approaching cash flow breakeven in the second half of the year, allowing for investment in our North American commercial launch of DrugSorb ATR later this year and into 2026. Now additionally, I wanted to introduce you to Melanie Grossman, our new Vice President and Corporate Controller. Melanie joined us in April and brings over 20 of accomplished finance and accounting leadership in global publicly traded and private companies. She began her career as an auditor with E and Y and her healthcare experience includes roles with Stryker, Byram Healthcare and Vacciniti. She has excellent experience across all areas of finance and accounting including SEC reporting, systems, processes and controls, as well as financial planning, analysis and strategy. Speaker 400:26:39We're pleased to welcome Melanie to the team and are looking forward to her many contributions as we continue to scale our operations for profitable growth across the organization. And now let me turn the call back over to Phil. Speaker 200:26:54Thanks, Pete. We believe our value proposition is both strong and highly differentiated. With CytoSorb, we have built a robust, high margin international business in critical care and cardiac surgery, markets with vast unmet needs and enormous potential for growth. Our foundation is solid, we are now focused on generating new clinical data to help guide physicians in optimizing CytoSorb use, treating the right patient at the right time with the right dose. We believe that improving clinical outcomes will drive broader adoption across a range of indications, ultimately accelerating product utilization and revenue growth. Speaker 200:27:32Last year, we saw encouraging momentum, particularly from strong direct sales outside of Germany and solid performance by our distributor and partner network. We're also taking proactive steps to reignite growth in Germany. If successful, this could significantly strengthen our overall financial performance. Importantly, continued growth in product sales brings us closer to our goal of near breakeven by the end of twenty twenty five and sets the stage for long term financial independence. What is not yet fully reflected in our growth story is the exciting potential of DrugSorb ATR. Speaker 200:28:06We are working diligently on driving positive regulatory decisions from both FDA and Health Canada this year. In the meantime, we are actively preparing for launch, building awareness with positive real world clinical data, corroborating the significant reduction in serious bleeding events in CABG patients on Brilinta seen in our pivotal trial, and presenting at major cardiovascular conferences. While we await regulatory decisions from FDA and Health Canada, a positive outcome could unlock our first commercial access to The United States and Canadian markets. We expect to begin with a controlled market release and scale up from there. The initial addressable market again is estimated at $300,000,000 for Brilinta in CABG surgery that could eventually exceed $1,000,000,000 with broader indications for use. Speaker 200:28:54With that, on behalf of the team at CytoSorbents, we thank you for your attention and continued support. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. Operator00:29:10Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Your first question comes from the line of Mr. Michael Serkan from Jefferies. Operator00:29:37Please go ahead. Speaker 500:29:40Good afternoon, and thanks for taking our questions, and thanks for all the detail you provided. Operator00:29:47Hi, Mike. Speaker 500:29:48Just to start, hey, Phil, understanding you're going to submit for an appeal of the FDA letter, I guess can you talk about your level of confidence that we can get this over the finish line and get clearance? And then as my follow-up to that, just when you think about the various scenarios, in a work case, if you appeal and it gets denied, where do we go from there? Thank you. Speaker 200:30:22Sure. Mike, why don't you take Speaker 300:30:24that question? Yeah, thanks. Thanks, Michael. So as we stated in our prepared remarks, we feel very strongly about the strength of our submission. We feel that the data in CABG from the STAR T trial are compelling. Speaker 300:30:39And as I showed you and discussed previously, our real world performance of the device has been excellent so far and very well received by practicing clinicians. We therefore believe that our chances during this appeal process are good. And we discussed this with our regulatory council who agree with us, and therefore we're taking this path as the most expedited way to resolve this. Now, on your second part of your question, what we can tell you is that there's always an opportunity should the appeal process not be successful to continue with a new de novo submission utilizing a very large portion of the original submission and therefore resulting in a much more truncated review time and review items that are remaining since many of the items were resolved during the initial submission. Speaker 500:31:35Got it. That's very helpful. Thank you. And I guess in that latter scenario, Mike, you have to run another trial and generate more data? Or would you not have to do that? Speaker 300:31:51Although in general, we have not discussed the details or the remaining deficiencies outlined on the letter we received from FDA. I think we can announce that we have not received a request for an additional trial. So we believe that the remaining issues can be resolved with the existing data at hand. Speaker 500:32:09Got it. Very helpful. Thank you. Operator00:32:15Your next question is from the line of Shana Lee from H. C. Wainwright. Please go ahead. Speaker 600:32:21Hey. Good afternoon, guys, and thanks for taking the questions. Hi, Shana. Hi. My first one is on the various registry as well as the data that you've been presenting. Speaker 600:32:34Will these results help you any way with your marketing or reimbursement in Europe? Speaker 300:32:46The clinical data is always the core of the discussion around the value of any introduced medical technology, the drugs or devices. So the strongest your clinical proposition, the more powerful your value proposition. So absolutely, we plan to leverage this clinical data to support reimbursement and health technology assessment decisions over the EU. Speaker 600:33:10Are there any current discussions going