Q3 2023 Cytosorbents Corp Earnings Call
Okay.
Good afternoon, and welcome to Cytosorb in third quarter, 2023 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.
Taylor Devlin. Please go ahead Taylor.
Thank you and good afternoon, welcome to <unk> third quarter 2023 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.
Black Chief Financial Officer, Dr Ischemia, Australia hit East.
Keith Medical Officer, Dr. Christian Steiner Executive Vice President of sales and marketing and managing director of Cytosorb in Europe G. M D H Christopher.
Christopher Cramer senior Vice President of business development, and Doctor Irina Nicole <unk> Senior Vice President of regulatory.
Before I turn the call over to Dr. Chan I'd like to remind listeners that during the call management's prepared remarks.
Forward looking statements, which are subject to risks and uncertainties management may make additional forward looking statements.
In response to your questions today.
Therefore, the company claims protection under the Safe Harbor for forward looking statements contained in the private Securities Litigation Reform Act of 1995.
Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the SEC.
Any projections as to the company's future performance represented by management include estimates as of today November nine 2023, and we assume no obligation to update these projections in the future as market conditions change.
During today's call, we will have an overview presentation covering the operating and financial highlights for third quarter of 2023 by Doctor Janet and MS block as well as an update regarding the star T clinical trial by Dr. W. Haiti's following that presentation, we will open the line to <unk>.
Your questions during the live Q&A session with the rest of the management team.
And now it's my pleasure to turn the call over to Dr. Phillip Chan.
Yeah.
Thank you very much Taylor and good afternoon, everyone.
As I discussed in our earnings press release today, our core business is built upon our EU approved flagship Cytosorb blood purification therapy.
More than 221000, human treatments with more than $250 million in sales to date, including $31 4 million in the last 12 months alone.
Let me start with dresses multibillion dollar markets in critical care and cardiac surgery in 75 countries worldwide.
Definitely inflammation and other life threatening conditions. These are common everyday ICU conditions.
Sepsis trauma burn injury respiratory failure liver failure and complications of surgery, where mortality is high despite standard therapies.
With the world struggling in the aftermath of the pandemic with war natural disasters and illness. We believe our lifesaving therapy has never been more relevant.
The drugs aren't herc antithrombotic removal system is our focus as our other focus having completed the U S and Canadian pivotal start T trial.
That was designed to demonstrate a reduction in perioperative bleeding in patients undergoing cardio thoracic surgery on Brilinta also known as Tech CAGR Award Brilinta is increasingly the Super aspirin blood thinner of choice for patients suffering from a heart attack or receiving a cardiac stents.
The data, which currently remains blinded support U S FDA and health, Canada regulatory approval. It would open up an estimated $650 million total addressable market. In these two countries alone, where we expect rapid adoption and strong user demand, reflecting our FDA breakthrough designation.
We believe we've made excellent progress on both of these programs. So far this year and are specifically pleased to report a 20% product sales growth in Q3 of this year versus a year ago. The Kathy will discuss in more detail and are nearing database lock of the pivotal U S and Canadian Star T trial and data analysis before year end.
The goal for today is to provide brief commentary on these topics, but to leave enough time for the Q&A session with the team at the end.
Now I'd like to go over our recent operating progress.
First we completed the pivotal start T trial in August following the last patient follow up the trial remains blinded and the database lock is nearing its completion of data analysis is expected before year end the.
International Star Registry highlighted low rates of catheter related perioperative bleeding in patients undergoing isolated cabbage surgery with cytosorb with two days of discontinuing brilinta.
In the first and second analyses.
We also exceeded 221000 cumulative human treatments across 75 countries worldwide to date.
<unk> expanded our and VSAT registration of Cytosorb to treat shock in Brazil, which is Latin America's largest medical device market and the seventh most populous country in the world.
We also highlighted how cytosorb in Echo 300 C Y are helping to shape the future of solid organ transplant by reducing inflammation during ex vivo organ perfusion.
Our strategy to potentially improve the quality and quantity of donated organs and improved transplant outcomes.
And last but not least Kathleen Bloch resumed her role as full time Chief financial Officer.
I'd like to next cover the Star T pivotal trial update.
