Q1 2020 Earnings Call
[music].
Good afternoon, and welcome to the Cytosorbents first quarter 2020 financial and operating results conference call. At this time, all participants, arguing they listen only mode. Following the formal remarks, well open the call for your questions. Please be advised that the call will be recorded at the company. Some question.
At this time I'd like to turn the call over to your moderator Jeremy Feffer. Please go ahead.
Thank you and good afternoon, welcome to Cytosorbents first quarter 2020 scenario.
So in all parts call.
Joining me today from the company are Dr. Phillip Chan Chief Executive Officer.
Vincent Capponi chief.
Operating like Kathleen Bloch, Chief Financial Officer, Dr. stimulus My guess don't you gear as Chief Medical Officer, Dr. Christian Steiner Senior Vice President of sales and marketing from Germany, and Christopher claim <unk>, Vice President of business development.
Sure I turn the call over to Dr. Chan I'd like to remind listeners that during the call management's prepared remarks, making <unk> can state to risks and uncertainties management may make additional forward looking statements in response to your questions today.
Well the company clay and his protect harbor for forward looking statements contained in the private Securities Litigation Reform Act.
Thank you Mike Polk may differ from results discuss today and therefore, we refer you to a more detailed discussion of these risks and certainties of the company's yes.
He projections as to the company's future performance represented by management include estimate today as of May swing, we assume no obligation to update these projections in the future as market conditions change.
Turning to they will have an overarching covering the operating and financial highlights for the first quarter by Dr. Chan and thus far following that presentation. We will open the lines your questions during the life accumulate session with the rest of the management team.
This time, it's now my pleasure to turn the call over to Dr. Phil.
No.
Thank you very much army and good afternoon, everyone.
I didn't get started I'd like to congratulate the company has now been promoted to president and Chief operating officer.
So from my comments in yesterday's press release. This has done an outstanding job you're going to 18 years of service to the company I just want to think in pure publicly for all that you've done.
Turning to the operational highlights for the first quarter last.
Last quarter, we achieved 80000 or more cytosorb treatment still deferred up from 61000 a year ago.
In the first quarter total revenue grew 68% to 8.7 million product sales grew 78% to 8.2 million over the first quarter and putting 19.
We ended the first quarter 20, 21.7 million inside of sort of order backlog and have ramped production near full capacity with the ability and flexibility to go up or down with current situation. We cheap blended product gross margins at 76% into first quarter 2020 up from 74% a year ago.
The lower than Q4 2019 due to expenses of rapid scale up to respond to the company 19 pandemic.
That is surface now you're kind of turned loose tiger worked hard on pump cardiothoracic surgery.
An expanded CE Mark label.
We have not treated the FERC and in the first quarter, we treat it the first 70 coping 19 patients, including the very first patients treated in China with partner trying to medical systems Holdings limited.
I've now more than 750 patients treated including 25 under the U.S.P.A. emergency use authorization.
During the quarter two case reports came out.
On the first successful cytosorb treatment of great poor or life, threatening cytokine release syndrome or Crs.
Car T cell immunotherapy painful.
And we also completed.
The 250 patient remove enterprise randomized controlled trial in Germany.
That is expected to read out and be 2020 that was done as an investigator initiated study and 15 centers throughout Germany.
We also I have a chief marketing approval of Cytosorb in Mexico, with our partner for Sonys medical care.
Now to talk a little bit more about ticagrelor and our recent breakthrough designation I'd like to introduce you to work you Chief Medical Officer, Dr., Yes, nobody gear as.
Who also goes by the name like it.
Mike its could you give a little background on yourself and get your thoughts as a subject matter expert in this area.
Application.
Thank you Phil and good afternoon, everyone.
It was my absolute pleasure to be joining cytosorbents, that's that's an exciting time.
Well, the incredible growth and tremendous potential.
My background is a triple board certified physician internal medicine, cardiology interventional cardiology.
The first part of my career I had the opportunity suit opportunity to practice, interventional cardiology and cardiology, the United States and in Europe, and approximately 10 years ago, a joint industry with a role at the medicines company and later on appeal ex farmer.
Throughout my career, a head of research and tourism thrombosis, and I could cardiac care and I've been very lucky to be involved in the development and support commercialization from two of the most important that somebody to the market today, namely by motherhood and then KANGREAL.
Well that like I've been very excited when developing the feel has already shared and the two recent FDA milestones.
First off I would like to comment on the recent emergency use authorization to critical could maintain cases.
For many this may seem as an over to stick to develop and.
Well most of the no harm moment for the cytokines Thorpe narrative.