on in countries outside of Germany? Speaker 300:33:18In in relation to? Speaker 600:33:21Reimbursement, I mean, know that your, the reimbursement is mostly focused on Germany and surrounding countries. Was wondering for the broader reimbursement team use, especially doing a cardiac surgery? Is there broader discussions on that? Speaker 200:33:40Yeah, I think that cardiac surgery is where the data are simpler and clearer and we absolutely have active discussions going on to try to obtain reimbursement in that area. In fact, in places like The United Kingdom, Surgery is one of the top applications that's driving revenue in that territory, for example. Speaker 600:34:05I see. Yeah, thanks for your comment. Don't know if all the questions we have. Speaker 200:34:11Thank you, Sean. Operator00:34:16Your Your next question comes from the line of Mr. Tom from Zacks Small Capital Research. Please go ahead. Speaker 700:34:36Everyone. This is Michael Kim filling in for Tom Kerr. Some of our questions have been asked and answered, but we did have a couple more. Just first, curious if there are any other European markets that might be showing promise for the CytoSorbent device besides Germany? Speaker 200:35:00Yeah. I think that we're making good progress in the big five. We go direct in The U. K. We go direct in Germany. Speaker 200:35:08We work through distributors in Italy and SpainPortugal. And in France, it's kind of a hybrid approach with partners and our own direct sales. So from that standpoint, I think our progress is going actually quite well. And then obviously in the other European territories, think that we're making good progress as well. We have decided to pull back in Scandinavia favoring a distributor focused approach in that territory given the types of volumes in that part of the world. Speaker 200:35:42But that being said, we are seeing good momentum in other countries around the EU as well as outside of the EU. Speaker 300:35:52Got it. That's helpful. Speaker 700:35:54And then any updates on other products in development besides CytoSorbent and DrugSorb ATR? Speaker 200:36:05Well, right now the big fish on the plate is drugsorb ATR, so we're uniquely and solely focused on driving that to the finish line. So, I think that when we obviously have other technologies like HemoDefend VGA that we'll hopefully be talking about in the future. But for right now, we are uniquely and singularly focused on drug sorb ATR. Speaker 700:36:31Got it. Thanks for taking our questions. Speaker 200:36:33Sure. Absolutely. Operator00:36:39Your last question is a follow-up from the line of Michael Sercon from Jefferies. Your line is now open. Speaker 500:36:46Hey, thanks again. Just had a follow-up on Germany. You talked about aiming to accelerate or get back to growth in the second half. I guess what kind of visibility do you have into the conditions there? And again, would just like to hear how you're thinking about your level of confidence in being able to reaccelerate growth in Germany? Speaker 200:37:12Yeah. You know, as I mentioned in my remarks and I mentioned last time that, you know, Germany faces is the largest medical device market in the European Union, but as such faces some unique challenges. And so there's been issues related to the pandemic and the pandemic hangover that we've talked about extensively in the past. There is the new issue of hospital reform that is happening, and this is being slowly rolled out throughout Europe where they're going to be focused more on quality measures to drive reimbursement rather than pay for procedure measures to pay for reimbursement. And that, again, we believe favors our technology given that our technology is designed to keep patients from getting so sick and getting them out of the hospital as quickly as possible, which I think is the major tenet of the hospital reform that is taking place in Germany. Speaker 200:38:16But that being said, we can always be doing better in our own execution of sales. And I think that is what our reorganization and new efforts at trying to drive operational efficiency at our German subsidiary. And I think that these changes are something that we can control that we are actively implementing. And we believe that the results of these changes that started at the beginning of the first quarter will flow through and ultimately we'll see benefits in the second half of this year. You know, already in Q2, we're seeing promising developments that would suggest that we're making progress. Speaker 500:39:06Great. Thanks, Phil. Sure. Operator00:39:13There are no further questions at this time. I'd like to turn the call over to Doctor. Phil Chan for closing comments. Sir, please go ahead. Speaker 200:39:20Well, thank you, everyone, for joining the call today. If you do have any other questions, please feel free to reach out to us at ircytosorbents dot com. We look forward to updating you in the future. Have a good evening, everyone, and thank you very much. Have a great night. Operator00:39:38This concludes today's conference call. Thank you very much for your participation. You may now disconnect.Read morePowered by Key Takeaways Q1 2025 sales were $8.7 million, flat in constant currency, with strong distributor growth offset by a strategic reorganization that temporarily disrupted German direct sales. Gross margin held at 71% despite lower production volumes, and management expects margin expansion as manufacturing stabilizes and volumes rise. DrugSorb ATR received an FDA de novo denial on April 25, prompting a formal appeal within 60 days, while Health Canada’s review remains in advanced stages despite delays. Financial progress shows a 17% reduction in operating loss to $3.9 million, net loss narrowed to $1.5 million, and a $6.8 million financing strengthened cash to $13.1 million, supporting a path to near breakeven in H2 2025. Growth catalysts include publishing new septic shock data, simplifying physician messaging, reigniting German sales, and expanding into the Middle East via a Dubai hub, while preparing for a controlled DrugSorb ATR launch in North America. