Q4 2023 Cytosorbents Corp Earnings Call
Yes.
Operator: Good afternoon, and welcome to the Cytosorbents fourth quarter and full year 2023 financial and operating results conference call. At this time, all participants are in a listen only mode.
Good afternoon, and welcome to the Cytosorb in fourth quarter, and full year 2023 financial and operating results conference call.
At this time all participants are in a listen only mode.
Operator: Following the formal remarks, we will open the call to 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, Eric Ribner. Please go ahead, Mr. Ribner.
Following the formal remarks, we will open the call for your questions. Please.
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 Eric.
Please go ahead, Mr. Reid there.
Okay.
Eric Ribner: Thank you and good afternoon. Welcome to Cytosorbents' fourth quarter and full year 2023 financial and operating results conference call. Joining me today from the company are Dr. Phil Chan, Chief Executive Officer, Vincent Capponi, President and Chief Operating Officer, Kathleen Bloch, Chief Financial Officer, Dr. Mica Sanchez Deliargyris, Chief Medical Officer, and Dr. Christian Steiner, Executive Vice President of Sales and Marketing and Managing Director of Cytosorbents Europe. Christopher Cramer, Senior Vice President of Business Development, and Dr. Irina Kulinets, Senior Vice President of Regulatory Affairs.
Thank you and good afternoon, welcome to Cytosorb in its fourth quarter and full year of 2023 financial and operating results conference call joining.
Joining me today from the company are Dr. Phil Chan Chief Executive Officer.
Ensign Compony, President and Chief operating Officer, Kathleen Bloch, Chief Financial Officer, Dr. Mike It's.
Delhi Archer.
Yes, Chief Medical Officer, Dr. Christian Steiner Executive Vice President of sales and marketing and managing director of Cytosorb in syrup.
Christopher Cramer senior Vice President of business development and Doctor Irina clinics.
And your vice President of regulatory Affairs.
Eric Ribner: Before I turn it over to Dr. Chan, I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking statements that 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.
Before I turn it over to Dr. Chan I'd like to remind listeners that during the call management's prepared remarks may contain forward looking statements, which are subject to risks and uncertainties.
Management 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 more detailed discussion of these risks and uncertainties in the company's filings with the SEC any.
Eric Ribner: Actual results may differ from those 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 today as of March 14, 2024, 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 the fourth quarter and full year 2023 by Dr. Chan and Ms. Bloch. Following that presentation, we will open the line to your questions during the live Q&A session with the rest of the management team. And now it is my pleasure to turn the call over to Dr. Thank you very much, Eric.
Any projections as to the company's future performance represented by management include estimates today as of March 14th 2024, and we assume no obligation to update these projections in the future as market conditions change.
Today's call, we will have an overview presentation covering the operating and financial highlights for the fourth quarter and full year 2023 by Dr Chan and Ms Bloch.
Following that presentation, we will open up the line to your questions. During the live Q&A session with the rest of the management team and now it is my pleasure to turn the call over to Dr. Chan.
Bill Thank you very much Eric.
Phillip P. Chan: Today, I'd like to talk a little bit about our recent operational highlights. First of all, we're pleased to say that as of the end of 2023, we had more than 228,000 cumulative Cytosorb treatments delivered, which was up 17% from the end of 2022. Our European Union CE mark for Cytosorb was extended under the Medical Device Directive, MDD, to the earlier of either December 2028 or when we achieve EU Medical Device Regulation Certification, also known as MDR, which effort is currently ongoing. We also entered into a new strategic partnership and temporary distribution agreement in India for Cytosorb with the publicly traded Indian pharmaceutical company Aris Lifescience, following its definitive agreement with Biocon Biologics to acquire Biocon's nephrology-branded formulations unit and with it Biocon's key leadership and field force of these businesses, including the personnel who are commercializing Cytosorb in India.
Sure. Thank you very much Eric.
Today I'd like to talk a little bit about our recent operational highlights first of all we're pleased to say that as of the end of 2023, we had more than 228000 cumulative cytosorb treatments delivered.
This was up 17% from the end of 2022.
Our European Union CE, Mark for Cytosorb with extended under the medical device Directive MTGE.
Earlier of either December 2028, or when we achieve EU medical device regulation certification also known as MTR, which effort is currently ongoing.
We also entered into a new strategic partnership and temporary distribution agreement in India for Cytosorb with a publicly traded Indian pharmaceutical company Eris Lifesciences. Following its definitive agreement with Viacom biologics to acquire bypass nephrology branded formulations unit and with it.
<unk> leadership in field force at these businesses, including the personnel who are commercializing cytosorb in India.
Phillip P. Chan: Also of importance is our standalone hemoperfusion pump initiative, which is expected to bring our next-generation blood purification capability to countries that do not have a strong dialysis infrastructure. We're expecting to launch our new Purify pump later this year following the expiration of our distribution agreement with Nikiso Europe GmbH for its PureJust pump in September of last year. And this is a picture of the pump. This is how it will look. It's very easy to use.
Also of importance is our standalone chemo prestige and pop initiatives are.
Our standalone pump initiatives is expected to bring our next generation electrification capability to countries that do not have a strong dialysis and infrastructure. We are expecting to watch our new purify pump later this year following the expiration of our distribution agreement with what Keith said Europe G. M D H for its pure just pump.
September of last year.
This is a picture of the pump. This is how it will look it's very easy to use and we've had excellent feedback from users who have been beta testing this unit.
Phillip P. Chan: We've had excellent feedback from users who have been beta testing this unit, and we're very excited to be able to get this out into the market in the very near future.
And we're very excited to be able to get this out into the market hopefully.
Hi.
Very near future.
Phillip P. Chan: Moving on to the STAR-T trial. The PIVLSTAR-T randomized controlled trial, we're pleased to say, was selected for a breakout presentation at the American Association of Thoracic Surgery annual meeting being held April 27th through the 30th in Toronto, Canada. The AATF annual meeting is one of the most prestigious cardiothoracic surgery conferences in the world and attracts, users, not only cardiac surgeons, but perfusionists and a whole host of other of Health Care Workers who are involved in cardiothoracic surgery to learn about new innovations and clinical data in the area of cardiothoracic surgery, following this, presentation, we plan to have a subsequent Analyst and Investor Day and provide a review of the data with investors and analysts by an esteemed thought leader panel.
Moving onto Starkey trial.
The pivotal start T randomized controlled trial, we're pleased to say it was selected for a breakout presentation at the American Association of thoracic surgery annual meeting being held April 27 through the 30 in Toronto, Canada.
