is waiting for the inflection point
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Hmmm. I didn't pick up on it before, because I was listening to the Q1 call in my car and did not see the slides. The REFRESH 1 study treatment group patients were treated with dual Cytosorb cartridges. So, double any calculations of potential Cytosorb sales for complex cardiac surgery.
I totally agree that the lack of urgency is puzzling and frustrating.
I agree that the delay in the release was annoying, but it seems to me that the posters on this board and the Yahoo board were expecting some earth shattering, game changing results from REFRESH 1. That expectation was not set by Cytosorbents, but instead by the folks that post on these boards. There is no way in the world you can expect those kind of results from a 46 patient trial.
Dr. Chan added some color in terms of the objective of REFRESH 1 in response to a question from an analyst, as far back as last August. See the excerpt from the transcript below. In many of the later presentations they specifically pointed out that the goal was to identify which procedure resulted in the higher hemoglobin levels, which would allow them to design REFRESH 2 to target the proper patient population.
“Now in the area of free hemoglobin reduction. This study was never designed to look at statistically significant reductions in free hemoglobin but the FDA and that was designed for pivotal study potentially the De Novo 510(k) study. But what the FDA is looking at the free hemoglobin levels for we believe and what we discussed with them is that they want to know that in this specific patient population where that we've defined through our inclusion and exclusion criteria that this specific patient population is having a problem with free hemoglobin and that will be evident in the control arm data for free hemoglobin after all the data analyzed.”
“So that will provide a data point for the FDA to say yes, this is the appropriate population this is where we've known for a long time that free hemoglobin is a problem, we’ve never had a technology that could remove free hemoglobin before and -- but that this patient population is now validate it. And so I think that is the -- that is what the FDA is looking for going into REFRESH 2. They’re primarily looking at safety, but they are looking at this free hemoglobin endpoint to make sure that we're not barking up at the wrong tree and we're not doing a futile trial right.”
The comments from Chan before the data release and the actual data release itself did show the product was safe and did identify a target patient population for REFRESH 2. Would releasing this data sooner have had a different impact on SP? I don’t think so.
You are commenting from the investor audience. He also has to speak to the scientific and medical audience. That audience includes the FDA. REFRESH I had a physician that lead the study and they likely played a big role in the release of data. Stepping lightly with hype of drug/device when heading towards an FDA meeting for a pivotal trial has no downside for the company or long term investor. Looking for a quick buck, move along.
If it happens, I hope it is not too soon, because I would like to enjoy some of the upside from this company I have been watching for over a decade.
I think they have a phase 2 SBIR grant that wraps up this summer. I have idea what that entails though. Government paying for you R&D is nice though.
300 to 500. They have not publicly stated if they will go the 510k or PMA route, but the most recent timeline and trial size points to the longer PMA route. Longer is a bummer, but positive results will provide more evidence of efficacy which will significantly help marketing and adoption. Not just in the US, but worldwide.
There are a few reasons. First, the cardiac surgery population is more homogenous. One valve replacement surgery is likely to have the same type of potential complications and the same odds of complications as another one. While sepsis can be triggered by a wide variety of initial illnesses. It could be pneumonia, burn injury, bacterial infection, etc. The list goes on and on. Each of these has its own unique potential complications that could lead to death. Getting a homogenous trial population of the sepsis patients would have to be very selective. Selective means slow to enroll.
Second, the cardiac trial could have a primary endpoint of reduced organ failure or a composite endpoint of reduction in the incidents of some of the common complications. With sepsis, the primary endpoint would almost cetainly be 28 day all cause mortality. With the heterogeneous sepsis population, even if Cytosorb resolved the cytokine storm, the initial trigger could still lead to death. That would mean a very large trial would be needed to ensure that CytoSorb provided a survival benefit and the randomization didn't just happen to favor the either the treatment or control arms.
