is waiting for the inflection point
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If I have time after soccer, baseball and the beach, later today I will check out my links to the old investor presentations. I don't think it was in Amy's presentation in Boston, but in another one in the last few months.
I seem to remember a number mentioned in one of the Q&A sessions after a presentation. Not sure if it was a Q presentation or and investor presentation though. I thought the 510k was in the 3 to 5 million range and the PMA maybe double that.
Umm. But they have not moved away from sepsis.
We should probably also factor in the resulting dilution of around 7.3 percent. That leaves it at about a 10% discount.
Could it be within the realm of possibility that a large buyer forced their hand to execute this offering before an FDA trial announcement?
Dilution is a reduction in the ownership percentage of a share of stock caused by the issuance of new shares.
Dilution sucks. I was hoping for a partner for REFRESH II. Hopefully this is at least a sign that they have nailed down the details for REFRESH II and the FDA has given it their blessing.
"De-risked" is the newest term that has been added to the investor presentations, starting with the Q4 2016 presentation.
Below, I included an excerpt from short article on the subject from the site mindsheet.
I find it encouraging that the person with the most inside information on the commercialization of Cytosorb now considers the company and product "de-risked". I think the many new and expanded partnerships, accelerating sales by the Cytosorbents Sales Team and a German hospital with annual purchases over a million dollars have demonstrated that there is now little market risk with Cytosorb. The physicians who have tried the product are getting good results and that is leading to increased adoption and sales numbers.
From mindsheet:
There are three major areas of risk in the product development process when it comes to developing new hi-tech products:
Technology risk
Management risk
Market risk
We tend to dwell on the first two, because that is what you’re aware of on a day to day basis.
Will the technology work? Do you have good development and communication processes? Do you have the right people? is the project on track? and so on… All best practices in the Stage Gate Process.
But by far the biggest area of risk is the third one – market risk. Think about it, you only really know if you’ve got a flop on your hand when you launch the new product into the market. By that stage, you’ve already spent all of the development budget.
Sounds interesting. The material is just at the in-vitro study phase though. Perhaps it could be a competitive product in 8 to 10 years if it's development does not depend on any of Cytosorbents' patented technologies.
The 100M is just 10 percent of total potential sales for one country, Germany, for one indication, Sepsis. Break past 10 percent multiply by many other countries then multiply by other indications then add in hemodefend, drugsorb, the potassium adsorber, etc. and you are looking at significantly higher sales.
I believe it is also almost two full weeks before the filing deadline.
A new case of the week has been posted on the Cytosorb page and the February Investors pretension is available on the Cytosorbents web page. There does not appear to be any real new information in the Feb presentation that has not been made public before. It did confirm that REFRESH I data will be presented at a conference in April and that REFRESH II is still planned to begin in the first half of 2017.
Incentive Stock Options
It looks like the Exec team was granted 80% of the options based on reaching their performance objectives.
dah174174 has been doing a good job at removing posts that violate board rules, but I thought I would post a reminder of some of the types of posts that are subject to removal.
Personal Attack
-This is when someone attacks one or more members personally rather than the content of that Member's message. The post does not have to be addressed to the "target" of the attack to be considered a Personal Attack. If it attacks a messenger rather than the message, it qualifies for deletion and it is expected that Moderators will remove it.
Off Topic
-Posts about or focusing on other Members or groups of people and their reasons for posting on the board (i.e. "XYZDownDaDrain" is just a basher, ignore him", "XYZToDaMoon" is a pumper", "the naysayers are very loud today", "c'mon, where did all the cheerleaders go?"). The post does not have to be addressed to a specific person. If the post is about other Users then it should be removed.
-Posts with religious or political statements should be removed as "off topic". These inevitably create an avalanche of replies that are off topic as well.
-Posts about Moderators and/or deletions are also "off topic". Issues of this nature need to be discussed with a Site Admin.
-Putting "ot" at the beginning of a post does not make it acceptable. It is still off topic and eligible for removal.
Anything government related moves slow. Check out the current CNN article on the Army's new gun.