The Ats annual meeting as one of the most prestigious cardio thoracic surgery conferences in the world and attracts.
Users not only cardiac surgeons, the perfusion is and a whole host of other.
Health care workers, who are involved in cardio thoracic surgery to learn about.
New innovations.
<unk> clinical data in the area cardio thoracic surgery.
Following this.
Presentation, we plan to have a subsequent analyst and Investor day, and provide a review of the data with investors and analysts I understand.
Later panel.
Phillip P. Chan: This will not be the same day as the AATS meeting presentation, but it will likely be, uh, either later that week or the following, based upon our additional analysis that we've done. Following our top-line data announcement in December, we plan to submit now for regulatory approval of drug-absorbed ATR to the U.S. FDA and Health Canada in the second half of 2024 with the idea of reducing the severity of bleeding in patients undergoing isolated CABG surgery on blood-thinner blood. Here you see is a tentative estimated STAR-T timeline where the final data analysis is pending imminently.
This will not be the same day as the Ats meeting presentation, but it will likely be.
Hi, either later that week or the following week.
Based upon our additional analysis that we've done.
Growing our topline data announcement in December we plan to submit now for regulatory approval of drugs, our ETR to U S FDA and health, Canada in the second half of 2024 with the with the idea of reducing the severity of bleeding in patients undergoing isolated cabot surgery on a blood thinner.
Yes.
Or do you see as the test today estimate that Starkey timeline, where.
We're at the final data analysis is pending imminently.
Phillip P. Chan: We expect to have the data presented at this late-breaking session at AETS in late April; data from the STAR Registry, which is a real world collection of data coming from Europe for using Cytosorb in the application to remove Blubsidder. An analysis of that registry, the third analysis, will be presented at the EuroPCR conference in Europe in May 2024. If everything goes well, we will be in a position to submit to FDA in the second half of this year. Based upon FDA timelines, 45 days after submission, the FDA will give formal notice, if appropriate, of acceptance.
We expect to have the data presented at this late breaking session at Aps in late April.
Data from the Star Registry, which is a real world collection of data coming from Europe.
Using cytosorb and the application to remove.
Blood centers.
Well an analysis of that registry. The third analysis will be presented at the Euro PCR conference in Europe in May 2024.
If everything goes well, we will be in a position to submit to FDA in the second half of this year.
Based upon FDA timelines 45 days after submission the FDA will give formal notice if appropriate of acceptance and from there. It's about an eight to 10 months process based upon FDA published timelines.
Phillip P. Chan: And from there, it's about an 8- to 10-month process based upon FDA-published timelines to potential approval. In the meantime, we will also be preparing a Health Canada submission, and we'll hopefully be able to get that out before the end of this year, setting up a timeline for the second half of 2025 to obtain potential approval from FDA for the drug survey TR and also approval from Health Canada as well. As things go well, we expect to begin commercialization shortly after receiving approval in the second half of 2025. We believe that focusing on our approval request for the isolated cabbage population will not significantly change our U.S. and Canadian total addressable market opportunity, given that patients on Ticagrel needing isolated cabbage represent the overwhelming majority facing this clinical need. And on the next slide, you can see that the numbers haven't changed much from what they were in our investor presentation. There are about 65,000 patients on Berlinta needing emergent or urgent CABG surgery annually.
To potential approval.
In the meantime, we will also be preparing the health, Canada submission and well hopefully be able to get that out before the end of this year.
Setting up the timeline for the second half of 2025 to obtain potentially approval for FDA.
FDA for drugs of ATR and also approval from health, Canada as well.
If things go well, we expect to begin commercialization shortly after receiving approval in the second half of 2025.
We believe that focusing on our approval request an isolated cabbage population will not significantly change our U S and Canadian total addressable market opportunity given that patients are type CAGR needing isolated cabbage represent the overwhelming majority.
This critical need.
On the next slide you can see.
Is that the numbers haven't changed much from what has been in our investor presentation. Just about 65000 patients on Brilinta meeting emergent urgent cabbage surgery annually and about $5000 of device represents about a $325 million initial U S. Canada total addressable market.
Phillip P. Chan: And at about $5,000 a device, it represents about a $325 million initial US and Canada total addressable market. We expect that the Verlinta market share will grow, given that drug-absorb ATR would make Verlinta the only reversible PQY12 platelet inhibitor on the market. And also because Berlintic goes off patent in 2024 this year, likely leading to a drop in prices, which has been the major advantage of Plavix, which is generic in the United States market. Once that price differential goes away, we expect the superior drug Berlinta to gain market share, helping to potentially expand the total addressable market in the United States and Canada by twofold. Now turning to our sales update. The press release, I think, goes over the sales highlights for 2023. However, I wanted to point out a few things.
We expect that the relative market share will grow given that drug czar of HCR would make brilinta. The only reversible ptw 12 platelet inhibitor on the market.
And also because Brilinta goes off patent in 2024, this year likely leading to a drop in prices, which has been the major advantage of Plavix, which is generic.
In the United States market.
Once that price differential goes away, we expect the superior drug for later.
To gain market share helping to potentially expand.
Total addressable market in the United States and Canada by twofold.
Now turning to our sales update.
The press release I think goes over the sales highlights for.
2023, however, I want to point out a few things one is that core cytosorb sales grew 10% year over year.
Phillip P. Chan: One is that core Cytosorb sales grew 10% year over year. And although that number is relatively modest, I think it masks some excellent performance that we have been seeing in certain of our sales divisions. As you recall, we have a hybrid sales model where we sell directly in Germany. We sell directly internationally in 14 other countries with our own direct sales force. And we sell in 60 other countries through our distributor and partner division.
And.
Although that number is relatively modest I think it is.
Masks.
Excellent performance that we have been seeing in our certain of our sales divisions. As you recall, we have a hybrid sales model, where we sell direct in Germany. We.
We sell direct internationally in 2014 other countries with our own direct sales force and we sell in 60 other countries through our distributor and partner.
Division.
Phillip P. Chan: What we saw in 2023 was strong performance from our International Direct Division, again accounting for 14 countries, where they saw 27% sales growth to $6 million, or roughly 19% of product sales for the year. This is important as we look to continue to diversify our revenue base and really account for the 75 countries around the world where we sell Cytosorb today. Distributor partner sales in the first three quarters of 2024 actually grew 18% versus the same period in 2022, not including U.S. distributor sales. However, because of the change that we've made and the decision to, less than the Kiso Pure Adjust Hemoperfusion Pump Distribution Agreement. Fire them in favor of bringing our own pump to market.
What we saw in 2023 with strong performance from our International direct Division again accounting for 14 countries, where they saw 27% sales growth $6 million or roughly 19% of product sales for the year.