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallCytosorbents Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Cytosorbents Earnings HeadlinesCytosorbents (NASDAQ:CTSO) Coverage Initiated by Analysts at Wall Street ZenMay 23 at 2:35 AM | americanbankingnews.comCytoSorbents Therapy Significantly Reduces Bleeding in Urgent CABG Patients on Ticagrelor in New Data Presented at EuroPCR 2025May 22 at 9:27 AM | prnewswire.com52 Money Mondays for $7 (This Weekend Only)Right now, for a limited time… You can get up to 52 Money Monday trades for just $7! Thanks to Wall Street’s “Most Wanted” trader, who just put the finishing touches on his brand-new Money Monday algorithm.May 24, 2025 | Timothy Sykes (Ad)CTSO: CytoSorbents Reports Strong 1st Quarter 2025 ResultsMay 21 at 6:22 PM | finance.yahoo.comFY2025 EPS Estimates for Cytosorbents Raised by AnalystMay 19, 2025 | americanbankingnews.comCytosorbents (NASDAQ:CTSO) Earns "Buy" Rating from D. Boral CapitalMay 18, 2025 | americanbankingnews.comSee More Cytosorbents Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cytosorbents? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cytosorbents and other key companies, straight to your email. Email Address About CytosorbentsCytosorbents (NASDAQ:CTSO) engages in the research, development, and commercialization of medical devices with its blood purification technology platform incorporating a proprietary adsorbent and porous polymer technology in the United States, Germany, and internationally. Its flagship product is CytoSorb, an extracorporeal cytokine adsorber for adjunctive therapy in the treatment of sepsis, adjunctive therapy in other critical care applications, prevention, and treatment of perioperative complications, and maintaining or enhancing the quality of solid organs harvested from donors for organ transplant; and offers VetResQ, a device for adjunctive therapy in the treatment of sepsis, pancreatitis, and other critical illnesses in animals. The company also develops CytoSorb-XL, a device for adjunctive therapy in the treatment of sepsis and other critical illnesses; HemoDefend blood purification technology platform to reduce contaminants in the blood supply that can cause transfusion reactions or disease when administering blood and blood products to patients, and removal of anti-A and anti-B blood group antibodies from whole blood and plasma; K+ontrol for treatment of severe hyperkalemia in patients with life-threatening conditions; and ContrastSorb for the removal of IV contrast in blood administered during CT imaging, an angiogram, or during a vascular interventional radiology procedure to reduce the risk of contrast-induced nephropathy. In addition, it develops BetaSorb, a device for the prevention and treatment of health complications caused by the accumulation of metabolic toxins in patients with chronic renal failure; DrugSorb, a device to remove drugs and chemicals from the blood; and DrugSorb-ATR, an antithrombotic removal system. The company was formerly known as MedaSorb Technologies Corporation and changed its name to Cytosorbents Corporation in May 2010. Cytosorbents Corporation was founded in 1997 and is headquartered in Princeton, New Jersey.View Cytosorbents ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Advance Auto Parts Jumps on Surprise Earnings BeatAlibaba's Earnings Just Changed Everything for the StockCisco Stock Eyes New Highs in 2025 on AI, Earnings, UpgradesSymbotic Gets Big Earnings Lift: Is the Stock Investable Again?D-Wave Pushes Back on Short Seller Case With Strong EarningsAppLovin Surges on Earnings: What's Next for This Tech Standout?Can Shopify Stock Make a Comeback After an Earnings Sell-Off? 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There are 8 speakers on the call. Operator00:00:00call is being recorded on Thursday, 05/08/2025. I would now like to turn the conference over to Ms. Operator00:00:05Adana Alexander. Please go ahead. Speaker 100:00:08Thank you, Constantine, good afternoon, everyone. Welcome to CytoSorbents First Quarter twenty twenty five Financial Results and Recent Business Highlights Conference Call. Joining me today from the company for prepared remarks are Doctor. Philip Chan, Chief Executive Micas Delia Guerreras, Chief Medical Officer and Pete Mariani, Chief Financial Officer. Speaker 100:00:29Before I turn the call over to Doctor. Chan, I'd like to remind listeners that during the call management's prepared remarks may contain forward looking statements, are subject to risks and uncertainties. Management may make additional forward looking statements in response to your questions today. Therefore, the company claims protection under the Safe Harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today. Speaker 100:00:56The forward looking statements we make reflect our views and estimates as of today 05/14/2025 and we assume no obligation to update these projections in the future as market conditions change. During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter twenty twenty five. Following the presentation, we will open the line to analysts for their questions. And now, it is my pleasure to turn the call over to Doctor. Philip Chan. Speaker 100:01:21Phil? Speaker 200:01:23Thank you very much, Adana. Good afternoon, and welcome, everyone, to our first quarter twenty twenty five earnings call. As a quick summary for those who are new to the company, CytoSorbents is a leader in the treatment of life threatening conditions in the intensive care unit in cardiac surgery through blood purification and the removal of harmful substances from blood with our proprietary sorbent bead technology. Cartridges filled with these beads are high margin single use disposables that are plug and play compatible with existing blood pump machines in a hospital, such as dialysis, ECMO, and heart lung machines. Our technologies are used in a broad number of blood purification applications. Speaker 200:02:01Specifically, CytoSorb, our flagship product, which is approved in the European Union, is used primarily to treat life threatening conditions in the ICU and cardiac surgery, such as sepsis, acute respiratory distress syndrome, liver failure, blood thinner removal, and infective endocarditis. CytoSorb is the anchor of our core international business, with over 270,000 devices utilized to date in more than 70 countries worldwide, and drove $35,600,000 in core product sales in 2024. Our second product, DrugSorb ATR, is an investigational FDA breakthrough designated medical device intended to reduce the severity of perioperative bleeding in patients undergoing cardiac surgery due to blood thinning drugs. We are focused initially on the blood thinner Brilinta