A large and long US sepsis trial will certainly happen, but the cardiac route is the fasted most economical way to initial US marketing approval.
How was it a bust? Even before the refresh one trial started they stated one of the objective was to identify the types of procedures that results in high plasma hemoglobin levels. They were aware that some did and some did not. They also repeated this line of thought in each presentstion after. You seem to be down playing an annual US patient population of 100,000 to 150,000 patients? That is 150 million dollars in potential sales for just the cardiac indication, in just the US.
So it was a 40 patient trial. 20 treatment 20 control. Only a subset of them exhibited elevated hemoglobin. So expecting them to announce a comparison of 10-12 patients against another 10-12 patients demonstrated clinically significant results would be foolish.
As they said very early on in the trial, it did, however, identify a subset of patients/procedures that could be used as part of the selection criteria for REFRESH 2.
Apparently confirmed safety and data that can be used to help design the next trial simply are not things that are going to move the SP. Hopefully an FDA approved pivotal trial design and IDE might move the SP. Who knows...
8 Years since what? CE Mark was granted in 2012.
Wow. That poor baby had everything going against her. Elevated plasma free hemoglobin from hemolysis of cardiac surgery, Sepsis SIRS, the need for ECMO and an extracorporeal circuit volume equal to her entire blood volume. I am happy they were able to save her with the help of Cytosorb.
Short interest up about 75k.
I'm not certain on the dates, but I think the HemoDefend phase 2 two year SBIR grant wraps up in August and the 1 year SBIR grant for potassium filter wraps up in September or October. This small company is letting the government finance the research of their pipeline products while they focus on commercializing Cytosorb. I call that being fiscally responsible to the shareholders.
As for the XL product, there are a zillion triggers for an out of control immune response leading to cytokine storm, sepsis, etc. Many of them can be controlled with existing treatments, but the cytokine storm becomes the bigger issue than the initial trigger. One of the common triggers, however, is endotoxin from Gram negative bacterial infections. XL will not just treat the unmet medical need of reining in the Cytokine storm, but also the unmet medical need of removing endotoxins from gram negative bacterial infections.
Sorry SSMMSS. I just feel that anyone that has been following the company for a long time would see that there is far more upside potential than a 900 million market cap. Everyone else has also brought up good points this morning, but I still feel that once some of these partners ramp up there could be exponential growth. Then in 3 years, when they get FDA approval, the gold standard worldwide, they will likely already have established sales teams in most of the developed countries in the world, ready to sell the next day.
I'm not sure if this is a soft bash or your math is just off. A share price of $30 puts the market cap a just under 1 billion. There are development stage biotechs with market caps near this level.
Dr. Chan has cited many time that the potential market for Critical care in Germany alone could be in the 400 M to 1.2 B range. In that estimate he mentions that there are 400 hospitals in Germany with 400+ beds and he also cites 1-3 million in sales per hospital. Recently he also mentions they have reached there first 1 M/year hospital in Germany and that there are other approaching this level. So his estimate are not out of the realm of possibility. Now multiply these numbers by all the other countries where sales will be ramping up over the next few years. Then add in the other indications and a US FDA approval for cardiac surgery. Then add in bringing Hemodefend and the potassium adsorber to market, etc. Don't forget Contrasorb, Drugsorb, Betasorb and of course Cytosorb XL.
If everything falls in to place, earnings over 1 B per year in the next 3-4 years could be a reality. A PE ratio of 20 would then put the market cap at 20 B and your share price at $600. Of course there will likely be more dilution for further studies and manufacturing expansion. But you get the idea of where this company could go.
There was that one time they said they would be released after hours but got released before trading started. I suspect thet someone must have checked the wrong box on a form that time
Zack's estimate is in line with yours at 2.99 M. I am also seeing that short interest is be reported as being down sharply. I thought the dissemination date was not until after close tomorrow. Does anyone know where this info is coming from?