What is important to clarify is that for Cytosorbents. This is a validation of the long standing thesis that quenching. The uncontrolled surge of cytokine can be a life saving intervention for many critically ill patients now it's covered 19, but this is also relevant for patients with septic shock.
Patient suffering a two trauma or those.
Bypass undergoing cardiac surgery.
The second development, which is actually closer to my heart.
The recent breakthrough designation foot that goggle removal in patients requiring urgent or emerging cardiac surgery.
I don't think platelet drugs, I, especially fundamental for patients with acute coronary syndrome, and especially those that we seem stance as part of their treatment.
The CAGR lower is viewed as the best agent in its class and its use is growing steadily around the world.
It is estimated that today its market share in the United States is close to 50% among patients surviving a heart attack.
However, there is one downside important want to ticagrelor.
And the rest of these aren't that thrombotic agents.
And that is that they put these patients at higher risk for bleeding.
No that vis can become life threatening when these patients while on treatment require urgency for emergency surgery.
Such scenarios the Doctor struggle with a choice of sending these patients to the all our at risk of serious bleeding.
Or delaying they needed surgery I feel these drugs watch out.
A process that can take up to a week.
This can be any possible situation.
Fortunately, it's also pretty frequently.
As you can see on this slide it is estimated at one in five cardiac surgeries, if you the urgent or emerging.
If we talk specifically for coronary artery bypass grafting operations that is approximately 80000 patients in the U.S. alone and approximately another 50000 urgent or emerging cases in Europe.
I'm old goes into Cogs or they have the choice either proceed to surgery, well on therapy and risk having excess bleeding.
Or to wait for this drug to wash out and currently a lot of clinicians opt for bridging this patients with short acting injectable agents that require hospitalization.
However, we know haven't you solution.
Cytosorb effectively removed spectacular during cardiac surgery, thereby mitigating any excess risk of bleeding.
The problem solved.
Patients can stay with that kind of color until surgery or getting rich to surgery with that kind of <unk>. If they were please previously treated with other agents such as plavix or at fan.
This is a simple effective and safe solution.
Furthermore, the value proposition of eliminating pre up hospitalization and post operative leading complications is truly enormous.
This indication as Phil noted has already been approved in Europe, and we plan to support all the necessary education that will make this approach than your standard of care.
We plan to work closely with the FDA.
<unk> the data required to leverage the recent breakthrough designation and get this indication also approved in the U.S. in the near future.
Thanks, and now we'll turn it back to Phil.
Thank you very might make it.
Hi, and to give you a little bit of overview about set a certain cozy 19.
Surface now than you treat more than 750 critically I'll Cook in 19 patients.
Only China, Germany, U.S. and in many other countries.
There's nothing in preliminary positive reports as a reduction in cytokine storm in inflammatory mediators <unk> well here Pete.
Also improved respiratory function in acute respiratory distress syndrome.
Signs of improved oxygenation improved free she has.
Noncompliance, and most importantly, weaning from Ecmo and mechanical ventilation.
And last but not least we've also heard many reports about an improved cemented NAMIC stability of patients and a reversal of shock one at a hallmark features of Cytosorb treatment.
But as surface now specifically recommended in Italy in Panama.
Guidelines electrification to treat cytokine storm and the China coping 19 guidelines as well.
April 10.
2020, <unk> ft emergency use authorization, enabling high to start to be commercially sold all hospitals in the U.S. for use in critically ill coping 19 patients 18 years of each are older with imminent or confirm respiratory failure.
We are currently prioritizing nearly 200 inquiries and we've received in the very short period of time about 30. After hospital accounts, the cytosorb shipped or use in more than half at these with multiple reorders and approximately 25 patients treated to date.
In the United States.
Germany, which is treated the most coca 19 patients today, a major Africa is under way to paint clinical data in many centers, including randomized controlled trials registry data as well as the report a case reports and K series.
I think it's important to note that we are confident I can't play, but not a code that 19 company.
And as Mike mentioned Cowen 19 has spotlighted our company Cytosorb.
Our company [laughter] start and Ireland, treating cytokine storm and believe it can be a long term.
Catalyst for our business.
Finally, I'd like to it I normally breakout clinical activity at this point. However in this unprecedented environment most clinical trial activity around the world has been put on hold and favorite making room for potential covered thankful patients.
And preventing infection of non essential personnel and patients.
Because of this there's not currently much to report however, when activity Kathy.
Oh, Thank you Phil and good afternoon, everyone for today's call I'll be providing an upbeat regarding say sir.
I've been from March 31st 2020 financial results and then it doesn't increase.
$3.6 million were 78% over first quarter.
