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Cytosorbents Corp (CTSO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered 25% year-over-year product revenue growth to $9.15M and 71% product gross margin; operating loss improved 61% to $3.73M, but GAAP EPS of -$0.14 missed consensus of -$0.05 as FX losses weighed on net income . EPS consensus values retrieved from S&P Global.*
  • On a comparable basis including grant income, Q4 “total revenue” would have been $10.1M, essentially in line with Street revenue consensus of $10.09M; reported revenue now excludes grants (reclassification improves medtech comparability) . Revenue consensus values retrieved from S&P Global.*
  • Management expects a short-term disruption in Germany from a sales-force reorganization, guiding to modestly lower product sales in Q1 2025, with intent to drive core business toward breakeven in H2 2025 .
  • Regulatory momentum remains intact: FDA De Novo for DrugSorb-ATR in interactive review and Health Canada MDL in advanced review; a controlled launch is planned upon approvals, with a U.S./Canada TAM of ~$300M expanding >$1B as Brilinta becomes generic .
  • Balance sheet strengthened via rights offering: pro forma cash (incl. restricted) ~$17M at year-end; Avenue Capital debt facility includes an additional $5M upon FDA approval of DrugSorb-ATR .

What Went Well and What Went Wrong

What Went Well

  • “We closed 2024 on a high note, achieving a 25% increase in Q4 sales… culminating in $35.6M in CytoSorb sales for the full year… with healthy 71% product gross margins” .
  • Regulatory progress: “FDA has accepted our De Novo application, and we are now in interactive review… Health Canada… in advanced review” .
  • Operating leverage: Q4 opex fell 30% YoY and adjusted EBITDA loss improved 70% to -$2.4M; adjusted net loss improved 78% to -$1.7M .

What Went Wrong

  • GAAP EPS (-$0.14) missed consensus (-$0.05) largely due to $4.9M FX loss; net loss widened YoY despite stronger operations . EPS consensus values retrieved from S&P Global.*
  • Germany growth stalled for a second year; management is reorganizing sales coverage and expects near-term disruption and modest product sales decline in Q1 2025 .
  • Material weakness disclosed: restatement for 2023 inventory and RSU stock comp errors; internal controls remediation underway .

Financial Results

Core P&L and Margins (USD)

MetricQ2 2024Q3 2024Q4 2024
Product Revenue ($)$8,842,000 $8,612,795 $9,150,416
Total Revenue ($)$9,895,000 $9,390,388 $10,100,000 (incl. grants; if historical reporting)
GAAP EPS ($)-0.08 -0.04 -0.14
Product Gross Margin (%)75% 61% 71%
Operating Loss ($)$(3,419,000) $(4,396,247) $(3,729,107)
Adjusted EBITDA ($000s)$(2,179) $(3,557) $(2,420)
Adjusted Net Loss ($000s)$(2,761) $(4,526) $(1,743)
Total Cash, Cash Equivalents & Restricted ($)$14,900,000 $12,200,000 $9,763,884 (3.28M cash + 6.48M restricted)

Notes:

  • Q4 “Total Revenue” shown for comparability includes $1.0M grants; reported revenue now excludes grants per reclassification .

Street vs Actuals (S&P Global; USD)

MetricQ2 2024Q3 2024Q4 2024
Revenue Consensus Mean ($)$9,682,500*$10,175,670*$10,086,000*
Revenue Actual ($)$9,895,000 $9,390,388 $10,100,000 (incl. grants)
Primary EPS Consensus Mean ($)-0.0975*-0.06333*-0.05333*
GAAP EPS Actual ($)-0.08 -0.04 -0.14
Primary EPS – # Estimates4*3*3*
Revenue – # Estimates4*3*3*

Values retrieved from S&P Global.*

Interpretation:

  • Q4 revenue was essentially in line vs consensus on an apples-to-apples basis including grants ($10.1M vs $10.09M*). The GAAP EPS missed (-$0.14 vs -$0.05*) due to sizeable FX loss .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product SalesQ1 2025Not providedModestly lower YoY and sequentially due to Germany salesforce reorganization Lowered
Core Business Cash FlowH2 2025Near breakeven by end of 2025 Intent to manage core business toward breakeven in H2 2025 Maintained/clarified timing
Regulatory Milestones2025Expect FDA & Health Canada decisions in 2025 FDA De Novo in interactive review; Health Canada advanced review; expect decisions in 2025 Maintained
Financing AvailabilityH2 2025$5M second tranche contingent on FDA approval $5M Avenue Capital second tranche available upon FDA approval of DrugSorb-ATR Maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Regulatory/ApprovalsFinalizing U.S. FDA De Novo; MDSAP site audit; Health Canada submission targeted FDA De Novo accepted for substantive review; MDSAP certification; Health Canada MDL submitted FDA interactive review; Health Canada advanced review; decisions expected in 2025 Steady progress → decisions approaching
Germany PerformanceOngoing post-COVID headwinds; initiatives to restore growth Recovery expected with normalized production; Germany still soft Reorganization of sales team; expect short-term disruption, H2 improvement Near-term soft → medium-term fix
Manufacturing/Gross Margin75% product GM; efficiency at Princeton facility Temporary production slowdown hurt GM (61%); issue resolved GM rebounded to 71%; normalized production Recovered margins
Launch Readiness (DrugSorb-ATR)Planning for U.S./Canada commercialization TAM ~$300M growing with generic Brilinta; launch experience leveraged Controlled release at trial sites; sales force target 15–25; hybrid distributor model Plans detailed; org build-out
Clinical Evidence/Thought LeadershipSTAR registry at EuroPCR; PuriFi pump launch Registries (STAR, COSMOS) data momentum Multiple conference presentations (ACC, SCA, EuroPCR, CSCS, ESC-HF) underpin launch narrative Increasing cadence
R&D/Opex DisciplineHeadcount down 17%; opex reductions Cash burn improved; opex moderation Opex down 30% YoY; adj EBITDA improved 70% Continued cost control
Controls/Restatement——Restated 2023 for inventory/RSU; material weakness disclosed New risk; remediation in 2025

Management Commentary

  • “We closed 2024 on a high note, achieving a 25% increase in Q4 sales… representing a 15% year-over-year increase with healthy 71% product gross margins.” — Dr. Phillip Chan, CEO .
  • “The FDA has accepted our De Novo application, and we are now in interactive review… we remain on track to receive regulatory decisions from both FDA and Health Canada in 2025.” — Dr. Phillip Chan .
  • “Q4 operating expenses decreased 30% year-over-year… As a result, operating loss improved 61% year-over-year to $3.7 million.” — Peter Mariani, CFO .
  • “We expect a short-term disruption in German sales… however, we expect these actions will yield improved results in the second half of this year with the intent to manage our core business toward breakeven.” — Dr. Phillip Chan .

Q&A Highlights

  • Regulatory timing confidence: FDA staffing reductions are not targeting review personnel; interactive review continues, with decisions expected in 2025 .
  • Launch approach: Controlled release at clinical sites to validate access (VAC committees), ordering, and usage patterns before broader national rollout .
  • Commercial build: U.S. sales force targeted at 15–25 reps initially; hybrid distributor supplementation in certain geographies .
  • Core breakeven path: No specific revenue guidance; moderate growth with >70% gross margins and continued efficiency expected to move core business to cash breakeven in H2 2025 (exclusive of DrugSorb-ATR investments) .
  • Liquidity: Pro forma cash ~$17M at year-end; actual today less than that due to Q1 burn; $5M debt tranche available upon FDA approval .

Estimates Context

  • Revenue: Due to reclassification (grant income no longer in revenue), Q4 reported revenue excludes grants. On a comparable basis including grants, Q4 revenue (~$10.1M) was essentially in line vs consensus ($10.09M*). Revenue consensus values retrieved from S&P Global.*
  • EPS: Q4 GAAP EPS (-$0.14) missed consensus (-$0.05*), driven by FX loss (-$4.9M) and interest expense; Q3 and Q2 were modest beats vs consensus .

Key Takeaways for Investors

  • Q4 showed healthy revenue growth and margin recovery, but FX and interest expense drove an EPS miss; the operational trend (opex down 30% YoY, adjusted metrics improved) is intact .
  • Reclassification of grant income clarifies medtech comparability; for “Street vs actual” analyses, use total revenue including grants until consensus definitions catch up .
  • Near-term headwind: Germany sales reorganization implies Q1 2025 softness; monitor H2 recovery and progress toward core cash breakeven .
  • Regulatory catalysts in 2025 (FDA/Health Canada) remain the primary stock drivers; controlled launch plans and TAM expansion underpin medium-term upside .
  • Liquidity appears sufficient through approvals and initial launch, with an incremental $5M debt tranche upon FDA approval; watch FX exposure given prior-quarter volatility .
  • Continued clinical data dissemination (ACC, SCA, EuroPCR, CSCS, ESC-HF) is building prescriber confidence ahead of launch—track adoption signals at trial sites .
  • Governance/controls: Restatement and material weakness remediation are in flight; progress updates in 2025 10-Qs are worth monitoring .