It might get you to market quicker, but a large scale trial proving clinical efficacy would help them get clinical adoption once it hits the market. In the end, the route taken is up to the FDA.
If the medical device is classified as a certain class, I think class 2, and there is a substantially equivalent medical device already approved for marketing the 510K regulatory route can be taken. This route should require a relatively smaller and shorter trial. Alternatively, the PMA route can be taken which will require a larger and longer study to prove clinical efficacy. I believe Cytosorb is "Class 2 with special controls".
From the article "A large-scale U.S. randomized, controlled trial called REFRESH (REduction in FREe Hemoglobin) II, intended to support FDA approval of CytoSorb, will start later this year."
I think "Large-scale" is further confirmation of the PMA route rather than 510K.
A new Shareholders letter is out. After just a quick review the two main items of new info I picked up include:
1. The offering will help fund build-out of a new manufacturing facility
2. There was no mention of either a 510K or PMA path for REFRESH 2 and rather than mentioning completion dates between 2018 and 2020 just the 2020 date was cited. To me that is a hint that the PMA route is in their future.
I received and email on upcoming events and the Registry. The registry is over 300 patients so far.
The independent, multi-national CytoSorb Registry, run by the Clinical Study Centre from Jena University, Germany, is set up to systematically examine the benefits and safety of CytoSorb therapy in everyday clinical conditions and application fields. Currently there are over 130 centres from more than 20 countries already registered with a rapidly increasing patient inclusion base, reaching more than 300 included patients currently.
The third interim analysis shows promising interim results and is due to be published soon. Results generated from the CytoSorb Registry will help increase the knowledge base about the safety, optimal treatment modalities and the clinical effectiveness of this novel therapeutic concept.
Great info. Thanks for posting! Probably a long shot, but you have to wonder what would trigger a rush into the recent offering whit REFRESH data release expected so soon.
I wonder if it is possible to seek separate classification for use in cardiac bypass machines vs. dialysis machines?
Does anyone else think it is odd that Cytosorb is classified under gastroenterology with the FDA? Did you also notice that "Filter, Prebypass, Cardiopulmonary Bypass" is an exempt device on the list you provided a link to? Wouldn't a reclassification or the addition to this list for Cytosorb be sweet.
I am betting REFRESH 2 trial plans will be announced at AATS.
I remember an analyst asked a question about the Cures Act. There was a brief question about it and he Q4 call. I also reviewed the Cowen Health conference recording. I did not hear anything about it in that call, but there was discussion on funding for REFRESH 2. That was March 8th and Ms. Bloch made it clear the the funding was up in the air as far as partner funding or an offering. So it sounds like something happened to trigger this rush into the offering in just a few weeks.
I forgot to add one other key de-risking factor. That is the new patents.
They are in far more than one hospital in Germany. In the Q4 call Dr. Chan mentioned that one hospital in Germany was the first to surpass one million in annual sales. That is 1000 cartridges sold to a single institution. To me, 1000 says it is way more than an few physicians evaluating a new product. It is wide adoption across the hospital. Specifically, he stated "we are able to publicly disclose that we have a number of large accounts that are moving towards this milestone and have already now achieved one of those customers that have had more than $1 million"
This was to support his frequently stated potential annual sales in Germany of 400 million to 1.2 billion for critical care applications. That comes from 400 German hospitals that have 400+ beds buying 1-3 million worth of Cytosorb cartilages annually. The fact that one hospital already hit the one million dollar mark and that other accounts are also nearing that number lends credibility to his estimate.
The timing of the offering is curious, but there is just no way for us outsiders to know what is going on. I am hoping that it is a sign that talks with the FDA have already happened and a clinical trial strategy has been determined. 510k vs. PMA. There could still be a partner for REFRESH 2 on the horizon but maybe the partner wanted Cytosorbents to have more skin in the game for the trial? Or perhaps any potential partners wanted more than their fair share of fruit from the tree, so Cytosobents is showing them they are willing and able to go it alone if needed?
