Q1 2025 Cytosorbents Corp Earnings Call

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Operator: Good afternoon, ladies and gentlemen, and welcome to the Cytosorbents First Quarter 2025 Earnings Conference Call. At this time, all lines are in listen-only mode.

Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the site Assortments first quarter 'twenty 25 earnings conference call.

At this time all lines are in listen only mode.

Operator: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

Speaker Change: Following the presentation, we will conduct a question and answer session. If at any time. During this call you require immediate assistance. Please press star zero for the operator.

Operator: This call is being recorded on Thursday, May 8th, Spring 5.

Dan Alexander: This call is being recorded on Thursday may Eastern spring five I would now like to turn the conference over to Mr. Dan Alexander. Please go ahead.

Dan Alexander: I would now like to turn the conference over to Mr. Dan Alexander. Please go ahead. Thank you, Constantine, and good afternoon, everyone.

Speaker Change: Thank you called some data and good afternoon, everyone. Welcome to Cytosorb, It's first quarter 'twenty 25 financial results and recent business highlights conference call joining.

Dan Alexander: Welcome to Cytosorbents' first quarter 2025 financial results and recent business highlights conference call.

Dan Alexander: Joining me today from the company for prepared remarks are Dr. Phillip Chan, Chief Executive Officer, Dr. Makis Deliargyris, Chief Medical Officer, and Pete Mariani, Chief Financial Officer. Before I turn the call 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 risk and uncertainty. Management may make additional forward-looking statements in response to your questions today.

Philip Chan: Joining me today from the company for prepared remarks are stuck with Philip Chan Chief Executive Officer, Dr. Michael <unk>, Chief Medical Officer, and Pete Mariani, Chief Financial Officer.

Speaker Change: Before I turn the call 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.

Speaker Change: 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.

Dan Alexander: Therefore, the company claims protection under the Safer Harbor for Forward-Looking Statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ. from results discussed today.

Speaker Change: Actual results may differ.

Speaker Change: From the results discussed today.

Dan Alexander: The following statements we make reflect our views and estimates as of today, May 14th, 2025, and we assume no obligation to update these projections in the future as market conditions change.

Speaker Change: Forward looking statements, we make reflect our views and estimates as of today May 14, 2025 of them, yes, no obligation to update these projections in the future.

Speaker Change: In the future as market conditions change.

Dan Alexander: During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter 2025.

Speaker Change: During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter 2025. Following the presentation. We will open the lines to analysts for their questions and now it is my pleasure to turn the call over to Dr. Phillip Chan Phil.

Dan Alexander: Following the presentation, we will open the line to analysts for their questions.

Phillip Chan: And now, it is my pleasure to turn the call over to Dr. Phillip Chan. Thank you very much, Adanna. Good afternoon and welcome everyone to our first quarter 2025 earnings.

Phillip Chan: Thank you very much Donna good afternoon, and welcome everyone to our first quarter 2025 earnings call.

Phillip Chan: As a quick summary for those who are new to the company, Cytosorbents is a leader in the treatment of life-threatening conditions in the intensive care unit in cardiac surgery through blood purification and the removal of harmful substances from blood with our proprietary Sorbent bead technology. Cartridges filled with these beads are high-margin, single-use disposables that are plug-and-play compatible with existing blood pump machines in the hospital, such as Dialysis, ECMO, and heart-lung machines. Our technologies are used in a broad number of blood purification applications, specifically Cytosorb, our flagship product, which is approved in the European Union, is used primarily to treat life-threatening conditions in the ICU and cardiac surgery, such as sepsis, acute respiratory distress syndrome, liver failure, blood thinner removal, and infective endocarditis.

Phillip Chan: That's a quick summary for those who are new to the company Cytosorb as a leader in the treatment of life threatening conditions in the intensive care unit in cardiac surgery through blood purification and the removal of harmful substances from blood with our proprietary Assortments B technology cartridges filled with these beads are high margin single use disposables that are plugged in.

Phillip Chan: Play compatible with existing blood pump machines in a hospital such as dialysis chemo in heart lung machines.

Phillip Chan: Our technologies are used in a broad number of blood purification applications, specifically cytosorb, our flagship product, which is approved in the European Union is primarily to treat life threatening conditions in the ICU and cardiac surgery, such as sepsis acute respiratory distress syndrome, liver failure blood thinner removal and infective endocarditis.

Phillip Chan: Yes.

Phillip Chan: Cytosorb is the anchor of our core international business, with over 270,000 devices utilized to date in more than 70 countries worldwide, and drove $35.6 million in core product sales in 2024.

Phillip Chan: So I'm just sort of is the anchor of our core international business with over 270000 devices utilize to date and more than 70 countries worldwide and drove $35 6 million in core product sales in 2024.

Phillip Chan: Our second product, Drugsorb ATR, is an investigational FDA breakthrough designated medical device intended to reduce the severity of perioperative bleeding in patients undergoing cardiac surgery due to blood thinning drugs. We are focused initially on the blood thinner Berlinta in patients undergoing coronary artery bypass grafting or CABG surgery. And in September and November of 2024, we submitted marketing applications to both FDA and Health Canada respectively.

Phillip Chan: Our second product drugstore of ATR is an investigational FDA breakthrough designated medical device intended to reduce the severity of perioperative bleeding in patients undergoing cardiac surgery due to blood thinning drugs.

Phillip Chan: We're focused initially on the blood thinner brilinta in patients undergoing coronary artery bypass grafting or cabbage surgery and in September and November of 2024, we submitted marketing applications to both FDA and health, Canada, respectively. Mike is we'll have some updates on the status of these applications later.

Makis Deliargyris: Makis will have some updates on the status of these applications later.

Phillip Chan: Given that we just had a broader update on the company in our end-of-year earnings call a month and a half ago, today's agenda will just focus on the three main areas where we are concentrating our efforts.

Phillip Chan: Given that we just had a broader update on the company and our end of year earnings call a month and a half ago. Today's agenda I will just focus on three main areas, where we are concentrating our efforts.

Phillip Chan: I will discuss our core Cytosorb business and highlight key catalysts for growth. Makis and I will then cover the regulatory status and activity of Drugzorb ATR in the U.S. and Canada to outline our plans going forward.

Phillip Chan: We'll discuss our core cytosorb business and highlight key catalysts for growth.

Phillip Chan: Like I said I will then cover the regulatory status and activity of drugs Arb ETR in the U S and Canada to outline our plans going forward and then Pete will go over our progress in our goal to have our core business near breakeven by the end of this year with sufficient cash to fund our company initiatives.

Phillip Chan: And then Pete will go over our progress in our goal to have our core business near break-even by the end of this year with sufficient cash to fund our company initiative.

Phillip Chan: So let's turn to Cytosorb. In the first quarter of 2025, we reported product sales of $8.7 million, representing a 3% year-over-year decline. However, when adjusted for constant currency, sales were approximately the same compared to the same period last year. International distribution and other direct sales markets delivered strong performances, helping to offset temporary disruptions in our German direct sales segment. These disruptions were anticipated as they stem from the strategic reorganization and realignment of our German sales team and the go-to-market approach, initiatives we believe are essential for positioning this critical market for renewed growth. Our goal is to return Germany to growth in the second half of 2025, following two years of flat annual performance.

Phillip Chan: So let's turn to Cytosorb.

