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Edited Transcript of CTSO.OQ earnings conference call or presentation 4-Nov-20 9:45pm GMT

·49 min read

Q3 2020 Cytosorbents Corp Earnings Call Nov 5, 2020 (Thomson StreetEvents) -- Edited Transcript of Cytosorbents Corp earnings conference call or presentation Wednesday, November 4, 2020 at 9:45:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Christian Steiner Cytosorbents Corporation - SVP of Sales & Marketing * Efthymios N. Deliargyris Cytosorbents Corporation - Chief Medical Officer * Kathleen P. Bloch Cytosorbents Corporation - CFO & Secretary * Phillip P. Chan Cytosorbents Corporation - CEO, President & Director * Vincent J. Capponi Cytosorbents Corporation - President & COO ================================================================================ Conference Call Participants ================================================================================ * Andrew Jacob D'Silva B. Riley Securities, Inc., Research Division - Senior Analyst * Anthony Charles Petrone Jefferies LLC, Research Division - Healthcare Analyst * Danielle Joy Antalffy SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst * Joshua Thomas Jennings Cowen and Company, LLC, Research Division - MD & Senior Research Analyst * Sean Lee H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate * Jeremy Feffer LifeSci Advisors, LLC - MD ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, and welcome to the CytoSorbents Third Quarter 2020 Financial and Operating Results Conference Call. (Operator Instructions) Please be advised that the call will be recorded at the company's request. At this time, I would like to turn the call over to our moderator, Jeremy Feffer. Please go ahead. -------------------------------------------------------------------------------- Jeremy Feffer, LifeSci Advisors, LLC - MD [2] -------------------------------------------------------------------------------- Thank you, Stacy, and good afternoon. Welcome to CytoSorbents' Third Quarter 2020 Financial and Operating Results Conference Call. Joining me today from the company are Dr. Phillip Chan, Chief Executive Officer; Vincent Capponi, Chief Operating Officer and President; Kathleen Bloch, Chief Financial Officer; Dr. Efthymios Deliargyris, Chief Medical Officer; Dr. Christian Steiner, Senior Vice President of Sales and Marketing and Managing Director of CytoSorbents Europe Gmbh; and Christopher Cramer, Vice President of Business Development. 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. Management may make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of the 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 November 4, 2020, 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 third quarter 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. At this time, it's my pleasure to turn the call over to Dr. Phillip Chan. Phil? -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [3] -------------------------------------------------------------------------------- Thank you very much, Jeremy, and welcome, everyone, to the third quarter 2020 earnings call for CytoSorbents Corporation. We had an outstanding third quarter marked by numerous accomplishments. First, third quarter 2020 total revenue grew 73% to $10.5 million, and product sales grew 79% to $10.2 million over the third quarter of 2019. Trailing 12-month product sales were $34.5 million. Secondly, we delivered more than 110,000 cumulative CytoSorb cartridges to date, up 51% from a year ago and up 10,000 from our recently announced milestone of achieving more than 100,000 devices delivered. We also achieved blended product gross margins of 74% in the third quarter compared to 77% a year ago but sequentially higher than the 70% in the second quarter of this year due to higher percentage of lower-margin distributor sales and higher cost of ramp from COVID-19 production. In July, we completed a $57.5 million financing led by Cowen and SVB Leerink with comanager, B. Riley FBR, strengthening our cash balance to roughly $88 million at the end of the third quarter. The REFRESH 2-AKI Data Monitoring Committee also recommended resumption of the trial following a favorable review of safety data. And in terms of COVID-19, we have now seen an estimated 2,800 COVID-19 patients in more than 30 countries around the world, including here in the United States, and are working to capture these data in the CTC COVID-19 Registry. We also established collaborations to commercialize CytoSorb in the United States in 25 states with Terumo Cardiovascular, InvoSurg and Surgical Partners and are working to cover the other states as well currently. We also hosted a key webinar on the use of CytoSorb for antithrombotic drug removal with key opinion leaders and users of CytoSorb for this application in July. We were also awarded a $4.4 million contract from the DoD to complete HemoDefend-Blood Group Antibody preclinical development, and we also expanded distribution to a total of 66 countries, including Brazil. With our strong financial performance and solid cash position, coupled with a strong current and anticipated demand for CytoSorb, we are executing a number of key initiatives to drive growth. These are in 2 major areas: one is commercialization and sales, and the second is clinical trials. On the sales growth strategy side, one of our first goals is to maximize the COVID-19 opportunity. We are well positioned in Europe and throughout the world to help in this next wave. We also have established collaborations in the United States, establishing key relationships throughout the country. Second of all, as COVID-19 fades, which is expected to happen next year with the approval of vaccines for COVID-19, we plan to return to our pre-COVID-19 growth strategy. This is detailed very extensively in our press release today, so I'll only cover this very briefly. But the key tenets of the strategy are: the focus on driving both direct and distributor sales; to maximize the ticagrelor and rivaroxaban EU approvals; to expand in new applications such as liver disease and also cardiac surgery such as endocarditis and other applications; to expand our international team with a focus on commercialization, manufacturing, clinical and R&D; to expand our plant to be able to get to the next level of scale, to be able to produce somewhere on the order of $300 million to $400 million in sales of products, thereby helping also to drive expansion of our blended product gross margins; to prepare for U.S. commercialization, which currently involves hiring a new VP of Sales for the United States to help manage COVID-19 sales but to also prepare for a potential feature approved applications in the United States, such as the removal of ticagrelor and other applications; and then finally, to streamline our balance sheet and, in particular, to come up with a strategy, either refinancing or repayment of our current debt, and that process is underway. But with that, I'd like to focus more on the clinical program. And with that, I'd like to turn it over to Dr. Makis Deliargyris, our Chief Medical Officer. Makis? Makis, you may be on mute. -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [4] -------------------------------------------------------------------------------- Apologies. Thank you, Phil, and good afternoon to everyone on the call. On a personal note, it's been a very exciting first 6 months for me in the company, and I'm very pleased today to be able to present to you with the overview of our clinical activities and our clinical plan going forward. During these last 6 months, I've had the chance to spend extensive time with my colleagues within CytoSorbents, prioritize our targets and finalize our clinical plans. During that time, we faced significant challenges from COVID-19 across our clinical programs, but we also encountered significant opportunities, and we'll discuss with you a little later about the COVID-19-related clinical activities. And finally, as you heard already from Phil, and