This is important as we look to continue to diversify our revenue base.
Two.
Really account for the 75 countries around the world, where we sell cytosorb today.
Distributor partner sales in the first three quarters of 2024 actually grew 18% versus the same period in 2022, not including U S distributor sales.
However, because of the change that we made.
And the decision Q.
Let the T cell pure just chemo profusion distribution agreement chemo precision pump distribution agreement.
Spire.
In favor of bringing our own pump to market.
This.
Phillip P. Chan: This, this impacted ordering from distributors and wound up with a delay in distributor orders flipping into 2024. Because of this, overall sales growth for the year was 9%, not including U.S. distributor sales, or 39% of product sales for the. And finally, direct sales in Germany grew 3%. Although the markets have significantly improved in 2023, hospitals are still feeling the weight of the aftermath of COVID-19 in terms of staffing shortages, fewer ICU beds, fewer ICU patients, fewer high revenue-generating procedures moving through the intensive care unit, but also a range of additional costs driven by inflation, including energy and staffing costs as well. However, we are seeing a significantly improved outlook for 2024, and we hope that this will begin Germany represented 42% of our product sales last year.
This impacted.
Ordering from distributors and Rhonda with the delay in distributor orders slipping into 2024.
Because of this overall sales growth for the year was 9% not including U S distributor sales were 39%.
Product sales for the year.
And finally direct sales in Germany grew 3%.
Although the markets have significantly improved in 2023 hospitals are still feeling the weight of the aftermath of COVID-19 in terms of staffing shortages.
You bet fewer ICU patients.
Fewer high revenue generating procedures moving through the intensive care unit.
But also a range of additional costs, driven by inflation, including energy and staffing costs as well.
However, we are seeing significantly improved outlook for 2024.
And we hope that this will begin a recovery in Germany.
Germany represented 42% of our product sales last year.
Phillip P. Chan: That said, we are currently tracking a proposal for health care reform in Germany's hospital system. In July 2023, Germany's federal and state governments issued a consensus white paper that could result in new laws that change how hospitals are funded. Government payments to hospitals would de-emphasize the DRG, also known as the diagnosis-related group lump sum payment system, that incentivizes revenue generation through more patients treated and procedures performed and instead emphasize base payments focused on quality measures and appropriate patient care. This is expected to favor a shift of routine operations and procedures to outpatient centers, a consolidation of smaller hospitals into larger ones, and importantly, an increased focus of remaining hospitals on sicker patients, more complex operations such as cardiothoracic surgery and organ transplants, and on therapies that help reduce the severity of illness and help patients recover faster.
That said we are currently tracking a proposal for health care reform of terminals Hospital system.
In July 2023, Germany, Federal and state governments issued a consensus white paper.
That could result in new laws that changed how hospitals are funded covering payments to hospitals with deemphasize. The DRG also known as the diagnosis related group lump sum payment system that incentivizes revenue generation through more patients treated and procedures performed.
And it's that emphasize based payments focused on quality measures and appropriate patient care.
This is expected to favor a shift of routine operations and procedures to outpatient centers.
Consolidation of smaller hospitals into larger ones and importantly, an increased focus of remaining hospitals on sicker patients more complex operations, such as cardio thoracic surgery and organ transplant.
And on therapies that help reduce the severity of illness and help patients recover faster.
Phillip P. Chan: Given that the goal of our therapies is to improve clinical outcomes while reducing the cost of critical care and cardiac surgery by controlling deadly inflammation and other life-threatening conditions, as well as reducing the need for expensive life support measures that keep patients in the hospital, we believe such reform may favor our business in the longer term. Possible administrators expect such change will take careful planning and time, potentially even years to implement, and we look to track these developments with interest.
Given that the goal of our therapy to improve clinical outcomes, while reducing the cost of critical care and cardiac surgery by controlling deadly inflammation and other life threatening conditions, while reducing the need for expensive life support measures that keep patients in the hospital, we believe such reform may favor our business in the longer term.
Hospital administrators expect such change will take careful planning and time essentially even years to implement.
When you look to track these developments with interest.
Phillip P. Chan: Now many of you have seen this slide before, where we talk about the extensive support of our technology by the U.S. government to the tune of about $50 million in grants and contracts and other non-dilutive funding. And on the left-hand side, you see here three products that are actually being commercialized today. We typically focus on cytosorbents, and we don't really talk too much about ECOS-300-TY or VetRef. But today, I wanted to try to do that.
Now many of you have seen this slide before we talk about the extensive support of our technology by the U S government to the tune of about $50 million in grants and contracts and other non dilutive funding and on the left hand side you see here three.
Products that are actually being commercialized today.
We typically focus on Cytosorb and we don't really talk too much about <unk> 300, and see why our event rescue but today I wanted to try to do that.
Phillip P. Chan: In addition, on the right-hand side, are products under current development. And one of the products, Hemodefend BGA, for the development of universal plasma, is a program for which we've received $17 million in DoD grant funding to bring this to market. And I thought I'd spend a slide on each of these products just to give you a flavor of what we're doing today. The ECHO 300-CY is approved in the European Union for ex vivo organ perfusion and for solid organ transplants. Solid organ transplantation is the main treatment option in advanced organ failure, but it is limited by the availability of suitable and healthy organs. Ex vivo organ perfusion, or otherwise known as EVOP, with temperature-controlled oxygenated nutrient-rich fluid or blood is being increasingly used as an alternative to transporting the organ on ice to improve the functioning of transplanted organs and to salvage substandard ones that would otherwise be discarded. However, it does not directly control inflammation within the organ that is often the core to the organ dysfunction that is seen perioperatively.
In addition on the right hand side, our products under current development and one of the products team would offend PGA for the development of Universal plasma.
Is a program, which we've received $17 million for an <unk> grant funding.
To bring this to market and I thought I'd spend.
Slide on each of these products.
Just to give you a flavor of what we're doing today.
So you've got 300 T y.
Is approved in the European Union for ex vivo organ perfusion and for solid organ transplant.
Solid organ transplant is the main treatment option and advanced organ failure, but it is limited by the availability of suitable and healthy organs.
Ex vivo organ perfusion or otherwise known as E V O P with temperature controlled oxygenated nutrient rich fluid or blood is being increasingly used as an alternative to transporting the oregon on ice to improve functioning transplanted organs at the salvage sub standard ones that would otherwise be discarded.
However, it does not directly control inflammation with the within the Oregon.
It's often the core does the organ dysfunction that has seen.
Perioperative Lee.
