Q1 2021 Cytosorbents Corp Earnings Call
Good afternoon, and welcome to the Cytosorb and first quarter 2021 financial and operating results conference call. At this time all participants are in a listen only mode. Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the company's request at this time I'd like to turn the call over to our moderator Amy Vogel.
Please go ahead and this novel.
Thank you and good afternoon, welcome to the Cytosorb and its first quarter 2021 financial and operating results Conference call. Joining me today from the company are Dr. Phillip Chan Chief Executive Officer, Vincent Caponi, President and Chief Operating Officer, Kathleen Bloch, Chief Financial Officer Dr.
F. B me, Australia, Gareth Chief Medical Officer, Dr. Christian Steiner Executive Vice President of sales and marketing and managing director of Cytosorb and to Europe G. M. B, H and Christopher Cramer, Vice President of business develop and before I turn the call over to Dr. Chan and I'd like to remind listeners that during the call me and.
Regiments prepared remarks may contain forward looking statements, which are subject to risks and uncertainties management may make additional forward looking statements in response to your questions today and therefore, the company claims protection under Safe Harbor for forward looking statements contained in the private Securities Litigation Reform Act of 1995.
Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties and the company's filings with the SEC and he projections as to the company's future performance represented by management include estimates today as of May Force 2021.
And we assume no obligation to update these projections and the future as market conditions change during today's call. We will have an overview presentation covering the operation operating and financial highlights for the first quarter by Dr. Chan and MS. Bloch following that presentation, we will open the line to your questions during the live Q&A.
And with the rest of the management team at this time, it's now my pleasure to turn the call over to Dr. Phillip Chan.
Yeah.
Thank you very much Amy and good afternoon, everyone.
We had another productive quarter and the first quarter of 2021 with Cytosorb sales of $10 1 billion.
Up 24% from $8 2 million a year ago with the core underlying non COVID-19 business accounting for 82% of sales and.
And 27% growth year over year.
We believe that sales would have been higher.
One moment.
We believe that sales would have been even higher if not for broad restrictions and lockdowns throughout Europe, and other countries that and package sales activities and.
Also rapidly declining new COVID-19 cases globally and the first two months of the quarter.
Blended product gross margins were 77 per cent from the first quarter of 2021 versus 76% and the first quarter of 2020, excluding nonrecurring onetime items and the first quarter of 2021, the Cathy will detail.
Later on in her presentation product gross margins were 81 per cent.
Also ended the quarter with a solid balance sheet with $68 5 billion and cash and.
No long term debt.
During the quarter, we delivered greater than 131000 cumulative cytosorb cartridges to date, which is up 49 per cent from 88000, a year ago with distribution across 67 countries. We also treated more than 5000 and 750 COVID-19 patients people, it's simple eating out and more than 30 countries, including here in the United States under <unk>.
And she's authorization granted in April of 2020.
We also during the quarter entered into a global co marketing agreement with B Braun and feed them. The third largest dialysis company and the world and a division of B Braun with $7 5 billion euros and worldwide sales.
And during the quarter, we also and just recently, we received FDA I D and gets the approval.
Approval to begin the U S start T trial with first patient is targeted for the third quarter of this year.
And the first quarter, the Korean Ministry of food and drug safety T. M. F. T. S. Also approved Cytosorb for all equivalents EU approved indications from Korea has a population of 52 million and South Korea and collaboration with our partner finished medical care health.
Canada also authorized subsurface and hospitalized COVID-19 patients from Canada with the population and about 38 million people.
During the quarter, we also appointed two industry veterans with strong medical device backgrounds that will help us.
Guide future success and the future.
First as James concept, who was appointed Vice President of U S sales and marketing was formerly a vice president of the restorative therapies group and paint group at Medtronic and also formerly a vice president of the North East cardiac and vascular group and <unk>.
Tronic.
So knows the cardiac surgery.
Area of extremely well.
Dr. David Cox.
Joined us as Vice President of Global Regulatory Affairs. He was formerly the Vice President of regulatory affairs for the tissue of origin and technology Division at Integra Lifesciences.
We also accelerated our clinical marketing with Cytosorb with in depth, Webinars and a wide variety of different areas, most notably as a liver dialysis therapy and patients with liver disease and cardiac surgery applications, particularly anti thrombotic removal.
And last but not least we signed our lease for our new Princeton, New Jersey headquarters and it.
And building out our new manufacturing facility that is expected to support sales of roughly $350 million to $400 million and sales.
And potential product gross margins in excess of 85%.
During the quarter. We also opened a new cytosorb and logistics hub in Berlin, Germany, and expanded warehouse and distribution facility.
Comedy <unk>.
And future growth.
Yeah.
So let's talk a bit about.
What COVID-19 doing worldwide and how this relates to our business.
We presented and her last earnings call on the upper left hand side. This was the activity of COVID-19 in March of 'twenty 'twenty. One we were just starting to see a surge in activity in Latin America, as well as and Europe fast.
Fast forward that by two months you can see that the numbers of new cases have grown dramatically in South America, and Europe and middle.
