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The FAQ really makes me question what is going on with hospital sales in Germany.
" If CytoSorb® became standard-of-care for the treatment of sepsis, just one hospital would account for potentially $1 to $3 million in CytoSorb® revenue."
So one hospital could generate more sales than they currently get per quarter. They have been working with certain hospitals for close to 5 years (counting the European sepsis trial). Why can't all these hospitals combined come close to generating the income a single hospital could supposedly provide?
This criticism is coming from a lot of us who have been familiar with this stock for years. For me, I had to ask myself, how much longer can I say "i'm long, so it's ok that it takes time". It's a question of is CTSO the best investment at this point in time, when they are many other promising biotechs. Situations change, but I just don't feel like CTSO is the most compelling investment at this time.
I'll admit I was a long term bag holder and unfortunately only made about 50% gain in all the time I've held this stock (sounds ok still until you look at the S&P last few years). I will change to a trading strategy as you have done.
To those who think it's bashing, I'm not saying this will never work out. I was in ADXS when there was terrible management and was frustrated too b/c the tech was great. Now they have new management who have really turned things around.
I agree. Without good sales, valuation pretty much dependent on clinical development and I think I've said enough about that.
The company has historically moved pretty slow, so I think Fresenius will take some more time to actually pick up.
The cardiac partner is also moving much slower than I thought. They are apparently only working with one physician, but no cytosorb use yet in 5 months?
haha if there was something to say in the first place, it would have been in the Q4 call already
seems to be helping the stock price at least
If valuation was not based on sales, why did it drop so much based on poor sales and guidance.
Thanks for the post.
I'm aware of the two multicenter trials. The first study of 100 patients, was actually only 43 patients (18 treated, 25 control), due to an error in randomization. Also, if you look at all 43 patients, there was no statistical difference between treated and control for survival (this data is hard to find). When you look at a small subset, there is a difference between patients with high cytokine levels. This study was concluded in 2011, and has not yet been published. Do you really think it will be published at this point?
For the dosing study in progress, I already pointed out that the update at 28 patients was extremely vague, saying the mortality was similar to the control arm in the 100 patient study. This does not make me hopeful the addition of 22 more patients will show a trend in survival benefit.
The other studies for sepsis that are recruiting, S20.111-1 and 2 are only 20 patient studies and one of them is uncontrolled.
It's great there's a lot of studies, but the criticism is there's not a large scale trial that shows clinical benefit. Yes, it shows it reduces cytokine levels, but as far as I'm aware, that is not an acceptable end point per the FDA, to replace 28-day mortality. There is evidence to support that high IL-6 correlates to increased mortality, but not the reverse, that reduction leads to better patient outcomes.
Also, yes it's great that they are working with well-known hospitals. Every drug that is approved also conducts their trials in well-known hospitals with well-known investigators. Do drugs still fail? yes...
I've held this stock for 3 years, but now I'm done waiting. I am not really not happy with how management has handled things. If you still believe, then best of luck. As I said before, I will reevaluate after dosing study results come out.
Revenue targets are really low now. so at this rate, can't really justify an increase in market cap through sales until sometime 2016...
I also don't see any impending data to move the stock. I'm still of the opinion that nothing that great will come out of the dosing study. Last update was 28 patients, total will be 50 patients, and at 28 patients, only positive conclusion was that it's safe. Mortality for >65yo was similar to control arm in prior study. This was also one of the sub-populations from the first trial that potentially had more benefit from cytosorb. Maybe there will be benefit again to patients with high cytokine level.
I had stayed invested in this b/c the clinical hypothesis sounded simple, since IL-6 is seen as one of the better biomarkers for mortality. Also, in CAR-T therapy, there are some cases that blocking IL-6 helps with managing CRS (cytokine release syndrome).
Maybe I was too hopeful b/c of my naive understanding of sepsis and its biomarkers, but at this point, 18 treated patients from first trial, plus 50 from dosing study should be showing some differences. I hope they release the data soon, or it is a bit suspect. Even really large trials with >1000 patients can release data in a few weeks after a study concludes.
so survival was 4 out of 19? For those saying there is enough clinical data out there. The article you posted suggests they are not even sure when to use cytosorb or if there is a benefit. However, they could have written a case report on the 1 of the 4 that did survive...you see how that works.
I am out for now. Will look to re-enter after there is clarity on the dosing study. Maybe I will miss a nice rise if results are positive, but just not comfortable enough with what is known at this time.
A firm commitment to run a large scale sepsis study would give me some confidence, but they are not giving that indication right now.
Maybe there is a shot of something from the Cardiac surgery partnership. 6 months from 10 Nov, would be 10 May. I would guess later based on the need for discussion and negotiation after the 6 months end.
Other thing would be some guidance on the plan for sepsis. It was end of 2013 when there was an update on dosing study (28 patients), the total number is 50 patients according to the new website. Even with 28 more patients, the update they gave was very vague, so I'm not expecting much. The best thing that could come out of it is some guidance for a comprehensive study.
This dosing study was supposed to be a quick study...before doing a real study, but it's dragging out way too long. The primary end point is 28 day survival, pretty short relative to other programs that are moving fast in pharma. In pharma, companies are always trying to find ways to expedite approval (break through therapy, buying priority review vouchers). I'm really not sure why they are dragging their feet with generating clinical data. Oncology trials that have longer end points with hundreds of patients are finishing faster than this dosing study...Regeneron/Sanofi started multiple phase III for their cholesterol trials in 2012 that are already finishing up. If this is truly a blockbuster, they are not acting with that kind of urgency. Pharma companies have to be more cautious because a lot of drugs fail on safety, this supposedly has zero safety concern, so why not just go for it.