Phillip P. Chan: ECOS 300-CY is specifically EU approved to reduce inflammatory mediators during EVOP. And on the lower left-hand side here, you can see an ex vivo organ perfusion machine called the Perlife system by one of our partners, Aphoretica, who's been one of the pioneers in this space, and we work with them and provide a private label cartridge called Persorb that plugs right into their system. The goals and cited benefits of ECOS 300-CY in early data are that it reduces inflammatory mediators. Additionally, it helps to recondition poorly functioning organs that would normally be discarded, increasing the donor pool of organs. And early data, in both pigs as well as in early human studies, has been shown to reduce rates of primary graft dysfunction, particularly in lung transplants, helping to improve clinical outcomes.
300, <unk>, why specifically EU approved to reduce inflammatory mediators during <unk>.
And on the lower left hand side here you can see.
And ex vivo organ perfusion machine by call. It the per life system by one of our partners Athletica.
And one of the pioneers in this space and.
And we work with them and provide a private label cartridge called <unk> that plugs right into <unk>.
Their system.
And the goals are excited benefits of eco 300 C Y and early data are that it reduces inflammatory mediators.
It helps to recondition poorly functioning organs that would normally be discarded increasing the donor pool of organs.
And in early data in both pigs as well as an early human studies has been shown to reduce rates of primary graft dysfunction, particularly in lung transplant, helping to improve clinical outcomes.
Phillip P. Chan: On the next slide is Vet Rescue, which is essentially Cytosorb for companion animals. Now, the COVID pandemic has driven companion animal ownership. Now, with 45% of U.S. households owning a dog and 26% owning a cat, according to the American Veterinary Medical Center, companion animals are prone to a wide variety of medical emergencies, ranging from drug intoxication, heat stroke, infections such as leptospirosis, sepsis, and septic shock, trauma, and others.
On the next slide is that rescue which is essentially cytosorb for companion animals.
Okay.
The Covid pandemic has driven companion animal ownership.
Now with 45% of U S households, owning a dog and 26% only a cat according to the American Veterinary Medical Society.
Companion animals approach for a wide variety of medical emergencies, ranging from drug intoxication heat stroke infections, such as leptospirosis.
<unk> in septic shock trauma and others.
Phillip P. Chan: VetRescue brings the power of Cytosorb to veterinary medicine with three sizes of cartridges intended to treat the full-size range of companion animals that you can see here. And in 2023, we had a limited but successful launch of VetRescue at a number of regional veterinary centers. And in 2024, we'll debut our integrated all-in-one solution that includes a hemoperfusion pump for vets. And last but not least, HumanFNBGA, which holds the promise of universal plasma. Human FMVGA was developed to create universal plasma, which is plasma that does not need blood typing and can be given off the shelf to anyone in need, regardless of blood type, by removing anti-A and anti-B antibodies that make blood types. And what you can see here on the right-hand side is the current status of plasma logistics today, where blood banks have to maintain pools of stores of type A, type B, type AB, and type O plasma.
That rescue brings the power of Cytosorb to veterinary medicine with three sizes of cartridges intended to treat the full size range of companion animals that you can see here.
And in 2023, we had eliminate but successful launch event rescue to a number of regional veterinary centers and a 2024, we will debut our integrated all in one solution that includes the hemo perfusion pumps for Vince.
And last but not least human F N PGA, which holds the promise of universal plasma.
Even if NPA was developed to create universal plasma, which is plaza that does not need blood typing and can be given off the shelf to anyone in need regardless of blood type by removing anti <unk> antibodies that meet plasma blood type specific.
And what you can see here on the right hand side is the current status of plasma logistics today, where blood banks have to maintain pools of stores of type a type b type <unk> and tyco plasma.
Phillip P. Chan: But universal plasma would simplify those logistics to a simple unit called universal plasma that could be given off the shelf to a patient regardless of their blood type. Many applications of life-saving plasma include trauma resuscitation, treatment of critically ill patients, and component purification, such as the isolation of clotting factors for hemophilia, for example, albumin for critical illness, and IVIT for autoimmune disease treatment and infectious disease.
But universal plasma, which simplifies logistics because then.
Simple unit called Universal plasma that could be given off the shelf to a patient regardless of their blood type.
Many applications of lifesaving plasma include trauma resuscitation treatment of critically ill patients and component purification such as isolation of clotting factors for hemophilia for example, albumin for critical illness, and <unk> for autoimmune disease treatment and infectious disease.
Phillip P. Chan: In the United States alone, more than 10,000 units of fresh frozen plasma are administered daily, or 3.6 million units per year. And again, with more than $17 million in funding from the U.S. Department of Defense, Cytosorb has successfully developed and demonstrated a prototype hemodefense BGA adsorber that removes anti-A and anti-B antibodies from human plasma with the goal of having our off-the-shelf, one-size-fits-all, blood-type-independent, universal plasma, provided that we can collaborate with the freeze-dried plasma provider to This is a big opportunity, and we have recently met with FDA in preliminary discussions with the goal of advancing human-defence BGA to human clinical trials and commercialization. So with that, I will turn it over to Kathy to go back and cover. Financial Highlights for 2023 Kathy?
Faith alone more than 10000 units of fresh frozen plasma are administered daily for $3 6 million units per year.
And again with more than $17 million in funding from the U S Department of Defense Cytosorb has successfully developed and demonstrated a prototype.
P. J S zorba that removes anti <unk> antibodies from human plasma with the goal of having our off the shelf one size fits all blood type independent universal plasma.
Provided that we can collaborate with the freeze dried plasma provider to have that universal freeze dried plasma and every ambulance and emergency room around the world.
This is a big opportunity and we have now met recently with FDA in preliminary discussions with the goal of advancing chemo defense Pega to human clinical trials and commercialization.
So with that let me turn it over to Kathy to go back and cover.
Financial highlights.
2023 Kathy.
Kathleen P. Bloch: Thank you, Phil, and hello to everyone on the call. Today I will discuss our full year and fourth quarter 2023 financial results, including revenue and gross margin. I will also be providing an update on our working capital and cash runway. Next slide, please.
Thank you, Phil and Hello to everyone on the call today, I will discuss our full year and fourth quarter 2023 financial results, including revenue gross margins I will also be providing an update on our working capital and cash runway next slide please.
Kathleen P. Bloch: Total 2023 revenue, which includes both product sales and grant revenue, was approximately $36.3 million, as compared to $34.7 million in 2022, which is an increase of approximately $1.6 million, or 5%. Cytosorb product sales were $31 million in 2023 compared to $28.6 million in 2022, which is an increase of approximately $2.4 million, or 9%. There was an increase in the average exchange rate of the euro to the US dollar, and this favorably impacted 2023 Cytosorb product sales by approximately $780,000. Other non-Cytosorb product revenue was $70,000 in 2023 compared to $787,000 in 2022. This was due to the discontinuation of orders from a customer who no longer required a specialized polymer.