in patients undergoing coronary artery bypass grafting or CABG surgery. And in September and November of twenty twenty four, we submitted marketing applications to both FDA and Health Canada, respectively. Speaker 200:03:01Micas will have some updates on the status of these applications later. Given that we just had a broader update on the company in our end of year earnings call a month and a half ago, today's agenda will just focus on the three main areas where we are concentrating our efforts. I will discuss our core CytoSorb business and highlight key catalysts for growth. Micas and I will then cover the regulatory status and activity of DrugSorb ATR in The U. S. Speaker 200:03:27And Canada to outline our plans going forward. And then Pete will go over our progress in our goal to have our core business near breakeven by the end of this year with sufficient cash to fund our company initiatives. Let's turn to CytoSorb. In the first quarter of twenty twenty five, we reported product sales of $8,700,000 representing a 3% year over year decline. However, when adjusted for constant currency, sales were approximately the same compared to the same period last year. Speaker 200:04:00International distribution and other direct sales markets delivered strong performances, helping to offset temporary disruptions in our German direct sales segment. These disruptions were anticipated as they stem from the strategic reorganization and realignment of our German sales team and the go to market approach, initiatives we believe are essential for positioning this critical market for renewed growth. Our goal is to return Germany to growth in the second half of twenty twenty five following two years of flat annual performance. We are confident that the changes underway will yield long term benefits. Meanwhile, gross margin performance remains solid, holding steady at 71%, blending higher margin direct sales with lower margin distributor sales, which is consistent with the 2024 average, reflecting ongoing discipline in our end user pricing and manufacturing cost controls. Speaker 200:04:52We expect gross margin expansion this year with smoother manufacturing operations and increased production volume. Importantly, as Pete will discuss later, we continue to make meaningful operational progress across the organization, moving steadily towards our goal of reaching near breakeven by the second half of twenty twenty five. CytoSorb is a powerful blood purification technology designed to remove a wide range of harmful substances that can severely damage the body. It is particularly effective in treating critically ill patients by targeting the overwhelming inflammatory response, often referred to as a cytokine storm, that drives many life threatening conditions. This uncontrolled inflammation is a major cause of patient instability, organ failure, and death, and is estimated to affect forty percent to sixty percent of ICU patients suffering from conditions that we talked about before, such as septic shock, severe infections including COVID-nineteen, flu, pneumonia, and postsurgical infections, ARDS, trauma, burns, pancreatitis, and many others. Speaker 200:05:59Caring for critically ill patients is complex with many variables influencing outcomes. However, one thing is certain, if severe inflammation is not addressed quickly and aggressively, it can spread like wildfire throughout the body, becoming nearly impossible to control. That is why CytoSorb is focused on early targeted intervention, what we call treating the right patient at the right time with the right dose. By intervening early in patients with signs of severe inflammation, CytoSorb helps break the vicious cycle of runaway immune activation, stabilizes patients in shock, supports organ function, and removes other harmful substances from the blood. This proactive approach offers a powerful tool in the fight against some of the most challenging and deadly conditions in the intensive care unit. Speaker 200:06:47In fact, the use of CytoSorb in treating critical illness closely parallels treatment guidelines for antibiotics. For the best clinical outcomes, CytoSorb must be used early, aggressively, and consistently, just like antibiotics. Even if a patient shows signs of improvement, it's crucial to continue therapy until the full course is complete. The objective is not just to control inflammation, but to reduce it to a safe level, much like extinguishing a wildfire which can take days to fully subside. We believe strongly this new simplified messaging will help drive broader adoption of CytoSorb by driving more effective patient treatment. Speaker 200:07:27This is expected to strengthen physician confidence, generate more positive word-of-mouth in clinical publications, and ultimately support the development of standard treatment guidelines and broad global uptake. There are clearly many catalysts for future growth, but some of the ones that we are focused on now are, one, publicizing compelling new data in core applications. New clinical and real world data strengthens our value proposition, drives adoption, and supports guideline inclusion, positioning us for accelerated growth in key markets. In particular, in the near future, we will be discussing a number of powerful studies highlighting the successful use of CytoSorb in one of our largest markets, the treatment of septic shock. Second is simplified, impactful customer messaging. Speaker 200:08:16As stated just before, easy to remember, impactful guidance to users can yield many benefits, including better patient outcomes, greater physician confidence, and broader adoption. Third is returning German sales to growth. Germany is the largest medical device market in the European Union with high strategic importance and accounts for approximately 40% of our sales. At flat growth over the past several years, this has held back our growth overall despite strong gains in other parts of our business. Although there are a number of macro factors that have impacted this market since the pandemic, we believe our efforts to better optimize our German sales team, our sales strategy and our medical messaging is under our direct control and can reinvigorate sales in the country to contribute to our growth overall. Speaker 200:09:05And lastly, expansion via our Dubai subsidiary. Dubai is a vibrant epicenter of healthcare business in The Middle East. Establishing