Company Press Releases Back
CytoSorbents Corporation Reports Full Year 2011 Financial Results and Corporate Update
Saturday March 31, 2012
MONMOUTH JUNCTION, NJ--(Marketwire - March 31, 2012) - CytoSorbents Corporation (OTC.BB: CTSO.OB - News), a critical care-focused company using blood purification to treat life-threatening illnesses, announced its financial results for the fiscal year ended December 31, 2011.
CytoSorbents generated product revenues of $36,078 and $-0- for the years ended December 31, 2011 and 2010, respectively. The Company's research and development costs were $2,888,245 and $1,757,370 for the years ended December 31, 2011 and 2010, respectively. The Company had net losses of $5,481,648 and $2,908,865 for the years ended December 31, 2011 and December 31, 2010, respectively. Historically, the Company's losses have resulted principally from costs incurred in the research and development of its polymer technology, and general and administrative expenses, which together were $4,118,434 and $2,516,757 for the years ended December 31, 2011 and December 31, 2010 respectively.
Dr. Phillip Chan, Chief Executive Officer, stated, "As we near the conclusion of our controlled market release phase for CytoSorb™ in Germany, we are pleased to report that this stage has gone very well. During this period, we focused on several key areas as we continue our transition from a research and development stage company, to a product-focused, commercialization stage company. The effort centered on several major areas including manufacturing, reimbursement, sales and marketing, financing, and corporate infrastructure. Some of the highlights include:
- We have established the ability to manufacture CytoSorb™ under ISO 13485 certification at our New Jersey manufacturing facility in commercial quantities and with healthy gross margins, even without having the benefit yet of economies of scale. This is very important as we work to build a profitable business model.
- A path for CytoSorb™ reimbursement has been established in Germany that is in addition to the standard DRG or "lump sum" reimbursement for a given disease. This incremental reimbursement is intended to allow hospitals to use CytoSorb™ without having to pay money out of their existing reimbursement, potentially removing a major barrier to adoption.
- CytoSorbents has recorded its first ever product sales, a major milestone in the history of the company. Although the sales are modest at $36,078, it represents the limited scope and nature of this test market phase and just the beginning of our commercialization efforts. We are encouraged by the willingness of early adopting physicians to purchase our technology, signaling the potential value that CytoSorb™ may offer their patients. Once the controlled market release is completed, we will look to grow our revenues as we begin a more formal launch of CytoSorb™ in Germany this spring and expand into other European Union countries this year.
- CytoSorb™ has now been used on a number of patients at different hospitals that are new customers. For all new therapies, the first treatment is always the hardest because of a lack of familiarity with how and when to use the therapy, not knowing what to expect, concerns of possible complications, and other factors. To overcome this inertia, we are fortunate to have data demonstrating CytoSorb's ease and safety of use and the potential for clinical benefit in critically-ill patients. We are pleased that the feedback from these new users has been positive and that the treatment has been easy to implement. Moving forward, we hope to build upon these positive experiences to encourage greater usage of CytoSorb™ amongst many different physicians at each hospital, for many different indications where cytokine reduction may be beneficial to patients.
- As we continue to build our direct sales force in Germany ahead of a broader launch this spring, we are also working in parallel to establish distributorships or partnerships to help target other European Union countries. We plan to report our progress in greater detail in the future.
- From a financing standpoint, the Company has raised approximately $1.6M in the first quarter of 2012 through our sale of convertible notes and sale of common stock under our $8.5M financing facility with Lincoln Park Capital. This will help us to continue to aggressively pursue commercialization of CytoSorb™ in Europe.
Dr. Chan continued, "In addition to our other activities, we have been very focused on creating market awareness of CytoSorb™ during this controlled market release. Since September 2011, we have now exhibited at five major critical care conferences, three of which were focused primarily on the German market. As previously reported, last week we exhibited and held a research symposium at the prestigious ISICEM critical care and emergency medicine conference in Brussels, Belgium. This was an important conference for us, and we were pleased by the exposure we received and the validated leads that were generated through our exhibit booth and our symposium. At our sponsored session, we had good attendance, with approximately 50 people, mostly physicians and key opinion leaders, who attended the program that featured presentations on cytokine reduction by CytoSorb™ in animal models of sepsis by Dr. John Kellum from University of Pittsburgh Medical Center (UPMC), an overview of extracorporeal techniques to treat sepsis by Dr. Steffen Mitzner from the University of Rostock in Germany, and an overview of data from CytoSorbents' European Sepsis Trial by Dr. Michael Quintel from University of Goettingen in Germany."