Total 2023 revenue, which includes both product sales and grant revenue was approximately $36 3 million as compared to $34 7 million in 2022, which is an increase of approximately $1 6 million or 5%.
Cytosorb product sales were $31 million in 2020 compared to $28 $6 million in 2022, which is an increase of approximately $2 4 million or 9%. There was an increase in the average exchange rate of the euro to the U S dollar.
And this favorably impacted 2023, cytosorb product sales by approximately $780000.
Other non cytosorb product revenue with $70000 for 2020 compared to $787000 for 2022.
Due to the discontinuation of orders from a customer who no longer required a specialized polymer.
Our product gross margin was 72% in 2023.
Up from 70% in 2022, and the company expects that gross margins will continue to improve into 2024 as we realize economies of scale at our new manufacturing facility and finally 2023 Grant revenue was $5 3 million, which is approximately.
Kathleen P. Bloch: Our product gross margin was 72% in 2023, up from 70% in 2022. And the company expects that gross margins will continue to improve into 2024 as we realize economies of scale at our new manufacturing facility. And finally, 2023 grant revenue was $5.3 million, which is approximately the same as 2022 grant revenue.
The same as 2022 grant revenue next slide please.
This next slide.
Our grass.
On which the blue bars represent our annual product sales for each year of 2017 to 2020 right now.
And we know that 2020, and 2021 product sales were very favorably impacted because cytosorb was used to treat COVID-19 patients and of course. This usage following the containment of the pandemic in subsequent years.
Taking a look though at the Orange Trendline Arrow, which tracks along the non Covid revenue, yes, we see that.
Kathleen P. Bloch: This next slide is a graph, on which the blue bars represent our annual product sales for each year of 2017 to 2023. And we know that 2020 and 2021 product sales were very favorably impacted because Cytosorb was used to treat COVID-19 patients. And, of course, this usage ceased following the containment of the pandemic in subsequent years.
22, and 2023 continues to show positive year over year growth in product sales.
The post Covid market has been challenging, particularly in Germany for reasons already articulated in.
In his comments however, while gradual we are seeing improvements in the marketplace, which we expect will bring more growth to our product sales for 2024 and into the future.
I also wanted to comment on the Green line, which tracks our year over year gross margins were.
Kathleen P. Bloch: Taking a look, though, at the orange trend line arrow, which tracks along the non-COVID revenue years, we see that 2022 and 2023 continue to show positive year-over-year growth in product sales. However, the post-COVID market has been challenging, particularly in Germany, for reasons already articulated by Phil in his comments. However, while gradual, we are seeing improvements in the marketplace, which we expect will bring more growth to our product sales for 2024 and into the future. I also wanted to comment on the green line, which tracks our year-over-year gross margins, where we experienced a slight decline in 2022 when we began manufacturing at our new facility. And this was a result of manufacturing inefficiencies. For example, we had to do test runs as we brought the new facility into full operation.
We experienced a slight decline in 2022, when we began manufacturing at our new facility and this was a result of manufacturing inefficiencies. For example, we have to do test runs as.
We brought the new facility into full operation.
And again, we do expect to see improvement in product gross margins in 2024 next slide please.
I'd just like to briefly review our fourth quarter 2023 results total revenue for the fourth quarter of 2023, which includes both product sales and grant revenue decreased 8% to approximately $8 7 million compared.
Compared to approximately $9 4 million.
In the fourth quarter of 2022.
Cytosorb product sales were $7 3 million in the fourth quarter of 2020.
Compared to seven 4 million in the fourth quarter of 2022, a decrease of 1%.
Kathleen P. Bloch: And again, we do expect to see improvements in product gross margins in 2024. Next slide, please. Now, I'd just like to briefly review our fourth quarter 2023 results. Total revenue for the fourth quarter of 2023, which includes both product sales and grant revenue, decreased 8% to approximately $8.7 million, compared to approximately $9.4 million in the fourth quarter of 2022.
The increase in the average exchange rate of the euro to the U S. Dollar favorably impacted fourth quarter 2023, cytosorb product sales by approximately $369000.
Other product revenue was $14000 in 2020 compared to.
$246000 in 2022, as we mentioned to you. This is due to the discontinuation of orders from a from a customer who required a specialized polymer.
And grant revenue in the fourth quarter of 2023.
Kathleen P. Bloch: Cytosorb product sales were $7.3 million in the fourth quarter of 2023, compared to $7.4 million in the fourth quarter of 2022, a decrease of 1%. The increase in the average exchange rate of the Euro to the U.S. dollar favorably impacted fourth-quarter 2023 Cytosorb product sales by approximately $369,000. Other product revenue was $14,000 in 2023 compared to $246,000 in 2022, as we mentioned due to the discontinuation of orders from a customer who required a specialized polymer. And grant revenue in the fourth quarter of 2023 was $1.3 million compared to $1.7 million in the fourth quarter of 2022.
One $3 million compared to $1 7 million in the fourth quarter of 2022 next slide please.
As of December 31, 2020, we have $15 $6 million in cash, which includes one 5 million of restricted cash.
This amount includes net proceeds of $9 8 million from our equity raise in December 2023, and approximately $4 5 million raised in 2023, utilizing our ATM facility.
Conservation of cash is a corporate priority, we have adjusted our budget and we've taken measures to reduce our quarterly cash burn in 2024, we have also instituted and continue to maintain tight controls over spending and these actions are expected to preserve our cash runway.
We know that we will need to raise capital to support our ongoing operations in the future and the company is actively pursuing other sources of capital, including less or non dilutive debt financing royalty financing strategic or direct investments equity financing <unk> combinations thereof.
Kathleen P. Bloch: Next slide please. As of December 31st, 2023, we have $15.6 million in cash, which includes $1.5 million of restricted cash. This amount includes net proceeds of $9.8 million from our equity raised in December 2023 and approximately $4.5 million raised in 2023 utilizing our ATM facility. Conservation of cash is a corporate priority. We have adjusted our budget, and we've taken measures to reduce our quarterly cash burn in 2024. We have also instituted and continue to maintain tight controls over spending, and these actions are expected to preserve our cash runway.
And that concludes my remarks for today at this time I'm going to turn the call back over to Bill.
Thank you Kathy.
So in summary, today cytosorb drives our growth.