When we talked to investors. Many are not aware of the use case of Brilinta. So I thought that we would present that here.
If you can see the graphics, you can see a man hunched over having a heart attack.
And this patient when they go into the emergency room, they typically get loaded on aspirin and a steeper aspirin like brilinta and something called dual anti platelet therapy. These patients typically go to the Cath lab to get a stent, which 90% of patients ultimately do however.
However, 5% to 10% will often need open heart surgery.
Because they are not eligible for <unk> due to widespread carty.
Cardiovascular disease.
Intractable ischemia and chest pain.
Or even complications of putting in a stent.
If these patients go to surgery, however, with these blood Thinners on board.
We'll bleed.
The only accepted therapy today is to wait.
And patients typically wait in the intensive care unit and the step down intensive care unit or on hospital Ward.
At a cost of approximately $6000 a day in the intensive care unit at approximately $4000 a day and a step down in ICU in about two to $3000 a day in a cardiac monitor bad <unk>.
Typically wait for three to five days.
In the hospital.
Costing anywhere from 6000 to $30000 just to wait and watch out the drug.
And these patients ultimately then go to surgery.
<unk>.
Where they ultimately get the definitive procedure.
Our value proposition for drugs or HR is actually to bypass this entire waiting period and to actually get patients.
The definitive.
Surgery that they need without delay, while reducing or preventing bleeding complications by actively removing the drag from blood during surgery.
So in terms of the Star T trial, what do we know.
Let's start T trial was completed in August with follow up on 100% of patients at 30 centers in the United States and Canada.
Data monitoring is nearing completion with database lock to follow the.
T study data remain blinded to all parties and will not be unblinded until after database lock on the final statistical analysis will occur the results of the study are currently unknown.
As noted previously there is no device there were no device related.
Safety issues with drugs, our ATR raised in the first reschedule data safety monitoring board data reviews. The last 180 patients. The final P. SMB analysis will take place after database lock.
We expect to complete our initial start data analysis before year end and we intend to announce whether we believe the results will start T can support an FDA marketing approval thereafter.
While encouraging initial results from the international Star registry demonstrate low rates of serious perioperative bleeding when cytosorb, which uses an equivalent polymer technology to drugs are of ATR is used for this indication.
Remember again Cytosorb is approved for this indication in the European Union.
With supportive data our goal is to submit to the App.
The U S FDA and health Canada.
For regulatory approval in early 2024 with the potential of a faster review with our FDA breakthrough device designation.
Targeting potential U S FDA marketing approval by late 'twenty four or early 2025.
For many discussions with cardiac surgeons in the United States, Canada and abroad, we continue to validate the potential value proposition that drugs or of ATR could have a successful and things that we're already seeing with cytosorb in Europe.
Some of these potential benefits include for patients the ability to get definitive surgery.
Thanks, Lee and without delay with low risk of bleeding complications.
For surgeons, we solve the intra operative and post operative nightmare of bleeding due to blood thinners.
We could also potentially reduce the need for costly and time consuming re exploration surgeries.
And we could also relieve the surgical scheduling logjam due to patients still recovering from bleeding complications in the cardio thoracic ICU, allowing new patients to be operated on.
For hospitals.
We have the potential to reduce or eliminate the three to five day waiting period to watch out for winter.
Again cost anywhere from 6000 to $30000, depending on where they wait.
We also have the potential to reduce longer operative times due to bleeding costs, which can be more than $4000 for every 30 minutes of extra time on the operating room table.
We could also relieved the logjam of patients in the ICU, who bleed, allowing more revenue generating surgeries for the hospital.
And on top of this we May also help to improve a hospital quality star ratings as defined by CMS or Medicare Medicaid by reducing serious adverse events like bleeding.
The star rating helps hospitals differentiate themselves based on objective quality criteria, helping to drive patient traffic and procedural revenue, which is what all hospitals.
One.
So this is one of the reasons why we believe drugs or ACR can be a potential win win win.
Turning to Cytosorb.
We are proud to say that we have now received trademark designation for the term expanding the dimension of blood purification in Europe.
What does that exactly mean.
