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2021 total revenue was $43.2 million, including product sales of $40.1 million. Core non-COVID-19 product sales increased approximately 13% Y-Y to $33.8 million.
2022 marks the 10th anniversary of CytoSorb® commercialization
MONMOUTH JUNCTION, N.J. , March 8, 2022 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery using blood purification via its proprietary polymer adsorption technology, today reported audited financial and operating results for the quarter and year ended December 31, 2021 and provides its 2022 outlook.
CytoSorbents Reports Fourth Quarter and Full Year 2021 Results and Provides 2022 Outlook
For a more detailed discussion of 2021 and our 2022 strategy, please refer to our annual stockholder letter, issued January 18, 2022 .
Dr. Phillip Chan , Chief Executive Officer of CytoSorbents stated, "CytoSorbents is the pioneer and leader in acute care hemoadsorption. This year, we celebrate the 10th anniversary of CytoSorb commercialization, during which time we have grown our business substantially, with more than 162,000 cumulative CytoSorb devices delivered to more than 70 countries worldwide. Our blood purification technologies help to treat patients who suffer from many of the most difficult and deadly medical conditions that physicians face on a daily basis. These are illnesses for which few, if any, therapies are effective, leading to millions of deaths each year. This is no easy task, but when used in the right patient, at the right time, with the right dose, our CytoSorb therapy is associated with exciting and often dramatic positive outcomes, which has driven adoption and usage around the globe. In fact, the scientific body of knowledge regarding CytoSorb use continues to grow with Company-sponsored and investigator-initiated studies, making CytoSorb the most published cytokine adsorption therapy worldwide. With every study - positive, neutral, or negative - we continue to learn who we can treat and how to achieve the best possible outcomes for these critically ill patients. And now with DrugSorb™-ATR in U.S. clinical trials for antithrombotic drug removal during cardiothoracic surgery to reduce perioperative bleeding, and the ECOS-300CY® cartridge approved in the E.U. for cytokine removal during ex vivo organ perfusion with the goal of improving the function of organs destined for transplant, we have even greater opportunities to impact human health."
Dr. Chan continued, "In 2021, as discussed in detail in our annual stockholder letter in January, we had a good year despite a challenging operational environment with the ebbs and flows caused by the COVID-19 pandemic. Total revenue and product sales were slightly ahead of our record results in 2020, highlighted by an approximate 13% increase in core non-COVID-19 product sales as we worked to offset the anticipated decline in COVID-19 related sales. Product gross margins remained strong at approximately 80% and we ended the year with a solid cash balance of nearly $54 million that is intended to fuel our future growth initiatives, fund the opening of the critical U.S. market, and propel us to profitability."
Dr. Chan added, "Looking forward in 2022, it is too early to predict how our business may be impacted by the ongoing effects of COVID-19 and the new geopolitical uncertainty caused by the Russia -Ukraine war. However, as it relates to COVID-19, we believe that 2022 will bring a near normalization of our operating environment with the most severe impacts of COVID in the rearview mirror. While the pace and timing are difficult to predict, we believe the trajectory of COVID-19 has followed other major viral pandemics, including the devastating 1918-1919 Spanish influenza epidemic almost a century ago to the year, that lasted roughly 2 years without the benefit of a flu vaccine. Mass immunity to COVID-19 from widespread vaccinations and natural infections have led to plummeting new infections from the Omicron variant in many countries, though note that infection rates are still near all-time highs in Germany and Austria and have only recently just peaked. However, taking other major E.U. countries as a guide, COVID-19 infections should rapidly fall in Germany and Austria over the next month or two, and Germany has already declared its intent to lift social restrictions by late-March. Turning to the Russia -Ukraine war, we are saddened for the people affected by this tragic turn of events and are unable to predict how it may evolve. With the current turmoil and economic and trade sanctions, we have assumed little to no sales from this region in 2022, which in 2021 only represented less than 4% of our product sales. Regardless, we remain focused on factors that are within our control and at the end of the day our priority is to help save lives."
Dr. Chan continued, "In 2022, we will continue to remain disciplined in our focus, execution, investment, and control of expenses to drive progress in 4 major areas.
We believe these initiatives will lead to sustainable and significant value creation for our Company and our shareholders."
Dr. Chan concluded, "Over the past decade, we have been working tirelessly to help save the lives of patients all over the world with our CytoSorb blood purification technology and to "Change Medicine" for the better. During the pandemic, under FDA Emergency Use Authorization, we have had the opportunity here in the United States to personally train and guide U.S. clinicians on how to use CytoSorb in the most critically ill COVID-19 patients with acute respiratory distress syndrome and refractory respiratory failure on ECMO. We were tremendously gratified to learn that in 52 such patients from 5 major U.S. ECMO centers, using CytoSorb helped roughly 7 out of 10 patients survive their life-threatening ordeal and make it back home to their families. What we are doing is meaningful and important and we are proud to work with all of our healthcare worker, hospital, and distributor/strategic partners to bring this vital therapy to patients in need. We have accomplished a lot over the last 10 years, but we are even more excited about the next ten."