"The Army's effort to buy a new handgun has already taken 10 years and produced nothing but a more than 350-page requirements document micromanaging extremely small unimportant details," Senate Armed Services committee chairman John McCain wrote in a 2015 report on the program's problems.
"A decade for a pistol?" Sen. Thom Tillis of North Carolina asked at the same Mattis confirmation hearing. "They're relatively simple devices ... This is a great testament to what's wrong with defense acquisition."
Feedback from my neighbor:
Very rare. There are lots and lots of cats in renal failure though and a fair number of dogs. People are more and more demanding these days when it comes to advanced medicine for their pets, so it isn't as crazy as it used to be.
I have a neighbor and an uncle who each own small veterinary hospitals. I'll ask them how common veterinary dialysis machines are.
New case of the week posted. Cytosorb treatment for a heart transplant procedure.
You have spouted this train of thought about the EAP designation many times on the Yahoo board. Each time someone has pointed out where you are incorrect. The fact that you continue to repeat information that you know to be incorrect has to make one question your motives. So I will once again repeat the facts about Cytosorbent’s choice to not pursue EAP designation.
A trial of the treatment of sepsis with Cytosorb adsorbers, with the “gold standard” primary outcome measure of 28-day all-cause mortality, would have to be large, time consuming and expensive. The new EAP program offered by the FDA included the possibility of preliminary marketing approval of medical devices based on data on surrogate endpoints. Cytosorbents hope was that the FDA might accept data on the reduction of some inflammatory biomarkers as a surrogate endpoint as part of the EAP program. The FDA’s response to Cytosorbents was that for Sepsis they would not accept surrogate endpoints. This was due to past study results of other companies devices and drugs. It had nothing to do with Cytosorb safety or existing sepsis Cytosorb treatment data. With the surrogate endpoints off the table there was no reason for the company to continue down the EAP path as any full sepsis study would be fast-tracked anyway.
Perhaps a token gesture, but at least it is a positive one.
It takes very little volume to manipulate this stock. Maybe there will be news later today or tomorrow? I've been wondering when we might hear something about the long hinted at Canada marketing approval.
Hopefully there will be REFRESH 1 data available soon to help them in their Cardiac marketing efforts.
The link to the webcast is in the PR. Listening to it now.
I see on their articles page there is mention of the 45th Critical Care Congress February 20-24, 2016 in Orlando Florida. It looks like Cytosorbents will be offering a presentation and a booth. That is just 10 minutes from my Orlando office. I wonder how difficult it would be to crash the event? In the past I have been able to walk freely around the venue when my wife's company had a booth at a forensics science conference.
http://www.sccm.org/SiteCollectionDocuments/CON16_On-SiteProgramLowRes_2016.pdf
I would not jump to the conclusion that they are struggling or delayed. There is certainly more work to an EAP submission than filling out a few forms. The early approval is granted if the device has a good safety record and a likelihood to prove an effective treatment. Post-approval data collection is required to confirm the safety, efficacy and effectiveness. Creating a data development plan for the post-approval data collection could require a significant amount of work. It would be really nice if the FDA would accept the registry data for the post-approval data collection.
From the FDA's guidance:
"In addition, FDA intends to work interactively with the sponsor to create a data development plan specific to the device (“Data Development Plan”). The Data Development Plan should outline all data the sponsor intends to collect in support of device approval, including what data will be collected premarket and postmarket."
Don't forget about their Chief medical Officer, Robert Bartlett. As the pioneer of ECMO you can bet he has some experience with the FDA and medical device regulatory approval.
I asked them a few weeks ago and their response was "We have not yet set the date . . . so as of now, on or before 3/31/15. Thanks."
Looks like a 2012/13 case study. Google "Leukocyte capture using a hemoadsorption", with the quotes and you will find it.
Bertha on the yahoo board also said the number was 3000 in August and 3500 as late as November.
Maybe I spoke too soon. The toxic shock case study certainly sounds like there was 14 hours on continuous treatment.
The EU trial protocol was for one 6 hour treatment a day for up to seven days. That is probably where the 6 hours comes from. I imagine the pours in the beads fill up eventually making it functionless efficiently. As others have pointed out on the Yahoo board there are other proteins in the 10-50 kDa range that serve a useful and important function in the human body, so 24/7 treatment may not be a good idea.