Cytosorb is fundamentally different from but complementary to dialysis technology, which most people equate with blood purification technology. However, we're different because we remove a broad range of dissimilar toxins that dialysis does not remove well.
Dialysis works like the kidney removed small molecules of motorcycle substances metabolic waste products et cetera that the body produces.
However, you are aware that you have a second major blood detoxification organ in your body, which is your liver and that is really what cytosorb works to replace.
It is capable of removing large molecules and fat soluble substances things like cytokines inflammatory mediators bacterial toxins liver toxins proteins and peptides as well as fat soluble drugs.
And because of this we are able to target.
Deadly conditions that afflict millions of people on.
On the left hand side Cytosorb is helping to remove the fuel to the fire of massive uncontrolled inflammation that is often associated with organ failure and death in many many.
And everyday conditions in the intensive care unit.
And on the right hand side, we're reducing inflammation in blood Thinners and cardio thoracic surgery targeting reduction in complications of cardiac surgery like sepsis bleeding shock and others.
Yes, one thing I want to revisit as our global marketing agreement with Fresenius Medical care, because this is really where the expansion of blood purification.
It comes in.
Last year as you recall, we announced a new expanded global marketing agreement with longtime partner Fresenius medical care the market leader in dialysis worldwide with a massive installed base of blood purification machines and ICU used around the world.
Fresenius has now been marketing begun marketing cytosorb as the future technology for cytokines bilirubin myoglobin removal on its critical care platforms worldwide, excluding the United States.
But is expected to officially launch a more comprehensive effort next year.
Salesforce website conferences marketing literature, social media and other platforms.
The partnership again expands the dimension of blood purification with excellent synergy between the two companies.
Fresenius dominates kidney replacement blood purification technologies with its rival Baxter, where tend to addressing 10% to 15% of patients in the ICU that have failed kidneys.
What we do however is that we strengthened and broadened the focus on the lucrative critical care segment by Cytosorb helps to address deadly inflammation and toxin overload that afflicts, an estimated 40% to 50% of patients in the intensive care unit.
Cytosorb in its benefits from the global endorsement and push on Fresenius is massive sales and marketing platform and in return we have agreed to subsidize this effort with a 9% royalty.
<unk> on X U S cytosorb sales, making it a win win for both organizations.
To highlight.
That percentage Cytosorb ins are well aligned I wanted to.
Draw your attention to a capital markets day presentation that Fresenius made earlier this year in April.
And in particular highlight this fly.
On the slide there talking about their assets in the company and basically categorizing them based on on the Y axis, there is strategic value to Fresenius and on the SaaS access.
To drive growth at <unk>.
And what you can see here in the Red box is that critical care represents a major focus of the company that can drive both growth potential and strategic value for Fresenius on the right hand side, you can see that that that circle represents roughly 500 million to a $1 billion in <unk>.
<unk> worldwide.
With roughly half of that in the United States.
So at $30 million and $31 million in trailing 12 month sales, we actually represent a significant portion of <unk>.
<unk> overall critical care sales.
Ex U S.
So with that let me turn it now over to Kathy Bloch, our Chief Financial Officer to go over our financial highlights Kathy.
Thank you, Phil and greetings to everyone on the call today.
For the quarter ended September 32023, total revenue, which includes product sales and grant revenue was $8 8 million as compared to total revenue of $8 $1 million in the third quarter of 2022, an increase of approximately 9%.
Product sales for the third quarter, 2023 were $7 $8 million as compared to approximately $6 $5 million in the third quarter of the prior year, representing an increase of approximately 20%.
Third quarter 2023 product gross margins was 72% compared to 55% for the third quarter of 2022.
Addicted improvement in gross margins is expected to continue as we ramp up production at our new facility in Princeton New Jersey.
Our third quarter grant revenue with $1 1 million compared.
Compared to $1 6 million in the same quarter of the prior year is slower because of the recent completion of several grants.
Next slide please.
For the nine months ended September 32023, total revenue was $27 7 million an increase of approximately 9% over the $25 3 million in total revenue for the same period of 2022.
<unk> sales for the nine months ended September 32023, with $23 7 million as compared to approximately $21 $7 million in the first nine months of 2022 and grant revenue was $3 $9 million in the first nine months of 2023 compared to $3 six.