this hub is expected to accelerate access to high growth markets in The Middle East and Africa, enabling faster market entry, stronger partnerships, and regional revenue diversification. With that, I would like to transition now to discuss DrugServe ATR. Acute heart attack patients are routinely treated with blood thinners like Brilinta, also known as ticagrelor, to improve clinical outcomes. Speaker 200:09:42However, while these medications save lives, they also present a significant challenge when patients require urgent CABG surgery. Brilinta can lead to serious and potentially life threatening bleeding complications during and after surgery. The only current solution is a drug washout period of three to five days to reduce bleeding risk. Unfortunately, time is a luxury many of these patients do not have. Rushing to surgery can lead to major bleeding if performed too soon, while delayed surgery can result in devastating complications such as sudden death if the procedure is postponed while the patient is still experiencing a heart attack. Speaker 200:10:17These delays are also costly and strain hospital resources. To address this critical and widespread clinical problem, we have developed DrugSorb ATR, an FDA breakthrough designated device. DrugSorb ATR is specifically designed to remove blood thinners like Brilinta from the bloodstream, enabling safer, timely surgeries. This innovation targets a serious unmet medical need affecting tens of thousands of patients each year in The United States and Canada, representing an initial market opportunity of over 300,000,000, 1 we estimate could grow to more than a billion if approved and used in different indications. To give you an update on the regulatory status of DrugSorb in The United States and Canada, I've asked our chief medical officer, Doctor. Speaker 200:11:04Micas Delagiris, to provide additional clarity on the strength and status of our application and path moving forward. Micas? Speaker 300:11:13Thank you, Phil, and good afternoon to everyone on the call. As most of you know, in the second half of last year, we submitted a de novo application to FDA and a medical device license application to Health Canada supported by the STAR T randomized clinical trial data and real world evidence from the STAR registry. The FDA review process has been interactive with many issues discussed and resolved. However, on 04/25/2025, the FDA issued a denial letter citing remaining open issues. Following the issuance of the letter, we met with the FDA and had the opportunity to discuss these remaining issues and gain better clarity. Speaker 300:12:01We continue to believe that our submission package and data are strong and that the remaining issues can be resolved. After consulting with our regulatory council, we concluded that the most direct path forward is the filing of a formal appeal, which needs to happen within sixty days of receipt of the FDA letter. Once the appeal is filed, the process is prescribed and includes a formal hearing that will be attended by the company and our regulatory counsel Duval and Associates, the FDA review team, additional FDA senior officials, and external clinical experts, such as cardiac surgeons, to provide expert testimony. The appeal decision is estimated approximately sixty days after the filing date, and there are three potential outcomes. First, the original decision is upheld and the de novo authorization is denied. Speaker 300:13:03Second, the original decision is reversed and the de novo authorization is granted. And finally, a third option where the original decision is reversed and the de novo authorization is granted, but under certain conditions that will need to be satisfied. Switching out to Canada, our medical device license application remains in advanced review. Health Canada recently indicated that they're experiencing delays and the review times are extending beyond their target timelines. They did reaffirm, however, the commitment to issue a decision to our application as soon as possible. Speaker 300:13:44We therefore continue to expect final regulatory decisions both in The U. S. And Canada in 2025. The evidence based on blood thinner removal during cardiac surgery continues to grow. Our international STAR registry now has 28 heart centers actively recruiting in six countries, including Germany, The United Kingdom, Belgium, Austria, Sweden, and Switzerland, and has enrolled over 600 subjects to date. Speaker 300:14:21The registry includes many types of surgeries, but we have focused our initial analysis on CABG. Last year, we presented data at EuroPCR on one hundred and two CABG patients on ticagrelor and showed that device use resulted in fewer severe bleeding events compared with what would be expected according to historical benchmarks. These results were published earlier this year and the paper is available online and with open access so anyone can download it for free. This year, again at EuroPCR, which is taking place in Paris next week, we are presenting another real world analysis, this time comparing bleeding rates after CABG between patients on ticagrelor operated with a device and patients on ticagrelor operated without the device. Details of the data are embargoed until the time of presentation, but what we can say is that we are very excited that we now have very compelling evidence of the device's effectiveness in reducing ticagrelor related CABG bleeding in the real world. Speaker 300:15:29We also have a new publication this year on the removal of direct oral anticoagulants or DOACs for short during CABG that also showed lower than expected bleeding rates. This paper is also available online with open access, so anyone can download it for free. Overall, our real world results consistently show that the device is effective in reducing severe bleeding complications in patients on blood thinners undergoing CABG. Importantly, the device is also safe for patients and easy to use by surgical teams. To date, we have zero device related adverse events and zero device deficiencies reported in the STAR registry, results that echo the clean safety we observed in STAR T to everyday use in the real world. Speaker 300:16:25We continue to believe that our technology that enables blood thinner removal during cardiac surgery has a powerful value proposition for patients, surgeons and hospitals. And we are very encouraged by