Also...side note, can someone explain reimbursement in Germany. In the US, hospitals would love another therapy you could tack on to bring in more revenue. If it's really only $500-1500/patient on cartridges, why would you not just add it in case there is an effect. Do you get a lump sum for treating a patient on disease X, or do you get fee for service.
BMA, I think it was a good call to sell. I unfortunately did not get a chance before it fell below $9, so I'm still holding, fortunately at a $5.60 cost at least.
I'm still not sure how you can say fundamentally nothing is wrong. The market cap was over 300 million, you're talking about probably <2 million sales in first half of this year to support that?
Now, the next quarter that might be good, is Q3, so we'll be waiting until October.
If there was concrete clinical data, sales would be starting in the tens of millions, and accelerating from there, not from a few hundred thousand dollars.
This is terrible...
At this point, we need convincing clinical data, or we will continue to deal with "lumpiness" in sales.
It's great we finally have plans for a cardiac surgery trial, but what about sepsis. We are still basing everything on success stories. My next fear is that the dosing study results will not give us any more clear picture for cytosorb in sepsis. The new therapy website says it's completed and undergoing data analysis, but no announcement yet, so I doubt it is conclusive at this time.
I'm just hoping that there will be some positive news from the cardiac partner Q2, otherwise we are waiting till 2nd half.
how do you think the market will react to revenue of ~1.5 million for the 4th quarter?
I was not too worried about it, but our market cap has crept up quite a bit. Long term investors would see 1.5 million revenue as good progress, but not sure about all the new investors on board.
I am glad someone else is seeing potential with CAR-T now.
Also, if anyone noticed, slide 7 of the new investor presentation mentions "activated t-cell therapies"
I don't think it's very applicable. It would be a liability for CTSO to let hospitals print their own. How would CTSO ensure quality (bead size, pore size, fill weight of beads, etc) and sterility.
Also, 3dp is probably not the best technology to make porous beads, if a printer could even do it. There are a lot of different types of printers, and some do use radical polymerization, but in general, 3dp are very slow and thus, are used for prototyping. The beads are made by suspension polymerization (monomer droplets that form the polymer are dispersed in an immiscible phase to give spherical porous particles). This process is commonly used and very scalable, so not a lot of reason to change.
If you really wanted a more portable way to make beads, it would probably be using microfluidics but you would still have to make FDA ok with it. At this time, I'd really rather not have CTSO spend resources on new manufacturing, but on clinical development.
Was doing some reading and came across a new indication where cytosorb could be used. CAR-T therapies have been really hot (look up JUNO or KITE), but a big drawback is cytokine release that affects a high percentage of patients.
Molecular Therapy (2014); 22 3, 477–478. doi:10.1038/mt.2014.8
"Despite these advances, life in the fast lane still has its speed bumps. A major clinical concern to any CAR T-cell physician is the poorly understood cytokine release syndrome (CRS), which is believed to be secondary to a massive release of cytokine mediators from activated T cells in response to antigen encounter.8,9,10,11 Patients often require aggressive support in an intensive care unit setting."
Cancer J. 2014 Mar-Apr; 20(2): 119–122. doi: 10.1097/PPO.0000000000000035
"Another strategy to manage CRS is to target elevated cytokines directly. The most significantly elevated cytokines in the CRS associated with CART-191 and blinatumomab20 are IL-10, IL-6, and IFN-?. IL-10, primarily produced by monocytes/macrophages, regulates both innate and cell-mediated immunity by inhibiting activated macrophages.
Yeah. I keep waiting for some more concrete data.
Has anyone been able to get information regarding the dosing study? I've e-mailed a few times, no response.
Last update was a year ago, so we should be due for another.
Hi Ping,
Any guesses on how this partnership with the top 4 cardiac surgery company may proceed? Does not seem like they would need to sponsor a trial as the germany trial you pointed out is decently sized.
Also, do you know of any examples of partnerships with similar wording that CTSO put out?
"the partnership will commence with an initial six-month market evaluation period to determine various market parameters, to obtain clinical data, and to build key opinion leader support in France."
I'm not familiar with medical device industry, but can't really think of a similar example in pharma.
That's unfortunate because a trial with a few hundred patients is not that many. A lot of phase 2b studies are 200-300 patients. Might as well go big or go home, and run the trial. The trial could have been done by now if they started it after receiving CE mark. 28 day endpoint is a very fast endpoint.
What do you think the market of cardiac surgery will be? If intraoperative, I'd guess they use one filter. Q2 transcript mentioned US/EU market is ~1 million surgeries per year, so sales in the few hundred million range at peak sales for US/EU. I am also curious as to how receptive reimbursement is if only a biomarker is used as primary endpoint. Seems ok in the EU so far, which is interesting given they seem to drive a harder bargain for reimbursement than US. Cardiac surgery approval will be great, but I still hope that it can be proven to be effective in sepsis.
BMA
How do you think they will continue to approach sepsis? Are they backing off from running a pivotal trial at this time? My inclination is that if they were to run a trial with high cytokine levels as the biomarker, they would have success. They could also attract attention from pharmaceuticals to partner the filter with a sepsis drug.
I worry because the dosing study does not seem like it will give definitive results, given that the dosing study population so far (N=28) is more sick than the previous control arm. I agree that real clinical results is the main thing that will move this stock, or a partner to take over one of the indications.
At this point, people are arguing over if sales will be $700k or $900k, which in the grand scheme of things is extremely insignificant if you are hoping for this to be a billion dollar company. With real results, sales will not start at $200k and ramp up 20-50% per quarter, but should start in the tens of millions and ramp up from there once manufacturing is expanded.
Appreciate your insights, especially on the financial aspects.
Was posted on the yahoo MB by scotteoc.