In the same period of 2022 next slide please.
Now this chart depicts our trailing 12 months product sales broken down into COVID-19 related and core non COVID-19 related product sales.
Our product sales are $31 4 million in the trailing 12 months ended September 32023, which is slightly higher than core product sales of $29 4 million in the prior year.
And while it is gradual we are continuing to see improvements in the marketplace, including our sales team's ability to better access health care workers and hospitals are returned to face to face discussions with physicians in the market as well.
Next slide please.
This slide shows our quarterly product sales also broken down by COVID-19 related and non COVID-19 related core product sales and as you can see over the past six quarters. There have been no COVID-19 related sales.
Three of the most recent four quarters have demonstrated sequential quarter over quarter growth in product sales.
Q3, 2023 core product sales, while lower relative to Q2 2023 product sales are up 20% over Q3 2022 product sales and we note that sales in the third quarter of the year are historically low due to seasonality.
As surgical procedures in the EU are lower during the summer months of July and August.
Next slide please.
I'd like to wrap up today's remarks, with some comments about our cash and cash runway as of September 32023, we had approximately $10 million in cash which includes $1 $7 million of restricted cash.
Our average quarterly burn for 2023 has been approximately $4 $6 million. This is down significantly from our average quarterly burn of $9 9 million in the same period of 2022.
We will need to raise additional capital to support our ongoing operations in the future.
As we disclosed in our Form 10-Q and earnings press release, we initiated an equity offering but terminated this process after determining that current market conditions and the terms of an offering would not be in the best interest of our shareholders.
We are currently focused on a number of alternative sources of capital, including less or non dilutive debt financing royalty financing.
T J or direct investments equity financing and or some combination thereof, we hope to have an update on this front for our shareholders very soon means.
Meanwhile, we are continuing to maintain tight controls over cash and are continuously identifying and implementing cost reduction opportunities in our operations.
And that concludes my remarks, and I'd like to turn the call back to Phil.
Thank you Kathy.
As I've mentioned before I'd like to reiterate our value proposition.
Cytosorb drives our growth Cytosorb photos, the company's foundation.
With an EU approved product thats sold around the world as generate approximately $205 million in sales since launch.
It has high margin, it's a high margin razor blade business model with historically high blended product gross margins that mix higher margin direct sales with lower margin distributor and product sales and partner sales.
We are strong validation by customers partners and government agencies.
And current sales supports near breakeven less to clinical trial costs, which we believe helps to Derisk the company and the investment opportunity. We believe cytosorb represents the fuel for future strong anticipated growth targeting the $20 to $30 billion worldwide total addressable market of major unmet medical needs in critical care cardiac surgery as well as.
Liver and kidney disease. We believe this gives cytosorb has the potential upside of a biotechnology company with a lower risk profile of our high margin medical device company with sales.
That said Cytosorb and drugstore could soon be dual growth engine for the company.
<unk> has now completed and is heading to database lock with initial data analysis expected. This year international usage and trial safety to date gives us confidence.
<unk> be successful in drugs, our ATR achieved U S FDA and health, Canada regulatory approval, we intend to commercialized drugs or HR in both the U S and Canada is potentially a major second engine of growth working in tandem with Cytosorb to drive sales.
First our ETR is expected to have a higher ASP and product gross margins.
Cytosorb and wood opened an expected U S and Canadian Tam of $600 million to $650 million for Brilinta alone, where we expect significant penetration given the major unmet need indicated by our FDA breakthrough device designation.
And with Cytosorb and drugs are ATR driving sales.
To drive accelerated sales growth of the company with the goal of profitability soon thereafter.
With that that ends our formal remarks, operator, please open up the lines for the Q&A session.
Thank you.
If you would like to ask a question. Please press star one on your Touchtone phone.
Please make sure your mute button is turned off to allow your signal to reach our equipment.
Again that is star one if you would like to ask a question and we will pause for just a moment to compile the Q&A roster.
And we will take our first question from you on <unk> with B Riley Your line is open.
Thank you for taking our call.
And congrats on a good culture on the star key file and appoint the.
Importantly, two of the accommodate unemployment can you just talk about how did you arrive at.
