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CTSO: 2Q20 Results Illustrate Surging Demand For CytoSorb

·2 min read

By M. Marin

NASDAQ:CTSO

READ THE FULL CTSO RESEARCH REPORT

Milestone: more than 100,000 CytoSorb cartridges delivered globally

Cytosorbents (NASDAQ:CTSO) reported 2Q20 revenue of $9.8 million this week, up 58% y/y and a quarterly record. Of this, $9.5 million was product revenue, which we believe underscores growing demand for CytoSorb as the company continues to generate data supporting its efficacy for a growing number of indications.

Gross margins were roughly 70% versus 76% in the prior year 2Q, reflecting the all-hands-on-deck mode with which CTSO stretched its manufacturing capabilities to meet surging demand. We believe the need to ramp production quickly in response to COVID-19 and other demand for CytoSorb underscores the need to expand production capacity. On an adjusted basis, gross margins were in-line with recent quarters.

As the number of indications for CytoSorb use has expanded, CTSO has delivered more than 100,000 CytoSorb cartridges globally to-date and has treated tens of thousands of patients. This has translated into product revenue of about $30 million over the past 12 months.

Separately, the Data Monitoring Committee (DMC) of the REFRESH 2-AKI trial has completed a comprehensive review of the safety data from the study and recommended that the trial resume. We view this as another positive that further supports the company’s prospects of obtaining regulatory approval for CytoSorb in the U.S.

We also believe that the potential incremental value of HemoDefend could be significant. CTSO continues to obtain funding to advance HemoDefend and just announced a new $4.4 million contract award from the U.S. Department of Defense to complete HemoDefend-BGA adsorber preclinical development. This is another instance of CTSO’s successfully minimizing its cash burn for R&D by leveraging grants and government awards to advance its drug candidates.

With the recent over-subscribed capital raise, CTSO has $89 million in pro forma cash. This strong cash position is expected to facilitate the company’s growth initiatives, which include adding production capacity and expanding its direct salesforce, among other measures.

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