Phillip Chan: In the first quarter of 2025, we reported product sales of $8 7 million, representing a 3% year over year decline. However, when adjusted for constant currency sales were approximately the same compared to the same period last year.

Phillip Chan: International distribution and other direct sales markets delivered strong performances, helping to offset temporary disruptions in our German direct sales segment.

Phillip Chan: These disruptions were anticipated as they stem from the strategic reorganization and realignment of our German sales team and the go to market approach initiatives. We believe are central for positioning this critical market for renewed growth.

Phillip Chan: Our goal is to return Germany to growth in the second half of 2025. Following two years of flat annual performance, we're confident that the changes underway will yield long term benefits.

Phillip Chan: We are confident that the changes underway will yield long-term benefits. Meanwhile, gross margin performance remains solid, holding steady at 71 percent, blending higher-margin direct sales with lower-margin distributor sales, which is consistent with the 2024 average, reflecting ongoing discipline in our end-user pricing and manufacturing cost controls. We expect gross margin expansion this year with smoother manufacturing operations and increased production volume.

Phillip Chan: Meanwhile, the gross margin performance remained solid holding steady at 71% blending higher margin direct sales with lower margin distributor sales, which is consistent with the 'twenty 'twenty four average reflecting ongoing discipline in our end user pricing and manufacturing cost controls, we expect gross margin expansion this year with smoother.

Phillip Chan: <unk> operations and increased production volume.

Phillip Chan: Importantly, as Pete will discuss later, we continue to make meaningful operational progress across the organization, moving steadily towards our goal of reaching near break-even by the second half of 2025.

Importantly, as Pete will discuss later, we continue to make meaningful operational progress across the organization moving steadily towards our goal of reaching near breakeven by the second half of 2025.

Phillip Chan: Cytosorb is a powerful blood purification technology designed to remove a wide range of harmful substances that can severely damage the body. It is particularly effective in treating critically ill patients by targeting the overwhelming inflammatory response, often referred to as a cytokine storm, that drives many life-threatening conditions. This uncontrolled inflammation is a major cause of patient instability, organ failure, and death, and is estimated to affect 40% to 60% of ICU patients suffering from conditions that we talked about before, such as septic shock, severe infections, including COVID-19, flu, pneumonia, and post-surgical infections, ARDS, trauma, burns, pancreatitis, and many others.

Speaker Change: So it does serve as a powerful blood purification technology designed to remove a wide range of harmful substances that can severely damaged the body. It is particularly effective in treating critically ill patients by targeting the overwhelming inflammatory response, often referred to as a cytokine storm that drives men.

Phillip Chan: Any life threatening conditions.

Phillip Chan: This uncontrolled inflammation is a major cause of patient instability organ failure and death and is estimated to affect 40% to 60% of ICU patients suffering from conditions that we talked about before such a septic shock severe infections, including COVID-19 flu pneumonia in post surgical infections.

Phillip Chan: A R D S trauma Burns pancreatitis and many others.

Phillip Chan: Caring for critically ill patients is complex, with many variables influencing outcomes. However, one thing is certain. If severe inflammation is not addressed quickly and aggressively, it can spread like wildfire throughout the body, becoming nearly impossible to control. That is why Cytosorb is focused on early targeted intervention, what we call treating the right patient at the right time with the right dose. By intervening early in patients with signs of severe inflammation, Cytosorb helps break the vicious cycle of runaway immune activation, stabilizes patients in shock, supports organ function, and removes other harmful substances from the blood. This proactive approach offers a powerful tool in the fight against some of the most challenging and deadly conditions in the intensive care unit.

Phillip Chan: Carrying for critically ill patients is complex with many variables influencing outcomes. However, one thing is certain if severe inflammation is not addressed quickly and aggressively it can spread like wildfire throughout the body, becoming nearly impossible to control.

Phillip Chan: That is why Cytosorb is focused on early targeted intervention, what we called treating the right patient at the right time with the right dose.

Phillip Chan: Intervening early in patients with signs of severe inflammation cytosorb helps break the vicious cycle of runaway immune activation stabilizes patients in shock supports organ function and removes other harmful substances from blood.

This proactive approach offers a powerful tool in the fight against some of the most challenging and deadly conditions in the intensive care unit.

Phillip Chan: Okay.

Phillip Chan: In fact, the use of Cytosorb in treating critical illness closely parallels treatment guidelines for antibiotics. For the best clinical outcomes, Cytosorb must be used early, aggressively, and consistently, just like antibiotics. Even if a patient shows signs of improvement, it's crucial to continue therapy until the full course is complete. The objective is not just to control inflammation, but to reduce it to a safe level, much like extinguishing a wildfire which can take days to fully subside.

Phillip Chan: In fact, the use of Cytosorb in treating critical illness closely parallels treatment guidelines for antibiotics.

Phillip Chan: For the best clinical outcomes Cytosorb must be used early aggressively and consistently just like antibiotics.

Phillip Chan: Even if a patient shows signs of improvement it's crucial to continue therapy until the full course is complete the.

Phillip Chan: The objective is not just to control inflammation, but to reduce it to a safe level much like extinguishing, a wildfire, which can take days to fully subside.

Phillip Chan: We believe strongly this new simplified messaging will help drive broader adoption of Cytosorb by driving more effective patient treatment. This is expected to strengthen physician confidence, generate more positive word of mouth in clinical publications, and ultimately, support the development of standard treatment guidelines and broad global.

Phillip Chan: We believe strongly this new simplified messaging will help drive broader adoption of cytosorb by driving more effective patient treatment.

Phillip Chan: This is expected to strengthen physician confidence generate more positive word of mouth and clinical publications and ultimately support the development of standard treatment guidelines and broad global uptake.

Phillip Chan: Okay.

Phillip Chan: There are clearly many catalysts for future growth, but some of the ones that we are focused on now are, one, publicizing compelling new data in core applications. New clinical and real-world data strengthens our value proposition, drives adoption, and supports guideline inclusion, positioning us for accelerated growth in key markets. In particular, in the near future, we will be discussing a number of powerful studies highlighting the successful use of Cytosorb in one of our largest markets, the treatment of septic shock.

Phillip Chan: There are clearly many catalysts for future growth, but some of the ones that we are focused on now are one publicising compelling new data and core applications.

Phillip Chan: New clinical and real world data strengthens our value proposition drives adoption and supports guideline inclusion positioning us for accelerated growth in key markets in particular in the near future. We will be discussing a number of powerful studies highlighting the successful use of cytosorb in one of our largest markets the treatment of septic shock.

Phillip Chan: Second is simplified impactful customer messaging. As stated just before, easy to remember, impactful guidance to users can yield many benefits, including better patient outcomes, greater physician confidence, and broader adoption.

Phillip Chan: Second is simplified impactful customer messaging as stated just before easy to remember impactful guidance to users can yield many benefits, including better patient outcomes greater physician confidence and broader adoption.

Phillip Chan: Third is returning German sales to growth. Germany is the largest medical device market in the European Union with high strategic importance and accounts for approximately 40% of our sales. At flat growth over the past several years, this has held back our growth overall, despite strong gains in other parts of our business. Although there are a number of macro factors that have impacted this market since the pandemic, we believe our efforts to better optimize our German sales team, our sales strategy, and our medical messaging is under our direct control and can reinvigorate sales in the country to contribute to our growth overall.