As the middle East as well as we've all heard and India, where theyre experiencing roughly 350000, new cases a day.
On the lower right hand side, you can see.
The numbers from new cases of COVID-19 worldwide.
Within the Green bars is the first quarter.
And what you can see here is that and the first two quarters after peaking very early in January the cases of COVID-19 dropped quite dramatically.
And the first quarter.
To roughly 300 or so thousand cases a day.
I think that a lot of people had a lot of optimism regarding the availability and vaccines and did not think that COVID-19 would be much of a problem anymore, but as we cited and the last earnings call. We started to see a plateauing and sure enough towards the end of the quarter you can see the rapid rise and new cases of COVID-19 worldwide.
And that has helped.
Fuel a.
And I E a strengthening of our Cytosorb business related to COVID-19.
Across our business areas.
So we expect the COVID-19 is expected to contribute to product sales and the second quarter of 2021 and likely for the remainder of the year, but the magnitude may depend on multiple factors, including weighted vaccination.
And the United States, it's a very different story.
And as you can see and early March there was a scattered low level activity throughout the country and even in early may although there were some hotspots like Michigan and Oregon and also Washington State you can see generally speaking the rates of.
COVID-19, new cases have been relatively flat and you can see that and the upper right hand corner and the Red graph, where you can see that the numbers from new cases has kind of plateaued, but the rates of hospitalization and deaths Fortunately have dropped dramatically and.
And although it may not have been the case previously it is likely the case now that vaccinations are having finally and impact with 32 per cent of the U S population and fully vaccinated or 106 million people with 45 per cent or 148 million people with at least one dose. The total of 247 million doses have been administered and the.
State.
And this contrast to even large countries like Germany.
And as the leading health care and countries in the world with only 8% of their population fully vaccinated or $6 6 million with 28% with at least one dose or roughly 23 24 million people.
And this is the numbers getting even worse when you look worldwide for only three six per cent of the world's population or fully vaccinated.
And you can see that the United States accounts for more than a third of all.
Of the patients fully vaccinated worldwide and.
And only seven 8% have at least had one dose or 609 million people.
So.
This next slide coming back to the slide that I presented and the last earnings call.
We can see if we say that we are not quite in a new normal yet COVID-19 continues to delay.
And our pre COVID-19, and growth strategy, but that being said you can see what we have accomplished and the first quarter.
Not standing still and we're working diligently and the background on making sure that we returned to our non COVID-19 correct.
Our non COVID-19 growth business as soon as possible.
To give you more color.
And on our clinical activities, let me turn it over now to our Chief Medical Officer, Dr. Mike is still like Yours, Mike.
Thank you Phil and.
And good afternoon, everyone over the next few minutes will review some of the important updates on our clinical programs.
But I also like to refer you to the press release, we just issued that also has additional information.
We are prioritizing the clinical programs that would lead us to U S FDA approval.
As we recently disclosed we have received F. D. A conditional approval to execute the investigational device exemption study once I calculate removals doing cardiac surgery.
We're also resuming the refresh two Aki trial.
And I'm happy to report and in addition to screening activities started and the majority of sites. We also have our first new patients enrolled.
We have also made significant progress on the remaining active studies and those that will be starting in 2020 one.
And Cytosorb therapy, and COVID-19, otherwise known and C. D. C. Registry has now accumulated sufficient data that we are progressing to a publication by the end of this quarter focusing on critically ill COVID-19 patients requiring extracorporeal and mechanical oxygenation support or otherwise known as I come home.
The Star Registry, which is meant to capture real world evidence with the use of.
Our device for anti thrombotic removal and patients undergoing cardiac surgery.
Getting ready to begin with data entry this summer the ethics submissions and at least two countries in Europe have been completed.
The two important trials, we're launching in Germany, the process trial, and septic shock refractory septic shock and the Hep on fire and trial in acute and chronic liver failure and making significant progress. Both of these trials have been submitted to ethics and.
And we're waiting for their approval and we're on target for first patient and before the end of this year from both trials.
We recently made the decision to close the types of studies and the U K.
This was driven by two main reasons first of all the significant delays that were encountered and the setting of the pandemic and the U K.
And also with the prioritization of the Star T trial, which will now be the primary data and evidence generation and study for our FDA submission.
Citation on the other hand was able to begin and is actively enrolling patients and three German sites are.
As of the first quarter of this year.
Finally, we remain steadfast on our clinical strategy and our execution will play and we.
We continued to expand our internal clinical capabilities, we've added to and we've added 10, new members to the team and the past year and will continue to expand our teams to ensure that we have cost efficient and timely execution of our clinical plan.
I'm going to focus and generating data from rigorous powered multicenter and company sponsored trials and Wouldnt do that in partnership with a top academic institution and a world renowned investigators.
We'll share some more detail later in this presentation about our academic leadership and to start the trial.
And finally moving to get this data by using and complementary approach of randomized clinical trials registries and capture a real world outcomes and also health economic analysis to generate the value proposition associated where they used to buy a device.