"We received good feedback about the seminar from participants with encouraging comments on our clinical trial data," stated Dr. Chan. "Many were not previously familiar with the preclinical animal work and were very interested in some of the new data that Dr. Kellum presented on the treatment of septic animals with our CytoSorb™ technology. Cytokine storm is known to cause severe inflammation and immune suppression that ultimately leads to multi-organ failure, infection and often death in septic patients. However, new research, conducted by Dr. Kellum's group at the University of Pittsburgh, suggests that cytokine storm may have yet another major detrimental role in sepsis. Cytokines are normally produced in the area of infection and help direct activated white blood cells (a patient's 'soldiers against infection') to the infected site. During sepsis, however, the levels of cytokines are very high throughout the body, often causing these white cells to inadvertantly invade and attack 'innocent bystander' organs, leading to latent organ injury. When CytoSorb™ is used to treat these animals, this 'immune confusion' resolves, and many more white blood cells go to the true site of infection, killing more bacteria, while fewer cells go to non-infected organs like the lung, leading to less organ injury."
Dr. Chan continued, "On a final note, we continue to move forward with the contracting process with DARPA and were invited to make a presentation at the DARPA Principal Investigator Review Meeting in Arlington, Virginia this past week as an 'anticipated performer' for the program. As can be seen from the publicly-available agenda, there are a number of outstanding universities and organizations participating in this 'Dialysis-like Therapeutics' program to treat sepsis."
"We hope to be able to successfully conclude our contract discussions with DARPA in the near future and begin to perform under the program."
About CytoSorbents, CytoSorb™, and HemoDefend
CytoSorbents Corporation is a critical care-focused therapeutic device company using blood purification to treat life-threatening illnesses. Its purification technology is based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and adsorption. In March 2011, CytoSorb™, the Company's flagship product, achieved European regulatory approval as an extracorporeal cytokine filter, and can now be sold throughout the European Union (E.U.) under the CE Mark to be used in clinical situations where cytokines are elevated. The goal of CytoSorb™ is to modulate the immune system by removing excessive cytokines, often called "cytokine storm," in critically-ill patients that can lead to deadly inflammation, multiple organ failure, immune dysfunction, and often death in common illnesses such as sepsis, trauma, burn injury, acute respiratory distress syndrome, and pancreatitis. CytoSorb™ has demonstrated statistically significant reductions in mortality in septic patients at high risk of death and is now available for sale in Germany for the treatment of critical care illnesses under a controlled market release, with a planned broad product launch in Germany anticipated for the first half of 2012 and availability in other E.U. countries, assuming adequate and timely funding, and continued positive results from our clinical studies. HemoDefend is a development-stage blood purification technology platform for the blood transfusion industry intended to reduce transfusion reactions and safeguard the quality and safety of blood products. The HemoDefend technology utilizes the Company's polymer bead technology to remove many substances, such as antibodies, free hemoglobin and inflammatory mediators that can cause potentially serious and sometimes fatal transfusion reactions. CytoSorb™ and HemoDefend are just two of a number of different polymers the Company has designed for various medical applications, including improved dialysis, the potential treatment of inflammatory and autoimmune disorders, rhabdomyolysis in trauma, removal of chemotherapy drugs during treatment of cancer with high dose regional chemotherapy, drug detoxification, and others. Additional information is available for download on the Company's website: http://www.cytosorbents.com.
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. Forward-looking statements in this press release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may differ materially from those expressed or implied by the statements herein. CytoSorbents Corporation and CytoSorbents, Inc believe that its primary risk factors include, but are not limited to: obtaining government approvals including required FDA and additional CE Mark approvals; ability to successfully develop commercial operations; dependence on key personnel; acceptance of the Company's medical devices in the marketplace; the outcome of pending and potential litigation; compliance with governmental regulations; reliance on research and testing facilities of various universities and institutions; the ability to obtain adequate and timely financing in the future when needed; product liability risks; limited manufacturing experience; limited marketing, sales and distribution experience; market acceptance of the Company's products; competition; unexpected changes in technologies and technological advances; and other factors detailed in the Company's Form 10-K filed with the SEC on March 30, 2012, which is available at http://www.sec.gov.
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Source: CytoSorbents Corporation