2019 products sales of approximately $4.6 million customers as well as an increase in distributor sales and in the middle of March sales demand rose as a read.
Revenue was $551000 Trosclair of 2020 as compared to 600.
In $15000.
Your first quarter of 29 cheap.
Q1, 2020 product gross margins were 76% compared to 70.
2020 represents another record quarter with products sales of 8.2 million on a constant currency basis.
Yeah contributed to this increase in house.
Difficult to quantify management estimate that approximately.
Our first quarter 2020 sales were related to the cool that 19 pandemic.
We also note that we entered the.
Second Claire what they sales order backlog of approximately $2.7 million, which we believe positions.
Clinical trial expenses, we achieved our first quarter of positive cash flow from operations of approximately.
Experienced a decrease in revenue in the second half of 2020 as compared to the first half of 2020 at the impact of this.
New growth remain robust in Soc I still am I guess I've already mentioned as a result of the cool that 19th.
Yes, sure and this is expected to fuel future sales growth even in our core markets once the pandemic passive.
Its margins.
As you can see by this chart.
We continue to maintain strong year over year products sales growth was approximately 52% over the past four years and we are maintaining a very positive trajectory of sales growth.
And I sales growth, we continue to benefit.
And lastly, we'll review our working capital position.
So as of March 31st 2020, we had a proxy.
The only $26.4 million in cash in addition in April the company received approximately one point.
Maybe $1.7 million from unsettled March ATM transactions further bolstering our working capital position.
In the first quarter of 2020, we raised approximately $17.7 million you are at the market equity City. Riley. However, given our current strong cash position, we have not utilize the ATM.
It's April 2nd.
2020.
The company also intends to refinance her 2020.
We believe we have us out solid foundation, which will enable us to execute on our operating plan.
Management would like to remind our shareholders that we are shareholders as well and we strive to do what is in our collective best interests.
Looted basis.
And at this time I'd like to turn the call back to sell Phil.
Thank you very much cat.
Hi, historically, given specific financial guidance on quarterly results until the quarter has been completed however provided that the current or.
Scale up in pretty Cytosorb, we expect that second quarter 2020 product sales will exceed first quarter 20.
Yeah.
Thank you as a reminder, if you do have a question that is the star one button on you.
Yeah I was hopeful.
Please make sure you Brian is turned off to allow you signaled to reach our equipment.
Well take our first question.
Riley and company.
You May proceed with your country.
Your question [laughter]. Thank thank you very much and thanks for taking my question.
Just to get started with me I'm, just not the CAGR or can you give a a little color on what kind of a trial or approval path. We should think about TV made another five 10-K, a and killer.
Study.
Yeah in the UK be relevant for the U.S. okay.
Sure well. Thank you very much Andy we certainly appreciate that.
In terms of the regulatory path.
Under the breakthrough designation, okay on that particular issue and we will give an update when we now.
The second question in terms of.
The election on acquisition.
Bucket called index up.
This had sales of roughly I think of $110 million and Alexia.
Which is a company that focuses on orphan indications for antagonism dollars today. So it's interesting that cytosorb not only <unk>.
Moves activated complement what we also have the ability to <unk>.
She removed.
Factor 10, a hook in a observational study that the removal of river ops, again, and hi, CAGR of or by Cytosorb could reduce.
Don't quite have the revenue of electrical yep central could be.
In this it's I'd thrombotic reversal agent space.
And I'm just curious.
Is that our product Cytosorb does what their products do together as well.
Right.
Situation is there like in in vitro studies that you can do to expand your label in Europe or is that even something that.
I device, Oh, we would comp up against it in Ah Ah in the field.
[noise], a colleague and collaborator of ours Dr. George Honolulu.
Who had published the initial in vitro.
Good on the removal of a wide variety of these insights robotics I believe just actually published a another paper just recently, where he said.
It's also show not only the removal of I cant ruler, but the removal of different soccer Kenny.
Inhibitors, including live Roxanne.
So the interesting thing I think about indexes is as you say it has a per thrombotic Rick.
As a black box warning.
And it's a very extensive to be used.
As a reversal agent in cardiac surgery doesn't make sense, particularly given the fact that you don't.
Juan <unk> changing anything into patient has a per thrombotic effect, because when you're dealing with the arterial system as you aren't cardiopulmonary bypass it can potentially leach.
The risk of stroke or risk of heart attack or risk of other <unk>.
Well, we think it cytosorb as a easily installed easy to use.
Fairly price a much better solution and that's one of the reasons why we feel confident that.
Should we be able to move forward with our marketing plans.
And data plans.
At a we could become the fact of <unk>.
Standard of care for these agents.
