CytoSorbents Corporation (CTSO)

[ping_pow_princess]

Partnership announcement soon?

If you recall back in 2010, Dr Chan was expecting CE Mark approval & commericalization in EU in 2010 and FDA trial in late 2010 or early 2011. The timeline is off by a year.

Biotech Showcase Jan 2010, Slide 3

http://webcastingplayer.corporate-ir.net/player/PlayerHost.aspx?EventId=2674413&StreamId=1420772&TIK=&override=reg

In August 2010, they had to raise some money through convertible notes.

http://finance.yahoo.com/news/CytoSorbents-Corporation-iw-925586129.html?x=0&.v=1

In Sept 2010, at the R&R conference, we all noted that they are no longer looking for a partner to out-license the sepsis application. We also hear that the cost of the European trial is approx 3 million and the FDA trial estimated cost expected is approx 8 to 12 million.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55087862

In reviewing this timeline, I think Dr Chan was expecting a partner announcement shortly after the results/CE Mark. They were expecting results/CE Mark in first 6 months and that a partner will assist with commericalization and fund the trial. When this timeline didn't hold, they had to raise cash through convertible notes. They certainly do not have the human resources and cash (in particular, to fund a FDA trial at the same time as commericalization).

I'm thinking they will announce partnership news at the same time as results or very shortly afterwards.

Hints to partnership in the works:

The September R&R conference, the "out-licensing the sepsis application" was omitted from their slide. This was Dr Chan's response, "I unfortunately cannot comment on changes made from one version of our presentation to the next. However you should be aware that we have an active business development program at the company focused on trying to unlock as much value from our technology portfolio as would be productive. We firmly believe that collaborations with the government, the military and individual companies are key toward creating significant and lasting shareholder value, to the benefit of all involved in the company."

This was Dr Chan's email response to Warren when asked about partnerships back in Nov 2010, "In general, the time to strike a strategic partnership is when you have the greatest leverage and the needs of the two sides are well-matched. For a small company, the more data, the more revenue, the more visibility that it can provide the partner, the better the terms will be. It does not, however, preclude the potential of doing a milestone based deal, where money is provided with each milestone reached. Deals are made at all points of development. You can see some of the deals for pre-clinical and Phase I products in the drug sector that have commanded $15-25M in upfront payments per compound just to start, with much more with milestones."

From the TWST 2009 article, Dr Chan stated they were looking to get a big partner (licensing/marketing/distribution) AND independent distributors. “We plan to complete this trial by the end of 2009, obtain CE Mark approval and begin commercializing the device by 2010 in Europe through independent distributors with a particular focus on Germany where our trial is taking place. Germany is the largest medical device market in the European Union and third in the world. We are currently looking for a strategic partner to license CytoSorb™ for the sepsis application and to help market and distribute the device throughout Europe through their sales force and distribution channels, providing a more rapid revenue ramp."

Other:

1) No longer looking to out license Cytosorb for Sepsis from Sept 2010 onwards

2) From the R&R Conference audio, we hear Dr Chan state: The goal is to basically work with an INDEPENDENT distributor and have a clinical support team in Germany and focus really on the German market. He looks to expand into other markets through independent distributors as well. They have been approached by independent distributors throughout the E.U. who heard about the technology through different sources.

3) Their current manufacturing facilities are sufficient to supply anticipated initial demand for approximately 1-2 years. It is mandatory to try to find a partner that can take over this but they stopped looking last year.

4) When the "Out-licensing the sepsis application to a strategic partner" from the last presentation in September was omitted, the addition of another new goal of "Stock listing on a national exchange" showed up. Can't get to this goal without some kind of revenue.

5) From the TWST Nov 2010 article, one of their goal is "announcing a strategic partnership deal". They are not seeking, not looking...they are "announcing".