And this slide you will see the progress that we plan to make in 2020 one.
And the milestones that we are anticipating for this year.
I guess, you could say, there's going to be a busy year since all of our programs are targeted to start enrolling patients before the end of 2021.
On top of the lines of Star T study as we discussed I D approval has been obtained we right now giving up our operational readiness and we expect to have the first patient enrolled and the third quarter.
Refresh two is a pretty.
Stated, we're happy to report that the first patient has been enrolled in the study resumption.
It ties up study is effectively stopped.
The citation trial has begun enrolling earlier in Q1, and we'll continue to do so throughout the year.
And the Star Registry right now at the stage of ethics submission and review and we're gearing up to again and roll start enrolling data, capturing a real world evidence and the ER and the middle of this summer.
Importantly, and the critical care space. The process Subsys trial has already been submitted the protocol is finalized and he has been submitted for review by the ethics.
And committees are in Germany, and we anticipate despite the delays associated with COVID-19 that we will still be able to enroll our patients towards the end of Q3 or beginning of Q4.
A similar situation applies to our multi center single.
Single armed Hep on fire trials, which we again expect to commence enrollment by the end of this year.
Relating to the CTC registry as I stated, we have enough data collected and the U S and we plan to submit a publication.
By the end of this quarter and we also plan to expand it now into the Cytosorb therapy and critical care registry to capture multiple applications and critical care and expand also to Europe.
Next slide please.
Our clear priority is FDA approval, and we maintain a dual path without two studies the refresh to them and start to study.
Relating to refresh two we now are up to 154 patients enrolled to date. The study resumption and as I stated has begun and we have approximately half of the sites that are active and screening and we are we believe will have the remaining of the sites are open and active and enrolling patients by the end of the second quarter and.
And next milestones to look forward Tuesday interim analysis.
Regarding to start to study.
We received a conditional approval of the I D and labor.
And with 2020, one, which effectively gives us the green light to start the study the sites that will participate and have already been identified and we have begun site initiation activities.
The IRB submission process and the site contracting is currently in progress and we have selected already this study vendors that will assist us in this study, including a contract research organization.
Most importantly, and we'd like to disclose to you today. The academic leaders of the trial are two investigators are gonna be principal investigators are gonna be Dr. Michael Mac cardiac surgeon from Baylor, Scott White and Dr. Michael Gibson and interventional cardiologist from Harvard.
The study committees haven't been established including the data safety monitoring board and the clinical events Committee and as stated previously we are targeting and the first patient to be enrolled and the third quarter of this year.
It is important to take a minute to introduce to you in more detail our two principal investigators.
First of all we're taking the heart team approach E.
He became very obvious and doing the development programs for the probably the most important innovation and our century and cardiovascular disease and that of the Transcatheter valve AR devices that at heart team approach was necessary when cardiovascular patients suffered an acute event that require a multi disciplinary approach and in our case, we're targeting acute.
<unk> syndrome is a great opportunity to utilize and knowledge and the input from both interventional cardiologists and cardio thoracic surgeons.
As such we have cut selected two of the most world renowned investigators and the setting Dr. Gibson is a professor of medicine at Harvard Medical School and he's also the president and CEO of the nonprofit Bay and Institute, formerly known as Harvard Clinical Research Institute and he is also the founder and editor in Chief of a wiki dock, which is the equivalent of Wikipedia, but for.
Physicians.
Dr. Michael Mac is a chair of cardio and vascular service line of Baylor, Scott and White. He's also the president of the Baylor Scott and the wide Research Institute.
And what's important to note about Dr. And Mac is also the pioneer of the heart team and she was part of the leadership of the pivotal trials that brought the first transcatheter valve therapies.
To FDA approval and clinical use.
Finally, I'd like to introduce to you our key hire on the clinical team. This is Ed to my and executive director of global clinical operations.
And it's coming in to fill a critical role to lead the global clinical teams are operational our teams are inside assortments. He brings with him more than 25 years of experience and clinical development and clinical operations and trial execution and optimization.
He has previously held global leadership roles at both zeros, such as Quintiles and power itself, but also very large players and the life science industry like Novartis Astrazeneca and Sanofi.
And throughout his career he has used technology solutions to drive quality and efficiency, including implementing programs for remote remote monitoring and risk based monitoring.
He has successfully built and led global teams and clinical operations and portfolio management and he's activities that were critical and driving life lifecycle management of blockbuster products like Perla sick Nexium Plavix and Gleevec within key we think Ed is a key addition to our team and we're very excited about his contribution and the continued broad.
Yes.
Thank you.
And back to you Phil.
Thank you Mike for that overview.
Kathy would you please give the financial overview.
Certainly thank you, Phil and Hello, everyone.
<unk> call I will be providing an update regarding our March 31, 2021 financial results and also an update around our working capital and cash runway.
So we'll start with a comparative quarterly revenue results product sales for the first quarter of 2021 was approximately $10.1 million, which is an increase of $2 million or 24% over first quarter, 2020 product sales of approximately $8 $2 million.
