MONMOUTH JUNCTION, N.J., Aug. 9, 2016 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader commercializing its flagship CytoSorb® blood filter to prevent or treat deadly inflammation and organ failure in critically-ill and cardiac surgery patients around the world, reports financial and operational results for the quarter ending June 30, 2016.
Second Quarter 2016 Financial Highlights:
- CytoSorb® product sales for Q2 2016 were a record $1.9 million. This represents an increase of approximately 140% over Q2 2015 product sales of $0.8 million, as a result of strong increases in both direct and distributor sales
- Second quarter 2016 annualized product sales run rate was approximately $7.4 million, as compared to an annualized product sales run rate of approximately $3.1 million in the second quarter of 2015
- Total revenue for the second quarter of 2016 was $2.2 million, which includes both product sales and grant revenue
- Overall gross margins rose to approximately $1.3 million in Q2 2016, representing an increase of approximately $0.8 million as compared to approximately $0.5 million in Q2 2015
- Product gross margins for Q2 2016 increased to 68% compared to approximately 63% for Q2 2015
- This represents the fourth consecutive quarter of record CytoSorb® sales, and the fifth consecutive quarter of quarterly growth in CytoSorb® sales
Second Quarter 2016 Operational Highlights:
- CytoSorb® adoption and usage increased to more than 14,000 human treatments performed worldwide as of Q2 2016
- The REFRESH I cardiac surgery trial is nearing completion with 44 patients enrolled toward the target of 40 patients who have completed all aspects of the trial. We are targeting the release of top-line data of this trial during the European Association for Cardio-Thoracic Surgery (EACTS) conference in Barcelona, Spain from October 1-5, 2016
- Strategic distribution partner Fresenius Medical Care, the world's largest dialysis company, officially launched CytoSorb® in France, Poland, Denmark, Norway, Finland, and Sweden in late May
- Strategic distribution partner Biocon Ltd, India's largest biopharmaceutical company, established a standalone internal division specifically focused on CytoSorb® product marketing, clinical studies, and sales in India and Sri Lanka
- Received $650K in two non-dilutive Small Business Innovation Research (SBIR) grant contracts to fund continued development of novel potassium binding polymers, a new product category for the company
- Received a $150K SBIR contract to expand the HemoDefend platform to enable the production of universal plasma
- Strengthened the Company's balance sheet, ending Q2 2016 with approximately $9 million in cash and short-term investments, after closing a term loan facility with Bridge Bank, a division of Western Alliance Bancorp
- Achieved final CytoSorb® product registration and initial sales in Russia
- Expanded CytoSorb® to 37 countries including the addition of Spain and Portugal (through a distribution agreement with Palex Medical SA), Hungary (through a distribution agreement with Medial, Ltd) and Czech Republic and Slovakia (through a distribution agreement with Meditrade, Ltd), with 28 of these countries now positioned to contribute to revenue
- Established CytoSorbents Switzerland GmbH, a wholly-owned subsidiary of CytoSorbents Europe GmbH
- Presented at the Cantor Fitzgerald Healthcare Investor Conference and exhibited at multiple international scientific conferences, including EURO-ELSO in Glasgow, Poland, the Spanish Intensive Care Congress in Valencia, Spain, and others
- Investor analyst coverage initiated by Maxim Group
Dr. Phillip P. Chan, President and Chief Executive Officer of CytoSorbents, stated "Momentum continues to build in our core CytoSorb® business, enabling us to post our fourth consecutive quarter of record product sales. Reorders from existing direct customers and distributors continue to make up the bulk of our revenue, resulting in healthy organic growth for the quarter."
Dr. Chan continued, "We also continue to make excellent progress in our broader business. In the last earnings report, we laid out many of our 2016 objectives. We are pleased to report solid execution against that plan, including achieving continued sales growth of CytoSorb®, strengthening our balance sheet at an attractive cost of capital, receiving substantial new grants that have enabled new product categories, driving REFRESH I towards completion, transitioning to more revenue generating countries, securing new analyst coverage with greater market awareness, and publication of more clinical data. We anticipate an even stronger second half of 2016."
