Cytosorbents Corporation (CTSO) Earnings Call Transcript & Summary

Good afternoon. Thank you for attending the Cowen conference call with Josh Jennings and the CEO of CytoSorbents, Dr. Phillip Chan. The contents of this call and the views expressed on it are solely for the use of Cowen and Company clients. Any publication, reproduction or transmission of this information without the express permission of Cowen is expressly prohibited. As a reminder, we are not interested in receiving and you should not disclose any confidential information. In the event that you inadvertently disclose such information, please notify us as soon as possible. I would now like to pass the conference over to your host, Josh Jennings with Cowen. Thank you. You may proceed, Mr. Jennings.

Thanks, operator, and good morning -- sorry, good afternoon, everyone. Thank you for dialing in and joining for this call, which is part of the Cowen COVID-19 Virtual Conference series. We have Dr. Phil Chan, the CEO of CytoSorbents. Phil, thanks so much for spending time with us today. Really appreciate it. CytoSorbents has a number -- numerous pipeline indications in development, and we'd like to discuss them later in the call. But we're going to focus here on the upfront piece on the COVID-19 crisis, and we'll get into it.

But maybe, it would be helpful for the audience to just hear a little about your background and just some high-level thoughts on the company.

Well, thanks very much, Josh, and it's a pleasure to be here today. Just a little bit about myself. I am the CEO of CytoSorbents Corporation, NASDAQ ticker symbol, CTSO. I've been the CEO for the past dozen years and has helped bring our flagship product, CytoSorb, to the markets now in 30 -- in 58 countries around the world as a way to treat cytokine storm and deadly inflammation using blood purification. I am an MD/PhD internal medicine physician by background. I did my MD/PhD at Yale School of Medicine, my internal medicine residency at the Beth Israel Deaconess Hospital in Boston at Harvard, then spent about 5 years working for the NJTC Venture Fund heading up health care and life science investments. We were one of the largest Series A venture funds in the New York region and a top 1% performing fund for our vintage. And since then, I've been on the operating side and with most of my time focused on CytoSorbents and building this company.

Fantastic. All eyes are on the COVID-19 crisis right now. And then your leading product, CytoSorb, is -- you're leading CytoSorb, which is the war against the virus by contributing to the treatment of COVID-19. Your principal product, CytoSorb, has been added to the arsenal of therapeutic interventions for critically ill COVID-19 patients internationally. I think it will be useful for everyone to understand the concept behind CytoSorb's role in the treatment of the sickest COVID-19 patients that are in the ICU and many of them probably on ventilators. Maybe we could start there, Phil.