Our 48% U D P. B class two events in the <unk> arm versus 24% in the drugstore bar was based on data from the open label trial or was it from real world experience. Thank you.
Yes, Thank you very much and thanks again for your recent analysis of.
The potential success of the <unk> trial that you've published recently.
Let me turn that over to you.
My guess is my guess.
Yes, Thank you Phil and thank you Ron for the question.
So as we have previously shared the baseline risk of bleeding complications in patients undergoing surgery, well impact tableau without completing the washout period exceed 50% as shown in the Plato trial.
Therefore, we <unk>.
Started from that number and took a discount.
In relation to the control arm bleed rates, although we're assuming for the start of the trial as you correctly noted that is up 40% of the political stage.
Regarding the treatment effect size with the use of drug Zorba ATR, we had to rely on the existing literature, which at the time represented the experience.
As published by Hudson.
We showed.
Reductions exceeding 50% in some of the components of the <unk> primary endpoint.
Transfusions and chest drainage.
On the effect size, we again took a discount.
For the purposes of the trial, a 40% reduction which has led to a very adequately powered trial with a power excuse me.
98%.
Got it.
Follow up question on all of the Star trial. So far is the analysis timeline can you talk about how long does it take for the database lock the analysis basically how you talk about your confidence to share that data by year end, which is very important to the stock.
Okay.
Okay.
Yes. Thank you for the question I think as Phil presented in the prepared remarks.
The process, leading to database lock is progressing well.
And as we already stated we think that the.
The lock is actually directly.
Once that happens then the analysis process begins which by itself requires.
An instantaneous process.
The results during this time, if all the parties remain Brian.
Regarding the release of the data we plan to.
Follow the conventional road.
Reviewing the data internally, but also considering the submission for a major cardiovascular conference.
Should we proceed that route we would have to then.
The requirements relating to the embargo.
Period of these conferences when they consider original results presentation.
However, as filled against stated in the prepared remarks.
We believe that by the end of this year, we will be able to provide.
Two.
Public make it public.
Press release.
Our initial assessment of whether we believe the data will allow us to proceed to the next step which is basically the submissions to the FDA.
Got it that's all from me thank you.
Thank you.
And we will take our next question from Tom <unk> with Zacks investment Research. Your line is open.
Good afternoon guys.
Any update on the European ICU bed market, particularly in Germany has that opened up any more.
Thanks, Tom Let me have Christian address that issue Christian.
Okay.
Okay.
Christian.
Thank you may still be on mute.
Yeah.
Well, Tom let me let.
Let me try to address that.
Question. So if you we follow very closely what's called the <unk> registry, which.
As published by the German intensive care unit Society in Germany, where they actually look at open beds.
The beds occupied beds and beds that are still reserved for emergency purposes for COVID-19.
And what we have seen is that the.
They'll building of ICU beds continues to be low.
I think speaks to.
The muted markets in Germany, I think that it is much better than it had been.
Particularly during Covid, where.
There was very tight.
You bet availability.
But women at ICU beds overall.
And I think this is helping too.
Drive our recovery in terms of German sales.
But also I think this phenomenon is happening around the world, which is why we believe that our our sales have stabilized this year.
And are in the phase of recovery with the potential to help grow next year.
Okay. Thanks for that color and a couple of financial questions.
The quarterly burn rate expected to be around the same in the mid $4 million range or does that go up or down over the next let's say two to three quarters.
Kathy would you like to answer that.
I would.
I think that right.
Right now as we're wrapping up our star T trial.
For the fourth quarter, it's probably going to be similar to what we've experienced in the early quarters, because we have a lot of invoices from our CRO with whom we're working et cetera.
The closing processes I think that we have been taking cost containment measures at the.
I'd say the assortments across our our organizations and that you should see lower burn rates beginning with the new year 2024 that will change again.
When we start up our Star D trial later in 2024.
Because that will add additional additional clinical costs.
But the.
Submission.
<unk> doesn't.
Maintain or increase the burn rate in the first couple of quarters or is that a.
Low cost no.
That's not that's not as expensive as the clinical study itself and that will be done.
Alright.
Okay.
One more a financial one.