Phillip Chan: Third is returning German sales to growth, Germany is the largest medical device market in the European Union with high strategic importance and accounts for approximately 40% of our sales.

Phillip Chan: At flat growth over the past several years. This has held back our growth overall, despite strong gains in other parts of our business.

Phillip Chan: So there are a number of macro factors that have impacted this market since the pandemic, we believe our efforts to better optimize our German sales team our sales strategy and our medical messaging is under our direct control and can reinvigorate sales in the country to contribute to our overall.

Phillip Chan: And lastly, expansion via our Dubai subsidiary. Dubai is a vibrant epicenter of health care business in the Middle East. Establishing this hub is expected to accelerate access to high growth markets in the Middle East and Africa, enabling faster market entry, stronger partnerships, and regional revenue diversification.

Phillip Chan: And then lastly expansion via our Dubai subsidiary.

Phillip Chan: Bi is a vibrant epicenter of health care business in the Middle East establishing this hub is expected to accelerate access to high growth markets in the middle Eastern Africa, enabling faster market entry stronger partnerships and regional revenue diversification.

Phillip Chan: With that, I would like to transition now to discuss DrugServe ATR. Acute heart attack patients are routinely treated with blood thinners like Berlinta, also known as Ticagrelor, to improve clinical outcomes. However, while these medications save lives, they also present a significant challenge when patients require urgent CABG surgery. Berlinta can lead to serious and potentially life-threatening bleeding complications during and after surgery. The only current solution is a drug washout period of three to five days to reduce bleeding risk. Unfortunately, time is a luxury many of these patients do not have. Rushing to surgery can lead to major bleeding if performed too soon, while delayed surgery can result in devastating complications, such as sudden death if the procedure is postponed while the patient is still experiencing a heart attack.

Phillip Chan: With that I would like to transition now to discuss drugs are of ATR.

Phillip Chan: Acute heart attack patients are routinely treated with blood thinners like Brilinta also known as <unk> to improve clinical outcomes. However, while these medications save lives. He also presented a significant challenge where patients require urgent cabot's surgery.

Phillip Chan: Melissa can lead to serious and potentially life threatening bleeding complications during and after surgery.

Phillip Chan: The only current solution is a drug washout period of three to five days to reduce bleeding risk. Unfortunately time is a luxury many of these patients do not have rushing to surgery can lead to major bleeding or perform too soon while delayed surgery can result in devastating complications such as sudden death, if the procedures postponed while the patient is still experiencing a heart.

Phillip Chan: [noise] attack. These delays are also costly and strained hospital resources.

Phillip Chan: These delays are also costly and strain hospital resources.

Phillip Chan: To address this critical and widespread clinical problem, we have developed DrugSorb ATR, an FDA breakthrough designated device. DrugSorb ATR is specifically designed to remove blood thinners like Berlinta from the bloodstream, enabling safer, timelier surgeries. This innovation targets a serious unmet medical need, affecting tens of thousands of patients each year in the United States and Canada, representing an initial market opportunity of over 300 million, one we estimate could grow to more than a billion if approved and used in different indications.

Phillip Chan: To address this critical and widespread clinical problem, we have developed drugstore of HR and FDA breakthrough designated device.

Phillip Chan: Drug serve ATR, specifically designed to remove blood centers like brilinta from the bloodstream, enabling safer tightened their surgeries. This innovation targets, a serious unmet medical need affecting tens of thousands of patients each year in the United States and Canada, representing an initial market opportunity of over 300 million one we.

Phillip Chan: To me it could grow to more than 1 billion, if approved and used in different indications.

Makis Deliargyris: To give you an update on the regulatory status of drug sorbent in the United States and Canada, I've asked our Chief Medical Officer, Dr. Makis Deliargyris, to provide additional clarity on the strength and status of our application and path moving forward. Makis. Thank you, Phil, and good afternoon to everyone on the call. As most of you know, in the second half of last year, we submitted the NOVA application to FDA and a medical device license application to Health Canada supported by the STAR-T randomized clinical trial data and real-world evidence from the STAR Registry. The FDA review process has been interactive with many issues discussed and resolved.

Speaker Change: To give you an update on the regulatory status of drugs orbit in the United States and Canada, I've asked our Chief Medical Officer, Dr. Mike Mike is stellar Gareth to provide additional clarity on the strength and status of our application and path moving forward I guess.

Speaker Change: Thank you Phil and good afternoon to everyone on the call.

Speaker Change: As most of you know in the second half of last year, we submitted a de novo application to FDA and medical device license application to health, Canada supported by the Star T randomized clinical trial data and real world evidence from the Star Registry.

Speaker Change: The FDA review process has been interactive with many issue discussed and resolved.

Makis Deliargyris: However, on April 25, 2025, the FDA issued a denial letter citing remaining open issues. Following the issuance of the letter, we met with the FDA and had the opportunity to discuss these remaining issues and gain better clarity. We continue to believe that our submission package and data are strong and that the remaining issues can be resolved.

Speaker Change: However on April 25, 2025, the FDA issued a denial that denial letter, citing remaining open issues.

Speaker Change: Following the issuance of the letter.

Speaker Change: We met with the FDA and had the opportunity to discuss this remaining issues and gain better clarity.

Speaker Change: We continue to believe that our submission package and data are strong and that the remaining issues can be resolved.

Makis Deliargyris: After consulting with our regulatory counsel, we concluded that the most direct path forward is the filing of a formal appeal, which needs to happen within 60 days of receipt of the FDA letter. Once the appeal is filed, the process is prescribed and includes a formal hearing that will be attended by the company and our regulatory counsel, Duval and Associates, the FDA review team, additional FDA senior officials, and external clinical experts, such as cardiac surgeons, to provide expert testimony. The appeal decision is estimated approximately 60 days after the filing date, and there are three potential outcomes.

Speaker Change: After consulting with our regulatory counsel, we concluded that the most direct path forward is the filing of a formal appeal, which needs to happen within 60 days of received of the FDA letter.

Speaker Change: Okay.

Speaker Change: Once the appeal was filed the processes prescribed and includes a formal hearing that will be attended by the company in a regular regulatory council. The violent associates. The FDA review team additional FDA senior officials in external clinical experts such as cardiac surgeons.

Speaker Change: To provide expert testimony.

Speaker Change: The appeal decision is estimated at approximately 60 days after the filing date and there are three potential outcomes.

Makis Deliargyris: First, the original decision is upheld, and the de novo authorization is denied. Second, the original decision is reversed and the de novo authorization is granted. And finally, a third option, where the original decision is reversed and the de novo authorization is granted but under certain conditions that will need to be satisfied.

Speaker Change: First the original decision was upheld and that didn't know authorization is denied.

Speaker Change: Second the original decision was reversed and the de Novo authorizations granted.

Speaker Change: And finally, a third option, where the original decision was reversed and they didn't know what the realizations granted but under certain conditions that will need to be satisfied.

Makis Deliargyris: Switching now to Canada, our medical device license application remains in advanced review. Health Canada recently indicated that they are experiencing delays and that review times are extending beyond their target timeline. They did reaffirm, however, their commitment to issue a decision to our application as soon as possible. We therefore continue to expect final regulatory decisions both in the U.S. and Canada in 2025.