you're going to hear in more detail from Kathy later, we have now the available funds to expand on our clinical capabilities and execute an ambitious clinical plan. As noted on this slide, we will focus on both areas of applications of CytoSorbents that we're seeing in practice today in Europe, and that is the critical care, therapeutic area and cardiovascular disease and, specifically, cardiac surgery. We have identified 6 specific priority therapeutic areas that we will target with our clinical programs. In the critical care space, we will focus on shock reversal where a CytoSorb device can be very effective by removing cytokines and providing rapid hemodynamic stabilization. We will also focus on acute liver failure and liver applications where the removal of liver toxins such as bilirubin or ammonia, coupled with cytokine removal, can be extremely effective in reversing the clinical course in these patients. We will also continue to expand our clinical activities in the COVID-19 space where, again, quenching the cytokine storm with CytoSorb, especially in the setting of a combined therapy with ECMO, has shown substantial clinical benefits so far. In the cardiovascular arena, our 3 targets will focus on antithrombotic removal, noted as ATR on this slide, where we have specific bench and already clinical evidence of very efficient removal of these antithrombotic agents by CytoSorb in the operating room. We will also focus on endocarditis where cytokine removal and hemodynamic stabilization could lead to substantial clinical benefits in these acutely ill patients faced with high mortality otherwise. And of course, we will continue our clinical program in preventing acute kidney injury in patients undergoing complex cardiac surgery. We will implement a complementary approach. Although heavily focused on randomized, company-sponsored clinical trials, we will also implement innovative other designs to complement data generation, including therapy registries and single-center or single-arm prospective trials. On this next slide, you will note the [type] table associated with the execution of these programs. Programs like the CTC registry in COVID-19, the REFRESH 2 trial in acute kidney injury prevention in cardiac surgery, the STAR Registry in antithrombotic removal and the TISORB study, also looking at ticagrelor removal are already ongoing. Early into 2021, we plan to initiate 3 trials in Germany, including the randomized clinical trial in shock reversal called PROCYSS multicenter trial in Germany; the HepOnFire single-arm study in patients with acute-on-chronic liver failure, again, initiated and executed in Germany; and finally, our second ticagrelor removal study called CyTATION is a multicenter PK/PD study also executed in Germany. In the next 12 months after that, we plan to initiate substantial clinical programs in the U.S., including a large randomized shock trial in the U.S., a liver trial in the U.S. and then the follow-up trials in both novel oral anticoagulant and ticagrelor reversal in multicenter randomized clinical trials in the United States. Next slide, please. In addition, we'd like to provide you some specific updates. Relating to our path to FDA approval, we'll continue to be on a dual path with the REFRESH 2 pivotal trial and the Breakthrough Designation of ticagrelor removal. During the third quarter, we made progress on both fronts. Specifically for REFRESH 2, as you already heard, an interim safety analysis was completed with data from the first 152 patients enrolled in the trial that were reviewed by the Data Monitoring Committee and the FDA who both recommended study continuation without major modifications. The study resumption process has already been initiated. And pending COVID-19-related delays, we believe that patient enrollment will commence again in the first quarter of 2021. In relation to the ticagrelor Breakthrough Designation, we believe that we have made significant progress in our discussions with the agency during our recent teleconference, and that we are very close to our regulatory path forward that's consistent with Breakthrough Designation status. More specifically, we align fully on the significant unmet medical need to remove ticagrelor during urgent emergent cardiothoracic surgery. We also reviewed together and discussed additional data that we believe support the very positive benefit-to-risk profile of CytoSorb for this application, including data that will be provided by our studies in the U.K., which is the TISORB study; and Germany, which is the CyTATION study. And finally, despite COVID-19-related resource shortages and challenges at FDA, the review team provided assurances that they will work with us with the necessary speed and urgency consistent with a Breakthrough Designation for these indications. Moving on to the TISORB study, which is the U.K. ticagrelor removal study. Non-COVID-19-related clinical activities continue to be challenged in the U.K., either related to institutional R&D lockdowns or prioritization of COVID-19-related vaccine trials. Regardless, our clinical team is working diligently with the TISORB sites to address these challenges and commence enrollment as soon as feasible. Moving on to the REMOVE randomized clinical trial. As we already discussed, COVID-19 has been a challenge worldwide. This also applies to this completed 250-patient, German government-funded, investigator-sponsored, randomized controlled trial that investigates the use of CytoSorbs in patients undergoing valve replacement surgery for infective endocarditis. We remain in close contact with the investigators who are working diligently to have top line data from the study as soon as possible, despite suffering COVID-19-related delays in data monitoring and analysis. We believe that the top line results may be available as early as before year's end and the detailed data and results presented at international scientific meeting and submitted for publication in the first half of 2021. The next slide, please. On a positive note, COVID-19 has also given us the opportunity to treat critically ill patients with coronavirus in ICUs in many countries around the world, including the United States under Emergency Use Authorization. As listed on the slide, we have launched a number of dedicated initiatives to capture data from an estimated 2,800 COVID-19 patients who have been treated with CytoSorb worldwide. As we recently announced, the CTC registry is live and actively enrolling patients from U.S. centers with an initial analysis planned for year's end. As a next step, we're expanding the CTC registry to countries with large experiences international. Additional data collection and pooled analysis are in progress to consolidate the experience from smaller countries and from single sites with a large number of patients. The intent is that all these initiatives will generate high-quality data, both on clinical outcomes and best practices for the use of CytoSorb in COVID-19 patients, and lead to multiple publications. In fact, initial case reports and case series have already been published. And with that, I would like to turn it back to Phil. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [5] -------------------------------------------------------------------------------- Thank you very much, Makis, for that overview. Now I'd like to turn the call over to Kathy for our financial overview. Kathy? -------------------------------------------------------------------------------- Kathleen P. Bloch, Cytosorbents Corporation - CFO & Secretary [6] -------------------------------------------------------------------------------- Thank you, Phil, and greetings, everyone. So for today's call, I'll provide an update regarding our third quarter 2020 financial results. And in addition, I'll talk about our working capital and cash runway. Next slide. So our CytoSorb product sales for the third quarter of 2020 were $10.2 million, which is an approximately 79% increase over product sales of $6.1 million for Q3 2019. And this increase was driven by an increase in direct sales of approximately $2.1 million, resulting from sales to both new customers and repeat orders from existing customers and also an increase in distributor sales of approximately $2.4 million. Now the euro-to-dollar exchange rate increased from an average rate of $1.11 in Q3 2019 to $1.17 in Q3 2020, and this had a positive impact on our third quarter 2020 sales of approximately $428,000. And though it's difficult to quantify, we did estimate that approximately $2.7 million of total product sales in the third quarter of 2020 were due to the demand for CytoSorb to treat COVID-19 patients. Our total revenues, which includes both product sales and grant revenue, was approximately $10.5 million for the third quarter of 2020 as compared to $6.1 million for the third quarter of 2019, which represents an increase of approximately 73%. And importantly, our third quarter 2020 gross profit grew to $7.7 million, which is an increase of 74% or $3.3 million greater than our gross profit for Q3 2019, which was $4.4 million. Our gross profit margins on product sales were approximately 74% for the third quarter of 2020 as compared to 77% for the third quarter of 2019, primarily due to an increase in the percentage contribution of lower-margin distributor sales as well as due to some additional COVID-19 incentive payments to employees as a result of our continuing efforts to ramp up production. Next slide, and then turning to our 9-month financial results. Product sales for the first 9 months of 2020 were $27.9 million, which is an increase of 73% over product sales of $16.2 million for the same period in 2019. Sales to hospitals in the United States under the Emergency Use Authorization granted by the FDA were approximately $928,000 for the 9 months ended September 30, 2020. And once again, we indicate it's difficult to quantitate, but we have estimated that approximately $6.9 million of our total product sales in the 9 months ended September 30, 2020, was due to demand for CytoSorb to treat COVID-19 patients. We do note that this increase in sales was offset, to some extent, by decreases in sales related to elective procedures, which were avoided or postponed during the COVID-19 pandemic, such as in cardiac surgery where CytoSorb may have otherwise been used. The change in the euro-to-U.S. dollar exchange rate did not have a significant impact on sales for the 9 months ended September 30, 2020, as compared to the same period in 2019. Next slide, looking at our quarter-over-quarter product sales. With the third quarter of 2020 and our product sales of $10.2 million, we achieved another record quarterly product sales growth, with the third quarter of 2020 representing our fourth consecutive quarter-over-quarter growth of in-product sales. Sales in 2020 have been positively impacted by demand for CytoSorb to treat COVID-19 patients in the ICUs. And given the order patterns that we are currently experiencing, we expect that the COVID-19 pandemic will continue to have a positive impact on product revenues for the remainder of 2020. However, this may change in the future should the pandemic be contained. Next slide, we look at our trailing 12 months' product sales. And as you can see from this chart, overall, our annual product sales growth continues to be very, very strong. In addition, year-over-year gross margins adjusted for -- in 2020 for the COVID-19-related incentive payments to employees during the ramp-up of production continued to rise, and they would be 77% if we didn't have those COVID-19-related ramp-up costs. And finally, let's take a look at our working capital, liquidity and cash runway. So as Phil has previously mentioned, at September 30, 2020, we had approximately $88 million in cash, which is the most that we've ever had. And this increase in cash over the prior quarter was a direct result of our July 2020 equity raise, which generated approximately $53.8 million in net proceeds to the company. We believe we now benefit from a solid capital foundation and that the existing cash will provide a runway to meet our operating needs well into the foreseeable future. With regard to our operating strategy, we intend to prioritize our spend around: one, generating clinical data and obtaining U.S. FDA approval; two, securing and expanding our production capacity; and three, driving worldwide sales growth and acceptance of CytoSorb as standard of care. And I also want to take a minute to mention our current position with regard to our $15 million term loan with Bridge Bank. We are finalizing a comprehensive analysis of alternatives with regard to the debt financing. And these alternatives include, but are not limited to, refinancing the existing debt and extending the interest-only period; expanding the amount of debt financing available to the company now and/or in the future; repayment of the current debt as well as repayment of the current debt now but retaining a commitment for debt availability in the future. And we have been in extensive discussions with Bridge Bank, our existing bank, as well as other extremely reputable lenders. And with the best interest of our shareholders in mind, we are weighing all of our options and deliberating closely with our Board of Directors. And we expect to finalize our decision with regard to the debt in the very near future. Lastly, just turning to our capital structure. As of September 30, 2020, we have approximately 48.6 million common shares outstanding on a fully diluted basis. And with that, I'd like to turn the call back to Phil. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [7] -------------------------------------------------------------------------------- Thank you very much, Kathy. And in terms of guidance, CytoSorbents has not historically given specific financial guidance on quarterly results until the quarter has been completed. However, provided that the current order pattern continues, and notwithstanding uncertainty related to the COVID-19 pandemic, we expect that the fourth quarter 2020 sales will be one of the company's strongest quarters to date. That concludes our current prepared remarks. Operator, please open up the call for a Q&A session. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from Anthony Petrone with Jefferies. -------------------------------------------------------------------------------- Anthony Charles Petrone, Jefferies LLC, Research Division - Healthcare Analyst [2] -------------------------------------------------------------------------------- Congratulations on the good quarter. I hope everyone is doing well. Maybe I could start a little bit with COVID just in light of where the recent case counts are, and I think you mentioned $2.7 million in the quarter. You do have multiple regulatory clearances, whether it's Emergency Use Authorization or full clearances, at this point. And so I'm just wondering how much stocking is there geographically? When we see where case counts are going, where ultimately do you think hospitals will position themselves with having CytoSorb on the shelf to deal with severe cases? And sort of as we go forward on the regulatory front, should we be expecting any additional authorizations and/or clearances? And then I'll have one more follow-up. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [3] -------------------------------------------------------------------------------- Yes. So I think then in terms of building inventory ahead of what is expected to be a very difficult and severe winter season for COVID-19 and flu, we have seen centers order in the third quarter in advance of the fourth quarter. However, I think that most of the existing stock that has been taken has been designed for patients who are currently ill, and so it's a mix of the two. In terms of potential other regulatory approvals or Emergency Use Authorization throughout the world, I think, at the current moment, we are well positioned. Again, we have the ability to sell this in 66 countries around the world for the treatment of cytokine storm. And because of that, we can be used in any country today that we're currently registered in to be able to treat COVID-19. So they are not necessary. We did get some approvals earlier, some authorizations earlier from Israel, for example, and from India. But again, those are not necessary to be able to use our therapy in COVID-19. -------------------------------------------------------------------------------- Anthony Charles Petrone, Jefferies LLC, Research Division - Healthcare Analyst [4] -------------------------------------------------------------------------------- And then maybe the two thoughts here would be, and I'll get back in queue, the first would be just in terms of Germany, and this was a ramp year in terms of the sales force, and maybe just an update on how that process is going and really the time you expect it to take the additional sales rep to really begin contributing to CytoSorb sales in Germany specifically. And then you referenced plant expansion in the U.S., just maybe a little bit on timing as to when you'll begin to actually break ground on plant expansion. You mentioned to support $300 million to $400 million in sales, but what level of CapEx will be committed to that expansion plan? -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [5] -------------------------------------------------------------------------------- Sure, Anthony. Two good questions. Let me turn the first one over to Christian Steiner. Dr. Christian Steiner is our Senior VP of Sales and Marketing in Germany. And then the second one, Vince Capponi, our President and Chief Operating Officer, if you could take that one, that would be great. Christian? -------------------------------------------------------------------------------- Christian Steiner, Cytosorbents Corporation - SVP of Sales & Marketing [6] -------------------------------------------------------------------------------- Yes. Thank you, Phil. And thank you, Anthony, for the question. Can you hear me all right? -------------------------------------------------------------------------------- Anthony Charles Petrone, Jefferies LLC, Research Division - Healthcare Analyst [7] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [8] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Christian Steiner, Cytosorbents Corporation - SVP of Sales & Marketing [9] -------------------------------------------------------------------------------- Okay. Very good. Yes, in terms of sales force in Germany, actually, we have finished the buildup of the sales force end of last year, beginning of this year, and also the training for order sales reps was finished in the first quarter. I think the COVID-19 pandemic has led to the case that we also had quite some time to expand the training for all the sales reps and bring them on speed. And I think everyone is at the right pace from Q2. Still, we have restricted access regulations for the sales reps in the hospitals. But as soon as we can access the hospitals 100%, everyone is ready to go. Yes, I think that's for the sales force. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [10] -------------------------------------------------------------------------------- Great, Christian. And Vince, if you could maybe take the question on manufacturing and the CapEx requirements for that and the timing. -------------------------------------------------------------------------------- Vincent J. Capponi, Cytosorbents Corporation - President & COO [11] -------------------------------------------------------------------------------- Sure. All right. Thanks, Phil. So regarding your question about starting and the CapEx expenditure, we are intending to actually zero in on the close of potentially a new building here in the first quarter of next year, in which case then it's going to take us roughly 12 months to build that out and actually have it approved and capable of producing product. We expect that that's going to be about -- with obviously landlord contributions as well as owner, around about $5 million build-out to be able to support about a $300 million business. -------------------------------------------------------------------------------- Anthony Charles Petrone, Jefferies LLC, Research Division - Healthcare Analyst [12] -------------------------------------------------------------------------------- That's helpful. -------------------------------------------------------------------------------- Vincent J. Capponi, Cytosorbents Corporation - President & COO [13] -------------------------------------------------------------------------------- Did that answer your question? -------------------------------------------------------------------------------- Anthony Charles Petrone, Jefferies LLC, Research Division - Healthcare Analyst [14] -------------------------------------------------------------------------------- Yes. Absolutely. -------------------------------------------------------------------------------- Operator [15] -------------------------------------------------------------------------------- Next question comes from Andrew D'Silva with B. Riley. -------------------------------------------------------------------------------- Andrew Jacob D'Silva, B. Riley Securities, Inc., Research Division - Senior Analyst [16] -------------------------------------------------------------------------------- Just a follow-up on the manufacturing question. As it relates to the current manufacturing facility, two parts. One, do you think, as you close out the year, you'll be back at that 80% gross margin level? You noted 77%, without ramp-up, incentive payments. So it seems like you're almost there. And then have you reached the ability to produce at full capacity near that $80 million annual number? -------------------------------------------------------------------------------- Vincent J. Capponi, Cytosorbents Corporation - President & COO [17] -------------------------------------------------------------------------------- Yes, so -- go ahead, Phil, sorry. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [18] -------------------------------------------------------------------------------- No, no, no, I was just going to pass it on to you, Vince. -------------------------------------------------------------------------------- Vincent J. Capponi, Cytosorbents Corporation - President & COO [19] -------------------------------------------------------------------------------- All right. Thanks, Andrew, for the question. So with respect to the gross margins, as you could -- as Kathy mentioned, we're roughly at the -- without the incentives, et cetera, around the 77%. We expect to be -- if you take those incentives out, et cetera, we'll expect to be close to the 80% gross margin. Our efficiencies are improving as we've now started to come up to full expansion, if you will. We're not completely there. And again, we're balancing with demand. So we don't want to go too excessive here. But basically, we are knocking on the door of that 80% gross margin as the bottom line. Again, I think our efficiencies have improved now. Taking out the incentives, et cetera, we should be very close to that. With respect to being at the full $80 million capacity, if you will, $80 million capacity, we're balancing again the operation relative to what we see as the orders in Christian's forecasting. So certain parts of the operation we run more, if you will, than other parts. But I will say between April of this year and now, we've actually added another production line to help increase, if you will, the velocity of product at which we could put out of the plant. So that has helped us keep up with Christian's demand and be able to supply the market with this -- obviously, with this COVID-19 situation. Does that answer your question? -------------------------------------------------------------------------------- Andrew Jacob D'Silva, B. Riley Securities, Inc., Research Division - Senior Analyst [20] -------------------------------------------------------------------------------- Yes. You're 2 lines now or are there more than just 2? -------------------------------------------------------------------------------- Vincent J. Capponi, Cytosorbents Corporation - President & COO [21] -------------------------------------------------------------------------------- We're actually at 3 lines now. -------------------------------------------------------------------------------- Andrew Jacob D'Silva, B. Riley Securities, Inc., Research Division - Senior Analyst [22] -------------------------------------------------------------------------------- Okay. Perfect. And then on the clinical side, you're clearly investing a lot more now on internally funded trials. One that notably stood out in your press release was related to septic shock. That's been historically a fairly challenging bar to hit. Just curious if you could talk around why you believe now is the right time to pursue that. And any differences that you see, whether with regulators or from an efficacy standpoint, that gives you confidence to go about that now versus before? -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [23] -------------------------------------------------------------------------------- Yes. Makis, would you like to take that? -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [24] -------------------------------------------------------------------------------- Thank you, yes. Thank you for the question. The academic community and the thought leaders in sepsis have, for many years, suggested that alternative outcomes be the measures of randomized clinical trials and that the field should move away from just testing everything against mortality since that bar is too high to reach. So in that regard, we recently saw, over the last few years, some regulators fall into that line, recently approved Giapreza, based on blood pressure stabilization in people with shock. So we believe that the ability to now execute clinical trials, with innovative end points that are clinically meaningful and now more and more accepted by the regulators, makes this an opportunity for us to execute clinical studies, especially because the consistent message we're getting from users in the field, that one of the most evident benefit they see when they connect CytoSorb to the septic shock patients is this immediate hemodynamic stabilization with a reduction for the need of vasopressors or the additional drugs to maintain blood pressure and the rapid return of the mean arterial pressure to levels that are considered to be now stabilized and, therefore, they can improve the other treatment that are necessary for these patients such as getting rid of fluids and improving the ventilator setting. So it's twofold: one, we think the performance of CytoSorb in everyday practice is compelling, and it's highly -- for us, it makes us very confident that we can show that in a clinical trial setting; and second of all is the evolution of both the academic community and regulators into looking into new innovative end points that we believe we can deliver using such new end points in these trials. -------------------------------------------------------------------------------- Andrew Jacob D'Silva, B. Riley Securities, Inc., Research Division - Senior Analyst [25] -------------------------------------------------------------------------------- Okay, great. And just a last question for me, and I get this from clients a lot. It's just related to HemoDefend-RBC versus HemoDefend-BGA, if you could just discuss where you are in the development path for both those and if there's any other opportunities we should be thinking about with that product line. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [26] -------------------------------------------------------------------------------- So with the HemoDefend-Red Blood Cell product, this is a product that is designed to reduce noninfectious contaminants from packed red blood cells, such as cytokines, antibodies, bioactive lipids, potassium and a wide variety of other contaminants that can cause potential transfusion reactions. And so this is a program that has been subsidized by National Heart, Lung and Blood Institute. And as we've discussed in the past, this was making its way towards human clinical studies and then potentially for -- we would then apply for approval in the United States. So because of COVID-19, it has essentially slowed that program significantly to the point where -- because we need to conduct some additional bench studies and also healthy volunteer studies, this has made limited progress over the past several months. That being said, it is very much still in our pipeline and very much one of the things that we will be moving forward in a post-COVID environment. The second program is the HemoDefend-BGA program, and this is a product that is designed to remove anti-A and anti-B antibodies from plasma as well as whole blood as a way to create a universal plasma product that is not blood type specific, that can be used off-the-shelf rapidly and given to trauma patients or critically ill patients or used in plasmapheresis and plasma exchange, for example, or used actually in a broad supply chain, I guess, in the area of plasma processing and production of factors, such as albumin and coagulation factors, for example, where they do not need to worry about the blood type specificity of that plasma unit. So that's the value of universal plasma. And then the second application is, one, in the ability to give whole blood transfusions, which the military believes is a superior alternative to giving -- rather than giving component units, such as packed red blood cells and platelets and plasma, for example, in terms of trying to stop hemorrhaging and bleeding related to combat casualty injuries. And so this is a program this year, actually, that we have received now $8.5 million in funding to complete the preclinical development and advance this product to human clinical studies and, eventually, approval. And so this is a program we are well funded for and are moving aggressively. It's one of the priorities of the company outside of CytoSorb. And our goal is to get this to a -- out of the preclinical realm within the next 1.5 years or so. So I think that COVID-19 has slowed everything down in terms of being able to work in the lab, et cetera, so we lost some time there. But that being said, our R&D folks are now back in the lab. And we are continuing to move these programs forward. -------------------------------------------------------------------------------- Andrew Jacob D'Silva, B. Riley Securities, Inc., Research Division - Senior Analyst [27] -------------------------------------------------------------------------------- Okay. And congrats on all the progress this year, and best of luck closing out 2020. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [28] -------------------------------------------------------------------------------- Thank a lot, Andy. -------------------------------------------------------------------------------- Operator [29] -------------------------------------------------------------------------------- Next question comes from Josh Jennings with Cowen and Company. -------------------------------------------------------------------------------- Joshua Thomas Jennings, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [30] -------------------------------------------------------------------------------- Congratulations on the strong results. I just wanted to ask about the STAR trials and wanted to see if you had -- could you help us just think about potential primary end points or secondary end points for this trial or those 2 trials, just to start with that? -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [31] -------------------------------------------------------------------------------- Sure. Let me turn it over to Makis for some additional color. Makis? -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [32] -------------------------------------------------------------------------------- Thank you, Phil, and thanks for the question. So the acronym STAR stands for, safe and timely antithrombotic removal. So the idea is that the STAR program will be comprised of a series of studies to look at different important areas for this application. STAR 1 is a registry. As you're probably aware, we have seen marked approval in Europe for removal of ticagrelor and rivaroxaban. So this is happening now in practice. And we have actually now collected a user's survey that suggests that over 400 cases have already been treated that way. So the intent of the STAR 1 program will be to capture real-world outcomes with its use and be able to, obviously, publish this data, which we believe will be very compelling, informing other institutions to establish this as a standard of care in the approved regions. The STAR 2 and STAR 3 programs are meant to complement with new information, the STAR 2 specifically looking into drug removal itself. And as per the FDA's own guidance, the gold standard in clinical studies to detect, measure, removal of drugs and, obviously, reversal of the drug effect is by doing PK/PD studies. So we plan to utilize an extensive program looking at the PK/PD parameters of using CytoSorbs in patients with every one of the direct oral anticoagulants, such as rivaroxaban or apixaban or the dabigatran and ticagrelor, as we're doing in the CyTATION and the TISORB trials. So the STAR 2 program is meant to provide the definitive mechanistic PK/PD data of definitive drug removal by CytoSorb. And then STAR 3 will be the late stage where we're going to show, in those randomized clinical trials, the implementation of this approach as the standard of care and the associated clinical benefits when it comes to bleeding reductions, obviously, those are the most obvious ones, but also substantial economic benefits. We believe that its application has a tremendous value proposition. It's not just a reduction in clinical outcomes, it's the improvement in the efficiency of care and the throughput of these patients that, today, in today's practice, they're basically sitting around in the hospital waiting for these drugs to wash out before they can have a necessary operation or intervention. So the STAR platform consists of many programs, all of them designed to provide the full picture of real-world use, drug removal, mechanistic evidence and then, of course, clinical outcomes and economic performance data. -------------------------------------------------------------------------------- Joshua Thomas Jennings, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [33] -------------------------------------------------------------------------------- Excellent. And just a follow-up on STAR 3, will that include patients on NOACs as well as ticagrelor or a combination? -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [34] -------------------------------------------------------------------------------- Yes, sure. We believe that the application has the exact same benefit, including, again, the reductions in clinical indices of bleeding and also the increase in efficiency. So we plan to invest in generating data on both ticagrelor and the NOAC class. -------------------------------------------------------------------------------- Joshua Thomas Jennings, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [35] -------------------------------------------------------------------------------- Great. And then just I had a question on the registries for critically ill COVID-19 patients of the U.S.-based registry, CTC, 500-patient registry, a bunch of other industries worldwide. Could you potentially use that data for a submission for a specific SARS-CoV-2 indication in the United States? -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [36] -------------------------------------------------------------------------------- So let me turn that over to Phil or to Vince to provide you more of the regulatory side. Phil or Vince, do you want to take that one? -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [37] -------------------------------------------------------------------------------- Yes. I think the goal of the registry in COVID-19 is really to generate the clinical data on the treatment of complications of viral sepsis. So it turns out that COVID-19 as a virus, just like the flu, for example, is causing a viral sepsis leading to an organ injury, particularly lung injury, shock and kidney injury. And these are common complications in a wide variety of different infections, including viral infections, such as influenza and COVID-19. So although the data from the registry, we don't believe, would be sufficient to drive U.S. regulatory approval, it may be sufficient in other countries but not in the United States, we do believe it will provide a key level of data to be able to begin studies in viral sepsis, particularly influenza, which is perennial. It happens every year. It comes back every year. And there are millions of patients, tens of millions of patients who get flu every year in the United States, 40 million, 50 million last year alone, leading to about 25,000 -- 400,000, 500,000 hospitalization and about 25,000 to 30,000 deaths. And so we think that any progress that we can make with COVID-19 will be potentially leverageable to do a definitive study in flu, for example, that could be a perennial source of revenue for us on an ongoing basis. -------------------------------------------------------------------------------- Joshua Thomas Jennings, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [38] -------------------------------------------------------------------------------- That makes sense. I appreciate that. And my last question, just the distributor team -- or your distributors generated some nice sequential momentum, I think 20% sequential revenue growth from that channel. Can you talk about the drivers? I mean was it mostly COVID related? Or did you also see demand or utilization from the ticagrelor and rivaroxaban removal locations in Europe? -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [39] -------------------------------------------------------------------------------- Sure, Josh. Let me turn it over to Christian to give some color on the distributor sales and where that's coming from. Christian? -------------------------------------------------------------------------------- Christian Steiner, Cytosorbents Corporation - SVP of Sales & Marketing [40] -------------------------------------------------------------------------------- Yes. Thank you, Josh, for the question. Yes, I think you are right in assuming that COVID plays a role, but that's not the whole story. So I think in -- you know that we are currently in more than 60 countries, and it takes quite a long time to prepare the markets together with partners. And in many countries, this has been for the last few months and years, and so the countries or markets were ready at the time when COVID kicked in. And this gave us a kind of head start that because quickly use the infrastructure in these countries and cover the demand. So it's both. It's, on one hand, a continuous growth on the -- on our standard indications, and the kick was really by COVID-19. Does it make sense? -------------------------------------------------------------------------------- Joshua Thomas Jennings, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [41] -------------------------------------------------------------------------------- Excellent. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [42] -------------------------------------------------------------------------------- Yes, I think also, for example, Latin America, which, as you know, we just opened this year, we expected actually, in fact, a much longer ramp to market penetration in many countries within Latin America. However, the COVID-19 pandemic has really accelerated that usage and adoption in places like Colombia and many other countries throughout Latin America. And so I think that we see as going to have a lasting benefit even when COVID-19 goes away, that the positive outcomes or the deposit outcomes that they've been seeing should help translate into usage and other applications as well. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- Next question comes from Danielle Antalffy with SVB Leerink. -------------------------------------------------------------------------------- Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [44] -------------------------------------------------------------------------------- So just to follow up on Josh's question, how do we think about the NOAC indication contributing as we come out on the other end of COVID? I mean if COVID limited the number of elective procedures being done in Europe, so if we think about a ramp there, like, should we be thinking about it in line with elective procedures ramping? Or help -- if you could give us even qualitatively some color there, and I have one follow-up. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [45] -------------------------------------------------------------------------------- Sure. Thanks, Danielle, and great to have you on the call. Makis, did you want to take that in terms of discussing how we feel that the market will develop with ticagrelor removal and also the NOACs? Makis, you may be on mute. -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [46] -------------------------------------------------------------------------------- Apologies. Thanks, Danielle, for the question. This application, as it relates to both ticagrelor and all the novel oral anticoagulants, it's an unmet need that's been around for a long time. These drugs have been available, antithrombotics, for many years and are a cornerstone now for most of the cardiac patients over the last couple of decades. And these new-generation drugs like ticagrelor, which is considered by many to be best-in-class and, of course, rivaroxaban, apixaban that are replacing Coumadin throughout the world, are only increasing the penetration among cardiovascular patients. So frequently, these patients require urgent care either in the sense of having an accident or requiring an emergent operation. And these doctors, these clinicians are stuck with this management problem, and they've been stuck with it for many, many years. So the difference in this market is that you do not need to develop the unmet need. The unmet need is very clear. And there is no solution right now. So we can tell you that the most common response we're getting from physicians when we present the evidence for this application is that this is a no-brainer for them to use. So we feel now that we have an opportunity for education and communication of our early clinical data and, obviously, as we're generating more clinical data, even more so. And then we view this as a rapid transition to the standard of care for these managers of patients. We don't see a slow ramp-up. We see a rapid adoption of this as long as we continue to support it with the necessary clinical information. -------------------------------------------------------------------------------- Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [47] -------------------------------------------------------------------------------- Great. And then -- oh, go ahead. Go ahead, Phil, sorry. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [48] -------------------------------------------------------------------------------- Sorry. I think that we're -- I've mentioned in the press release that sales from our ticagrelor and rivaroxaban approvals that we've received earlier this year have been -- have not really made major contributions yet. And I think part of the issue there is the fact that for those who don't know about it, we need to get out there and bring them -- and educate them, as Makis as mentioned. And that's been limited because of COVID-19 in terms of medical conferences, in terms of being able to detail hospitals and talk to them about the technology and how it's used and also in training as well. And so I think that once we come out of COVID-19 and are able to now leverage our significant commercial resources to really bring this to clinicians all over the world, I think then that is when you will see a significant uptick in usage. Those who know about it really like it a lot, and that's the feedback that we've been getting. -------------------------------------------------------------------------------- Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [49] -------------------------------------------------------------------------------- Yes. So just a follow-up on that. So as we think about the upcoming U.S. indication, and you're already -- presumably, you're in some centers already given the COVID EUA, so just curious how to think about the go-to-market strategy. You have a good partner in Terumo. So how quickly should we be thinking about a U.S. ramp here? Is there a way to give us some color on the number of centers that already have the system and have experience? I appreciate it's in the critical care setting versus the cardiac setting but still gives you an entrée presumably into those centers, so maybe help, even qualitatively, give us some color there. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [50] -------------------------------------------------------------------------------- Yes. So I think that the exciting thing about COVID-19 is that the patients who are -- it represents an opportunity to actually introduce the technology to cardiac surgery -- surgeons and perfusionists because one of the main modalities of rescuing patients who fail mechanical ventilation is a technology called ECMO where we've had thousands of uses over the years using CytoSorb with extracorporeal membrane oxygenation, a machine that can oxygenate blood outside of the body when the lungs gets so diseased that mechanical ventilation fails. Typically, these patients will die. And ECMO was designed, in fact, by our former Chief Medical Officer, invented by our former Chief Medical Officer, Dr. Robert Bartlett. That's one of the reasons why this is a growing modality in terms of artificial respiratory support throughout the world. But that being said, we do not market CytoSorb off-label to these centers. However, what they are getting experience with is the concept of the use of CytoSorb to reduce cytokines as a means to improve -- to reduce deadly inflammation and also how easy it is to hook up to extracorporeal systems. So we believe that those centers will be primed and ready to go when we actually look to launch this if, hopefully, and when, we get U.S. regulatory approval and will be the basis of that commercialization effort. We also obviously run clinical studies in cardiac surgery here in the United States. REFRESH 2, for example, is being done at 25 centers, major centers, throughout the country, particularly on the East Coast, and they also represent targets for us in the initial commercialization focus. One of the things that we are doing, and Vince is actually leading this program, is we are actually working to begin developing our commercialization effort here in the United States. And maybe with that, Vince, if you want to talk about it or I can keep going? -------------------------------------------------------------------------------- Vincent J. Capponi, Cytosorbents Corporation - President & COO [51] -------------------------------------------------------------------------------- Phil, go ahead. Sorry, Danielle. -------------------------------------------------------------------------------- Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [52] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [53] -------------------------------------------------------------------------------- Okay. Well, so we are actually in the process of hiring a VP of Sales and Marketing for the United States. And that person -- the goal of that person is to, one, help manage the