the growing adoption of the device as part of standard care at heart centers around the world. With that, I would like to turn it back to Phil now. Speaker 200:16:47Thanks, Micas. As we await regulatory decisions from both the FDA and Health Canada, we're proactively preparing for the potential commercial launch of DrugServe ATR in The U. S. And Canada. With the FDA's breakthrough device designation, DrugServe ATR is uniquely positioned to help address the critical challenge of perioperative bleeding in patients on blood thinners like Brilinta undergoing CABG surgery. Speaker 200:17:11Upon potential approval or authorization, our initial focus will be a controlled market introduction at select clinical trial centers. This phased approach will enable us to gather real world data and valuable insights, confirm key assumptions, and optimize our commercialization strategy ahead of a broader national rollout. We remain deeply committed to bringing DrugSurb ATR to the North American market, where it represents a meaningful advance in the care of CABG patients facing life threatening bleeding while on Brilinta. Momentum continues to build on the technology with growing awareness of DrugSorb ATR's potential and compelling new European data emerging in 2025. As Micas has highlighted, these real world findings consistently demonstrate reduced bleeding and highlight the device's promise in helping surgeons address a significant and persistent clinical challenge. Speaker 200:18:07We are thrilled to welcome Tom Shannon to the CytoSorbents team as Vice President of Marketing for North America, a big move as the company gears up for the potential launch of Drozorb ATR in The United States and Canada pending market authorization. Tom is a global strategic marketing executive with over twenty five years of experience bringing cutting edge cardiovascular and critical care technologies to market and knows how to build momentum around major product launches. Tom has held leadership roles at multinational corporations like Medtronic, Fresenius, and Gedinga, as well as Genesee Biomedical where he helped launch dozens of products and drove consistent growth. For example, he helped launch the market leading cardio help ECMO platform used around the world at gettinga in patients with refractory lung failure that was also used routinely with CytoSorb during the pandemic to salvage patients who otherwise would have died of COVID-nineteen. Tom also brings hands on clinical experience, having worked for over a decade as a cardiovascular perfusionist. Speaker 200:19:09Tom will be leading the marketing strategy for DrugSorb ATR, which is designed to help reduce serious bleeding risks in heart surgery patients taking Brilinta. In the very short time he has been with the company, we have already been impressed with his deep expertise and operational efficiency that we believe makes him the right person to help CytoSorbents successfully enter the North American market with this important new therapy when the time comes. Now, I'll turn it over to Pete to give a financial update. Pete? Speaker 400:19:39Thank you, Phil, and good afternoon everyone. Today, I will be reviewing our Q1 financial performance, including the strengthening of our balance sheet and our outlook for 2025. Revenue was $8,700,000 a decrease of 3% and flat on a constant currency basis compared to $9,000,000 in Q1 of twenty twenty four. As Phil noted, we had strong revenue growth in our distributor and other direct European markets and that growth was offset by declines in our largest market in Germany. The realignment of our German commercial team and approach is a key strategic initiative and we are pleased with the progress we're making and expect these actions will drive improved execution and results in the second half of the year. Speaker 400:20:30Gross margin for the quarter was 71%, which is consistent with our full year 'twenty four and lower than the 76% in Q1 of twenty twenty four. The year over year decrease was primarily due to a 23% reduction in the number of units produced in Q1 of this year compared to 2024 and partially offset by an 11% reduction in production costs year over year. We expect that production volumes to increase across the year to support growth in our core business and to prepare for the anticipated launch of DrugSorb ATR in The US and Canada later this year. Q1 operating loss improved by 17% to 3,900,000 in the current year compared to 4,700,000 in 2024, driven primarily by a 12% reduction in operating expenses to 10,100,000.0 in Q1 of this year compared to 11,500,000.0 last year. The decrease was driven by a 26% reduction in R and D expenses following the completion of our STAR T trial, as well as lower spend in other clinical projects and the impact of cost cutting efforts implemented over the previous year, including a 15% reduction in headcount. Speaker 400:22:01Net loss for the quarter was 1,500,000.0 or $02 per share compared to 6,100,000.0 or $0.11 per share in the prior year. Eliminating the impact of foreign currency changes and non cash stock compensation in both periods, adjusted net loss in the quarter was 3,700,000.0 or 6¢ per share, which is consistent with an adjusted net loss of 3,700,000.0 or $07 per share in the prior year. Adjusted EBITDA loss for the quarter, which also excludes the impact of non cash stock compensation and changes in foreign currency, improved by 17% to a loss of $2,700,000 compared to adjusted net loss of $3,300,000 in the prior year driven by the reduction in operating expenses. Now we're pleased to have successively executed our shareholder rights offering inclusive of the exercise of the Series A right warrant, which raised total proceeds of 6,800,000.0 net of all related expenses including banking, legal and transfer agent fees. This raise also allowed for the release of 5,000,000 of restricted cash on our balance sheet and combined the raise increased our available liquidity by $11,800,000 And as a reminder, in early April we provided a sixty day extension of the Series B right warrant which will now expire on June tenth of this year. Speaker 400:23:42Our total cash, cash equivalents and restricted cash was $13,100,000 on March 31 compared to $9,800,000 at the end of the year. The increase reflects the net 6,800,000.0 raised in the offering and is net of cash used in the quarter of 3,700,000.0, which includes disbursements