Let us start forms the company's foundation is EU approved and sold around the world has generated more than $200 million in sales since launch.
High margin razor blade business model, the historical 80% blended product gross margins.
Strong validation by customers partners and government agencies.
We believe we can return to and potentially even exceed our historic compound annual growth rate of approximately 25% we.
We have previously discussed the number of macro trends in healthcare that favor our therapies such as the aging population that is prone to critical illness.
Kathleen P. Bloch: We know that we will need to raise capital to support our ongoing operations in the future, and the company is actively pursuing other sources of capital, including less or non-dilutive debt financing, royalty financing, strategic or direct investment, equity financing, and or combinations thereof. And that concludes my remarks for today. At this time, I'm going to turn the call back over to Phil.
Use of blood thinners by millions of people worldwide to reduce the risk of heart attack stroke, and the epidemic of chronic liver disease that afflicts one in every five people globally.
Meanwhile, we have also discussed our numerous growth initiatives like our Standalone pump initiative with the pending launch of our own purified machine.
Phillip P. Chan: Thank you, Kathy. So in summary, today, Cytosorb drives our growth. Cytosorb forms the company's foundation. It is EU-approved and sold around the world. It's generated more than $200 million in sales since launch. It's a high-margin razor blade business model with historical 80% blended product gross margins. It has strong validation by customers, partners, and government agencies.
Pack that supported data from Star T may have on the blood center opportunity worldwide, our global marketing agreement with Fresenius Medical care, where Cytosorb is the featured solution for cytokine bilirubin in my global removal on its critical care platforms worldwide.
Our new EU trademark of expanding the dimension of blood purification that highlights the up to 40% to 50% of patients in the ICU, where our therapies could be beneficial.
Phillip P. Chan: We believe we can return to and potentially even exceed our historic compound annual growth rate of approximately 25%. We have previously discussed a number of macro trends in healthcare that favor our therapies, such as the aging population that is prone to critical illnesses, the use of blood thinners by millions of people worldwide to reduce the risk of heart attack and stroke, and the epidemic of chronic liver disease that afflicts one in every five people globally. Meanwhile, we have also discussed our numerous growth initiatives, like our standalone pump initiative with the pending launch of our own Purify machine, and the impact that supportive data from STAR-T may have on the blood thinner opportunity worldwide. Our global marketing agreement with Fresenius Medical Care for Cytosorb is the featured solution for cytokine bilirubin and myoglobin removal on its critical care platforms worldwide. Our new EU trademark for expanding the dimension of blood purification that highlights the up to 40 to 50 percent of patients in the ICU where our therapies could be beneficial and the relatively new applications with exciting recently published clinical data.
And the relatively new applications with exciting recently published clinical data.
Because of that we believe that Cytosorb, which is designed to address the $20 billion $30 billion worldwide total addressable market of major unmet medical needs in critical care cardiac surgery, as well as liver and kidney disease.
It gives us a.
Massive potential growth engine going forward. 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.
But soon.
To start TV successful drug their ATR achieved U S FDA and health, Canada regulatory approval, we intend to commercialized drugs or HR in both United States and Canada, a potential second engine of growth working in tandem with Cytosorb to drive sales and ultimately profitability at this stage, we believe our company.
<unk> represents an exceptional value proposition.
So with that operator that ends our formal comments. Please open up the lines for questions.
Phillip P. Chan: Because of that, we believe that Cytosorb, which is designed to address the $20 billion to $30 billion worldwide total addressable market of major unmet medical needs and critical care cardiac surgery, as well as liver and kidney disease, gives us a massive potential growth engine going forward. We believe this gives Cytosorbents the potential upside of a biotechnology company with the lower risk profile of a high-margin medical device company with sales. But soon... Could Starkey be successful and DrugSorb ATR achieve U.S. FDA and Health Canada regulatory approval? We intend to commercialize DrugSorb ATR in both the United States and Canada, a potential second engine of growth, working in tandem with Cytosorb to drive sales and ultimately profitability. At this stage, we believe our company represents an exceptional value proposition. With that, operator, that ends our formal comments.
Thank you.
As a reminder, if you do have 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.
Our first question comes from the line of <unk> <unk> with B Riley Financial Inc. Your line is open.
Thank you for taking our questions and congrats on the Etfs, great comps presentation I'll plan to transform longer extend the timeline.
The release there was a conference will begin in late April do you anticipate some abstract released before that thank you.
Sure. Thanks, Sean Mike do you want to take that.
Sure. Thank you for the question.
The data as part of the breakout session of clinical trials of the conference and the acceptance goes together with the agreement of an embargo released any of that information ahead of the conference.
So the data will be released live during the Ats conference in Toronto.
No not ahead of them.
Got it.
Operator: Please open up the lines for questions. Thank you. As a reminder, if you do have a question, please press star 1 on your touchtone phone. Please make sure your mute button is turned off to allow your signal to reach our equipment.
The FDA was that many patients now with this.
Star Key final results do you intend to submit <unk> application or the pre market authorization just want to check if theres a change all the standards.
Operator: Our first question comes from the line of Yuan Zhi with B. Reilly Financial Inc. Your line is open. Thank you for taking our questions and congrats on the AETS breakout presentation opportunity. Just want to understand the timeline for this data release. So the conference will be in late April. Do you anticipate any abstract release before that? Sure, thanks Yuan. Micah, do you want to take that?
Hi.
Currently we have not disclosed what the regulatory strategy will be but suffice it to say that we are currently working on that but at the appropriate time.
Closer to submission will make that publicly.
Yes.
Got it and then maybe one last question from me just welcome here about the impact of this sales channel trends I'm curious how long will this.
Efthymios N. Deliargyris: Sure, thank you for the question. The data is part of the breakout session on clinical trials at the conference, and the acceptance goes together with the agreement of an embargo on the release of that information ahead of the conference. So the data will be released live during the AATS conference in California, not ahead.
Impact and see.
See our recovery from this channel changed in first half or second half of this year.
Okay.
When youre talking about the channel change or are you talking about the relative distribution of sales from our three.
Phillip P. Chan: And then Phil, on the FDA device application, now that we have this Star T file result, do you intend to submit the 501k application or the pre-market authorization? Just want to check if there's a change of plan. Currently, we have not disclosed what the regulatory strategy will be, but suffice it to say that we are currently working on that. But at the appropriate time, closer to submission, we'll make that public. Got it.
Divisions.
Yes.
Yes.
<unk>.
As it turns out that the peak percentage contribution to product sales has remained relatively constant.
What we have seen is that distributor sales have been growing in importance as that channel has gotten stronger.