And this increase was primarily driven by an increase and direct sales of approximately $608000 and also an increase and distributor sales of approximately $1.4 million grant revenue for the first quarter of 2021 with $455000 as can.
Paired to $551000 in the first quarter of 2020 and total revenues, which includes product sales as well as grant income increased by 22 per cent to $10 6 million for the first quarter of 2021 as compared to $8 $7 million for the first quarter.
2020.
Our Q1, 2021 product gross margins were 77 per cent.
Excluding the negative nonrecurring impact of 2018, 19, and 20 tariff adjustments of approximately $732000 and the offsetting nonrecurring positive impact of the employee retention tax credit of $388000.
Product gross margins were 81 per cent in Q1, 2021 and that compares to 76% and the first quarter of 2020 next slide please.
Now, we'll take a look at our quarter over quarter product sales, our first quarter 'twenty 'twenty. One was our third best quarter in terms of product sales and as Phil already mentioned, we believe sales could have been even higher had it not been for the widespread lockdowns and restrictions throughout Europe, including Germany, Austria The U K.
K, Italy, and others and for the rapid decline and COVID-19, new cases, and hospitalization for two thirds of that quarter. The lockdowns prevented our sales reps and distributors from accessing hospitals and delayed our return to what we're calling the new normal non COVID-19 gross.
Strategy and filled previously discussed.
And so it's difficult to quantitate, we've been trying to do so every quarter COVID-19 sales were estimated to be approximately $1.8 million and the first quarter of 2021 as compared to approximately $1 $6 million in the first quarter of 'twenty, and 'twenty and lower than the $2.6 million and.
COVID-19 sales, which we saw in the prior three quarters.
With the resurgence of COVID-19 since March we have seen a strengthening of COVID-19 related orders of Cytosorb.
And just one final note on the first quarter of 2021 we exclude clinical trial expenses and noncash stock compensation expenses, our core operations generated a positive EBITDA of approximately $164000 next slide please.
And we'll take a look at our trailing 12 months product sales and blended gross margin and as you can see by this chart. We continued to maintain strong year over year product sales and gross margin growth.
As of March 31st 2021, trailing 12 months product sales were 41 $4 million and increase of $15 $1 million or <unk> 57 per cent over trailing 12 months product sales of $26 $3 million one year ago. We also know.
That our compound annual growth rate or CAGR was 40% over the past three years and we are continuing to observe a very positive trajectory in this regard.
Year over year gross margins also continued to climb with blended gross margin adjusted for nonrecurring charges and benefits as I previously discussed of 81% and the first quarter of 2021 compared to approximately 77 per cent for the first quarter of 2020.
And lastly, we'll review our working capital position as of March 31st 'twenty 'twenty. One we had approximately $68.5 million in cash, which is a very healthy cash balance and we experienced a quarterly burn of less than $3 million in the first quarter of 2020.
And one and that burned by the way is solely a result of spending associated with our clinical trial activities. We believe we have sufficient liquidity to price for the continuing commercialization of cytosorb as well as to execute on our robust clinical trial strategy. We further believe that we have adequate funding.
To allow us to continue to operate without the need for any additional capital rates through to GAAP breakeven and with our 80 plus percentage gross margin once we reach GAAP breakeven, 40% to 50% of every incremental sales dollar is expected to fall to operating profit.
Lastly, as of March 31, 2021, we had approximately 46 48.6 million common shares on a fully diluted basis.
Thank you and at this time I'd like to turn the call back to Phil Phil.
Thank you very much coffee.
What kinds of guidance Cytosorb and has not historically given specific financial guidance on quarterly results and called the quarter has been completed however provided that the current order pattern continues and non.
Notwithstanding uncertainty related to the COVID-19 pandemic.
The product sales person and second quarter of 2021 will exceed those and the second quarter of 2020.
Because of the recent surge and COVID-19 activity, we expect COVID-19 to positively contribute.
And the second quarter of 2021 and for the remainder of the ear with the magnitude of these sales will depend on multiple factors, including the rates of box and leasing markets as well as globally. We continue to expect the 2021 would represent another year of growth.
So with that.
This concludes our prepared remarks, I would now like to open up the call for a live Q&A session.
Thank you moderator.
Thank you as a reminder, if you have a question please.
Please dial star one on your Touchtone phone. Please make sure your mute button is turned off to allow your signal to reach our equipment.
And we'll take our first question from Anthony Petrone of Jefferies. Please state your question.
Oh, Thanks, hope everyone's well and congratulations from strong start to the year here no maybe maybe fill and Kathleen we could dig in a little bit to underlying product sales and when we back out COVID-19 shorting.
Shorting hit are you approaching.
Approaching a 26%.
And your growth level and.
And so we're just wondering how to sort of think about that in two buckets one being.
There certainly seems to be some reversal and underlying procedures one.
But also cytosorb uptake usage triggered by COVID-19.
Our and non critical areas, you've seen a pick up there as well so how do we think about recapture procedures driving that number versus share gains that were driven by COVID-19 elsewhere and all the surgical procedures and I'll have a couple of follow ups.
