CTSO - Earnings call transcript Q3 2018 | Cytosorbents Corporation

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Operator

Good afternoon and welcome to the Cytosorbents Third Quarter 2018 Financial and Operating Results Conference Call. [Operator Instructions] Please be advised that the call will be recorded at the company’s request. At this time, I would like to turn the call over to our moderator, Jeremy Feffer. Please go ahead, sir.

Jeremy Feffer

Thank you, Jessica and good afternoon. quarter and third call. results Cytosorbents’ to XXXX operating financial conference Welcome

Officer; Financial me are Medical Sales President; Marketing of Officer Operating company from Officer; President Vincent Cramer, Vice from Bloch, Phillip Chief Joining Vice the and Executive Dr. Dr. Christian today President Mortensen, Dr. Officer; Eric Chan, Steiner, Chief Capponi, Germany; Development. Kathy Chief Chris Chief of Business and and

during discussed may Management Act the risks call the claims response are to protection to discussion of more differ detailed to over change. XXXX. make from Private results to call to the represented statements Actual I in filings may and your company Harbor forward-looking Chan, Safe remarks the like the that forward-looking for and in November subject no by uncertainties. Therefore, which of turn estimates Dr. may as statements results you refer we under today as therefore a and Any projections remind market uncertainties company’s would these XXXX X, contained to performance contain we company’s additional of listeners I Reform the risks questions today statements and SEC. Litigation in prepared management’s as Before conditions in today. future update Securities these obligation future the management projections include forward-looking the assume with to

Dr. highlights and will have the Ms. call, we presentation by the and During overview Chan for today’s covering operating third quarter an financial Bloch.

team. Dr. Phil? the the pleasure the will rest line call it’s now turn live with my session questions At over we your time, the during presentation, that to Chan. open this Following of Phillip the management to Q&A to

Phillip Chan

ago. XX of record end product have you company of more partner well-capitalized year a $XX.X working XX,XXX much, sales million, from XXXX. a and including million, XX-month half with of quarter of than with treatments of countries. achieved to We good pleased The distributor XX-month XX,XXX second and the a delivered a achieved total total as everyone. revenue We record $XX.X cumulatively the balance Thank Cytosorbents afternoon third into the were trailing very Jeremy mix and sufficient is providing of cash direct capital strong of $XX.X million sales in healthy of

have expected to now at blended XX% XXXX are production from We full facility. in gross margins product new the that of is manufacturing QX rise

Transplantation the Cytosorbents’ per-life for preservation the technology serving quarter, partner, at debut the proprietary our with During we XXth system which transplant, Congress organ International of also uses Aferetica organ the Society.

We also designation. received Procedure a payment in is Code that pending CytoSorb Switzerland currently

In I pivotal terms X-AKI pleased clinical progress trial. on to U.S. the am update, our trial REFRESH good announce of

feedback in XX active in modified enrollment XX acute during at enrolled September As we reduction the the discussed trial postoperative eligible the have enroll study. into by approved intra-operatively easier upon is trial that site expecting Because you recall, cardiac this, I in of study, criteria are patients. patients based total to future. The to an call of the is pleased accelerate XXX-patient sites adaptive we now with of was be announce has multi-center with the injury our near it among randomized enrollment protocol surgery. CytoSorb by on targeting previous been to protocol we subsequent the The complex using PMA this controlled clinical FDA that trial a to approvals this ethics kidney with sites. committees amendment trial am XX sites, a that earnings more clinical active

organ and the trial controlled that safety used endocarditis. a to efficacy you trial that evaluating intra-operatively funded infective XXX-patient being In surgery valve for German improve is as by is replacement terms randomized is the during when of government, recall, dysfunction of Endocarditis the CytoSorb REMOVE this

inflammatory patient in has X and patients clinical to FDA total patients blood and a but planned with not The focused a in enrolled XXXX. centers. at to Last Recall a start support pivotal to contaminants mediators planned enrolled With to of There first working on XX financial trial next cytokines that trial. for Lung on The prepare the is several red turn have was filter interim trial study. U.S. this now as that packed the XX such Kathy? blood fund pivotal analysis will and cells. January the I closely National the point-of-care this for HemoDefend Heart, call transfused least, from months. removes first our a was been a noninfectious that approval overview. we NIH is early designed that, And cells and red of is over for packed division HemoDefend Institute, Blood Kathy U.S. expected is