Phillip P. Chan: And maybe one last question from me. I just want to hear about the impact of this sales channel change. I'm curious how long this impact and the risk or recovery from this channel change will take in the first half or second half. When you're talking about the channel change, are you talking about the relative distribution of cells from our three divisions? Yeah. But, surprising, as it turns out, the percentage contribution to product sales has remained relatively constant.
Those markets are being developed worldwide.
So historically.
Germany sales had been 50% of our sales base is currently as of last year, 42%.
And.
Distributor sales, which had been historically, 30%.
Are now 40% and so.
Hi.
We.
Believes that if everything goes to plan that those percentages should remain roughly the same but it is predicated on.
Phillip P. Chan: What we have seen is that distributor sales have been growing in importance as that channel has gotten stronger and as those markets are being developed worldwide. So historically, German sales have been 50% of our sales base. It's currently, as of last year, 42%, and distributor sales, which have been historically 30%, are now 40%.
Germany.
Sure.
Obviously recovering faster than we've seen it historically, but the good part is that.
We we do see a change in the German market.
Compared to a year ago.
And maybe Christian you would like to comment maybe on Germany, and what Youre seeing there.
Christian Steiner: And so we believe that if everything goes to plan, that those percentages should remain roughly the same, but it is predicated on Germany obviously recovering faster than we've seen it historically. But the good part is that, you know, we do see a change in the German market compared to a year ago. And maybe Christian, you'd like to comment on Germany and what you're seeing.
Yes. Thank you Phil Thank you for the question.
Yes.
So just to add some text to what Phil said.
Yes, we see obviously a.
Stabilization of the business.
More mature markets. So the more mature markets, specifically say that central European markets like.
Germany, Austria, Switzerland.
But on the other hand, we see a much.
Christian Steiner: Yeah, thank you, Phil, and thank you, Yuan, for the question. So just to add some text to what Phil said, yes, obviously, we see the stabilization of the business in the more mature markets. So the more mature markets, I specifically say the central European markets like Germany, Austria, and Switzerland. But on the other hand, we see a much more pronounced path toward growth in the other direct markets and our distributor markets. And this is what it looks like.
Much more pronounced.
Cost towards growth.
The other direct markets and our distributor markets.
And this is.
This is very much.
Dependent on the stage of development.
Very much as expected.
Please.
Direct markets outside Germany, Austria, Switzerland.
The distributor markets.
Coming towards similar girls face as you have seen in Germany.
Two three years ago.
This is one point.
Christian Steiner: This is very much dependent on the stage of development, and I very much expect that these direct markets outside Germany, also Switzerland, and the distributor market will enter a similar growth phase as we saw in Germany two, three years ago. So that is one point, and the other point is, coming back to Germany, that, as I said, we have seen the stabilization of the markets, but there are still a lot of... post-pandemic but also structural problems in the healthcare system. We are at the moment on a path to overcome this, and on top of that, we have initiated or scheduled a number of initiatives over the year, of which two campaigns have started already, and we see progress in these two campaigns. And so I think that on top of the stabilization I've talked about, we will see additional development. At this time, please. Thank you all. I got it. Thanks for the additional color.
The other point is coming back to Germany.
As I said, we have CD.
The stabilization of the markets, but still there's a lot of.
Post pandemic, but also structural problems in the health care system.
At the moment.
Possible become list and on top.
<unk> initiated or scheduled a number of initiatives over the year.
Two campaigns have started already and we see already.
Progress in these.
And these two campaigns and so I think.
That.
A couple of the standardization on talked about we will see.
<unk> development.
Okay.
So that's going for you.
That's my answer.
Sure. Thanks Krishna.
Got it thanks for that additional color.
All farmland. Thank you.
Our next question comes from the line of MS <unk> with Zacks investment research.
Operator: That will be all from my end. Our next question comes from the line of Thomas Kerr with Zacks Investment Research. Your line is open. Hello, everyone.
Line is open.
Hello, everyone.
Operator: Some of my questions were just unanswered, but can you give us more color on the India arrangement in terms of timeline and that such a thing? And secondly, related to that, the slide said you're approved in the EU, obviously, and it's sold around the world. But is Phytosorb approved in other regions, Asia, South America, et cetera? Yeah, thank you. Kathy or Chris, would you like to comment
So one of my questions were just answered, but can you give us more color on the India arrangement in terms of timeline and that such a thing.
Secondly related to that.
Slide said.
You approved in the EU, obviously, and it's sold around the world, but cytosorb.
Cytosorb approved in other regions in Asia, and South America et cetera.
Yes.
Hi, yes. Thank you.
Cathy your Chris would you like to comment on.
Christopher Cramer: the Arish Agreement. You know, I can only say that, based on my conversations with the operations people in India, that the transition has gone very smoothly from Biocon to ERIS. They've done a lot of retraining of the actual employees of Biocon who are knowledgeable about cytosorbs. They transferred over to ERIS, and they've been retrained. And they are out and off to a successful beginning of the distribution partnership. Yeah, I think Biocon was an outstanding partner, and Eris is a billion-dollar U.S. market cap publicly traded company, not as large as Biokind, but a kind of a specialty pharma company that has been very aggressive in the market and has been able to really take assets and grow them. Very impressive.
The <unk> agreement.
Yeah.
Alright, Ken.
I can only say that based on my conversations with the operations people.
In India that the transition has gone very smoothly from Viacom to arris, they've done a lot of freight.
Retraining.
The actual employees of Biocrime, who are knowledgeable of cytosorb have transferred over to Rs they've been retrained.
And they are out and off to a successful <unk>.
Beginning of the of the.
Distribution partnership.
Yeah.
Yes, I think <unk> was an outstanding partner and but Arris is a.
$1 billion U S market cap publicly traded company not as large as <unk>.
But.
Kind of a specialty pharma company that has is very.
Has been very aggressive in the market and has been able to.
Really take assets and grow them.
Very impressively.
Phillip P. Chan: We have a temporary agreement that has the same terms as the distribution agreement that we have with Biocon with the exception of the expiration of the date of the agreement, which has been updated from September 2026 to now December 2020, to September 2026 from what was formerly December 2025 to basically give ERIS some additional time in the market to get their feet wet with cytosorbents and to see what it can do. We expect to enter into a good-faith agreement to negotiate a new agreement with Iran, and that will hopefully happen sometime in the near future. And the second part of the question was, where else is Cytosorb sold right now? I was confused by one of the slides in the presentation.
We have a temporary agreement that has the same terms as the distribution agreement that we have with <unk>.
With the exception of the exploration of the date of the agreement, which has been updated from September 2026 to December 2020.