Yeah.
Well, thanks, very much Anthony I think that and in the United States the rates of Uh Huh.
Non COVID-19 related procedures has been increasing but in Europe, I think it's been touch and go because of the various lockdowns that or in countries around Europe as well as eastern Europe as well.
So.
Christian can probably comment a little bit on what the environment looks like right now, but what we're still continuing to see is a reduced numbers of elective surgeries.
With that we're often and the post operative period, they're using cytosorb.
We're also seeing.
We're also seeing lower.
Uh huh.
Lower ability of our sales reps to be able to get into hospitals.
And then also the.
Less effectiveness of of conferences and scientific conferences, where that are typically have been typically poorly attended.
But let me turn it over to Christian to give a little bit more color and what what he's seeing in Europe Christian.
Thank you Phil and thank you Anthony and for the question, Yeah, it's a suitable pointing out a.
The COVID-19 situation is is still very much impacting them Oh, our business and we have two tons of a possible situation walnuts are the COVID-19 related business was significantly lower compared to Q4.
And you can see this Q4, $2 6 million U S to us and in Q1, one point of.
Compared to Q1, 2020, it's roughly the same considering the change from the exchange rate between you won't at all so what happened in Q1, and secondly, ICU patients has declines and they've been and less patients.
New patients.
And at the beginning of Q1.
And Latin America for example into summer low.
Two less COVID-19 activity and as Phil pointed out was as old as well and they've been less patients and U S, a which led to a.
Roughly stable business and the U S.
On the other hand, the COVID-19 restrictions and and.
And all of them off and it's our best as and when the harvest.
Throughout the whole pandemic, so the hospital accessible to sales reps and distributors.
And don't even auto.
Doctors and health care professionals, and Oh, I have to say I totally exhausted, even if they would like to be the half month of time and energy to speak to the industry.
Representatives and most important and I have to see and elective surgery programs or down 40% to 60% of.
Oh and markets and if you look at the gross me has shown and Q1 to Q1 and 2020 to 'twenty. One are there is a growth of 27% despite.
This dawn of the elective surgery programs, and I think one and and mentioned that.
And all the restrictions people to do much better even with all of the positive impact of COVID-19.
COVID-19 related business.
I could go a little bit more detail, if you want but I'm, telling you is sufficient.
Oh, that's fine two follow up questions from me there would be one when we then consider that elective is still a headwind and key markets was there some stocking and 27%.
And then the last question from me and I'll hop back in and it's just on the U S Star T V.
Can be a little bit more detail on on how many sites are expected.
Insurance and and and endpoints to the extent that you can share. This at this point thanks again.
Yeah.
So if I still do and fishing rods, whether they're almost any stocking and product.
And with the customers or distributors and I can't say no. There was no stocking it's.
And in and out Hum like the patients get treated.
No no stocking.
Bill.
Yeah and thanks.
And in terms of Ah.
Yeah in terms of the car T trial, what we've said is that once we get full approval of the I D and know exactly what the FDA has agreed to and we will.
Give more detail on both the primary endpoints and the nature of the trial. The the size of the study the number of sites and and all of that other detail.
Thank you again.
Great. Thank you Anthony.
Our next question is from Josh Jennings of Cowen.
Please state your question.
Hi, good evening, thanks for taking the questions and Echo Anthony's comments on that congratulations on the strong start to the year. Despite all the challenges was hoping to just.
Ask about I know, we've probably talked about this before Phil, but we had and intra quarter call with with some ads embedded executives and they spoke about lobbying for with the F. D. A to streamline and formal approvals of products and have achieved a E.
And you a approvals and I was wondering if there's any discussions that are ongoing between set assortments and the F. D. A.
The Cytosorb EUA for COVID-19, 19, and whether there could be a potential streamlined path.
For our critical care indications.
Yeah, Thanks, very much Josh it's not something that we can comment on at this time, but we do have an interest and we have actually had a considerable amount of experience relative to the overall numbers and ecmo and COVID-19.
And its use to treat acute respiratory distress syndrome and so.
Hum, but you know and so we do believe that there is a potential benefit.
Benefit of having Cytosorb approved and the United States, we're treating E. R. D S and general, but it's not something that we can comment on at this time.
Great and and just on the C. P C COVID-19 registry data and.
And then the interim analysis I mean is is that could that would be supportive of a potential streamlined path or what what do you expect that dataset.
And to do and clearly it could it could catalyze increased utilization and COVID-19 patients and the U S and and globally, but then any future ramifications outside of of that for that for the CTC COVID-19 registry data.
And I think that what we've seen is that the early intervention with Cytosorb and Ecmo.
And potentially very promising long rest strategy to treat acute respiratory distress syndrome.
And we've seen cytosorb be used with ecmo and a lot of different cases patients not hyper inflamed patients.
And where it's being used as kind of a rescue therapy, when they've been on mechanical ventilation for weeks and weeks and.
There are it's hard to have a positive benefit and those patients, but when used earlier and use more aggressively.