Sure. And maybe for your viewers, I can give just a little bit of background on CytoSorbents as a company. So we are a New Jersey-based company, just north of Princeton, and we specialize in treating cytokine storm through blood purification using our proprietary porous polymer bead technology. And as I mentioned before, CytoSorb is our flagship product. It is approved in the European Union as the first extracorporeal cytokine adsorber approved in the European Union, and we've been now commercializing that for a number of years with now more than 80,000 uses cumulatively of the device in life-threatening illnesses in the intensive care unit as well as during open-heart surgery, generating approximately $23 million in sales last year. Our company is about 156 employees across 2 offices. Our headquarters, again, is based out of the New Jersey region where we manufacture the CytoSorb device, including the highly porous polymer beads sorbent in each of these cartridges as well as doing the final device assembly under ISO 13485 standards. And we have a second office space at Berlin, Germany, that focuses on commercialization of CytoSorb across 58 countries around the world, including 10 countries where we sell direct. We have major strategic partnerships with some of the leading players in the world, including Fresenius Medical Care, the largest dialysis company in the world; as well as Terumo Cardiovascular, the largest cardiac surgery disposables company in the world; and Biocon, the largest biopharmaceutical company in India. And for the COVID-19 outbreak, we have allied ourselves with China Medical System Holding Ltd, a publicly traded company with nearly USD 1 billion in revenue in China as a specialty pharma company. And together, we provided CytoSorb cartridges to treat -- and we donated CytoSorb cartridges to treat patients with COVID-19 infection. And the technology has also been supported by the U.S. government to the tune of approximately $29 million. And that's from major institutions such as DARPA, the Defense Advanced Research Projects Agency; NIH, National Heart, Lung and Blood Institute; and various divisions of Department of Defense and U.S. military such as the U.S. Army and Air Force. And in the United States, we are not yet approved. But we are working to try to get approval through our pivotal trial called REFRESH 2-AKI trial, where we are looking to try to quell the deadly inflammation that can be generated by complex open heart surgery as a way to reduce the severity or incidence of acute kidney injury following cardiac surgery that can lead to a high risk of death in the 5 years following surgery. So that being said, I think that we have been talking about the treatment of cytokine storm for many years. And we have always maintained that the reason why people die of life-threatening infection is often not because of the infection itself, but is often because of the overwhelming immune response to that infection that ultimately leads to the damage of vital organs like the heart, lungs and kidneys, ultimately leading to the death of those patients. So today, this -- what they call sepsis, which is this overzealous immune response to an infection, has recently been recognized to be responsible for 1 out of every 5 deaths in the world. So it's a major problem. And even with antibiotics and the best medical care, those with -- those in the intensive care unit with a severe sepsis, meaning infection with organ dysfunction, have a mortality somewhere on the order of 20% to 25%, even with the wide availability of antibiotics and vaccines. Those with septic shock, where they have infection and there is now blood pressure instability, requiring strong medicines to boost the blood pressure such as vasopressors, they have a mortality of 40% to 50%. And those who do not respond to vasopressors wind up having a mortality of 80% to 100% with refractory septic shock. And so currently, today, there are no good ways of dealing with this inflammation, and that is one of the things that CytoSorb is trying to do. So maybe if I could just take a step back, and this, I think, will put some of my comments on COVID-19 into perspective. People often say, "Well, inflammation is a bad thing." And it is not, in fact. It is -- in fact, your inflammation is your body's way of dealing with injury and infection. And for example, when you have sprained your ankle, it swells up like a balloon. It gets red, it gets hot. Well, that is really an adaptive response of your immune system to help that area heal. It is designed to bring nutrients, oxygen, blood supply into the area of injury. And over time, that whole process, that inflammation, that localized inflammation, will help the ankle heal. And many of us have seen that happen with ourselves. Also, inflammation can be helpful when it's systemic. For example, when you have the flu, the fevers, the chills, the body aches, the pain and the fatigue, that is not the virus speaking. That is, in fact, your body's immune response to that virus speaking, and the production of what are called cytokines, which are small molecules, small proteins, of which you have more than 100 different cytokines in your body that help regulate and stimulate your immune response. And so in fact, if I injected you with one of those cytokines, any one of the cytokines, I could cause you to feel like you have the flu within hours. And if I injected enough of those, I could actually kill you. So these cytokines are very powerful. But when controlled in a normal immune response, they are fine and they're actually helping you, in the case of influenza or in the case of other injury, it's helping you deal with this injury and infection. And for example, helping you get rid of the virus, helping you kill cells that are infected by the virus and thereby, ultimately, clearing the virus from the body and getting better. But what we now know is that, in fact, that inflammatory response can go out of control. And it's almost as if the immune system didn't know what to do. So the only thing it knows how to do is to rev up in response to an injury or an infection. And when that injury and infection is so great, such as trauma from a motor vehicle accident or a burst appendix or a COVID-19 infection or severe acute pancreatitis or an acute exacerbation of liver failure, that immune response begins to rev up. And the body's immune system starts to produce cytokines, which then cause other cells to produce cytokines. And it becomes this upward spiral that we often call cytokine storm, where the cytokines are at such a high level that they are no longer functional to the body. They no longer cause the immune system to help fight the illness. They actually become toxic. They actually can rapidly disrupt, for example, the connections of the blood vessel cells, what we call the endothelium. And when that happens in the lungs, that basically allows fluid from the blood vessels to now go straight into the air sacs of the lungs. Along with that, inflammatory cells, inflammatory mediators like cytokines and many other things wind up going into those air sacs and then essentially drowning a person from the inside out. And -- but when this