I think 20B is the total potential sepsis market. There is also the cardiac surgery market. Maybe a cancer cachexia market and many other conditions with elevated pro-inflammatory cytokines. Then there is also the potential market for hemodefend, drugsorb, betasorb, contrastsorb.
I thought I would share the update I wrote for one of my friends that I turned on to Cytosorbents.
It has been an eventful month. On the financial side things are falling into place for growth. In December they did a reverse split to meet the share price requirements for up-listing to the Nasdaq capital markets and up-listed. They also reduced the authorized shares to 50 million. They also just completed a follow-on-offering of 1.25 million shares at $8.25 to raise about 10 million dollars, after costs, to fund marketing, more studies and increase manufacturing capacity. The follow-on offering prospectus also included a clause that allowed the underwriters to manipulated the stock price for stability during the process of the offering. I think that is why there was a price drop and it has stayed near the offering price. With the offering, the total outstanding shares is just about 25.5 million. Add in authorized warrants and option, the fully diluted share count is at about 27.7 million. With just under 5 million shares owned by one venture capital company linked the Cytosorbent’s founders the float is at about 23 million. That is not a lot of shares once things gain momentum.
I am fairly certain Cytosorbents has quite a bit of good PR they want to release, but according to the company they are in a “quiet period” as part of the offering. Nasdaq says that period ends on 2/8/2015, so I don’t expect much news or PR to start flowing until after that time.
One the regulatory side of things, they submitted an Investigational Device Exemption (IDE) application to the FDA on 12/30/2014. I’m not sure how familiar you are with the regulatory process, so I will share my research with you. With an IDE approval the company will be able to conduct a phase 3 pivotal cardiac surgery trial. When an IDE application is submitted the FDA sends a letter to the company acknowledging they received the application. That starts a 30 day clock running. In that 30 days the FDA can deny the application approve the application, request more information or data or not respond at all. No response is equivalent to an approval. Cytosorbents has been in constant communication with the FDA for years so I am pretty confident that at this point the IDE approval is almost a formality. Once the IDE is approved we can expect Cytosorbents to announce the planned start of the pivotal cardiac trial and get a better idea of the trial protocol. From my research and review of their August 2014 presentation, the IDE application PR and the recent OneMedForum presentation I think there are clues to what regulatory path they are planning to take. The August presentation listed 3 possible FDA regulatory approval pathways:
1. 501(k) – Cytosorb used intra-operatively during cardiac surgery with a primary outcome measure of reduced pro-inflammatory biomarkers
2. PMA (Pre Marketing Approval) – Cytosorb used intra-operatively during cardiac surgery with a primary outcome measure of reduced organ dysfunction
3. PMA (Pre Marketing Approval) – Cytosorb used post-operatively during cardiac surgery with a primary outcome measure of reduced organ dysfunction
If Cytosorb is classified a class 3 device they will have to go through one of the PMA paths. The PMA route is more rigorous and requires a larger study and more time. As I understand it class 3 devices are usually implantable devices, so I think Cytosorb will be a class 2. Class 2 devices can go through the 510(k) process instead of PMA if there is a substantially equivalent predicate device already approved or cleared by the FDA. Note that 510(k) results in a device that is “cleared” for marketing while PMA results in a device that is “Approved” for marketing. Not sure what the difference is. There has been some speculation among a group I talk with about Cytosorb that there may be an approved Leukoreduction filter that may qualify as a substantially equivalent predicate device for Cytosorb. Now take note that the IDE PR and OneMedForum presentation both mentioned “Intra-operative use of CytoSorb® represents an innovative new strategy to improve the safety of complex cardiac surgical cases, and to reduce inflammation generated during the surgery”. There was no specific mention of reduction in organ dysfunction, although that is obviously the ultimate goal. This leads me to believe they are looking for a primary outcome of reduced pro-inflammatory biomarkers, the 510(k) path. If they do go the 510(k) path I hope one of the secondary outcome measures is reduced organ dysfunction though. Also note that in the August presentation they specifically stated that regulatory path they choose would be decided based on feedback from the FDA, so the path they take will already have the FDA’s blessing.