that are unique to the first quarter of approximately $900,000 Additionally, as previously announced on April 21, we received an additional $1,700,000 from the sale of our 2023 and amended 2022 NOLs and R and D credits from the technology business tax transfer program sponsored by the New Jersey Economic Development Authority. The program allows technology and biotech businesses with net operating losses to turn their tax losses and credits into cash to buy equipment or facilities or other allowable expenditures. We intend to utilize the funding to help drive ongoing growth including preparations for the anticipated launch of DrugSorb ATR in The US and Canada, scaling up manufacturing in our Princeton facility and supporting other key strategic initiatives. Additionally, our loan agreement provides for a second tranche of $5,000,000 which may be drawn at our request in the second half of twenty twenty five provided the company receives FDA marketing approval of its DrugSorb ATR applications. Speaker 400:25:28The strengthening of our balance sheet together with our initiatives to reduce cost, manage cash has provided a solid foundation where we will drive continued growth and further cost efficiencies that we believe will result in our core business approaching cash flow breakeven in the second half of the year, allowing for investment in our North American commercial launch of DrugSorb ATR later this year and into 2026. Now additionally, I wanted to introduce you to Melanie Grossman, our new Vice President and Corporate Controller. Melanie joined us in April and brings over 20 of accomplished finance and accounting leadership in global publicly traded and private companies. She began her career as an auditor with E and Y and her healthcare experience includes roles with Stryker, Byram Healthcare and Vacciniti. She has excellent experience across all areas of finance and accounting including SEC reporting, systems, processes and controls, as well as financial planning, analysis and strategy. Speaker 400:26:39We're pleased to welcome Melanie to the team and are looking forward to her many contributions as we continue to scale our operations for profitable growth across the organization. And now let me turn the call back over to Phil. Speaker 200:26:54Thanks, Pete. We believe our value proposition is both strong and highly differentiated. With CytoSorb, we have built a robust, high margin international business in critical care and cardiac surgery, markets with vast unmet needs and enormous potential for growth. Our foundation is solid, we are now focused on generating new clinical data to help guide physicians in optimizing CytoSorb use, treating the right patient at the right time with the right dose. We believe that improving clinical outcomes will drive broader adoption across a range of indications, ultimately accelerating product utilization and revenue growth. Speaker 200:27:32Last year, we saw encouraging momentum, particularly from strong direct sales outside of Germany and solid performance by our distributor and partner network. We're also taking proactive steps to reignite growth in Germany. If successful, this could significantly strengthen our overall financial performance. Importantly, continued growth in product sales brings us closer to our goal of near breakeven by the end of twenty twenty five and sets the stage for long term financial independence. What is not yet fully reflected in our growth story is the exciting potential of DrugSorb ATR. Speaker 200:28:06We are working diligently on driving positive regulatory decisions from both FDA and Health Canada this year. In the meantime, we are actively preparing for launch, building awareness with positive real world clinical data, corroborating the significant reduction in serious bleeding events in CABG patients on Brilinta seen in our pivotal trial, and presenting at major cardiovascular conferences. While we await regulatory decisions from FDA and Health Canada, a positive outcome could unlock our first commercial access to The United States and Canadian markets. We expect to begin with a controlled market release and scale up from there. The initial addressable market again is estimated at $300,000,000 for Brilinta in CABG surgery that could eventually exceed $1,000,000,000 with broader indications for use. Speaker 200:28:54With that, on behalf of the team at CytoSorbents, we thank you for your attention and continued support. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. Operator00:29:10Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Your first question comes from the line of Mr. Michael Serkan from Jefferies. Operator00:29:37Please go ahead. Speaker 500:29:40Good afternoon, and thanks for taking our questions, and thanks for all the detail you provided. Operator00:29:47Hi, Mike. Speaker 500:29:48Just to start, hey, Phil, understanding you're going to submit for an appeal of the FDA letter, I guess can you talk about your level of confidence that we can get this over the finish line and get clearance? And then as my follow-up to that, just when you think about the various scenarios, in a work case, if you appeal and it gets denied, where do we go from there? Thank you. Speaker 200:30:22Sure. Mike, why don't you take Speaker 300:30:24that question? Yeah, thanks. Thanks, Michael. So as we stated in our prepared remarks, we feel very strongly about the strength of our submission. We feel that the data in CABG from the STAR T trial are compelling. Speaker 300:30:39And as I showed you and discussed previously, our real world performance of the device has been excellent so far and very well received by practicing clinicians. We therefore believe that our chances during this appeal process are good. And we discussed this with our regulatory council who agree with us, and therefore we're taking this path as the most expedited way to resolve this. Now, on your second part of your question, what we can tell you is that there's always an opportunity should the appeal process not be successful to continue with a new de novo submission utilizing a very large portion of the original submission and therefore resulting in a much more truncated review time and review items that are remaining since many of the items were resolved during the initial submission. Speaker 500:31:35Got it. That's very helpful. Thank you. And I guess in that latter scenario, Mike, you