Speaker Change: Switching now to Canada, our medical device license application remains in advanced review.

Speaker Change: Health, Canada recently indicated that they are experiencing delays in the review times are extending beyond their target timelines.

Speaker Change: They did reaffirm however, the commitment to issue a decision to our application as soon as possible.

Speaker Change: We therefore continue to expect final regulatory decisions both in the U S and Canada in 2025.

Speaker Change: Yes.

Speaker Change: Okay.

Makis Deliargyris: The evidence based on blood thinner removal during cardiac surgery continues to grow. Our International Star Registry now has 28 heart centers actively recruiting in six countries, including Germany, the United Kingdom, Belgium, Austria, Sweden, and Switzerland, and has enrolled over 600 subjects to date. The registry includes many types of surgeries, but we have focused our initial analysis on CABIT. Last year, we presented data at EuroPCR on 102 CABG patients on ticagrelor and showed that device use resulted in fewer severe bleeding events compared with what would be expected according to historical benchmarks. These results were published earlier this year and the paper is available online and with open access so anyone can download it.

Speaker Change: The evidence based on blood center removal during cardiac surgery continues to grow.

Speaker Change: Our International Star Registry now has 28 heart centers actively recruiting in six countries, including Germany, the United Kingdom, Belgium, Austria, Sweden, and Switzerland, and has enrolled over 600 subjects to date.

Speaker Change: The registry includes many types of surgeries, but we have focused our initial analysis on cabbage.

Speaker Change: Last year, we presented data in Europe, you see are on 102 cabbage patients with <unk> and showed the device use resulted in fewer severe bleeding events compared with what would be expected according to historical benchmarks.

Speaker Change: These results were published earlier this year and the papers available online and with open access so anyone can downloaded for free.

Makis Deliargyris: This year, again at EuroPCR, which is taking place in Paris next week, we are presenting another real-world analysis, this time comparing bleeding rates after CABG between patients on ticagrelor operated with a device and patients on ticagrelor operated without the device. Details of the data are embargoed until the time of presentation, but what we can say is that we are very excited that we now have very compelling evidence of the device's effectiveness in reducing tachycardia-related cabbage bleeding in the real world. We also have a new publication this year on the removal of direct oral anticoagulants, or DOACs for short, during CABG.

Speaker Change: This year again at Euro PCR, which is taking place in Paris next week, we are presenting another real world analysis. This time, comparing bleeding rates after cabbage between patients on <unk> operated with a device in patients onto kagler operated without the device.

Speaker Change: Details of the data are embargoed until the time of presentation, but what we can say is that we are very excited that we now have very compelling evidence of the devices effectiveness in reducing that CAGR related cabot's bleeding in the real world.

Speaker Change: We also have a new publication this year or the removal of direct oral anticoagulants or <unk> for short during cabbage that also showed lower than expected bleeding rates.

Makis Deliargyris: That also showed lower than expected bleeding rates. This paper is also available online with open access, so anyone can download it for free. Overall, our real-world results consistently show that the device is effective in reducing severe bleeding complications in patients and blood thinners undergoing CABiT. Importantly, the device is also safe for patients and easy to use by surgical teams. To date, we have zero device-related adverse events and zero device deficiencies reported in the star registry. Results that echo the clean safety we observed in STAR-T to everyday use in the real world. We continue to believe that our technology that enables blood thinner removal during cardiac surgery has a powerful value proposition for patients, surgeons, and hospitals.

Speaker Change: This paper is also available online with open access so anyone can downloaded for free.

Speaker Change: Overall, our real World results consistently show that the device is effective in reducing severe bleeding complications in patients from blood centers undergoing cabbage.

Speaker Change: Importantly, the device is also safe for patients and easy to use by surgical teams.

Speaker Change: To date, we have zero device related adverse events and zero day device deficiencies reporting the star registry.

Speaker Change: Results that echo the clean safety, we observed can start T to everyday use in the real world.

Speaker Change: We continue to believe that our technology that enables blood thinner removal during cardiac surgery has a powerful value proposition for patients surgeons and hospitals and we are very encouraged by the growing adoption of the device as part of standard of care I've heart centers around the world.

Makis Deliargyris: And we are very encouraged by the growing adoption of the device as part of standard care at heart centers around the world.

Phillip Chan: With that, I would like to turn it back to Phil now. Thanks, Makis. As we await regulatory decisions from both the FDA and Health Canada, we're proactively preparing for the potential commercial launch of DrugSorb®-HER in the U.S. and Canada. With the FDA's Breakthrough Device designation, DrugSorb®-HER is uniquely positioned to help address the critical challenge of perioperative bleeding in patients on blood thinners like Berlinta undergoing CABG surgery. upon potential approval. or authorization, our initial focus will be a controlled market introduction at select clinical trial centers. This phased approach will enable us to gather real-world data and valuable insights, confirm key assumptions, and optimize our commercialization strategy ahead of a broader national rollout.

Phil: With that I would like to turn it back to Phil now thanks.

Phil: Thanks, Mike.

Phil: As we await regulatory decisions from both the FDA and health, Canada, we are proactively preparing for the potential commercial launch of drugs are of HR in the U S and Canada with the Fda's breakthrough device designation trucks or of ATR is uniquely positioned to help address the critical challenge a perioperative bleeding in patients on blood Thinners like Brilinta undergone.

Phil: Cabot surgery.

Phil: Upon potential approval.

Phil: Our authorization our initial focus will be a controlled market introduction at select clinical trial centers. This phased approach will enable us to gather real world data and valuable insights confirm key assumptions and optimize our commercialization strategy ahead of a broader national rollout.

Phillip Chan: We remain deeply committed to bringing DrugSorb ATR to the North American market, where it represents a meaningful advance in the care of cabbage patients facing life-threatening bleeding while on Berlinta. Momentum continues to build on the technology with growing awareness of drug sorb ATR's potential and compelling new European data emerging in 2025. As Makis has highlighted, these real-world findings consistently demonstrate reduced bleeding and highlight the device's promise in helping surgeons address a significant and persistent clinical challenge.

Phil: We remain deeply committed to bringing drugs, our ATR to the north American market, where it represents a meaningful advance in the care of cabbage patients facing life threatening bleeding while on Brilinta.

Phil: Momentum continues to build on the technology with growing awareness of drugs or <unk> potential and compelling new European data emerging in 2025 as Mike has highlighted these real world findings consistently demonstrate reduced bleeding and highlight the devices promise in helping surgeons address a significant and persistent.

Phil: Clinical challenge.

Phillip Chan: We are thrilled to welcome Tom Shannon to the Cytosorbents team as Vice President of Marketing for North America. A big move as the company gears up for the potential launch of drug-absorbed ATR in the United States and Canada, pending market authorization. Tom is a global strategic marketing executive with over 25 years of experience bringing cutting-edge cardiovascular and critical care technologies to market and knows how to build momentum around major product launches. Thomas held leadership roles at multinational corporations like Medtronic, Fresenius, and Gettinga, as well as Genesee Biomedical, where he helped launch dozens of products and drove consistent growth.

Speaker Change: We are thrilled to welcome Tom Shannon to the Cytosorb <unk> team as Vice President of marketing for North America, a big move as the company gears up for the potential launch of drugs or <unk> in the United States and Canada pending market authorization.