Kathy Bloch

Thank good Phil everyone. you, and afternoon

the production our in an more from QX in both including quarter increase and financial will sales This I product impact was of and third sales XX% revenues, For capital had million In XXXX, million XXXX on approximately million and with along were third the results, increase compared CytoSorb I for of runway. from around million, approximately $X.X provide in decline orders distributor working QX sales on to margins QX of today’s customers, which approximately result customers an increase sales increase XX% due to for sales. from an regarding XXXX. for update few were XXXX. product QX efficiencies for approximately in of over primarily as detail manufactured negative revenue million, in million, cost over a a of which quarter moments. profit gross profit XX% reductions approximately The will a increase direct and XXXX year-over-year approximately $X.X for quarter approximately a driven $X.X devices of grew product able addition is will QX million euro were XXXX new $X.X we XXXX. represents This increase product by increase an up gross our $X.X approximately I of product achieve. third $X.X QX cash were sales of Gross to grant XX% XXXX, product to this profit discuss as the approximately the existing in in is is which an sales call, XXXX provide $X.X includes of XX%. for QX Total update an for repeat a and which sales XXXX,

$X.X Grant September same $XX.X Increases are a aided was sales is revenue million, our the million an for major ended Turning approximately XX, month were XX% euro sales $X.X now $XX.X months million over of total approximately grant XX, direct XXXX, period same million for XX% compared were is for X to million period approximately XXXX for by to the XXXX September X and of results, which over XXXX X sales total product an of revenues the distributor sales months as product in financial average XXXX. contributors of grant of and and dollar stronger revenue period which ended for increase period XX%. to month of XXXX $X.X increase exchange X $XX.X the rate. the a of the U.S. approximately includes million growth approximately XXXX which revenue revenues product to of also of for revenues, increase

look XXXX a quarter-over-quarter sales QX product sales. closer number take Now, were slightly $X.X of of product sales there our million XXXX at quarter-over-quarter slight were QX factors underlying sales. in product and this below a let’s reduction

QX a impact if $X.XX importantly, in XXXX First which by reduced would $XX,XXX million sales decrease XXXX the QX exchange of approximately over the negatively or to euro words, by and been approximately XXXX. had were more remained $XXX,XXX. the reported rate, unchanged quarter other XXXX sales dollar exchange effect an increase second year, rate QX have of the In QX sales from of the

not despite In third than shipments, the CytoSorb also unit of by And sales percentage of have and in direct to than addition which the slowdown European only quarter XXXX. third in selling the but workers, lower second XXXX, lower and a higher many prices in August quarter in distributor due had customers of margins summer quarter finally, sales, vacations especially. businesses we record July

patterns this our record year-over-year in being remains first Given slowdown XX quarters of sales this believe most revenue in consistent that track really magnitude. have the the year-over-year future. which seen strengthened year results remain we business of we our significantly, concentration That and surprised will the was our the of this consecutive increases drivers time, Europe, first intact. that the growth strong and And were remains in said, growth we underlying to impact of our financial

growth annual into sales future. past a So XX% company rate product turning annual sales growth year-over-year we our has experienced overall, X that strong chart, the expect to the growth our the trajectory a continue to compound XX trailing over and and exhibits very years, product month

to shares Now, existing $XX.XX, company. and way for utilize equity million that of turning an average generated company. at-the-market, operating our meet approximately raise solid well-capitalized the XX,XXX In provides third cap before, remained needs will ATM in said at and of with for trial of provides we effective efficient allow as $XX.X cash, sold price for to which of our believe half to very We And quarter and runway us the capital cash XXXX. we September which the foundation XX, as believe facility well of working us the we proceeds approximately XXXX, table, Fitzgerald. cost net second the the $XXX,XXX. our a an XXXX, did we with clinical approximately ATM Cantor funds into We

the structure approximately Turning capital common XX, call would turn XX.X to basis. on to we fully shares like And I back September that, our with to a diluted million have as XXXX, Phil. of

