Dr. Phillip P. Chan, the CEO and President of CytoSorbents Corporation (CTSO), Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - August 1, 2014 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Orthopedics and Cardiovascular Medical Devices - Medical Device Innovation and Consolidation Trends - Affordable Care Act - Aging U.S. Population - Medical Technology Innovation - Medical Equipment Growth Opportunities - Efficient Patient Treatment - Bifurcation in Medical Devices

Companies include: CytoSorbents Corporation (CTSO) and many more.

In the following excerpt from the Medical Devices Report, the CEO and President of CytoSorbents Corporation (CTSO) discusses company strategy and the outlook for this vital industry:

TWST: It sounds like the company is starting to gain some significant momentum. Can you explain the business model?

Dr. Chan: With CytoSorb, we are targeting many dangerous situations where excessive inflammation can spiral out of control, and lead to organ failure and death. This is a massive worldwide market where there are little to no alternative treatments and where CytoSorb may be the difference between life and death. Because of this, CytoSorb represents a unique potential "need to have" therapy that supports attractive, stable pricing. CytoSorb is the basis of a profitable disposable "razorblade in someone else's razor" business model. The device is plug-and-play compatible with standard hemodialysis machines found in ICUs around the world. Importantly, hospitals can utilize their existing dialysis infrastructure and do not need to buy a new machine to use our device.

We sell primarily to critical care and cardiac surgery departments in acute care hospitals. In turn, the hospitals receive reimbursement of more than $500 per cartridge in Germany and Austria. The number of devices used per patient depends on the application. An ICU patient may require up to seven cartridges. For cardiac surgery, one device is used intraoperatively, while two to three are used to treat patients postoperatively. Depending on the application, average revenue generated per patient is approximately $2,000 to $5,000, or comparable to the cost of one to two days in the ICU in Western Europe.

Using these numbers, the 154,000 new cases of severe sepsis in Germany each year alone is already a $300 to $800 million total addressable market. The therapy more than pays for itself if it can improve patient outcome and/or reduce ICU time and cost. Our sales are solidly profitable with blended gross margins greater than 60% at relatively low volumes. We expect gross margins to rise as we gain economies of scale and benefit from cost reductions.

TWST: Distribution and strategic partnerships appear to be key to revenue growth. How does this reflect in your expected revenue growth, and what are you expecting for CytoSorb revenue in 2014?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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