Cytosorbents Corporation

Good afternoon and welcome to the CITOsorbents Third Quarter 2020 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call for questions. 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 Pfeffer. Please go ahead.

Thank you, Stacey, 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?

Thank you very much, Jeremy, and welcome everyone to the third quarter 2020 earnings call for CITUS Orbents 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 ramped COVID-19 production. In July, we completed a $57.5 million financing led by Cowan and SVD Lyric with co-manager B. Riley FBR, strengthening our cash balance to roughly $88 million at the end of the third quarter. The Refresh2 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 treated 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 termo-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 hemophend blood group antibody preclinical development. 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 two 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. detailed very extensively in our press release today so I'll only cover this very briefly but the key tenants 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 plan to be able to get to the next level of scale, to be able to produce somewhere on the order of $300 to $400 million in sales of product, thereby helping also to drive expansion of our blended product risk margin. To prepare for US 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 potential future 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. Micas Deliargyris, our Chief Medical Officer. Micas? Micas, you may be on mute.