"Please join us on our previously announced earnings call today at 4:45PM ET where we will cover our progress in more detail. We will also respond to questions from the audience during our live Q&A session. The investor presentation and a written transcript of the conference call will be available within a week of the webcast."
Conference Call Details:
Date: Tuesday, August 9, 2016
Time: 4:45 PMEastern
Participant Dial-In: 1-719-457-2714
Live Presentation Webcast: http://public.viavid.com/index.php?id=120613
It is recommended that participants dial in approximately 10 minutes prior to the start of the call. There will also be a simultaneous live webcast of the conference call that can be accessed through the following audio feed link: http://public.viavid.com/index.php?id=120613
An archived recording of the conference call will be available within a week under the Investor Relations section of the Company's website at http://www.cytosorbents.com/invest.htm
Financial results for the second quarter ended June 30, 2016:
Revenues:
Revenue from product sales was approximately $1,853,000 in the three months ended June 30, 2016, as compared to approximately $773,000 in the three months ended June 30, 2015, an increase of approximately $1,080,000, or 140%. This increase was largely driven by an increase in direct sales from both new customers and repeat orders from existing customers, along with an increase in distributor sales.
Grant income was approximately $370,000 for the three months ended June 30, 2016 as compared to approximately $180,000 for the three months ended June 30, 2015, an increase of approximately $190,000, or 106%. This increase was a result of revenue recognized from new grants.
As a result of the increases in both product sales and grant income, for the three months ended June 30, 2016, we generated total revenue of approximately $2,222,000, as compared to total revenue of approximately $964,000 for the three months ended June 30, 2015, an increase of approximately $1,258,000, or 130%.
Cost of Revenues:
For the three months ended June 30, 2016 and 2015, cost of revenue was approximately $873,000 and $465,000, respectively, an increase of approximately $408,000. Product cost of revenues increased approximately $313,000 during the three months ended June 30, 2016 as compared to the three months ended June 30, 2015 due to increased sales. Product gross margins increased to approximately 68% for the three months ended June 30, 2016, as compared to approximately 63% for the three months ended June 30, 2015, due to a favorable mix of sales prices. Grant income related expenses increased due to direct labor and other costs being deployed toward grant-funded activities, an increase of approximately $95,000 during the three months ended June 30, 2016 as compared to the three months ended June 30, 2015.
Research and Development Expenses:
For the three months ended June 30, 2016, research and development expenses were approximately $1,092,000, as compared to research and development expenses of approximately $802,000 for the three months ended June 30, 2015, an increase of approximately $290,000. This increase was due to an increase in costs related to the various clinical studies of approximately $353,000, and increases in salaries and other research and development costs of approximately $32,000. The increase was offset by an increase in direct labor and other costs being deployed toward grant-funded activities of approximately $95,000, which had the effect of decreasing the amount of our non-reimbursable research and development costs.
Legal, Financial and Other Consulting Expenses:
Legal, financial and other consulting expenses were approximately $319,000 for the three months ended June 30, 2016, as compared to approximately $298,000 for the three months ended June 30, 2015, an increase of approximately $21,000. This increase was due to an increase in accounting fees of approximately $13,000 due to fees incurred related to the audit of our internal controls as required by the Sarbanes-Oxley Act of 2002 and an increase in legal and other consulting fees of approximately $8,000.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were approximately $2,625,000 for the three months ended June 30, 2016, as compared to approximately $1,626,000 for the three months ending June 30, 2015, an increase of approximately $999,000. This increase was due to an increase in salaries, commissions and related costs of approximately $506,000 due to headcount additions and increases in product sales, an increase in royalty expenses of approximately $77,000 due to the increase in sales, additional sales and marketing costs, which include advertising, and conferences of approximately $43,000, an increase in travel and entertainment costs and other expenses of approximately $29,000 due to the increased volume, and an increase in stock-based compensation of approximately $366,000 due to 2015 milestone options awarded to the Company's employees and restricted stock units awarded to the Company's executive staff during the three months ended June 30, 2016.
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