Phillip Chan

Thank you Kathy. very much,

be exceed guidance to first our we sales, refined product our sales prior sales. product XXXX additionally will and sales that that XXXX product half guidance QX addition have QX than greater half will second product In expect

and session. quarter. quarter objective the clinical achieving operating as also XXXX with achievement That currently facility. production We Q&A were of a new We third currently growth $XXX,XXX. blended quarterly for our solid XXXX We defined trial and to product manufacturing this again of approximately expenses concludes costs the gross as prepared non-cash margins in to expansion loss on Operator, from less call remarks. of an very continue XX% operating profitability up our basis scale expect in the open we this anticipate please in close up at

Operator

go Instructions] Thank will first We with to Riley B. D’Silva you. Andrew FBR. [Operator

Andrew D’Silva

afternoon. good Hi,

looks missed I right a were Sorry couple expected now pipeline between or any have of to about had a if to been knew related dozen one. so how a standpoint? of you you this that if but updates calls, publish studies, that was wondering any from hopping and ago your of investigator-initiated you have do quarters I couple I the

Phillip Chan

Hi, continue Andy. we Well, and doing? in ones starting studies investigator-initiated you all fact are time. of How the the are new

number you If you look studies. actually are pace These published. at case series publications being will the controlled and that currently randomized of studies range small of from see

getting have with been and Some studies that of investigator-initiated and ago now completed these publication. of and our getting input and were continue many those to those to pipeline robust only clinical published But team. started be support clinical studies scientific from years finally input as continues we are to are

Andrew D’Silva

patients then And many that up that And to and X, thus countries product able worldwide. product? questions – have into great. of after established many are is the registrations [ph]? out you the How changed XX noted protocol have noted two noticed enrolled REFRESH distribute of then that far I how you the you to and Okay, that enrolled one, sites the sell put guess actually XX were out XX the in you actually

Phillip Chan

Yes.

over Vince give talk if don’t let Let Vince, can a that little on me registrations. that. to product you I color about to know

Vincent Capponi

of registered. So, the bringing least training to XX% fully – that this are of is are to basically product at we’re about now, from is activity Right countries actually and But those from the them XX% registrations point. I'd hey, the Andy, bring do say in-servicing end probably speed. our so registered that up perspective almost the up distributors at on countries those

Phillip Chan

the I Vince, question, has second after – approved. from – and think amendment of after and protocol thanks, protocol the enrollments think submitted have And I the your been been majority the has

one system. clinical enrolling of So the was We their were trial actually FDA last expect site time we a that, ahead have protocol that before that clinical mentioned sites protocol lot through amendment aggressively wait they the of to approved the but that we work had until trial enrolling. did new already the using wanted that guidelines, had that

have they gotten accelerate So enrollment final expect now the we protocol to that that approved.

Operator

And with our Jennings question next we’ll Company. from and Josh take Cowen

Bryan Bergin

Thank you.

Phillip Chan

Hi, Josh.

Bryan Bergin

Phil, Josh. This you? is Hi, how for are here Bryan

Phillip Chan

Good.

Bryan Bergin

with start product wanted I sales. to

So but Euro a the can distributor of more reason modest in greater company-specific the the you and I rather of amount impact percentage facing something discuss than confident, Europe? the understand you’re of you’re sales, seasonality

Phillip Chan

Yes.

let maybe to me So Christian? give over to some Christian that. turn it on color

Christian Steiner

Phil. Bryan. you, I always the Yes, in the Thank Hi, vacation time little slower. a normally is Yes. business think bit

especially especially and I the Europe surgery. think hot in seen this in more, by has cardiac surgery of this So in had time surgeons in collective septic also doctors an the I especially of and the first been vacation year we impact think impacted like of have our postponed lot surgery has been summer on because the field. business impact in And this so of that had an patients – number unusual Central

shown our think the seen of the reason in also other there growth the and additionally, I all business think business of no is I this companies the slower same other So field. have that analysis for picture have