happens in the kidneys, for example, the kidneys can swell only so far they're in a capsule. And then when they swell up to that point, then what happens is that the pressure inside this capsule goes up, and then you decrease renal flow, which further injures the kidneys, and then it shut offs urine flow, right, which is just one of the mechanisms of acute kidney injury. But that is just an example of how these cytokines can play a very toxic role. And then the other way -- so aside from direct toxic injury, the other way is, of course, driving this uncontrolled immune response. And when it does -- when it is driving that uncontrolled immune response, the entire immune system then becomes a potential lethal weapon to the patient, particularly activated immune cells that can enter healthy tissues and cause just widespread damage of uninfected healthy tissue like other organs. So today, we don't have good ways of dealing with this infection and this inflammation -- I'm sorry, we don't have good ways of dealing with the inflammation. We have very good ways of dealing with the infection in terms of antibiotics and antiviral therapy in non-COVID-19 infection. But there are not good ways of dealing with this inflammation. Typically, people have tried anti-inflammatory drugs or steroids. These are either too weak or too strong and have not been recommended after many clinical trials to be useful in helping to control this deadly inflammatory response. And so what happens to these patients is that they just go into the intensive care unit, where nothing is really done for this out-of-control inflammatory response today. So for example, someone with massive trauma, for example, they will go to the operating room, they will have blood transfusions, they will fix the broken bones, et cetera. But then they get wheeled into the intensive care unit for recovery. But the problem is, is that if they survive the initial incident of injury, days later, there's a second wave of mortality that doctors have seen because this uncontrolled inflammatory response of this massively injured patient then becomes a cytokine storm that ultimately leads to organ failure and damage to these vital organs and then high risk of death in those patients. We see this routinely in infection and in many, many other illnesses as well. And because we don't have good ways of dealing with the inflammation, patients typically wind up in the intensive care unit for days to weeks at a time in the United States at a cost of about $5,000 a day and with a high risk of mortality. In many of these illnesses, it's 1 in every 3. So that's a little bit of background on inflammation. But if you will allow me, so what we do is that CytoSorb is a new way to treat inflammation. It's actually not so new anymore, but it is a very compelling way, we feel, to do so. And what it is, is a cartridge that is filled with a highly porous polymer bead, roughly the size of a grain of salt. Each of these beads has millions of pores and channels in them that allow them to act like tiny sponges to remove toxic materials from blood based on size; based on adsorption capabilities, meaning things sticking to the polymer; and as well as concentration, the higher the concentration something is in blood, the more that we can remove. And so these beads are put into a blood filtration cartridge. That blood filtration cartridge is plug-and-play compatible with the existing blood pump infrastructure that is in a hospital today, whether or not it's a dialysis machine, a continuous renal replacement therapy machine. In the COVID-19 era, you've heard of ECMO, extracorporeal membrane oxygenation, a machine that will oxygenate blood outside of the body when the lungs are so diseased that they can no longer maintain oxygen and carbon dioxide diffusion, and also heart-lung machines in the operating room. And so -- and how it works is basically you take blood, just like you do in dialysis, take it out of the body, pump it through this cartridge, the beads inside the cartridge extract the cytokines and the cytokine -- and other inflammatory toxins that are driving this uncontrolled inflammatory response in the body. And then the purified blood goes back into the body, and we just recirculate the blood through our cartridge over and over again such that in a 24-hour period, I can treat your entire blood volume more than 70 times, 7-0 times, with a single cartridge. And every day, we do a new treatment, we use a new cartridge. And so now, today, in the COVID-19 environment, what is interesting about COVID-19 is that it is a very severe disease that not only causes -- not only does -- it's really caused by 2 problems. One is that the virus infects deep into the lung and creates a massive injury in the lung because when the virus infects the respiratory epithelium and the lung tissue itself, it does so and then it replicates within that cell. And then much like the movie Aliens, it grows in the cell and then it bursts -- and then it comes out of the cell and in doing so destroys the cell. But in destroying the cell, it releases millions of copies of itself that then go on to infect neighboring cells, and this process goes on and on. And that is why viruses are so evolutionarily well equipped to infect a large number of cells very quickly in the body. But that inflammation and that damage is bad enough. But the second problem that we see in COVID-19 infection is that, that infection and the inflammation that it causes ultimately leads to a cytokine storm, just as we see in other life-threatening illnesses. It creates a cytokine storm, for example, where 1 study showed that interleukin-6, which is one of the commonly studied cytokines in inflammation, is as high as 15,000 picograms per ml, right? We, here on the phone, hopefully, no one is sick, but have an IL-6 of less than 10 picograms per ml. Someone who has community-acquired pneumonia has an IL-6 of maybe 150 to 250 picograms per ml. But people who are critically ill in the intensive care unit routinely have IL-6 levels that are very high, often higher than 1,000 picograms per ml, which already -- which in studies has already shown to predict mortality. So these patients coming in with 15,000 picograms per ml of IL-6, it's just one of the cytokines that's elevated, one of the cytokines that's resulting in cytokine storm. And that's then wreaking havoc through the cytokine storm process that leads to organ failure and death in many patients. So today, CytoSorb has now been used, I think, now in more than 100 -- easily more than 100 patients across the world in China, in Italy, in Germany, in France and now some initial treatment in the United States as a way to try to treat this cytokine storm. And to your point, Josh, you've mentioned that we are actually in the guidelines now for Italy and Panama, specifically called out by name, to help treat cytokine storm in COVID-19 infection in different circumstances. And the concept of blood purification to treat cytokine storm is also in the Chinese guidelines for treating COVID-19 as well. And so our hope is that CytoSorb, we're able to help more people with our therapy not only abroad but here in the United States as well.