have to run another trial and generate more data? Or would you not have to do that? Speaker 300:31:51Although in general, we have not discussed the details or the remaining deficiencies outlined on the letter we received from FDA. I think we can announce that we have not received a request for an additional trial. So we believe that the remaining issues can be resolved with the existing data at hand. Speaker 500:32:09Got it. Very helpful. Thank you. Operator00:32:15Your next question is from the line of Shana Lee from H. C. Wainwright. Please go ahead. Speaker 600:32:21Hey. Good afternoon, guys, and thanks for taking the questions. Hi, Shana. Hi. My first one is on the various registry as well as the data that you've been presenting. Speaker 600:32:34Will these results help you any way with your marketing or reimbursement in Europe? Speaker 300:32:46The clinical data is always the core of the discussion around the value of any introduced medical technology, the drugs or devices. So the strongest your clinical proposition, the more powerful your value proposition. So absolutely, we plan to leverage this clinical data to support reimbursement and health technology assessment decisions over the EU. Speaker 600:33:10Are there any current discussions going on in countries outside of Germany? Speaker 300:33:18In in relation to? Speaker 600:33:21Reimbursement, I mean, know that your, the reimbursement is mostly focused on Germany and surrounding countries. Was wondering for the broader reimbursement team use, especially doing a cardiac surgery? Is there broader discussions on that? Speaker 200:33:40Yeah, I think that cardiac surgery is where the data are simpler and clearer and we absolutely have active discussions going on to try to obtain reimbursement in that area. In fact, in places like The United Kingdom, Surgery is one of the top applications that's driving revenue in that territory, for example. Speaker 600:34:05I see. Yeah, thanks for your comment. Don't know if all the questions we have. Speaker 200:34:11Thank you, Sean. Operator00:34:16Your Your next question comes from the line of Mr. Tom from Zacks Small Capital Research. Please go ahead. Speaker 700:34:36Everyone. This is Michael Kim filling in for Tom Kerr. Some of our questions have been asked and answered, but we did have a couple more. Just first, curious if there are any other European markets that might be showing promise for the CytoSorbent device besides Germany? Speaker 200:35:00Yeah. I think that we're making good progress in the big five. We go direct in The U. K. We go direct in Germany. Speaker 200:35:08We work through distributors in Italy and SpainPortugal. And in France, it's kind of a hybrid approach with partners and our own direct sales. So from that standpoint, I think our progress is going actually quite well. And then obviously in the other European territories, think that we're making good progress as well. We have decided to pull back in Scandinavia favoring a distributor focused approach in that territory given the types of volumes in that part of the world. Speaker 200:35:42But that being said, we are seeing good momentum in other countries around the EU as well as outside of the EU. Speaker 300:35:52Got it. That's helpful. Speaker 700:35:54And then any updates on other products in development besides CytoSorbent and DrugSorb ATR? Speaker 200:36:05Well, right now the big fish on the plate is drugsorb ATR, so we're uniquely and solely focused on driving that to the finish line. So, I think that when we obviously have other technologies like HemoDefend VGA that we'll hopefully be talking about in the future. But for right now, we are uniquely and singularly focused on drug sorb ATR. Speaker 700:36:31Got it. Thanks for taking our questions. Speaker 200:36:33Sure. Absolutely. Operator00:36:39Your last question is a follow-up from the line of Michael Sercon from Jefferies. Your line is now open. Speaker 500:36:46Hey, thanks again. Just had a follow-up on Germany. You talked about aiming to accelerate or get back to growth in the second half. I guess what kind of visibility do you have into the conditions there? And again, would just like to hear how you're thinking about your level of confidence in being able to reaccelerate growth in Germany? Speaker 200:37:12Yeah. You know, as I mentioned in my remarks and I mentioned last time that, you know, Germany faces is the largest medical device market in the European Union, but as such faces some unique challenges. And so there's been issues related to the pandemic and the pandemic hangover that we've talked about extensively in the past. There is the new issue of hospital reform that is happening, and this is being slowly rolled out throughout Europe where they're going to be focused more on quality measures to drive reimbursement rather than pay for procedure measures to pay for reimbursement. And that, again, we believe favors our technology given that our technology is designed to keep patients from getting so sick and getting them out of the hospital as quickly as possible, which I think is the major tenet of the hospital reform that is taking place in Germany. Speaker 200:38:16But that being said, we can always be doing better in our own execution of sales. And I think that is what our reorganization and new efforts at trying to drive operational efficiency at our German subsidiary. And I think that these changes are something that we can control that we are actively implementing. And we believe that the results of these changes that started at the beginning of the first quarter will flow through and ultimately we'll see benefits in the second half of this year. You know, already in Q2, we're seeing promising developments that would suggest that we're making progress. Speaker 500:39:06Great. Thanks, Phil. Sure. Operator00:39:13There are no further questions at this time. I'd like to turn the call over to Doctor. Phil Chan for closing comments. Sir, please go ahead. Speaker 200:39:20Well, thank you, everyone, for joining the call today. If you do have any other questions, please feel free to reach out to us at ircytosorbents dot com. We look forward to updating you in the future. Have a good evening, everyone, and thank you very much. Have a great night. Operator00:39:38This concludes today's conference call. Thank you very much for your participation. You may now disconnect.Read morePowered by