COVID-19 opportunity while it lasts, and we believe again that COVID-19 will continue to play a dominant role in U.S. health care through Q4 and also well into Q1. But because it takes time -- we are not a commercialization organization in the United States, we are a -- this is where our headquarters is. This is where we do our manufacturing and all of our quality, our clinical and nonclinical R&D, but we are not a commercialization organization in the U.S. And so it takes time to build that, as you know. And so that is going to be one of the goals of coming up with a strategy of rolling out, whether or not it's a direct or partner strategy, and then building that infrastructure here in the United States to be able to support that effort. So Vince will be leading that -- is leading that effort right now. And I guess it will be just a short time now until we can give you a little bit more detail on that strategy. -------------------------------------------------------------------------------- Operator [54] -------------------------------------------------------------------------------- Next question comes from Sean Lee with H.C. Wainwright. -------------------------------------------------------------------------------- Sean Lee, H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate [55] -------------------------------------------------------------------------------- Congratulations on a great quarter. I have just two quick questions on the clinical programs. So first, could you provide a bit more color on your strategy for tackling the sepsis? I see that you have both the German study planned and as well as a future U.S. study. So maybe you can tell us a little bit more about the design of these studies and what the potential end points are and whether there are any differences between the German study and the U.S. study. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [56] -------------------------------------------------------------------------------- Sure. Makis, would you like to take that? Or I can take it as well. -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [57] -------------------------------------------------------------------------------- Either/or, Phil, your call. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [58] -------------------------------------------------------------------------------- Sure. Why don't you go ahead? -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [59] -------------------------------------------------------------------------------- Okay, great. So Sean, thanks for the question. So the PROCYSS trial is a multicenter trial that's going to be executed in Germany, targeting septic shock patients. And the idea here is that we will attempt to demonstrate shock reversal. And by shock reversal, that's another term to what I mentioned earlier in the call, which is hemodynamic stabilization, which tends to be the #1 treatment goal in these patients. When they present themselves in the intensive care units, the first thing you need to do is stabilize the hemodynamics to be able to apply all the other therapies. So we have implemented a primary end point, specifically detecting the time to get these patients stabilized. So it's a time-dependent manner because we know, just like in an acute cardiac event where every minute counts, it's a very similar situation in sepsis. The longer these organs are hypoperfused, the higher the likelihood they will progress to organ failure. So we believe it's a very meaningful end point. It's kind of an innovative end point. But as I presented earlier today on the call, the regulators are believing to -- are starting to believe that this is the kind of end points we need to be looking at simply because previous studies that were negative using mortality have kind of removed the interest of executing clinical studies in this setting. So that's the German trial. That's meant to have an interim analysis halfway through, and we believe that's going to be a very informative initial provided information for us for the progression of that trial and the next trials. The U.S. trial, we're in the early process of creating the Executive Committee, identifying the PIs and discussing the relevant issues. We feel, based on the experience that we are seeing with the commercial use of CytoSorb in septic patients and always getting a consistent report of hemodynamic stabilization that we would again focus on some similar end points. And we plan to engage with the agency to make sure that whatever end points we use, they're considered meaningful by the FDA as well. So we do anticipate this trial to be able to launch before 2021, and we're currently in the early stages of planning it. -------------------------------------------------------------------------------- Sean Lee, H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate [60] -------------------------------------------------------------------------------- Great. My second question is on the ongoing TISORB and CyTATION studies. Now with the flare-up of COVID in Europe, I was wondering what's the impact on those -- on the time line of those studies and whether you can update on maybe when we can potentially see the results from those? -------------------------------------------------------------------------------- Efthymios N. Deliargyris, Cytosorbents Corporation - Chief Medical Officer [61] -------------------------------------------------------------------------------- Yes. Great question. The TISORB study actually was activated and enrolled its first patient right before the COVID shutdowns took effect. So that's an active study. And basically, the teams, both our internal clinical team and the CRO-related team, have been working on navigating the COVID-19-related R&D restrictions that have been imposed both in the U.K. and Scotland. We have seen, over the last 6 to 8 weeks, some easing of these requirements, and we already have active sites now that are looking to enroll patients in TISORB. Having said that, we're also seeing the second wave now starting to play out throughout Europe, including the U.K. So we don't know how exactly this will impact our sites, but we do expect that there is a possibility that additional restrictions may come in the near future. Regarding CyTATION, CyTATION is about to get started. We recently made some progress regarding regulatory and IRB approvals in the study. That is being executed as a multicenter study in Germany. Germany did have a little lighter kind of impact of COVID on the first wave. We don't know exactly how the second wave will impact Germany. But as you know, Germany has a much more -- much higher numbers of intensive care beds and a much greater capacity to manage a surge in critical cases. So we are progressing both trials. But at the same time, we're looking carefully at what COVID-19 may impose as the second wave plays out. -------------------------------------------------------------------------------- Operator [62] -------------------------------------------------------------------------------- At this time, I would like to turn it back to management for any additional or closing remarks. -------------------------------------------------------------------------------- Phillip P. Chan, Cytosorbents Corporation - CEO, President & Director [63] -------------------------------------------------------------------------------- Well, thank you, everyone, for your participation today. And if you do have any other questions that we did not answer today, please feel free to reach out to Jeremy Feffer at jeremy@lifesciadvisors.com, and we'll try to reply to your questions where possible. We look forward to the next quarterly call. And thank you, everyone, very much. Have a good night. -------------------------------------------------------------------------------- Operator [64] -------------------------------------------------------------------------------- Thank you. That concludes our conference for today. I'd like to thank everyone for their participation.