Phil: Tom is a global strategic marketing executive with over 25 years of experience, bringing cutting edge cardiovascular and critical care technologies to market and knows how to build momentum around major product launches.

Phil: Tom has held leadership roles at multinational corporations, like Medtronic, Fresenius and getting that as well as Genesee biomedical where he helped.

Phil: Dozens of products and drove consistent growth for example, he helped launch the market, leading cardio health Ecmo.

Phillip Chan: For example, he helped launch the market-leading cardio health ECMO platform used around the world at Gettinga in patients with refractory lung failure, that was also used routinely with Cytosorb during the pandemic to salvage patients who otherwise would have died of COVID-19. Tom also brings hands-on clinical experience, having worked for over a decade as a cardiovascular perfusion. Tom will be leading the marketing strategy for DrugServe ATR, which is designed to help reduce serious bleeding risks in heart surgery patients taking Berlinta. In the very short time he has been with the company, we have already been impressed with his deep expertise and operational efficiency that we believe makes him the right person to help Cytosorbents successfully enter the North American market with this important new therapy when the time comes.

Phil: Platform used around the world at getting Guy in patients with refractory lung failure that was also used routinely with cytosorb during the pandemic the salvage patients who otherwise would have died of COVID-19, Tom.

Speaker Change: Tom also brings hands on clinical experience, having worked for over a decade as a cardiovascular perfusionist.

Speaker Change: Tom will be leading the marketing strategy for drugs are of ATR, which is designed to help reduce serious bleeding risks in heart surgery patients, taking brilinta and the very short time. He has been with the company. We have already been impressed with his deep expertise and operational efficiency that we believe makes him the right person to help cytosorb and successfully enter the North American Mark.

Speaker Change: With this important new therapy, when the time comes.

Peter Mariani: Now, I'll turn it over to Pete. to give a financial update. Peace.

Pete: Now I'll turn it over to Pete.

Pete: To give a financial update Pete.

Peter Mariani: Thank you, Phil. And good afternoon, everyone. Today, I will be reviewing our Q1 financial performance, including the strengthening of our balance sheet and our outlook for 2025. Revenue was $8.7 million, a decrease of 3%, and flat on a constant currency basis compared to $9 million in Q1 of 2024. As Phil noted, we had strong revenue growth in our distributor and other direct European markets, and that growth was offset by declines in our largest market in Germany. The realignment of our German commercial team and approach is a key strategic initiative, and we are pleased with the progress we're making and expect these actions will drive improved execution and results in the second half of the year.

Pete: Thank you Phil and good afternoon, everyone today.

Pete: I will be reviewing our Q1 financial performance, including the strengthening of our balance sheet and our outlook for 2025.

Pete: Revenue was $8 7 million, a decrease of 3% and flat on a constant currency basis compared to $9 million in Q1 of 2024.

Pete: As Phil noted, we had strong revenue growth in our distributor and other direct European markets and that growth was offset by declines in our largest market in Germany. The realignment of our German commercial team and approach is a key strategic initiative and we are pleased with the progress we're making.

Pete: These actions will drive improved execution and results in the second half of the year.

Peter Mariani: Gross margin for the quarter was 71%, which is consistent with our full year 24, and lower than the 76% in Q1 of 2024. The year-over-year decrease was primarily due to a 23% reduction in the number of units produced in Q1 of this year, compared to 2024, and partially offset by an 11% reduction in production costs year-over-year. We expect that production volumes to increase across the year to support growth in our core business and to prepare for the anticipated launch of DrugSorb ATR in the US and Canada later this year. Q1 operating loss improved by 17% to $3.9 million in the current year, compared to $4.7 million in 2024, driven primarily by a 12% reduction in operating expenses to $10.1 million in Q1 of this year, compared to $11.5 million last year.

Pete: Gross margin for the quarter was 71%, which is consistent with our full year 2004, and lower than the 76% in Q1 of 2024.

Pete: The year over year decrease was primarily due to a 23% reduction in the number of units produced in Q1 of this year compared to 2024, and partially offset by an 11% reduction in production costs year over year.

Pete: We expect that production volumes to increase across the year to support growth in our core business and to prepare for the anticipated launch of drug Zorba ATR in the U S and Canada later this year.

Pete: Q1 operating loss improved by 17% to $3 9 million in the current year compared to $4 7 million in 2024, driven primarily by a 12% reduction in operating expenses to $10 1 million in Q1 of this year compared to a <unk>.

Pete: 11, 5 million last year.

Peter Mariani: The decrease was driven by a 26% reduction in R&D expenses following the completion of our STAR-T trial, as well as lower spend in other clinical projects and the impact of cost-cutting efforts implemented over the previous year, including a 15% reduction in head costs. Net loss for the quarter was $1.5 million, or $0.02 per share, compared to $6.1 million, or $0.11 per share, in the prior year. Eliminating the impact of foreign currency changes and non-cash stock compensation in both periods, adjusted net loss in the quarter was $3.7 million, or $0.06 per share, which is consistent with an adjusted net loss of $3.7 million, or $0.07 per share, in the prior year.

Pete: The decrease was driven by a 26% reduction in R&D expenses. Following the completion of our Star T trial.

As well as lower spend and other clinical projects and the impact of cost cutting efforts implemented over the previous year, including a 15% reduction in head count.

Pete: Net loss for the quarter was $1 5 million or <unk> <unk> per share compared to $6 1 million or 11 cents per share in the prior year, eliminating the impact of foreign currency changes and noncash stock compensation in both periods adjusted net loss in the quarter.

Pete: Was $3 7 million or six per share, which is consistent with an adjusted net loss of $3 7 million or <unk> <unk> per share in the prior year.

Peter Mariani: The adjusted EBITDA loss for the quarter, which also excludes the impact of non-cash stock compensation and changes in foreign currency, improved by 17% to a loss of $2.7 million. compared to adjusted net loss of 3.3 million in the prior year driven by the reduction in operating expenses. Now we're pleased to have successfully executed our shareholder rights offering, inclusive of the exercise of the Series A Right Warrant, which raised total proceeds of $6.8 million net of all related expenses, including banking, legal, and transfer agent fees. This raise also allowed for the release of $5 million of restricted cash on our balance sheet, and combined, the raise increased our available liquidity by $11.8 million.

Pete: Adjusted EBITDA loss for the quarter, which also excludes the impact of noncash stock compensation and changes in foreign currency improved by 17% to a loss of $2 7 million.

Pete: Compared to adjusted net loss of $3 3 million in the prior year driven by the reduction in operating expenses.

Pete: Now we're pleased to have successively executed our shareholder rights offering inclusive of the exercise of the series a REIT warrant, which raised total proceeds of $6 8 million net of all related expenses, including banking legal and transfer agent fees.

Pete: This raise also allowed for the release of $5 million of restricted cash on our balance sheet and combined the raise increased our available liquidity by $11 $8 million.

Peter Mariani: And as a reminder, in early April, we provided a 60-day extension of the Series B Write Warrant, which will now expire on June 10th of this year. Our total cash, cash equivalents, and restricted cash was $13.1 million on March 31 compared to $9.8 million at the end of the year. The increase reflects the net $6.8 million raised in the offering and is net of cash used in the quarter of $3.7 million, which includes disbursements that are unique to the first quarter of approximately $900,000. Additionally, as previously announced, on April 21, we received an additional $1.7 million from the sale of our 2023 and amended 2022 NOLs and R&D credits from the Technology Business Tax Transfer Program sponsored by the New Jersey Economic Development Authority.