Bryan Bergin

you. a HCAP for Thank the the to Okay. the you protocol, of last follow-up, that on was made [ph] And on discussed REFRESH ClinicalTrials.gov there amendments quarter. the including suggest X, two to ask just entries wanted removal I

the So made of and mean, to that the proposed? my you and more two were one amended reflect totality there actual you're with the what FDA, that proposed guess, working changes is, the you what question the does of does more than now the importantly, to by protocol I I totality reflect protocol,

Phillip Chan

But correct. over color some it more that. Eric turn is Yes. to Eric? me give let to That on

Eric Mortensen

Phil. Sure,

in recruitment just in this round, or implementation. it administrative, the equal looking one factor think period line. basically me baseline, very I limited the that small make is it to listing how we XX more we of at risk rapidly is A can with improve was a their study, we so much of to that goes [indiscernible] that part about to protocol wire the of in This changed obesity, – which And finally, surgical have of what you to improve and for a small coordinators AKI what moderate that large the did have the also seen terms per of and really then So we Amendment their just but coordinators just mild patients really we changes clear just study are have made evaluate really were was the really change both time really actually change the renal to as this than the identify let can their is [ph] The of speak. in appropriate on in change meter very study patients reflects from BMI we that very and very mind, patients. in noted are added impairment actually last to ability intake D, and talked two, HCAP, some what kinetics bear greater was the is really really which to we square. really amendments well-established kilograms

what I exclusion frankly, quote from of some have have one thinking make really gotten meets that state coordinators, you now give we So had schedule qualified that sure we’re majority criteria. no can hearing patients just case the seen pre-screening during we

that see just time those very our half from about So big recruitment. you month big a of in and a a that previous XX it so a can rate really made change change has patients makes

Operator

our Group. We’ll from McCarthy Jason now next with question take Maxim

Jason McCarthy

taking my question. for thanks Hi,

uptake myoglobin important you provide in expansion regards to revenues indications? which broadly, driving progress with those like an more can if into to CytoSorb of So most specifically first any then and the bilirubin I’d MACE to in related therapeutic just in consider And going bit areas just see label you growth update for forward?

Phillip Chan

Yes.

two the are currently major think we that that in have I indications sepsis.

patients all indications It so help stabilize and stabilize CytoSorb either sepsis quarter postoperatively SIRS. a that surgery for endocarditis cases. represents currently help patients applications patients who undergoing critical during dominates various surgery, is our the example, of in patients into for to about develop surgery, the postoperative in then to intraoperatively, care in surgery cardiac going which cardiac then preemptively of And use surgery And we have. of

terms from we earlier, we is that In that had, these the label we use announced physicians applications. particular this wanting the therapy of demand our pursued of that something expansion because to for label on

rhabdomyolysis, and liver and the liver so be a sort the and injury death into added can dialysis of us patients failure treat removal specifically by crush with toxic can on the in is again bloodstream of the to myoglobin to an label. ability And And risk addition releases crush then therapy to treat trauma, accumulate muscle independent help of severe for to to in able treat addition which factor label them trauma. myoglobin as allowed which bilirubin which failure, cause kidney with patients is injury, caused that kidneys the

So fields, real we that growth seeing being the our effect don't some but is think I good on in yet. uptake those are initial sales felt

think area we for company where has think the CytoSorb – one one for I technology. areas but developing is where our tremendous – have and still but and opportunity – this think we

up treating other into And alone disease or or China in acute So toxicity. have we the some that are getting liver worldwide. from alone who million hospital for exacerbations clear the get massive alcoholism who chronic decompensated the and that with patients patients in estimated XXX a example I liver just acute up disease think of form disease wind of are people that to patients is liver hepatitis wind acute liver disease. be It’s problem

– that being are believe is We – it already CytoSorb current big. very are markets our these will current that where used. but applications – the So complement