Results of Operations for the year ended December 31, 2021
Revenues Total revenue, including product revenue and grant income, for the year ended December 31, 2021 was $43.2 million , a 5% increase from $41.0 million for the year ended December 31 , 2020. Product sales in 2021 were $40.1 million in 2021, a 2% increase from $39.5 million in 2020. COVID-19 relates sales in 2021 were estimated to be $6.3 million compared to $9.4 million in 2020. Core non-COVID-19 sales grew approximately 13% from $30.1 million in 2020 to $33.8 million in 2021.
Cost of Revenues Cost of revenue for the year ended December 31, 2021 was $11.0 million compared to $11.1 million for the year ended December 31 , 2020. Product gross margins were approximately 80% for the year ended December 31, 2021 , compared to 76% for the year ended December 31, 2020 , due to certain costs associated with the rapid ramp-up of production during 2020 that did not recur during 2021.
Operating Expenses Operating expenses for the year ended December 31, 2021 amounted to $54.9 million , a 36% increase from $40.3 million for the year ended December 31 , 2020. Research and development expenses increased from $8.8 million in 2020 to $16.4 million in 2021 due primarily to an increase in clinical trial and related costs associated with the start of our STAR-T and STAR-D clinical trials in the U.S. and our PROCYSS and Hep-on-Fire clinical trials in Germany. Selling, General & Administrative (SG&A) expenses increased 26% to $35.8 million in 2021 from $28.5 million in 2020 due primarily to an increase in salaries, commissions, and related costs of $4.5 million , an increase in non-cash restricted stock expense of $1.0 million related to restricted stock units granted to the Company's executive officers and an increase of $0.5 million in non-cash stock option compensation expense, among other items. Legal, financial, and other consulting expense decreased 10% in 2021 to $2.7 million compared to $3.0 million in 2020.
Liquidity and Capital Resources Since inception, our operations have been primarily financed through the private and public placement of our debt and equity securities. At December 31, 2021 , we had current assets of approximately $64.3 million including cash, cash equivalents and restricted cash on hand of approximately $53.8 million and had current liabilities of approximately $13.7 million . As of December 31, 2021 , $25 million of our total shelf amount was allocated to our ATM facility, all of which is still available. Also, we expect to receive approximately $736,000 in cash from the approved sale of our 2020 net operating losses and research and development credits from the State of New Jersey in the first half of 2022.
We believe that we have sufficient cash to fund our operations and clinical trial activities well into the future.
Results of Operations for the Quarter ended December 31, 2021
Revenues Total revenue, including product revenue and grant income, for the fourth quarter of 2021 was $10.8 million , down 10% from $12.0 million in the fourth quarter of 2020. Product sales in the fourth quarter of 2021 were $9.7 million , down 16% from $11.5 million in the fourth quarter of 2020. COVID-19 relates sales in the fourth quarter of 2021 were estimated to be $1.7 million compared to $2.6 million in the fourth quarter of 2021. Core, Non-COVID-19 sales declined 10% from $8.9 million in the fourth quarter of 2020 to $8.0 million in the fourth quarter of 2021.
Cost of Revenues Cost of revenue for the fourth quarter of 2021 was $3.1 million compared to $2.5 million for the fourth quarter of 2020. Product gross margin was approximately 78% for the fourth quarter of 2021, compared to approximately 81% for the fourth quarter of 2020, due mainly to a scheduled manufacturing plant shut down for planned maintenance and year-end inventory count.
Operating Expenses Operating expenses for the fourth quarter of 2021 amounted to $17.2 million , a 43% increase from $12.1 million for the fourth quarter of 2020. Research and development expenses increased from $2.7 million in the fourth quarter of 2020 to $6.1 million in the fourth quarter of 2021 due primarily to an increase in clinical trial and related costs associated with the start of our STAR-T and STAR-D clinical trials in the U.S. and our PROCYSS and Hep-on-Fire clinical trials in Germany. Selling, General & Administrative (SG&A) expenses increased 26% to $10.4 million in the fourth quarter of 2021 from $8.3 million in the fourth quarter of 2020 due primarily to an increase in salaries, commissions, and related costs of $1.5 million , and an increase in sales and marketing costs, which include advertising and conference attendance of approximately $0.6 million , among other items. Legal, financial, and other consulting expense declined 42% in the fourth quarter of 2021 to $0.6 million compared to $1.1 million in the fourth quarter of 2020.
The macro environment in which we operate remains difficult to predict given the complex drivers of our business and global nature of our operations.
We expect COVID-19 cases and hospitalizations worldwide to continue to decline and expect to reach a more normalized operating environment as the year progresses, as high rates of vaccination and natural immunity have reduced the severity of COVID-19 illness and need for hospitalization and ICU care, and with it the use of CytoSorb in these patients. Our 2022 outlook assumes a gradual recovery of normalized hospital activity in Germany and other key countries and no major economic slowdowns as a result of new variants of COVID-19. As a result, we expect limited COVID-19 related product sales in 2022 compared to an estimated $6.3 million in COVID-19 related product sales in 2021.