And so interrupting said a these data a would all be very helpful to helping support the market for a <unk>.
This particular application in Oh, I kagarlitsky removal and hopefully we'll have some more news on other.
Provided an update and an 8-K I believe it was last Ah last month and at the end of that 8-K you referenced.
I was just a little the curious on.
What we should be thinking about there would you be and you know <unk>.
Any within an existing facility or any color and that would be useful and oh. So if you could just tie in where you are in your you know.
Oh sure let me I turn it over to the company has been doing a great job in terms of managing a that up.
Taking capacity both.
Yeah. Thank you pharmas reveal a related to covert 19, we really are cranked up to seven days a week 24 hours a day.
Right now.
Oh in order to meet the demand is capping Phil mentioned you know we all that we said we could supply you know essentially a an 80 million dollar business. So we'll give exact percentages.
But you know we're.
So we are using a significant portion of the capacity of the plant.
You know, obviously, all potentially what the next level of expansions going to be.
Given what we've just experience now in the fact that you know Christians continuing to drive.
Oh, well introduce opposite cetera, you know, we need to take a look at that and.
We would probably not do it within this existing facility.
From a scale standpoint, and this is really not quite designed to do that kind of work here ssli looking very closely what the trend is in the market for us to best.
Determine what a that path will be going forward.
Okay.
Great and just last question for me.
As relates to seasonality.
Would you wouldnt traditional seasonality.
And 2020 given just.
How come out Jewish things are or do you believe that.
At.
That should be a fair proxy for 2020 Sars seasonality in past years. Thank you very much okay. Congrats on that it really depends on what happens with Coca 19.
No.
<unk> as and social just anything that has been so affected in the recent past and preventing a further infections, there's change and potentially even a third surge of infections.
Okay, clearly as we move into the flu season, where.
Flu and Coca 19 Bay coexist together and they just exacerbate the a burden on hospitals.
The risks do people all over the world.
So currently right now we're at the beginning of May but thinking about getting back to normal way of life I think some seats in the United States have already tried to do that and have seen sharp upticks in in a new Kate.
Because of Coven 18 infection as well as a in increasing mortality.
And but I know that there is a oppressing after now they think that in in Europe, and maybe we could get a Christians perspective on this but you know it ever.
Everybody has been working remotely since a you know in March and whether or not or there will be a traditional particularly if everyone winds up going back to work during that time after being at home for so long.
Maybe Christian you want to maybe give a little bit of color.
And what you're thinking in terms of the European business and seasonality.
That we typically see in Q3.
Yeah, certainly I'm sure. Thank you and a good afternoon, everyone. Good evening to those from Europe.
I think of the number of points have to be considered when we think about seasonality or not.
Altogether I think that the business, we have is very healthy and.
The there might be a part which is a onetime effects.
But as is up.
This will depends very much on the holds a situation it was a cool with launching evolves.
But also I seem to us there's a number of very sustainable it affects.
So I think experiences and the results we have in treating covert 19 patients will be translated into other diseases.
So this is obviously septic shock patients, but there's also involves holdings routes.
For them for patients.
Then because.
This condemning read has gone to the number of new customers using more vileness. So all these effects I think Lou at.
To the normally business.
And number three I think that'd be hasn't vida awareness of our therapy.
Yeah.
Also the.
Listing of looked on.
In the different countries leads to another phenomenal.
<unk>.
It was rise was a pandemic a lot of elective programs have been postponed and obviously those has to be.
Started again and we see that the hospitals are starting to normal programs at the moment.
All this in the next two or three weeks. So we expect a very robust.
Business, even after the end damages has been solved.
Thanks, again victims huh.
Great.
<unk>.
And our next question is from Josh Jennings from Cowen and company. Please proceed with your question.
Hi, This is Brian here for Josh. Thank you for taking my questions.
I have a it's very hard question on cobot 19 to start.
First can you share the average number of cartridges use per koeppen 19 pacing in the first quarter and the trends you saw for stocking for cobot.
19, specifically in the quarter.
And then regarding backlog do you expect backlog to become a normal dynamic going forward, where you'll exit each quarter with excess demand specifically for covert 19, and then I've a follow up question as well. Thank you.
Hi, yes, so I think that.
You know it the usage of Cytosorb is varied from Senator Center. It's also very base on the patients that they're treating.
I think we're.
Doctors and physicians have been having the most successes the early treatment.
Patients.
With Kols in 19 infection sooner.
After they are put on mechanical ventilation or soon after they develop shock.
I think that when they are a far gone home stays on mechanical ventilation a it is much harder to bring those patients back we've seen to the usage of Cytosorb very again the numbers of cartridge is very.