To September 2026 from what was formerly at December 2025.
To basically give arris some additional time in the market.
To get their feet wet with cytosorb and to see what it can do.
We expect to enter in good faith agreements.
Can you go shape.
Okay agreement with Arris.
And that will happen hopefully sometime in the near future.
Okay.
Second part of the question was also clinical Sorb sold right now that's confused by one of the slides in the presentation.
Phillip P. Chan: Yeah, Cytosorb is sold all over the world, with the notable exception of the United States, Japan, and China. But, for example, we are in most of the, I think, if not all of the European Union countries. We're in many countries in Southeast Asia, for example, Singapore, Thailand, Vietnam, Hong Kong, South Korea, et cetera. We're in Russia, too. We're in many countries in the Middle East. We are in Australia, New Zealand, we are in India, and we are in many countries in Latin America.
Yes, so cytosorb is sold in fact.
All over the world with the notable exception of the United States, Japan and China.
But for example, we are in most of the I think if not all of the European Union countries.
We're in many countries in southeast Asia for example.
Poor, Thailand, Vietnam, Hong Kong South Korea.
Et cetera, we're in Russia, we're in many countries in the middle East.
We are in Australia, and New Zealand, we are in India.
And we are in many countries.
In Latin America.
Phillip P. Chan: So, in fact, and we also have a footprint in South Africa as well, so, you know, not that much in Africa, with the notable exception of the U.S., Canada, Japan, and China, but otherwise, we have a fairly broad footprint around the world where we leverage our EU approval to be able to sell in these countries. Got it. Okay. Yeah, I wasn't quite sure about that.
In fact.
And we also have a footprint in South Africa as well.
Not that much in Africa.
Notable exceptions of the U S, Canada, Japan, and China, but otherwise we have a fairly broad footprint around the world, where we leverage our EU approval.
To be able to sell in these countries.
Got it okay great.
Quite sure about that.
Kathleen P. Bloch: And on the quarterly burn rate for 2024, it used to be sort of in the $4 million to $4.5 million range. With all the cost savings initiatives, will it fall below that, do you think, in 2024, on a quarterly basis? Kathy, do you want to take this? Yeah, so, you won't see the full impact of the cost-cutting measures in the first quarter of the year because there are sometimes some severance or other costs associated with the implementation, but you can expect our cash burn to be reduced to something around the order of $3 million a quarter in the last two quarters of the year. OK, and Matt.
Quarterly burn rate for 2024 used to be sort of in the 4 million to $4 $5 million range.
With all the cost savings initiatives fall below that you think in 2024 on a quarterly basis.
Kathy do you want to take up.
Yes.
No.
Yes, you won't see the full impact of the cost cutting measures in the first quarter of the year because there are sometimes.
Severance or other costs associated with the implementation but.
We expect our cash burn could be reduced to something around the order of $3 million a quarter in the last two quarters of the year.
Okay.
And then just a little.
Phillip P. Chan: I was just a little surprised because you still have to support the drug ATR development and that sort of stuff. Those are the costs, I was assuming. We actually still have clinical trial costs. In terms of winding down STAR-D, winding down STAR-T, and we also have clinical programs ongoing, such as the COSMOS Registry, our STAR Registry, and our process, randomized controlled trial that is running in Germany. So there is still significant clinical spend that we are undertaking in 2024, but that being said, the burn will be dramatically lower than it was last year. And our goal is, obviously, as Kathy mentioned in her presentation, cash conservation is key. I think we detailed many cost-cutting efforts, not just a 15% workforce reduction but cutting non-essential programs, particularly on the R&D side, as well as things even like a third year of salary freezes for executives, for example. And so there are a lot of things across the board that we've been doing in this challenging financing environment. But we hope that with additional operational progress this year, the value in our company begins to be unlocked, and it allows us to capitalize on that.
And then you start to support the drug ATR develop none of that sort of stuff slips.
Does it cover as I'm assuming.
We actually still have.
Clinical trial costs.
Terms of winding down start winding.
Blending down start key.
And we also have clinical programs ongoing such as the Cosmos registry, our star registry and our process.
Randomized controlled trial that is running in Germany. So.
There is.
Still significant clinical spend.
That we.
Are undertaking in 2024, but that being said the burn will be dramatically lower than it was last year.
And our goal is to obviously as Kathy mentioned in her presentation cash cash conservation is key.
Alright.
I think we detailed many cost cutting efforts not just <unk>.
15% workforce reduction.
But.
Cutting non essential.
Programs, particularly on the R&D side.
As well as.
Things, even like a third year of salary freezes for.
Executives for example, so there is there is a lot of things across the board that we've been doing.
In this challenging financing environment, but we hope that.
With additional operational progress this year that.
The value.
Our company begins to be unlocked.
And in.
Kathleen P. Bloch: That makes sense. And last question, do you have a current share count? Because I don't see the 10K filing unit on the SEC website or your website. I think you have that number. Yeah. Yes, so our common shares outstanding right now are $54.2 million. And then, in addition, we have options, warrants, and RSUs, which bring our fully diluted common shares outstanding to $67.9 million.
And allows us to capitalize upon that.
Got it.
That makes sense and last question.
Do you have a current share count because I don't see the 10-K filing you told me SEC website or your website.
Yes.
Okay.
Do you have that number yes.
Yes, so our common shares outstanding right now are $54 2 million.
And then in addition, we have options warrants and RF skus with Springer fully diluted common shares outstanding to 67 9 million and I can send you that breakdown if it would help you Tom.
Kathleen P. Bloch: And I can send you that breakdown if it would help you, Tom. There are no further questions at this time. I would like to turn the call back to management for any additional or closing remarks. Well, thank you everyone for joining the call today. If you do have any other questions, please feel free to reach out to Kathy Bloch at kbloch, K-B-L-O-C-H, at cytosorbents.com, and we will reply to your questions where possible.
Yes.
Yes.
There are no further questions at this time I would like to turn the call back to management for any additional or closing remarks.
Well. Thank you everyone for joining the call today. If you do have any other questions. Please feel free to reach out to Kathy Bloch at.
K block K L O CHS cytosorb in Dot Com and we will reply to your questions where possible. We will look forward to the next quarterly call. Thank you everyone very much have a good night.
Phillip P. Chan: We look forward to the next quarterly call. Thank you everyone very much. Have a good night. Thank you. That concludes our conference for today. I'd like to thank everyone for their participation. You may now disconnect.
Thank you that concludes our conference for today I'd like to thank everyone for their participation you may now disconnect.
Please wait the conference will begin shortly.
[music].
Okay.
Okay.
Okay.
Okay.