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Regulatory Update on DrugSorb-ATR
On August 20, 2025, the company announce that it had received an FDA appeal decision following its July 2025 in-person supervisory administrative review (appeal) meeting with FDA under 21 CFR 10.75. The appeal was in response to an April 25, 2025 FDA denial letter of the company’s De Novo application for DrugSorb-ATR.
In this appeal decision, the FDA found no issues with device safety but upheld its prior De Novo denial decision citing the need for additional information to support the company’s desired label indication for this FDA Breakthrough Device. The FDA proposed a potential path forward for market authorization of DrugSorb-ATR and the company continues to have interactive discussions with the FDA for further clarification on the proposal. The FDA also noted another avenue for appeal to a higher level within the FDA, specifically with the Director of the FDA’s Center for Devices and Radiologic Health (CDRH), that must be filed within 30 days of the appeal decision, which CytoSorbents is currently evaluating.
CytoSorbents continues to advance its efforts toward FDA approval of DrugSorb-ATR, despite the recent decision to uphold the denial. The company has successfully resolved the majority of issues previously raised by the FDA, with no concerns identified regarding device safety, a critical factor in establishing the favorable benefit-to-risk profile required for De Novo authorization. Importantly, the FDA has invited further discussions on a path forward to market authorization, providing a potential avenue to unlock significant commercial opportunity. DrugSorb-ATR, designated an FDA Breakthrough Device, addresses a large and growing unmet need: tens of thousands of U.S. heart attack patients requiring urgent coronary artery bypass graft (CABG) surgery each year while on ticagrelor currently face the choice of delaying surgery or risking severe, life-threatening bleeding. With millions of patients worldwide on blood thinners, the market for effective perioperative bleeding solutions is substantial and expanding. Already in use internationally, DrugSorb-ATR positions CytoSorbents to capture a major market opportunity in the U.S. and Canada, with the potential to deliver both significant patient impact and long-term shareholder value.
Valuation and Estimates
Our 2025 revenue estimate is adjusted to $37.8 million, and our 2025 EPS estimate is an adjusted loss of ($0.20) based on better than expected EPS in the 2nd quarter of 2025. We believe 2026 revenues could exceed $41.0 million with the approval and commercialization of DrugSorb-ATR. Our 2026 GAAP EPS estimate is a loss of ($0.11) per share.
With ongoing cost controls and the maintenance of gross margins above 70%, we believe the core business of the company (i.e. the existing CytoSorb business) could reach near cash flow breakeven at some point in late 2025, which will free up cash for investment in the expected DrugSorb-ATR launch later this year and into 2026.
Beginning in 2025, the company began a significant reorganization of the direct sales team and strategy in Germany (its largest market for the CytoSorb device). This includes the rebalancing of territories and hospital accounts with the goal of restoring sales growth through deeper customer engagement, more effective market development, and improved sales representative productivity. The company is pleased with the initial progress of this reorganization and remains confident it will lead to stronger execution, improved performance, and more robust sales growth in the region.
Last year, the company implemented significant cost-cutting measures to reduce the cash burn, including major reductions in headcount, termination of non-core R&D programs, termination of the STAR-D trial to focus on STAR-T, and a third consecutive year of salary freezes for executive management, with management voluntarily reducing salaries in exchange for stock options in 2024. The benefit of these cost cuts on operating expenses have been apparent in the significant cash burn reduction for the past four quarters.
In addition, the company has worked diligently to optimize manufacturing efficiencies. The company had product gross margins of 71.1% in the 1st quarter of 2025 and 70.9% in the 2nd quarter and we expect product gross margins for the rest of 2025 to be in the low 70% range. In the long term, we expect gross margins to expand to the mid-high 70% range after full commercialization of DrugSorb-ATR in North American markets.
Based on these factors, we maintain our price target of $4.00 per share.
As of June 30, 2025, the company had total cash of $11.7 million (including $10.2 million unrestricted and $1.5 million restricted cash) and total debt of $14.4 million. During the quarter, the company sold certain New Jersey NOLs and R&D tax credits, resulting in a net increase in cash of $1.7 million. Current assets were approximately $23.0 million and current liabilities were $9.8 million. Net working capital was positive at $13.2 million. Upon FDA approval of DrugSorb-ATR, the company will be able to access an additional $5.0 million from its lending facility if necessary.
We believe the company is fully funded to support its business model through the expected regulatory approval of DrugSorb-ATR and the subsequent commercial launch in late 2025 or early 2026.
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