Pete: And as a reminder, in early April we provided a 60 day extension.

Pete: The series B, right warrant, which will now expire on June 10th of this year.

Pete: Our total cash cash equivalents and restricted cash was $13 1 million on March 31, compared to $9 8 million at the end of the year. The increase reflects the net $6 8 million raised in the offering and is net of cash used in the quarter.

Pete: Three 7 million, which includes disbursements that are unique to the first quarter of approximately $900000.

Pete: Additionally, as previously announced on April 20, <unk>, we received an additional $1 $7 million from the sale of our 2023 and amended 2022, Nols and R&D credits from the technology business tax transfer program sponsored.

Pete: By the New Jersey Economic development Authority.

Peter Mariani: This program allows technology and biotech businesses with net operating losses to turn their tax losses and credits into cash to buy equipment or facilities or other allowable expenditures. We intend to utilize the funding to help drive ongoing growth, including preparations for the anticipated launch of DrugZorb ATR in the US and Canada, scaling up manufacturing in our Princeton facility, and supporting other key strategic initiatives. Additionally, our loan agreement provides for a second tranche of $5 million, which may be drawn at our request in the second half of 2025, provided the company receives FDA marketing approval of its drug sorbate TRF.

Pete: The program allows technology and biotech businesses with net operating losses to turn their tax losses and credits into cash to buy equipment or facilities or other allowable expenditures.

Pete: We intend to utilize the funding to help drive ongoing growth, including preparations for the anticipated launch of drug Zorba ACR in the U S and Canada scaling up manufacturing in our Princeton facility and supporting other key strategic initiatives.

Pete: Additionally, our loan agreement provides for a second tranche of $5 million, which we which may be drawn at our request in the second half of 2025 provided the company receives FDA marketing approval of its drug Zorba ATR applications.

Peter Mariani: The strengthening of our balance sheet together with our initiatives to reduce cost, manage cash has provided a solid foundation where we will drive continued growth and further cost efficiencies that we believe will result in our core business approaching cash flow breakeven in the second half of the year, allowing for investment in our North American commercial launch of DrugZorb ATR later this year and into 2026.

Pete: The strengthening of our balance sheet together with our initiatives to reduce costs manage cash has provided a solid foundation.

Pete: Where we will drive continued growth and further cost efficiencies that we believe will result in our core business approaching cash flow breakeven in the second half of the year, allowing for investment in our North American commercial launch of drug Zorba ATR later, this year and into 2026.

Peter Mariani: For more information visit www.drugzorb.com Now additionally, I wanted to introduce you to Melanie Grossman, our new Vice President and Corporate Controller. Melanie joined us in April and brings over 25 years of accomplished finance and accounting leadership in global, publicly traded, and private companies. She began her career as an auditor with ENY, and her healthcare experience includes roles with Stryker, Byram Healthcare, and Vaccinity. She has excellent experience across all areas of finance and accounting, including SEC reporting, systems, processes, and controls, as well as financial planning, analysis, and strategy.

Speaker Change: Now. Additionally, I wanted to introduce you to Melanie Grossman, our new Vice President and corporate controller Melonie joined US in April and brings over 25 years of accomplished finance and accounting leadership and global publicly traded in private companies. She began her career as an auditor with the NY.

Speaker Change: And our health care experience includes roles with Stryker Byrom healthcare and <unk>.

Speaker Change: She has excellent experience across areas, all areas of finance and accounting, including SEC reporting systems processes and controls as well as financial planning analysis and strategy.

Peter Mariani: We're pleased to welcome Melanie to the team and are looking forward to her many contributions as we continue to scale our operations for profitable growth across the organization.

Speaker Change: We're pleased to welcome Melanie to the team and we're looking forward to her many contributions as we continue to scale our operations for profitable growth across the organization.

Phillip Chan: And now let me turn the call back over to Phil. Thanks, Pete. We believe our value proposition is both strong and highly differentiated. With Cytosorb, we have built a robust, high-margin international business in critical care and cardiac surgery, markets with vast unmet needs and enormous potential for growth. Our foundation is solid, and we are now focused on generating new clinical data to help guide physicians in optimizing Cytosorb use, treating the right patient at the right time with the right dose. We believe that improving clinical outcomes will drive broader adoption across a range of indications, ultimately accelerating product utilization and revenue growth.

Phil: Now, let me turn the call back over to Phil.

Phil: Thanks Pete.

Speaker Change: We believe our value proposition is both strong and highly differentiated with Cytosorb. We have built a robust high margin international business in critical care and cardiac surgery markets with vast unmet needs an enormous potential for growth. Our foundation is solid and we are now focused on generating new clinical data.

Speaker Change: Guide physicians in optimizing cytosorb use treating the right patient at the right time with the right dose, we believe that improving clinical outcomes will drive broader adoption across a range of indications ultimately accelerating product utilization and revenue growth.

Phillip Chan: Last year, we saw encouraging momentum, particularly from strong direct sales outside of Germany and solid performance by our distributor and partner network. We're also taking proactive steps to reignite growth in Germany. If successful, this could significantly strengthen our overall financial performance. Importantly, continued growth in product sales brings us closer to our goal of near break-even by the end of 2025 and sets the stage for long-term financial independence.

Last year, we saw encouraging momentum, particularly from strong direct sales outside of Germany, and solid performance by our distributor and partner network.

Speaker Change: Also taking proactive steps to reignite growth in Germany. If successful this could significantly strengthen our overall financial performance importantly continued growth in product sales brings us closer to our goal of near breakeven by the end of 2025 and sets the stage for long term financial independence.

Phillip Chan: What is not yet fully reflected in our growth story is the exciting potential of drug sorb ATR. We are working diligently on driving positive regulatory decisions from both FDA and Health Canada this year. In the meantime, we are actively preparing for launch, building awareness with positive real-world clinical data, corroborating the significant reduction in serious bleeding events in CABG patients on Berlinta seen in our pivotal trial, and presenting at major cardiovascular conferences. While we await regulatory decisions from FDA and Health Canada, a positive outcome could unlock our first commercial access to the United States and Canadian market.

Speaker Change: Where does not yet fully reflected in our growth story is the exciting potential of drugs Arb ATR. We are working diligently on driving positive regulatory decisions from both FDA and health Canada. This year in the meantime, we are actively preparing for launch building awareness with positive real world clinical data corroborating the significant reduction.

Speaker Change: And serious bleeding events and cabbage patients on Brilinta is seen in our pivotal trial and presenting at major cardiovascular conferences, while we await regulatory decisions from FDA and health, Canada, a positive outcome with could unlock our first commercial access to the United States and Canadian markets.

Phillip Chan: We expect to begin with a controlled market release and scale up from there. The initial addressable market, again, is estimated at $300 million for Berlinta and cabbage surgery that could eventually exceed $1 billion with broader indications for use.

Speaker Change: We expect to begin with a controlled market release and scale up from there. The initial addressable market again is estimated at 300 million for Brilinta and cabbage surgery that could eventually exceed $1 billion with broader indications for use.

Phillip Chan: With that, on behalf of the team at Cytosorbents, we thank you for your attention and continued support. That concludes our prepared remarks.