The series that was published in that was presented in our Webinars several weeks ago for example.
The only used a one karcher they only he's 24 hours of treatment.
Hi, good typically are recommending.
And about four cartridges oh per patient.
With a flexibility to do more treatment if necessary if the patient is improving I think that's how most ER physicians are are looking at it.
You know that if they are seeing an initial positive response, they will continue until.
You know what one of a number of different clinical outcomes that are observing happens either a <unk>.
<unk> reduction in inflammatory mediators down to a more normal levels or reversal shock or you know and ability to get someone often mechanical ventilation.
Or other types of <unk>.
No outcomes.
In terms of your question about a backlog so I think that.
The the demand for Cytosorb at the very at in the third month of our first quarter.
[noise] was you know <unk> actually quite robustly.
And we were just a scaling up at that time, we had already as I mentioned in the press release began to scale up process in the planning early in Q1, and we were just a you know it meeting the needs of our business and then trying to build and excess inventory to.
Meet the needs of.
I think that the demand got a little ahead of supply I think that you know we've done a you know the team you know just.
Want to congratulate our our production quality R&D and engineering, a that Vince has managed to get to really scale up this production.
So that we can try to get ahead of the curves, but the good part about our manufacturing process is that.
You know it it is very flexible it we have the ability to scale up in scale down very quickly without incurring a a lot of different fixed expenses.
And we can be very flexible so a I think that actually get ahead of the curves the likelihood of backlog.
I would be less but you know that remains to be seen and of course, our guidance is predicated upon our ability to continue to produce at the rate that we are so.
I think a the backlog is just an indicator I think that.
You know, there's a lot of demand out there and a that backlogs.
Right and we're going to do whatever we can say beat that backlog because it means that is this is a patients in need.
And so obviously our goal is to be able to make sure that that need is fulfilled.
That's helpful. Thank you and staying on the topic of Cobot 19, a competitor recently discussed the possibility of seeking a permanent U.S. approval that it will would allow the product twos remained in the market pass the emergency use interval for covered 19.
Is this something you're considering and if so can you discuss the clinical data you'd need to make this happen.
Yeah, I think it would be premature to be able to speculate on what yesterday with you willing and not willing to do so I.
I don't think that that is something that I like to comment on at this time.
Okay. Thanks.
Sure.
Our next question is from Jason Mccarthy from Maxim Group. Please proceed with your question.
Everyone. It's a day bond online for a for Jason. Thanks for taking my question sort of kind of switch gears your briefly and as water. So you can give us an update on where you work with respect to de lever. The refresh to you kidney injury studies and where are you are in meeting the a recommendation that line by the dancy.
Thanks.
Hi, I apologize I couldn't hear that last part or would you could you. Please repeat that last part of your question.
Oh, just like where you are with respect to the refresh to AK IDE study and a where you are in terms of meeting the the apply recommendation that wide by the Idmc.
Okay very good.
Yeah, I think that we are on track I think the at the one issue with Ecova 19 pandemic is that.
Many hospitals, including all of our trial sites have excluded non essential outside people, including people who work for our contract research or is there anything from a entering the building and from <unk>.
A you know any non essential activities within the hospital I think they eat you're hearing a lot of hospitals now beginning to open up the elective procedures and other things and a you know at the time that just Ciro was done through the majority of the data a lot the data scrubbing and and qualify.
Occasionally and validation of that data amongst the 150, plus I patients that we've.
Don to date.
And they have they been also working remotely to try to you ascribe that data at certain centers remotely, but again, it's not that much work that needs to be done and I think that.
Uh huh.
Provided that centers are open are able to open up.
To finish I, just some of that last day, describing how we should be able to get that dining in fairly short order.
I think the goal would be sometime this summer.
That we would address.
The the needs of the DMC in terms of data quality and data analysis, and hopefully have the issue put to bed shortly thereafter.
Great that Oh, well and just wanted to a kind of what we circle back.
Here, you mentioned that you had a a sort of like an order backlog going into the second quarter was that it wasn't number again I think I missed it sorry.
It was a 2.7 million.
Alright, Oneseven alright, great. Thank you appreciate it.
Sure.
During our next question is from Sean Lee from H.C. Wainwright. Please proceed with your question.
Oh, So hi, guys, congratulations great quarter and thank you for taking my questions.
I just I think just a quick question. The first is on the U.S. commercialization you mentioned that you already have a 30 active a hospital accounts in the U.S. and some facility has already started reordering the product. So I was wondering how is that handle right now and do you plan on building a separate commercial structure for the U.S. compared to you.
Your European operations.