Think that Oh, and and preventing mechanical.
Ventilator induced lung injury.
And there may be a actually a play here.
To use Ecmo plus cytosorb as a primary treatment of acute respiratory distress syndrome, which currently today, even and in a non COVID-19 environment still has mortality and roughly 30%.
So I think that in order to gain that application and it will require a large larger scale multicenter study.
But it's not.
But the you know I think the registry data.
Would be supportive of that concept.
Great no. Thanks.
Thanks for taking the questions and I'll get back in queue.
Yeah. Thank you very much.
So the question is from Daniela and healthy and let's see.
Leerink. Please state your question.
Hey, good afternoon, everyone. Thanks, so much for taking the question I'm just the question on Europe and I. Appreciate that there is a lot of moving parts. There COVID-19 is still a big issue in Europe.
But I have to imagine a good portion of your confidence and growth. This year comes from being able to get back into European centers, and really market and a tight tight hi, Tiger lore, and rivaroxaban removal indication and fill.
I just wanted to get a little bit more of us and some sort of are there centers, where you're you're seeing ramping adoption there yet in Europe and sort of what gives you the confidence that in the adoption ramp once you guys can actually get back in there and I have one follow up.
Sure Yeah, I think that and as we've said previously that we really invested quite a bit and our infrastructure and sales and marketing and.
And the commercial team overall in Europe.
Take advantage of this non COVID-19 core opportunity and critical care and cardiac surgery, so the business and.
And sepsis and other critical illnesses walls and cardiac surgery is actually quite healthy.
And as we mentioned that core business grew 27% year over year.
I think that moving forward here, we are looking to try to get back to this a non COVID-19 strategy and.
And.
To tell you a little bit more about what we're doing I think in particular and in cardiac surgery and and the blood thinner application Christian might be able to provide some additional detail on on how we're doing and Germany. For example is a microcosm of of the market.
Christian.
Yeah. Thank you Phil and thank you Danielle for the question just to give me a little bit more flavor on what's happening in Europe. I think one has to see the whole development and and perspective, that's a I have a set before the access to hospitals is.
Very much restricted just to to to reflect this.
No. So nowadays our sales reps have roughly 10% of the appointments and they have normally before the COVID-19 pandemic.
Pandemics.
And taking this into account and also the AR.
Decline of the elective surgical programs by 40% to 60% the growth of 27% and the core indications and I think is has to be seen and just perspective.
But you also have mentioned them all.
And new indications over the I'm just from going to get moving.
A few minutes and and this case I mentioned at the last earnings call that I'm more than 90% of the heart centers in Germany or customers and of those more than 50 per cent.
And using Cytosorb and this application and.
We were able to despite the.
Restrictions and also despite.
Almost all of them Hudson and southern Germany are closed.
Increase this even more we have to.
No 94 per cent of the Hudson does this old customers and and.
And those who are using cytosorb and this new application is to more than 60 per cent. Nowadays. So you can see despite all this restriction this progress.
And this progress we see also and the other markets outside of Germany and.
Our direct markets for example, and Benelux, we had and I'm all for new accounts.
Started and this application, but once you use it also as a door opener and once again and.
And this is then spreading also too on the 12.
Two other indications.
And maybe that this and giving you a little bit more insight and the development.
Yeah, no that that's incredibly helpful. Thank you so much Christian and I appreciate that and and then one quick follow up on the Star T trial, and I mean, congratulations on getting a doctor and Michael Mac and I know him very well and he's very highly regarded him. So I think that's a big win for you.
Guys I guess, what are the sort of gating factors around the enrollment timing for star T. Because that's really going to be I think the inflection point for the company from a sales perspective as the U S approval. So just wanted to make sure we're thinking about the enrollment and timing and we were appropriately.
Putting up barriers around that sort of bear case, and bulky and scenarios there. Thanks so much.
Yeah. Thanks, Danielle Microsoft would you like to take that.
Yes, Thank you Phil.
So yeah, that's a great point about Dr. Michael Mac, but also Dr. Mike Gibson has an incredible track record and development and antithrombin.
<unk> and it's also very well regarded so with their help and with some additional you know our network.
Sites that we had from refresh through it also from personal connections and we have been now in contact with a very very large number of our U S. You know a large U S. Cardiac surgery centers and we've seen a lot of interest. So we are you know we have a long list of high performing sites and we're slowly going to start bringing them on.
So we think that's probably the number one and factor that can drive enrollment right getting the right sites are we've got them all about their day, cagoulard usage and making sure they're actively using this drug as the top line agent for acute coronary syndromes and then obviously you have the research capabilities to execute well.
But what's really important to the interest and we're seeing from these sites. You know this has been a long standing unmet need literally a nightmare and clinical practice for these surgeons to deal with and they are extremely excited about being part of the study.
So you know the the kind of momentum we're seeing from the sites that the interest level the kind of sites, we're bringing on board, including a fair amount of our refresh two sites that want to continue to do research with US gives US you know a lot of a lot of confidence that we'll be able to enroll but having said that you know the patients will require urge.