The August 2014 presentation also said the 510(k) path would require a study of less than 150 patients. Couple this with the fact that Cytosorbents has MD’s on their cardiac advisory board that are from a number of large US university hospitals could lead to a trial that enrolls fairly quickly. If they choose to also use EU trial sites it could enroll very quickly as the device is actually approved in the EU, not experimental, and it has already been used on over 100 cardiac patients there.
The US cardiac trial will have a primary outcome measure of reduced pro-inflammatory biomarkers. The EU study that got Cytosorb CE mark approval in Europe had a similar primary outcome measure. There have also already been over 3500 human treatments with Cytosorb and the data from many of these has been collected in the International Cytosorb Registry database. Many pivotal FDA studies only have limited phase1 and phase 2 study data that can use to design the phase 3 study on. Cytosorbents however, has a large amount of data to base their pivotal study design on, which means they will go into it with a higher probability of success.
One Key opinion leader, Frank Born, the Head of the Perfusion Services, Department of Cardiac Surgery University Hospital Munich-Grosshadern, Germany stated in regard to Cytosorb "I can imagine this therapy will become established as the standard care in cardiac surgery and repeat cardiac surgical procedures in the next few years." That is a pretty powerful statement from someone who is using the device regularly. Also note that I think this quote is over a year old.
I think we will have the following upcoming catalysts to look forward to:
1. Q4 2014 sales results and shareholder letter
2. IDE approval
3. Start of Pivotal US cardiac trial
4. Announcement of a partner for the US cardiac study. They may go it alone, but a partner would be a big boost to ramp up sales and distribution quickly in the US if approved.
5. Marketing approval and start of sales in the 6 EU countries where Fresenius is their distribution partner. The contract with them states they must secure this approval within 6 months
6. Announcement of a pediatric version of Cytosorb. There are hints to this in development on the Cytosorb Registry web site.
7. Results of the US Air Force study on the use of Cytosorb for Rhabdomyolysis
8. Results of the EU cardiac study
9. Result of the EU dosing study. This has been going on for over a year at 8 trial sites
10. Announcement of the name of the top 4 cardiac company that is evaluating Cytosorb in France and a possible partnership. Rumor is that it may the Sorin Group.
11. Result of any of the other 40 + investigator initiated studies in the EU.
12. Licensing or possible partnership for the Hemodefend product.
13. Results of the ABLE study, hopefully supporting the need for a product like Hemodefend
14. Updates on other pipeline products: ContrastSorb, DrugSorb and BetaSorb
15. Update in the SBIR contract with the US army for burn treatment
16. Update on the DARPA contract
Great article, especially after reading slide 5 of the Q3 presentation.
I had forgotten about LEF. Years ago I used to order L-Arginine and L-Ornithine powder from them as a pre-workout bodybuilding supplement.
If I missed anything important please let me know and I will update my overview.
Market, I live in St. Pete and they don't expect the oil to reach shore here. The Gulf Stream should actually keep it offshore. We are worried about the fishing offshore though.
I am more of a lurker than a poster. Joined Ihub years ago to get info on ACEL. What a turkey that turned out to be. Turned back to Ihub while keeping an eye on CCTC because a prolific poster on Yahoo made that board worthless. Seem to find better info and less garbage here. I am holding 59,900 shares of POSC. I know and odd number. Long story...
BTW... Learned about POSC from the ABPI/BVTI boards a few weeks ago. Looks like they just came out BK today with common shares intact. Doesn't seem like the market cares though. Bummer..
Latest BMR report
Nobody buying today's BMR report the the partner is confirmed to be COV? It is all over the Yahoo board. I thought the posts here would at least bring it up.
Local news here is doing a report on FEMA changes. One of the things mentioned is a purchase of 20,000 GPS tracking devices for trucks. Anyone know if this is a HISC product?
http://www.baynews9.com/content/36/2006/7/29/171228.html?title=FEMA%20makes%20major%20policy%20chang...