So we've developed a what we call it coded a task force within the company as you know all of our commercial operations are outside of United States, primarily in Europe, but also spread out and 58 countries around the world a in in Europe.
We have a full complement of the sales team with all of the necessary functions need it to effectively commercialize the product in the United States. It has been more focused on clinical studies and in manufacturing and we did not have the infrastructure a set up ahead of time.
I'm honored to be able to meet this the new demand from the United States based on the FDA emergency use authorization.
That said I think.
I think that Oh, we have had a a multi distant from all aspects of the company to help here in this a commercialization effort that has been supported.
By the European operations, as well and so we've been working very hard to a again prioritize the a inquiries that have been coming in and should be able to start these sites up in a safe responsible manner. So I think that we've been doing a good job. So far we're not relying on the U.S., obviously to drive sales.
But it what it does represent is a way to introduce the therapy.
To to to a hospital major hospital systems throughout the country and she is a key opinion leaders throughout the country or and I have to say that there's been a lot of excitement.
About the therapy, a lot of enthusiasm and a in fact, some early cases of side with the therapy, just getting started sharing I'm very excited about what's happening and.
But I think that we will be able to manage without having to build it.
Hey, a sales team here in the United States, because we really don't need one at the moment a it's a there were just you know.
Utilizing what we have.
And Ah Ah, making the most of it.
Oh I see a my second question is on Omidria breaks down the sales. So I was wondering if you could provide a little bit more clarity on has now photos. Okay. So the improved for septic shock for a combined cardiac surgery I know, it's like hagler removal, so maybe a which.
Indications are you seem to be good growth and also a which areas a geography, so youre Hussein seem the biggest school <unk>.
So I think that <unk> you know all the 88000 treatments that we've had to date a.
The split remains fairly stable roughly two thirds in critical care and one third in cardiac surgery clearly the ticagrelor application is a in the area of cardiac surgery and we were just getting started there before it comes in 19 pandemic ahead.
So that being said as I mentioned in the press release, we believe that this is a potentially very large growth area for cytosorbents.
And as Mike mentioned and turns a quantitative some of the the initial demand for the product.
That that this application alone could double the current revenues that we have.
In Europe overtime, it won't be overnight.
But we do believe that there's a very compelling case.
To be made for the therapy at <unk> to become standard of care for this anti thrombotic removal application.
And so a I think that will Ah that market will become clearer as time goes by and hopefully that will translate into.
Significant increases in revenue.
And so I think that you know direct sales continues to.
Dominate our results however, international sales, particularly demand from Covidien King has been very brisk and as Christian mentioned, where we think that that the need to pull from the market for for Coca 19 will result in many many more physicians are using.
The therapy and a in a post closing making environment. We believe that if they are having good success with the therapy.
That can lead to a potentially long term business noncovered business for our company.
Oh, Thank you for the additional color I'm not talking huh.
Thank you.
And our next question is from when you lose young from Zacks investment Research. Please proceed with your question.
Hi, good afternoon, congratulations and thank you for taking my question.
Thank you for Josh maybe I guess I'm, asking how badly I cited I sorry, yeah, I kinda like trial goes I know you mentioned that you'd be able to do better they didn't actually yesterday.
In terms of the patient demographic.
Besides a those will likely be emergency surgery, what about patients who can actually weightfully El Nino fatigue, I got my theme might be axes, Casa de skinny complications would they be Oh, we probably are they did you too.
Yeah, Mike is if you I want it to comment on that.
Great. Thank you. Thank you for the question Great question.
So the ability of the other device to remove that casual has been shown both a in a model you know laboratory experiment and you know almost completely removed from circulation and we also have no.
Evidence from a study are done in Hamburg in humans are very effective.
Removal Oh the of the of the drugs on the circulation and in addition return of Cleveland function a while the patient is undergoing this therapy. So in that regard the.
Biological plausibility has already been proven.
Why people need to have the drug we moved the indication for it now that can be variable and as you mentioned in addition to the acute patients presenting to the hospital with an acute event and already.
On a on that casual therapy, which would be a very very important target population for this.
Therapy, you can also have the so called urgent not emergent like the first case, but urgent cases, where people on the outpatient.
They get diagnosed with the need for for cardiac operation and they opt to stop their drugs and wait for a week.
Within a week the drug is worst out of the bleeding risk can be managed that way. The problem is when you take these patients of these drugs visit rebound increasing ischemic events.
So imagine no somebody who has the diagnosis has it treatment plan in place.
No that they need in operation However, they have to stop their medication in the suffer an event other waiting for the operation.
So with with this with Cytosorb now in this indication this will not be necessary anymore.