And to emergent surgery, a limited compared to the you know the total number of Acs patients. So that's why we intend to bring the you know the the right number of sites on board.
And two to support and robust enrollment and like Phil said earlier, there are a lot of the details around the study will be able to disclose once we have the full approval from the FDA and once our you know our discussions are ongoing discussions are completed and we should be very soon so we will be disclosing more information on that.
Does that help.
That is helpful. Thank you so much.
Yep.
Yeah.
Our next question is from Andrew de Silva.
B Riley Securities. Please state your question.
Hey, good afternoon, and thanks for taking my question and sorry, if you mentioned any of these and I was jumping between calls.
Just to start and as it relates to the uptick.
And cases, COVID-19 cases and India.
And obviously, you've been a long time strategic partner with Viacom and I was curious are you.
You're seeing and increased traction in the region, there biker and did reference cytosorb.
A couple of times and press releases as well as Oh on their conference call. So it seems like you know at least it's being well regarded and.
Given current conditions.
Yeah, I think Sandy let me turn it over to Christian to give some color commentary on it yet and Biocrime Christian.
Yeah.
Yeah. Thank you for.
Hi, Andrew.
Maybe a little bit more color on India and general we are working with some volume come for a long time now and Hum as you know over the last yes. We also have expended all Oh, a few itself application and indications and Sylvia.
And I told you are evaluating as volume comes on and how they can represent us and India and all of our relevant application segments and of course, how to grow and speed up the growth and these are areas.
And so we have additionally to the to the partnership we have installed one man power and and.
And the Indian market to support and buying from and this has.
Led to a number of developments for example, now that the secondly, and and and the COVID-19 pandemic and India.
It's a growing soma massively rehab organized.
And meeting last Friday, and I don't know, whether you are somebody else's with all the medical.
Neatest of different specific cities are involved and the treatment of COVID-19 patients, but also was lead us off a big hospital groups like Apollo.
And.
Small collaboration was it was buying from and this COVID-19 situation, and it's a Toyota and and increasing and obviously.
And so be reflected by.
Several illness from their side.
I think that smokers and reveal.
No no and that that was very useful context.
So with that being said.
Obviously kind of a transient nature of COVID-19.
And I know and a long term and this isn't a COVID-19 company, but.
So I would imagine that at least.
And some areas.
When physicians and start using Cytosorb and then you know there are many COVID-19 related cases drops.
And they realize that the indications cytosorb can be utilized for goes far beyond COVID-19, So I'm kind of curious has there been any sort of stickiness that you can identify.
Thanks to.
The COVID-19 utilization and.
But outside of COVID-19 and the reason I'm asking that is obviously, India is such a large region.
And I'm curious if you see an analogous situation did that potentially developing and as you utilize there.
So from sort of continue with this.
Yes, sure or I can come and at home.
So maybe and just not the right exemplar for this because we have so we're often and you know already was and all the different indications, including cardiac surgery, and also including liver disease, but and you also have some it's a very specific market. That's U S you might Nova sea.
And our public sector and and the private sector. So even in the public sector.
The muscle patients in this case have to P and lots of the treatments positively. So nevertheless, and market is is big because I think.
Between 50, and 150 million people able to pay Houska SB knowing from the from the rest of them are from the best from launch.
And I think you're crushing and can be answer is much better.
And this territory. So maybe just have started and we have started in the pandemic, which whilst the case actually and Latin America and last year. So we have and it as you know 10 countries last year and Latin America, and most of them started with COVID-19 patients and based on the on the successful treatment.
<unk>.
The stock answer to treat other patients, including septic shock patients, including inflammatory shocks day. This is.
From other rich and and but also including our patients and it was liver disease. So we see absolutely what you.
And suggesting that are based on the experience with COVID-19 and that our doctors gets.
It's let's say inspire to treat all the patients and all the.
And I tend to get pictures.
Okay.
Okay.
Yeah, I think just to add to that I mean, a cytokine storm and such play such a central role and so many different diseases not just COVID-19, again cytosorb use and COVID-19 is not to treat the viral infection. It's tricky.
Uncontrolled inflammation that gets generated by the infection that then leads to lung failure kidney failure shock and all different types of organ injury and those are the same complications that we see every day and trauma patients and patients who are infected with a burst of <unk>.
<unk> for example, or upper and patients are pancreatitis patients or complications of cancer immunotherapy and other things and so it's a direct.
And if they see that it helps stabilize shock and COVID-19 patients. It's a very easy translation to think Hey, you know in this patient and the non COVID-19 patients who is also and shock. Let me think about trying to use cytosorb as well right and that's kind of where we are and a lot of these new markets.
Okay, Okay, great and I, just want to make sure I'm understanding your character driving this correctly and is it fair to say that during the first quarter. They were still very stringent COVID-19 lockdowns and and you know.
Areas such as Germany.
And where you generate a significant portion of revenue from however.
Hmm.
And then the types of COVID-19 cases, and maybe weren't has to be your meaning they are and amount of critically ill COVID-19 patients likely dropped.