Jason McCarthy

possibly related into the detail go U.S. to with X you for REFRESH label expansion like one in then and patients the I’d CRS? regards to bit And then data to CytoSorb if positioning thank if you. see a studies plans you more these could trials? than from And require full Okay, small rather also leverage in only your CAR-T. then just more in

Phillip Chan

is So, coming where market. where high and for area, is spent ones of the CAR believe on optimism new T-cell money profile very this the being lot we of treatments that there market a and lot immunotherapy, to the is over a approved already a

one cancer the by by have as approved experience of as Now, had approached treat Europe number whose to collaborate and we in United a have Union. And centers critical illnesses already now European Yescarta in and us in already cytokine release both now hospitals our using been Kymriah, on working also one Novartis product syndrome. are in well States with Gilead the by to

an program able to in use as the to that believe these centers Europe have approaching clinical these it a to oncology also We of syndrome. steroids. viable release have – cytokine are in active CytoSorb alternative it We treatment we where positioned to be have outreach for various represents in well, very

steroids, line it’s used be IL-X effective that, is receptor studies, that can impacting an partial we is potential because of that we need requires response atezolizumab, first cause be likely long-term and potential injection antagonist believe complete as often will alone currently cells to in not atezolizumab many for the the first is which treatment So, treatment. potentially apoptosis of and ultimately an instead But line immunotherapy those steroids have causing and steroids cells believe damage T-cell to rates. and and the Car we the of used

positioning our to And will an talk we and Union will but future. the are that U.S., on here currently that’s in States CytoSorb we the today how the have something then in in United about activities European that superior is that believe and a so alternative we represents update the hopefully CytoSorb steroids

Operator

to Lee [Operator with Instructions] Wainwright. go next We will Sean H.C.

Sean Lee

overall just Good breakout and Switzerland. that’s I know operations color now? impact question bit a direct code you afternoon, per how sales dedicated this to provide results, sales? what’s country how important you different available I procedural little quick a guys. on Could material guys approval don’t highlight to for your expect have is on the you for although Switzerland from do given more make And your

Phillip Chan

Yes.

allow in I ancillary very what more as think also Germany. The obviously direct Austria underlying for that our Austria prior well being is the CytoSorb territories, a way incomplete the was many represent products Switzerland Germany, we reimbursement one, as but reimbursement. and many, and generic code being throughout now and of strong. procedural hospitals code reimbursement based the full top upon Switzerland procedure has Switzerland now And the have potential itself with the Germany, that the reimbursement to same full sales in number

Europe So, with Switzerland citizens is one of top-of-the-line best their therapies. having as systems widely regarded healthcare in the medical providing

it only so perception getting is become believe important reimbursement And nature a the standpoint, revenue given over also profile from time, very we Switzerland mature issue not of can in but where high Swiss from generation a that medicine. do

Sean Lee

Thank you.

Operator

no are this at any for there additional appears further time. it turn or the questions And I management to to back conference like closing would remarks.

Phillip Chan

have any out you at thank you where And everyone Jeremy will reach to reply do and Well, questions Feffer if participation for feel free please to your to we your questions, possible. much to other try today. jeremy@lifesciadvisors.com very

the very quarterly conference much call. everyone forward comments, In to analysts next our look Thank Good available addition, are night. for of any follow-up you for call. had additional We we questions if participating. or

Operator

concludes That conference our for you. Thank today.

Jeremy Feffer	Investor Relations
Phillip Chan	Chief Executive Officer and President
Vincent Capponi	Chief Operating Officer
Kathy Bloch	Chief Financial Officer
Eric Mortensen	Chief Medical Officer
Christian Steiner	Vice President, Sales and Marketing
Chris Cramer	Vice President, Business Development
Andrew D’Silva	B. Riley FBR
Bryan Bergin	Cowen and Company
Jason McCarthy	Maxim Group
Sean Lee	H.C. Wainwright

Cytosorbents (CTSO) 6 Nov 182018 Q3 Earnings call transcript