They can march straight to the or all that kind of little therapy, there by having zero excess ischemic risk during the waiting period for the surgery and of course have the very effective removal during surgery and mitigate any leading risk.
Well it does that answer your question.
Oh, Yeah, Yeah that was very helpful. Thank you.
As a follow up you just wanted to just curious to know is a dangerous I just want to be being tested in clinical studies.
Yeah, Hi, Antithrombotic Aegions <unk>.
Besides the <unk> you too light right.
Yeah, I think in the study that I mentioned before the observation will study from St York Hospital in Hamburg, Germany.
Authored by Hassan and colleagues.
Studied a population a mixed population of patients on ticagrelor as well I swear blocks of bad.
Hi, which is I was there also.
One of the factor 10, a a inhibitors so and again study for studies have been done by George Angelou, showing the effective removal of liver rock span for example.
And so I think that it represents a viable market for us going forward and.
As it relates to.
Portola and Alexia on I think it it can show you what the potential of our product could be in that space given that factor 10 a inhibitors.
The top to a factor kinase inhibitors. It takes a bad word rocks and have about 16 billion in worldwide sales and a very widely used and these patients have a high risk because they are cardiac patients are vastly that patients or clotting or they have other evidenced that pee on there and melissa or on keeping front.
Most is a there there are higher risk for developing the need for emergency cardiac surgery or other cardiac surgery and so I think that's a very.
Viable population for us.
Phil if I can add one more comment those topic.
I would of course or would you comment on the index a discussion in Apparels here.
There is a very different clinical need that's being a addressed with index of versus Cytosorb.
Index, a use <unk> after the occurrence of life threatening leading.
Think of index as being the airbag right you deployed after the accident.
Think of Cytosorb is being the seat belt.
Cytosorb is will prevent any axes bleeding and therefore, we will be use of the standard approach to anyone who has been drug circulating and to answer that operating.
So two very different.
Size of the population and he is also very different clinical application of the therapy.
Makes sense, but we'll get the cytosorb therapy will be preventing any bleeding from happening.
Versus managing a catastrophic event, which indexing doing right now he requires patience to be having a catastrophic bleed before it can be used.
No.
That's a great.
Okay. Thank you yes.
Yeah that decision be mistaken thank you for that.
And I think is relates to the.
Approval that you really got in Mexico.
Could you give us some high Oh Danish analog it looks like something anyway, and then Oh. So I'll follow up you that like I used to leading maybe changing from South Korea.
Sure I'll, let me turn it over to do Chris Cramer, Vice President business development Chris.
Yes, Hi, hi, Thank you for the question Yeah. As you mentioned Cytosorb was officially approved by the.
Mexican Health authority at the end of March and just for some context, Mexico's homed over a 129 million people and is this second largest medical device market in Latin America after Brazil.
As previously announced as well Fresenius medical care FMC maintains the rights to distribute cytosorb in Mexico.
And so with this approval they can import the product and commercial sales of Cytosorb me now officially commence a in Mexico.
As Weve also mentioned a they've got a very strong and motivated direct sales force in Mexico, and it's a group that has.
And excited to work with us from day one.
There are management has made it started sort of a top priority as well and I think yeah working with these guys we.
Noted that they learn from their colleagues in Europe, and they've come up to speed very quickly any partner and a very closely with and this includes promoting it several major medical conferences and so when it gets about awareness and support amongst leading ice you docs in Mexico.
One other thing it's worth mentioning is that they've recently brought in a new and dedicated head of sales.
To lead the decide to swear Mexico business.
And just the person that comes with extensive commercial experience and network connection specifically and I see you in hospital sales, which I think is a really good <unk> will help accelerate the introduction of the product out to your question FMC has a indeed already placed as first quarter of Cytosorb and the product has.
Been shipped from our New Jersey warehouses and on top of that because of the the work that they've been doing they already have seen preorders in place from several major institutions and as you know Christian had mentioned, we also anticipate that.
We'll see increased demand for Cytosorb is cobot 19 washes over Mexico as it hasn't has everywhere else. So overall I'd say, we're very pleased with how things are progressing.
And I believe FMC in Cytosorb are well positioned for success.
Thank you and just one more regarding the <unk> sales in the European region.
We know what did you amazingly strong market that Dan what about Oh, we do like Nike <unk> <unk> that I, usually do they have a dedicated procedures close I decided yet.
Hi, Chris or would you like to take that question.
Yes, so many things you're thinking for the Christian.
In General I think we can compare the two markets, Germany, and then Switzerland's in terms of a infrastructure and ER and also to a range of mix on.
Supply.