You guys look for equity offering if you have a ATM equity program in place or is that the same thing you are talking about them.
We're really talking about any.
Any type of go ahead Phil.
Oh, sorry, no I think that I think one of the values of doing a standard equity offering is to bring new investors around the table.
<unk> introduced the story to new investors and so I think that was part of the goal to try to do that I think with the ATM.
It is a very useful and good vehicle that we've used.
So you're very successfully but the goal here was in front of.
Data to basically half.
More.
Investors focused on near term catalysts so.
But I think as Kathy mentioned that.
We decided to not pursue that avenue and focus more on.
Wes or non dilutive forms of financing for the moment.
Given market conditions.
Got it and there is still roughly 23 million availability on the ATM if I recall.
When necessary.
Thats correct Thats approximately correct, yes, yes got it okay. That's all I have for now thank you.
Thank you Tom.
We will take our next question from Sean Lee with H C. Wainwright Your line is open.
Good afternoon, guys and thanks for taking my questions.
First one is on the Star T.
Potential for.
Data by the end of this year end.
During submission next year.
Needs to be done before you can file.
Submission and in terms of commercialization have you done any.
Kind of building out any.
The structure is in the U S.
Yeah.
Okay.
Arena would you like to try to take that.
Yes sure.
In terms of submission.
Oh for the drop in venue Jason.
It's.
Quiets extends it gives document which would be based on our results all fair.
Clinical trial clinical trial as well as all extensive.
Preclinical.
And manufacturing package.
Which we're developing as we speak.
The last piece of information of course would be a clinical study report, which will be at the heart of that submission.
It will be submitted a at some point.
Italy in 'twenty.
2024.
Based on availability of clinical study park.
But what do you think the second part of the question.
Yes, Sean if you could repeat that second part please.
Yes, I was just wondering.
What sort of preparations have you made so far in terms of commercialization in the U S assuming that.
Submission of the study and the submission goes well.
Yeah, So Vince would you like to take that.
<unk>.
Sure Thanks, Phil Sean Thank.
Thank you for the question. So there's a couple areas that we've already started preparation and one is in the manufacturing facility.
So we're preparing that facility to meet all the requirements within <unk>.
<unk>.
Any potential inspections et cetera that we're up to snuff with everything and we're completing obviously, all our validation et cetera necessary to produce drug zorba ETR on the commercial side.
We've hired.
Jim comes under Vice President of sales and marketing and Scott Brown, our director of marketing and senior director.
We've already developed a go to market plan with phase gating.
With respect to bringing on the resources to build the infrastructure of course, we will work on back office first.
You know, which is again building all the Sn.
Essentially customer service etcetera training.
And then we will focus on sales as we near.
Closer to approval, we've not pulled the trigger on.
On those additional hires yet obviously, we're waiting till we get the readout and then based on that will determine when we will start bringing those hires in.
So to answer your question.
Yes, that's very helpful.
Alright.
Follow up for the start I know you guys have.
CE Mark approval for type that will remove already in Europe.
The results from the sea from Star T. Use holds we used to secure reimbursement in the major European countries.
Absolutely, Sean I think that that with part of the goal I think we talk about opening up the $650 million Tam in United States and Canada.
And in fact, the data given that drugs arent ATR uses an equivalent polymer technology to cytosorb that data would be directly transferable potentially to the world markets.
With high quality randomized control trial data that should hopefully support.
Not only clinical usage, but also reimbursement as well.
And so.
Certainly I believe that will be the case.
Great.
Thanks again for taking my questions.
Thanks, Sean.
Okay.
And as a reminder, it is star one if you would like to ask a question.
And we will take our next question from Josh Jennings with PD Cowen Your line is open.
Hi, good afternoon. Thanks for the questions I wanted to ask about potential reimbursement for drug Sorb and how you envision coverage during the early commercial period after approval.
The reimbursed through through a DRG.
And as with breakthrough designation.
Are you anticipating filing for <unk> and potentially <unk>.
You've taken hold yet add on payment in place for launch or shortly thereafter.
Yes, no. Thanks, Josh that's a good question.
<unk> discussed in the past at a very base case.