With that on behalf of the team at site Assortments. We thank you for your attention and continued support.

Speaker Change: That concludes our prepared remarks operator, please open the line for questions. Thank you.

Operator: Operator, please open the line for questions. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speakerphone, please make sure to lift your handset before pressing any key.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have any question. Please press star followed by the number one on your Touchtone phone that you will hear a prompt that your hand has been raised.

Speaker Change: Should you wish to decline from the polling process. Please press star followed by the number too.

Speaker Change: If you are using a speaker phone please make sure to lift your handset before pressing any heath.

Michael Sarcone: Your first question comes from the line of Mr. Michael Sarcone from Jeffries. Please go ahead. Good afternoon and thanks for taking our questions and thanks for all the detail you provided. Hi Mike.

Speaker Change: Your first question comes from the line of Mr. Michael share Count from Jefferies. Please go ahead.

Speaker Change: Good afternoon and.

Speaker Change: Thanks for taking our questions and thanks for all the detail you provided.

Speaker Change: Hi, Mike.

Michael Sarcone: Just to start, hey Phil, You know, understanding you're going to submit for an appeal of the FDA letter, I guess, can you talk about, you know, your level of confidence that, you know, we can get this over the finish line and get clearance? And then as my follow-up to that. You know, when you think about the various scenarios, in the worst case, if you appeal and it gets denied, you know, where do we go from there? Thank you.

Speaker Change: Just to start Haynesville.

Speaker Change: Understanding you're going to submit.

Speaker Change: For an appeal of the FDA letter I guess can you talk about your level of confidence that we can get this over the finish line and get clearance and then as my follow up to that.

Speaker Change: When you think about the various scenarios in a worst case, if your appeal and indicate denied.

Where do we go from there. Thank you.

Makis Deliargyris: Sure, Makis, why don't you take that question. Yeah, thanks. Thanks, Michael. So as we stated in our prepared remarks, we feel very strongly about the strength of our submission. We feel that the data in CABG from the STAR-T trial are compelling. And as I showed you and discussed previously, our real-world performance of the device has been excellent so far, and very well received by practicing clinicians. We therefore believe that our chances during this appeal process are good. We discussed this with our regulatory counsel who agree with us, and therefore we're taking this path as the most expedited way to resolve this.

Speaker Change: Sure Mike why don't you take that question, yes. Thanks, Thanks, Michael.

Speaker Change: So as we stated in our prepared remarks, so we feel very strongly about the strength of our submission we feel that the data in cabinets from the <unk> trial are compelling and as I showed you and discuss previously our real world performance of the device has been excellent so far and very well received by practicing.

Speaker Change: Initiatives, we therefore believe that our chances during this appeal process or.

Speaker Change: Our good and we discussed this with our regulatory Council, who agreed with us and therefore, we've taken this path is the most expedited way to resolve this.

Makis Deliargyris: Now, in the second part of your question, what we can tell you is that there's always an opportunity, should the appeal process not be successful, to continue with a new de novo submission. utilizing a very large portion of the original submission and therefore resulting in a much more truncated review time and review items that are remaining, since many of the items were resolved during the initial submission. Got it. That's very helpful. Thank you.

Speaker Change: Now your second part of your question.

Speaker Change: What we can tell you is that there's always an opportunity should the appeal process not be successful to continue with the new de Novo submission.

Speaker Change: Utilizing this.

Speaker Change: A very large portion of the original submission and therefore, resulting in a much more <unk> review time and review items that are remaining since many of the items were resolved during the initial submission.

Speaker Change: Got it that's very helpful. Thank you and I guess in that debt ladder scenario.

Makis Deliargyris: And I guess in that latter scenario, Makis, Would you have to run another trial and generate more data, or would you not have to do that? Although, in general, we have not discussed the details of the remaining deficiencies outlined on the letter we received from FDA, I think we can announce that we have not received a request for an additional trial. So we believe that the remaining issues can be resolved with the existing data. Got it. Very helpful. Thank you.

Speaker Change:

Speaker Change: Would you have to run another trial in and generate more data.

Speaker Change: We do not have to do that.

Speaker Change: Although in general we have not discussed the details of the remaining deficiencies outlined on the on the letter we received from FDA I think we can we can announce that we have not received a request for an additional trials. So we believe that the remaining issues cannot be resolved with the existing data at hand.

Speaker Change: Got it very helpful. Thank you.

Sean Lee: Your next question is from the line of Sean Lee from H.C. Wainwright. Please go ahead. Good afternoon, guys, and thanks for taking the questions. Hi Sean. Hi.

Speaker Change: Your next question is from the line of his China Li from H C. Wainwright. Please go ahead.

China Li: Hey, good afternoon, guys and thanks for taking my questions.

Makis Deliargyris: My first one is on the various registry as well as the data that you've been presenting. Were these results helping in any way with your marketing or reimbursement in Europe? The clinical data is always the core of the discussion around the value of any introduced medical technology, the drugs or devices. So the stronger is your clinical proposition, the more powerful your value proposition. So absolutely we plan to leverage this clinical data to support reimbursement and health technology assessment decisions over in the EU. Are there any current discussions going on in countries outside of Germany? in relation to I'm really impressed with them.

Speaker Change: My first one is on the.

Louise: So Louise.

China Li: Registry as well as the.

China Li: The data that you presented.

China Li: These.

China Li: Results, hoping anyway, with your marketing or reimbursement in Europe.

China Li: The clinical data is always the core of the discussion around the value of any introduced medical technology, the drugs or devices. So the strongest clinical proposition the more powerful year value proposition. So absolutely we plan to leverage it.

China Li: This clinical data to support reimbursement of the health technology assessment decisions over the year.

Speaker Change: Are there any discussions going on in countries outside of Germany.

China Li: In relation to.

Speaker Change: Uh-huh reimburse if any.

Makis Deliargyris: I know that the reimbursement is mostly focused on Germany and surrounding countries, so I'm wondering... for the broader reimbursement team views, especially doing cardiac surgery. Is there broader discussions on that? Yeah, I think that cardiac surgery is where the data are simpler and clearer, and we absolutely have active discussions going on to try to obtain reimbursement in that area. In fact, in places like the United Kingdom, cardiac surgery is one of the top applications that's driving revenue in that territory, for example. I see.

Speaker Change: I know that you are.

Speaker Change: The reimbursement is mostly focused on Germany and surrounding countries I was wondering.

Speaker Change: For the broader reimbursement team views, especially.

Speaker Change: Cardiac surgery.

Speaker Change: While there are discussions on that.

Speaker Change: Yes, I think that cardiac surgery is where the data are simpler and clearer and we absolutely have active discussions going on to try to obtain reimbursement in that area. In fact in places like the United Kingdom.

Speaker Change: Cardiac surgery is is is one of the top applications, that's driving revenue in that territory for example.

Sean Lee: Yeah, thank you, Mr. O'Connor. That's all the questions we have. Thank you.

Speaker Change: Thanks Nishu.

Speaker Change: Thats all the questions themselves.

Speaker Change: Thank you Sean.

Operator: As a reminder, if you'd like to ask a question, you can press stars and the number one under touchtone phone. If you are using a speaker phone, please make sure you lift your handset before pressing any.