Yes, no in Germany, we have a dedicated a reimbursement was the reimbursement code.
And in Switzerland. This process is little bit behind so we have a dedicated a cool, but not yet the payments on it and this is always like to use behind the the cooled and has to be on a loss from the different has insurance data.
Yep.
This I think very comparable <unk>.
Yeah.
Thank you and Justice My last question or we do expect the data from numerous study sometime in December.
I think that died notwithstanding any potential delays.
Caused by Cozy 19.
Ah at these hospitals again, most hospitals and and throughout Europe, and as you've seen in the United States have.
I have limited hustle workers, not Q essential personnel and so as you know from all indications. We believed that there is still on track.
And if we have an update on any kind of delays will make sure to let that now.
But as for right now I think that's right now I think that the a the expectation is.
Ah data by mid year.
Okay, great. Thank you for taking my question W.
Sure. Thank you.
And our next question is from GE Rose from Bradley Foster <unk> Sargent incorporated. Please proceed with your question.
Hi, Thanks for taking my question and congratulations on the recent development so with the quarter. So the coated crisis.
That of course.
The emergency and Oh around trying to save lives or it can you give me some color on the process of how and when the filter is used and in a way that can support we protect your objectives around data collection.
Supports your story going forward.
<unk>.
Sure I think as I mentioned before a as with our other business I'm critical care around the world.
We find that early intervention with a therapy is better Italy intervention.
Oh I am I have an analogy is of organ failure being like walking away from home. The further you walk away from home the longer it takes to get back and often bad things happen when a that.
When you're you're coming back and and so I think that further out you go in organ failure.
It's just very difficult to recover no amount of cytokine reduction will bring back and necrotic sell for example.
So I think that the the goal here is to try to intervene earlier and we are not trying to intervene on patients who are highly inflamed otherwise okay. No. That's always fever highway cannot you know a.
Signs and symptoms of inflammation fast Hartley fast breathing et cetera, we're not intervening on those patients, but when they started to Gulf organ dysfunction and organ failure that is when we are intervening. So in closing I'd team I think it's very similar I when patients going mechanical ventilation is often a trigger point for somehow.
So is it particularly in Germany, where their intervene early in some.
Very nice data I think but also.
You know when mechanical ventilation begins to escalate that is another time when people are intervening with cytosorb.
When patients are doing worse and and rapidly deteriorating.
So I think it runs the gamut I think a coke and actually it's actually so new a novel that we're learning a lot everybody is learning a lot as we are going for it the to pass the Genesis at the disease appears to be.
A very unique compared to other viral pneumonia is in Italy, they they've called this to the worst spirals ammonia they've ever seen.
And so I think.
It is a process of learning how best to use these various treatments whether or not there that's like oral therapies or a immunomodulatory therapies.
Is there.
Any type of a common she would make relative to how are the application of cytosorbents in bad theater is can be controlled in a way are used in a way like I said to support.
After could see and or do you think it's being sounds like it's being used in a whole range in different ways it different different interventions intervention points and it might be difficult to draw.
You know.
Significant conclusions from this coated experiences is that fair you have a different well I.
I I think that the first treatments that have ever been done with Cytosorb and cover 19 patients was experienced in China, where are they were really trying it on a wide variety of different patients. Some early suddenly all of which had a organ failure. So early is that relative term.
I think that in the early treatment <unk> under the old emergencies.
Under the expanded access pathway here in United States for example, I kind of relegate. It Cytosorb cities a as the end of life therapy of last resort treatment. However, the emergency use authorization that we now have a good doctors the wide flexibility to treat.
When they think that it's important and.
I think that to your point I think a lot of our guidance has been to treat early but they're also a large they're also randomized controlled trials that are in process. A one is how did the university of hyper a using cytosorb with ecmo extracorporeal membrane oxygenation, but there are other studies ongoing.
Looking at <unk>, a randomized controlled trials trying to get at eight more standardized way of treating patients based upon a the collective wisdom of the investigators and the most recent experience with a cytosorb in East Coast 19 patients. So you know that did the the answer to your question is.
Date is coming high and the best data will be that there was coming from a randomized controlled studies and we're also looking to try to do at such a study here in the United States.
Thank you very much very helpful.
Sure.
At this time I would like to turn it back to management for any additional or closing remarks.
Okay, well. Thank you everyone for taking the time this afternoon to.
Listen to this call we certainly appreciate all the support.
If you do have any other questions Keith please feel free to reach out to Jeremy Feffer at life side Visors until next time. Thank you everyone have a good night.
Thank you that concludes our conference for today I'd like to thank everyone for their participation have a good evening.