Would 9 million even be enough for the PMA route? They stated the capital raise was to fund the trial, working capital, R&D and acquisitions. So maybe they did get the go ahead for the cheaper, faster 510K route, which would be good for us investors. But then again, maybe a partner is splitting the cost of the PMA route?
The are just so many unknowns for us outsiders, that we just have to wait and see how things play out. Personally, I take comfort in the fact that company now considers this a de-risked investment. I think there are two things that lead to them classifying themselves as de-risked. First is accelerating uptake in Germany and the fact that the groundwork has been laid for 30+ other countries follow Germany's lead. Second is REFRESH 1 results and the fact that it has provided them with data that will allow them to design REFRESH 2 to target a patient profile with the highest chance obtaining clinically significant results.
In my opinion REFRESH 1 is far too small to expect a demonstration of clinical efficacy. We already know a portion of the procedures included in the trial did not even lead to highly elevated plasma free hemoglobin, so they will not help show efficacy. However, they will help them design REFRESH 2 to excluded those types of procedures, so there was still value to them having been included in REFRESH 1.
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I don't know about your market cap adjustment Aliberto. I don't think you can simply add the 10 mil to the market cap. The current market cap is based on what the investors value the company at. It is not based on available working capital or even profits at this point in the commercialization process and drive toward profitability. At this point, I think it is based almost completely on perceived possible future sales tempered by the unknowns of an actual FDA approval and actual market uptake where Cytosorb is already for sale.
So rather than the 10 million going straight to the market cap, I think it only has the potential to help the market cap because it tells investors that an FDA trial is going to happen and because the company has more working capital to sustain it until it reaches profitability.
I also don't know if the 333,333 shares the underwriter can purchase should be included in the offering price calculation, because their purchase is entirely optional.
Someone please check my math
Pre-Offering there were 25,552,827 shares outstanding. The Offering was for 2,222,222 shares. 2,222,222/25,552,827 = 8.6 percent dilution. Share price at close before Offering was 5.45. Adjusted this price for the 8.6 percent dilution you end up with 4.98. That means that the price of 4.50 is exactly a 10 percent discount.
From early on in the REFRESH trial the company has stated the goal was, in addition to demonstrating safety, to identify the types of procedures and patients that end up with high plasma-free hemoglobin. This is just a 46 patient study though. If just half of the procedures did not result in high hemoglobin levels we are talking about comparing less than a dozen treated patients to less than a dozen control patients. I think it would be hard to claim blockbuster results with such a small sample. I do like that Chan did also point out that the study did demonstrate the removal of inflammatory mediators though.
From the Q4 call on the topic of REFRESH 1:
One, demonstrated the safety of the therapy; Two, we identified surgical procedures that were in this complex cardiac surgery group where patients were identified as having the highest levels of plasma-free hemoglobin and that is very important because that will allow us to enrich the next trial for those at greatest risk of organ injury due to these high levels of plasma-free hemoglobin thereby potentially allowing our trial to be more focused, smaller, less expensive and potentially executed faster. And last but not least, we demonstrated that CytoSorb removes key inflammatory mediators during the treatment period.
On FORM 424B5 read the section on stabilization. During the course of the offering the underwriters are legally permitted to make trades to manipulate the price. So the price we see during the offering is probably not being driven by the market.
The big flaw with this line of thought is that you are running with the assumption that Cytosorbents' commercialization strategy started with the US and an FDA trial. This is not the case. Focusing on EU first has always been their commercialization strategy.
Sigh... Fact check: Advisory board <> high paid position.
They also has "acquisitions" listed, if I recall correctly. I thought that was interesting. I wonder if that is in the technology or the production/manufacturing space?
I could not find the recording with the trial cost guestimates in the Q&A session. It might have been the R&R one, which is no longer available.
Sorry, I meant Ms. Bloch, not Amy.