Sequentially or at least relative to our you know that.
The state that you were seeing for the majority of our 2020. So basically your legacy business.
Non COVID-19 related impacts because of Lockdowns, but you didnt get as much of a benefit from treating critically ill COVID-19 patients because they werent necessarily as many as a percentage of day total volume of patients that had COVID-19.
Yeah, that's correct and I think all the numbers support that if you look at the numbers of hospitalizations and numbers of deaths the ICU capacity utilization they all drop when the.
The numbers of cases precipitously.
Precipitously dropped in January and February after having hit that peak in late December and early January.
You know a lot of countries had instituted lockdowns because of that but those lockdowns continued even though the cases of COVID-19, our worldwide began dropping very rapidly.
So it was a little bit of a and <unk>.
Transition for.
For US has as we are you know look to manage that.
That you know.
Drop and COVID-19 cases, and getting back to business as usual or back to the new normal.
Okay, Yeah, no that makes a lot of sense and I just wanted to make sure I was understanding that correctly and last question for me and.
Any updates on additional candidates that you might defend RBC or B G. A and then was there was another cytosorb XL.
And that you referenced previously and just curious how the pipeline outside of Cytosorb.
Okay.
Yeah, I think that you know COVID-19, and certainly slowed a little bit of our development work and various programs, but last year. As you saw we received about $8 6 million and government grants from the mainly from the U S Army to to drive the development of human F. N B G, a which has actually been making.
So very nice progress, particularly very recently.
And so you know in terms of these.
These programs are a research and development folks have been back and the lab and and factor actually at the new facility at the moment and the new labs with a lot more space and.
And able to stay socially distanced and kept there get the work done and so they've been making some really great progress and that and all of our programs including <unk>.
And the Cytosorb P. J programmed cytosorb XL I mean, the humid offend P J programs and Cytosorb XL program.
And the humid offend RBC program is.
Slightly delayed, but we are still making some progress on that as well.
Okay perfect. Thank you very much and best of luck going forward.
Thanks, very much and me.
Our next question is from Sean Lee and H C. Wainwright. Please state your question.
And good afternoon, and Phil and thanks for taking my questions.
My first question I think and the prepared remarks, you guys mentioned that you.
And you saw quite a bit of growth from distributor yourselves. So I was wondering if you could put price a little bit more color on that for example, which geographies and which distributors are you seeing the biggest growth from and where do you think that's going to go.
Thanks.
Okay.
Yeah, I think that as Christian mentioned COVID-19 has been a catalyst for a distributor sales given how prevalent COVID-19 is around the world we.
And we saw strength in Latin America for example, we saw strength and the middle East.
Certainly.
Uh huh.
And and.
Are some of our non direct territories as well in Europe, and particularly our.
Eastern Europe.
And so.
We expect that that activity will continue going forward in a COVID-19 or even non COVID-19 environment.
There's been a lot of positive responses from those from physicians from all of those territories.
Oh thanks.
And also on the clinical side, it's great to hear that the refresh two is resuming. So I was wondering have you had to modify or co any of the previous data that you've collected.
Are you, making any changes to the study protocol compared to before and whats the expected timeline for the study now.
Let me turn it over to Mike is to answer some of those questions Mike.
Yeah.
Thank you Phil and.
Thanks for the question.
So we did not have to make any major modifications of the protocol. If you recall the voluntary hold or refreshed. It was triggered by the quality of the data that was being captured and we greatly improved diet and you probably remember the whole saga would change the CLO and everything so following the review by the D. M. C. They suggested we had a couple of additional.
Those data points to be collected with the same protocol procedures, meaning we didn't change at all how patients are.
Treated or throughout the trial study related procedures remain the same with just capturing some additional data points. So that was those were the sole difference and the protocol, but we had to resubmit, obviously doing the resumption process.
And regarding timelines I think what we're looking to do now for the next few months and get all the sites up and running and.
And evaluate the rate of enrollment with the study resumption.
And we're hoping that the ramp up will be a little faster than usually in the beginning of Oh well. The initial start of a trial where sites are not very familiar because a lot of sites. You know probably are familiar with the study based on the previous involved and enrollment. So I think for us to be able to give you a better idea of the timeline, we're probably should observe how enrollment.
Is performing over the next quarter or so and then we should be able to provide better guidance.
Hum.
Thanks for that and Thats all questions like that.
Yeah.
Great. Thanks, Sean.
Okay.
We have reached the end of the question and answer session. At this time I would like to turn it back to management for any additional or closing remarks.
Well. Thank you everyone for joining us today on today's earnings Conference call. We appreciate your participation. If you do have any other questions. Please feel free to reach out to Amy Vogel at eight Vogel.
E V O G E L and Cytosorb and Dot Com and we'll try to reply to your questions where possible and the meantime, and hopefully you'll join us for our virtual annual meeting on June 1st. Thank you everyone very much for joining today take care.
Thank you that concludes our conference for today I'd like to thank everyone for their participation have a great evening.
Yeah.
Okay.