Speaker Change: As a reminder, if you'd like to ask a question you can press Star then the number one on your Touchtone phone. It. If you are using a speaker phone. Please make sure you lift your handset before pressing any keys.

Tom Kerr: Your next question comes from the line of Mr. Tom Kerr from Zach Small Capital Research. Please go ahead. Hi, everyone.

Speaker Change: Our next question comes from the line of Mr. Tom <unk> from Zacks small capital Research. Please go ahead.

Speaker Change: Hi, everyone. This is <unk>.

Michael Kim: This is Michael Kim filling in for Tom Kerr. Some of our questions have been asked and answered, but we did have a couple more. Just first, curious if there are any other European markets that might be showing promise for the Cytosorbent device besides Germany. Yeah, I think that we're making good progress in the big five. You know, we go direct in the UK, we go direct in Germany, we work through distributors in Italy and Spain, Portugal. And in France, it's kind of a hybrid approach with partners and our own direct sales. So from that standpoint, I think our progress is going actually quite well.

Speaker Change: Michael Kim filling in for Tom Curran.

Speaker Change: All of our questions have been asked and answered, but we did have a couple more.

Speaker Change: Just first curious if there are.

Speaker Change: Any other European markets that.

Speaker Change: Might be showing promise for the site to assortment device Besides Germany.

Speaker Change: Yes, I think that we're making good progress in the big five.

Speaker Change: We go direct in the UK, we go direct in Germany, we work through distributors in Italy, and Spain, Portugal, and in France, It's kind of a hybrid approach with partners and our own direct sales. So from that standpoint, I think our progress is going actually quite well.

Phillip Chan: And then obviously, in the other European territories, I think that we're making good progress as well. We have decided to pull back in Scandinavia, favoring a distributor focused approach in that territory, given the types of volumes in that part of the world. But that being said, we are seeing good momentum in other countries around the EU as well as outside of the EU. Got it. That's helpful.

Speaker Change: Obviously in the other European territories, I think that we are making good progress as well.

Speaker Change: We have decided to pull back in Scandinavia favoring a distributor focused approach in that territory given the types of volumes in that part of the world, but that being said we are seeing good momentum and in other countries around the EU as well outside of the EU.

Speaker Change: Got it that's helpful and then any updates on other products in development.

Phillip Chan: And then any updates on other products in development besides Cytosorbent and Drugsorb ATR? Well, right now, the big fish on the plate is DrugSorb ATR. So we're uniquely and solely focused on driving that to the finish line. So I think that when we, we obviously have other technologies like HemaDefend BGA that we'll hopefully be talking about in the future. But for right now, we are uniquely and singularly focused on DrugSorb ATR. Got it. Thanks for taking our questions.

Speaker Change: Besides cytosorb in a drugstore ATR.

Speaker Change: Well right now the big fish on the plate as drugs, our backyard. So we're uniquely and solely focused on driving that too.

Speaker Change: The finish line, so I think that when we we.

Speaker Change: We obviously have other technologies like Hema defend PGA that we'll hopefully be talking about in the future but for right now we are.

Speaker Change: <unk> uniquely and singularly focused on drugs are of ATR.

Speaker Change: Got it thanks for taking my questions sure absolutely.

Michael Sarcone: Your last question is of Holo from the line of Michael Sarcone from Jeffries, your line is now open. Hey, thanks again. Just had a follow up on Germany.

Speaker Change: Your last question is a follow from the line of Michael <unk> from Jefferies. Your line is now open.

Speaker Change: Hey, Thanks again just.

Speaker Change: I had a follow up on Germany, you talked about aiming to.

Phillip Chan: You talked about aiming to Thanks for joining us today. Yeah, you know, as I mentioned in my remarks, and I mentioned last time that, you know, Germany faces is the largest market medical device market in the European Union, but as such faces some unique challenges. And so there's been issues related to the pandemic and the pandemic hangover that we've talked about extensively in the past. There is the new issue of hospital reform that is happening. And this is being slowly rolled out throughout Europe where they're going to be focused more on quality measures. to drive reimbursement rather than pay for procedure measures to pay for reimbursement.

Speaker Change: Accelerated or get back to growth in the second half I guess, what kind of visibility do you have into the condition there and again, we'd just like to hear how you're thinking about your level of confidence.

Speaker Change: And being able to reaccelerate growth in Germany.

Speaker Change: Yeah as I mentioned in my remarks, and I mentioned last time that Germany faces is the largest market medical device market in the European Union, but as such faces some unique challenges and so.

Speaker Change: There has been issues related to the pandemic and the pandemic.

Speaker Change: Hangover that we've talked about extensively in the past.

Speaker Change: There is the new issue of hospital reform that is happening and this.

Speaker Change: Is being slowly rolled out throughout Europe, where theyre going to be focused more on quality measures.

Speaker Change: <unk>.

Speaker Change: To drive reimbursement rather than pay for procedure.

Speaker Change: Measures to pay for reimbursement and that again, we believe favors our technology given that our technology is designed to get patients to keep patients.

Phillip Chan: And that, again, we believe favors our technology, given that our technology is designed to get patients, to keep patients from getting so sick and getting them out of the hospital as quickly as possible, which I think is the major tenet of the hospital reform that is taking place in Germany.

Speaker Change: From getting so sick and getting them out of the hospital as quickly as possible, which I think is the major tenant of the hospital reform that is taking place in Germany, but that being said, we can always be doing better and our own execution of sales and I think that is what R. R.

Phillip Chan: But that being said, we can always be doing better in our own execution of sales. And I think that is what our reorganization and new efforts at trying to drive operational efficiency at our German subsidiary. And I think that these changes are something that we can control, that we are actively implementing. And we believe that the results of these changes that started at the beginning of the first quarter will flow through and ultimately we'll see benefits in the second half of this year. Already in Q2, we're seeing promising developments that would suggest that we're making progress.

Speaker Change: Our reorganization and new efforts at trying to drive at.

Speaker Change: Operational efficiency at our German at our German subsidiary and I think that these changes are something that we can control that we have.

Speaker Change: Are actively implementing and we believe that the results of these changes that started at the beginning of the first quarter will flow through and ultimately we'll see benefits in the second half of this year.

Speaker Change: No.

Speaker Change: Already in Q2, we're seeing promises promising developments that would suggest that we're making progress.

Phillip Chan: Great. Thanks, Phil. Sure.

Bill: Great. Thanks Bill.

Speaker Change: Sure.

Operator: There are no further questions at this time.

Speaker Change: There are no further questions at this time I'd like to turn the call over to Dr. Phillip Chan for closing comments Sir. Please go ahead.

Phillip Chan: I'd like to turn the call over to Dr. Phil Chan for closing comments. Sir, please go ahead. Well, thank you, everyone, for joining the call today.

Speaker Change: Well. Thank you everyone for joining the call today. If you do have any other questions. Please feel free to reach out to us at IR at Cytosorb in Dot Com, we look forward to updating you in the future have a good evening, everyone and thank you very much.

Phillip Chan: If you do have any other questions, please feel free to reach out to us at iratcytosorbents.com. We look forward to updating you in the future. Have a good evening, everyone, and thank you very much. Have a great night.

Speaker Change: Have a great night.

Operator: This concludes today's conference call. Thank you very much for your participation. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you very much for your participation you may now disconnect.

Speaker Change: Yes.