Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CytoSorbents Corp (CTSO, Financial) reported a 10% increase in product sales to $8.8 million for the second quarter of 2024.
- The company achieved a significant reduction in operating loss by 48%, decreasing from $6.6 million in Q2 2023 to $3.4 million in Q2 2024.
- Gross product margins improved to 75% in the second quarter of 2024, indicating enhanced operational efficiencies.
- CytoSorbents Corp (CTSO) secured a $20 million credit facility with Avenue Capital Group, strengthening its financial position.
- The company is on track to submit marketing applications for its DrugSorb-ATR system to the FDA and Health Canada, with potential FDA decision expected within 6 to 12 months post-submission.
Negative Points
- Second quarter 2024 grant revenue decreased to $1.1 million from $1.3 million in 2023 due to the conclusion of several grants.
- The company reduced its workforce by 17% over the past five months, indicating potential challenges in maintaining operational scale.
- Despite improvements, the company still reported an operating loss of $3.4 million for the second quarter of 2024.
- The transition to a new manufacturing facility previously led to a decline in gross margins, although improvements are being realized.
- CytoSorbents Corp (CTSO) is actively pursuing alternative sources of capital, indicating ongoing financial pressures.
Q & A Highlights
Q: Can you provide an update on the FDA and Health Canada submission for DrugSorb?
A: Efthymios Deliargyris, Chief Medical Officer, stated that the STAR-T pivotal trial provides necessary information for a benefit-risk analysis. The company is on track for a third-quarter submission to both the FDA and Health Canada, with the FDA submission prioritized. No additional discussions with the FDA have occurred since the last call.
Q: What factors contributed to revenue growth in the second quarter, and do you expect similar trends in the third quarter?
A: Phillip Chan, CEO, noted strength in the distributor and partner channel, coinciding with the launch of the PuriFi pump. The third quarter is typically seasonal due to European holidays, but they expect it to be respectable.
Q: What is the outlook for gross margins, and what level of sales might achieve 80% margins?
A: Kathleen Bloch, CFO, mentioned that with 15% to 20% year-over-year growth, gross margins could approach 80%. Approval in the US would further increase margins. Vincent Capponi, President and COO, added that manufacturing improvements and volume growth are key to achieving this target.
Q: Can you clarify the timeline for the Canadian submission for DrugSorb?
A: Phillip Chan, CEO, reiterated that both the FDA and Health Canada submissions are expected in the third quarter, with the FDA submission prioritized.
Q: What are the major R&D projects currently supported by grants?
A: Phillip Chan, CEO, and Vincent Capponi, President and COO, highlighted the focus on HemoDefend-BGA, with progress towards human testing. The program targets military and civilian applications, with ongoing efforts to secure additional funding.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