We could certainly fall under the DRG because what we're trying to do is actually reduce significant cost from either waiting in the intensive care unit or in the hospital to wash out the drug or by reducing significant bleeding complications that are common and.
In cardiac surgery patients undergoing surgery with these blood Thinners on board.
I think that.
However seek.
Line item dedicated reimbursement for this and as you say because of the breakthrough device designation. It gives us the ability to file for the end cap.
Our new technologies add on payment.
As a separate.
Our reimbursable payment.
For hospitals, and we are currently pursuing that with consultants.
There is also another program that we've discussed in the past called T. CEP program or the transitional coverage for emerging technologies program and this is a program that was proposed by CMS or Medicare and Medicaid.
And just actually put out for public.
Commentary and that commentary period is over and we're waiting for the final.
Final.
Version of that program, but that program is designed to for breakthrough device designation program.
<unk> devices.
That are applicable to Medicare.
Patients right, so so elderly patients essentially which cytosorb.
And drugs are absolutely is.
Given that it's typically the elderly population that are having.
Tax and are having open heart surgeries.
For that.
Problem.
<unk>.
And that is designed to guarantee coverage of <unk>.
Breakthrough device designated product.
Devices that qualify for at least three years after.
FTA approval.
We are absolutely tracking all of these.
Areas currently.
An opportunity to trim it.
Great Thanks for that.
I think the press release.
Your team has called out Tam for drug store for the AAA Kegler Mughal.
<unk>, yes, we came in around $650 million it seems like.
Little bit of a tick up is there any new market analysis or is it. The addition of Canada into the Tam, but just wanted to.
Just read regroup on the Tam.
Putting forward for take casually removal indication. Thanks, so much yes.
Absolutely it's in all of them.
Mike is comment on this because it was his team that actually lead that market analysis, but.
It's very interesting Canada is a country that uses type CAGR Laura.
Very frequently even though Canada has a smaller population in the United States and represents a substantial market effient, which is one of the competitors.
Is no longer distributed in Canada.
I think Eli Lilly was the company that was.
Initially distributing and Plavix and Canadian.
Canadian guidelines has.
Highlighted that.
That brilinta is the preferred drug over Plavix based on clinical outcomes.
Yes.
In these.
These.
Surgical patients.
No.
So <unk> is actually used quite widely in Canada and in particular, the use of dual anti platelet therapy is widely used as well given that it's often used as a temporary measure to help try to improve clinical outcomes, while patients are traveling to from far.
Far away distances to major.
Cardiac <unk>.
Centers in major cities within Canada.
It.
It does represent a very exciting market for us and maybe I'll turn it over to Mike just comment.
And maybe you can comment on contribution to the to the.
Starchy trial Mikus.
Yes, Thank you Phil.
Hey, guys.
Phil said the system of care in Canada, So, it's a very harmonized across the country.
National protocols, the national guidelines tend to be universally.
<unk>, which is a little different.
Regional kind of Pratt.
Practice that we secured in the U S, where you can see variability in different geographic regions between academic versus non academic centers in Canada tends to be more universal treatment approach.
Cargo carrying the highest recommendation that hasn't been adopted in the treatment protocols or a good quarter in shingles, So very high penetration dominant position of Buckeye galore.
And then what we knew was happening based on this information, we validated and they start to trial the enrollment rates and if you've followed it closely you saw that we hit a really.
Very high pace towards the end and we finished the trial actually with extra patients.
Our own internal projections that was because of the numbers that came in from Canada.
So those patients are abundant.
Institutions are.
Very high volume so they in color them almost on a daily basis to have patients like these that they need to do work around these delays.
The trial was very popular with patients who are abundant in the enrollment relates to vary from this when we take the addition of candidates that our initial Tam analysis brings a substantial upside that you're seeing this uptick that's a good question.
You noted.
I appreciate it thank you.
Yeah.
And we have no further questions at this time I will now turn the call back to Dr. Phillip Chan for closing remarks.
Yeah.
Well. Thank you everyone for taking the time to get on this call today hopefully it was a productive session for you how we look forward to the next update.
On the next call. Thanks, so much everyone have a good night.
Yeah.
And ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.
Please wait the conference will begin shortly.
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