In addition, given our global presence, the Russia -Ukraine war presents a unique challenge, and we are unable to predict at this time how this situation may evolve. We believe we currently have limited exposure, where in 2021, product sales generated from Russia and neighboring countries potentially impacted by the conflict amounted to less than 4% of product revenue.
Assuming little, to no sales in 2022 from Russia and neighboring countries that might be impacted by the war, we expect growth of 20% or more in 2022 core, non-COVID-19 sales, compared to $33.8 million in core, non-COVID-19 product sales generated in 2021.
For additional information, please see the Company's Form 10-K for the period ended December 31, 2021 , to be subsequently filed with the SEC at http://www.sec.gov.
The company will conduct its fourth quarter and full year results call today at 4:30 p.m. Eastern time . It will be archived for replay following the conference call.
Conference Call Details: Toll free: 1-877-451-6152 International: 1-201-389-0879 Conference ID: 13726520
It is recommended that participants dial in approximately 10 minutes prior to the start of the call. There will be a simultaneous live webcast of the conference call that can be accessed through the following audio feed link: https://viavid.webcasts.com/starthere.jsp?ei=1525680&tp_key=7f828ec8e8
An archived recording of the conference call will be available under the Investor Relations section of the Company's website at http://cytosorbents.com/investor-relations/financial-results/.
About CytoSorbents Corporation (NASDAQ: CTSO) CytoSorbents Corporation is a leader in the treatment of life-threatening conditions in intensive care and cardiac surgery using blood purification. Its flagship product, CytoSorb®, is approved in the European Union with distribution in more than 70 countries around the world as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" seen in common critical illnesses that may result in massive inflammation, organ failure and patient death. These are conditions where the risk of death can be extremely high, yet few to no effective treatments exist. CytoSorb is also being used during and after cardiothoracic surgery to remove inflammatory mediators that can lead to post-operative complications, including multiple organ failure. More than 162,000 cumulative CytoSorb devices have been utilized as of December 31 , 2021. CytoSorb was originally introduced into the European Union under CE-Mark as a first-in-kind cytokine adsorber. Additional CE-Mark label expansions were received for the removal of bilirubin and myoglobin in clinical conditions such as liver disease and trauma, respectively, and both ticagrelor and rivaroxaban during cardiothoracic surgery. CytoSorb has also received FDA Emergency Use Authorization in the United States for use in adult critically ill COVID-19 patients with imminent or confirmed respiratory failure. The DrugSorb-ATR™ Antithrombotic Removal System, which is based on the same polymer technology as CytoSorb, has also been granted FDA Breakthrough Designation for the removal of ticagrelor, as well as FDA Breakthrough Designation for the removal of the direct oral anticoagulant (DOAC) drugs, apixaban and rivaroxaban, in a cardiopulmonary bypass circuit during urgent cardiothoracic surgery. The Company has initiated two FDA approved pivotal trials designed to support U.S. marketing approval of DrugSorb-ATR. The first is the 120-patient, 20 center STAR-T (Safe and Timely Antithrombotic Removal-Ticagrelor) randomized, controlled trial evaluating the ability of intraoperative DrugSorb-ATR use to reduce perioperative bleeding risk in patients on ticagrelor undergoing cardiothoracic surgery. The second is the 120-patient, 25 center STAR–D (Safe and Timely Antithrombotic Removal-Direct Oral Anticoagulants) randomized, controlled trial, evaluating the intraoperative use of DrugSorb–ATR to reduce perioperative bleeding risk in patients undergoing cardiothoracic surgery on direct oral anticoagulants, including apixaban and rivaroxaban.
CytoSorbents' purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption. Its technologies have received non-dilutive grant, contract, and other funding of more than $39.5 million from DARPA, the U.S. Department of Health and Human Services (HHS), the National Institutes of Health (NIH), National Heart, Lung, and Blood Institute (NHLBI), the U.S. Army, the U.S. Air Force, U.S. Special Operations Command (SOCOM), Air Force Material Command (USAF/AFMC), and others. The Company has numerous marketed products and products under development based upon this unique blood purification technology protected by many issued U.S. and international patents and registered trademarks, and multiple patent applications pending, including ECOS-300CY®, CytoSorb-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, K+ontrol™, DrugSorb™, DrugSorb-ATR™, ContrastSorb, and others. For more information, please visit the Company's websites at www.cytosorbents.com and www.cytosorb.com or follow us on Facebook and Twitter.
This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, future targets and outlooks for our business, expectations regarding the future impacts of COVID-19 or the ongoing conflict between Russia and the Ukraine , representations and contentions and are not historical facts and typically are identified by use of terms such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements in this press release represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks discussed in our 2021 Form 10-K filed with the SEC on March 9, 2021 and our 2022 Annual Report on Form 10-K, to be subsequently filed with the SEC, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under the Federal securities laws.
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Investor Relations Contact: Terri Anne Powers Vice President, Investor Relations and Corporate Communications (732) 482-9984 [email protected]
U.S. Public Relations Contact: Eric Kim Rubenstein Public Relations 212-805-3052 [email protected]
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