Replies to post #14053 on CytoSorbents Corporation (CTSO)

[caesare74]

Correct Techxen. Key trigger for more sales here in Europe but also other countries, is mainly the "medical code", thus a doctore can directly/automatically process the bill with the health insurance companies. Without the "medical code", the use of filters is low because the administration work to get the reimbursement is (too) high. Even if a doctore sees all the advantages using the CTSO filters, he rather goes for a traditional product (antibiotics) having a medical code. I spoke to a doctore here in Switzerland who used some time ago the filter. For trial purposes. But a further use is planned in Jan. 2019 when Switzerland gets the medical code for the CTSO filter. In Switzerland, Cytosorb has one direct sales, like in Germany. Although, Cytosorb has a partnerhsip agreement with Fresenius Medical, Cytosorb Switzerland has a direct sales. Outside of Germany, Switzerland, Austria (not yet a direct sales), Cytosorb will build direct sales. Partner business, e.g.Fresnenius, is fine, but very slow. As said, a partnership with a big pharma will be a key trigger as well to speed up the sales.

[caesare74]

Texcan, correct. CTSO has a great product pipeline and a huge market to address but is very slow to convert the addressable market into a sustainable and repetitive business. It seems that Cytosorb understood now that they need to increase agressively the direct sales channel.
Sure, as a tiny company with a relative small capital base, the partnership model is the prime choice. In Germany they got the proof that the direct channel sales is far above of all other markets (more than 50% of total turnover. To cover different markets, it was ok to have Fresenius Medical and other partnerships on board (Italy, India,...). But this model does not bring a comparable success as in Germany. If you are in a competitive situation, sure, a direct and indirect channel strategy is required. But the time is now mature to increase substantially the direct sales force. Even if they get a partnership with a big pharma (which I assume will be announced in
Q1-2019), Cytosorb needs additional sales people to big pharma sales and support channels. I would be very much wondering, if Cytosorb does not require addtional capital to fund an agressive sales strategy. They have no other choice. Good news is that competition is not yet seen on the horizon. A slow moving company like Cytosorb with a great product and huge market does face the danger to be too slow. They might be overrun by competition or taken over by a big pharma (which might be the only way to survive).