Thank you, Phil. That's a great foundation for the call, and I appreciate it. If we -- I know you just put an update last week. But you relayed that roughly 70 COVID-19 patients have been treated with CytoSorb, I think, in Italy, China, Germany and France. Are there any updates, I know it's only been a week, but just in terms of number of patients treated? And then we can just talk about how you think utilization could evolve over the coming weeks and months.

So what we know is that the usage of CytoSorb continues to grow. And I think that based upon the data sources that we have, easily more than 100 patients have now been treated with CytoSorb. In the clinical experience to date, as we've mentioned in our press releases, we do not have a lot of patient-level data, meaning data on specific patients and how they do. The reason for that is that it's all hands on deck in Italy and in the places where the device is being used. And it really is a -- these are places where physicians don't even have time to sleep, [ let alone ] copy data down into a database on a patient level. Their goal is to really save lives and save as many lives as they can. So I think many companies are facing the same issue, which is why many studies have been popping up in terms of trying to formalize the process of collecting this data in clinical studies. So for us -- but what we have heard, and one of the reasons why CytoSorb has been included in the Italy and Panama guidelines, for example, and in China as well, is that use of the therapy significantly reduces cytokine storm in these patients, particularly IL-6. It is also associated with improved oxygenation of patients as well as improved ratios of showing that the lung is improving and has actually helped patients get off the ventilator in a number of cases. And another thing that they have seen is that CytoSorb also helps to reverse shock, which is a dangerously low blood pressure. And we've talked about shock in the past, but shock is basically -- all of us should be hopefully 120/80, our blood pressure. But people's blood pressures, because of their illness and because of this inflammation, can drop so suddenly and so rapidly that their pulse may not even be palpable, or you will not even be able to feel the pulse. Their blood pressure could be 60/not palpable, right? So this is very dangerous because without blood pressure to pump oxygenated blood to the vital organs of the body, those organs will suffer irreparable ischemic injury from a lack of oxygen. And ultimately, that patient will develop multi-organ failure and die. We can see that even 30 minutes of lack of oxygen can cause the kidneys to shut down, for example. And the brain obviously can only tolerate less than 5 minutes of being without oxygen. So this is a critical component of most critical illnesses. Shock is very important, and that is the hallmark of CytoSorb treatment that we reverse shock in many, many cases. And if you go to www.cytosorb.com, we have a searchable literature database, and you can see that this is a very reproducible effect of the therapy. And in COVID-19 patients, roughly 20% to 30% of them have shock. Not initially, but often the very severe patients have it later on in their course.

Thanks for that. And just thinking about China, for a minute, you'd mentioned that China Medical System Holding is -- you're collaborating with them within the guidance with China's National Health Commission. That guidance includes a recommendation to use blood purification to treat cytokine storm in COVID-19 patients. I mean, how do you see data accrual playing out? I think Peking Union Medical College Hospital has at least registered a clinical trial to collect safety and efficacy data for COVID-19 patients being treated with CytoSorb. But I mean, is there any sense of how data could accrue over the coming weeks and months?

So I think that by the time that we had actually gotten into the Wuhan area with our devices that we donated, the outbreak in China was rapidly coming to an end. And so I think the final tally was about 17 patients treated with CytoSorb in multiple hospitals in China. And so the goal right now absolutely is to get that patient-level data. And we're working with CMS and working with physicians at these various hospitals to put that patient-level data together for potential publication or at least for an analysis so that we can use that data to help other people around the world. And so that is under active -- that is an active goal for us. In general, getting patient-level data is a priority for the company all over the world. And so in Italy, we are working to try to get this data. But again, it's very challenging. But in Germany, where we have now seen good initial use, this data is -- they are not as overwhelmed as in Italy, and we are working with various centers to try to get this data out as quickly as possible.

Excellent. Excellent. I was going to ask about Germany and just whether CytoSorb was being used in COVID-19 patients. I mean, because it would be an on-label treatment in Germany, correct? And I mean, is there any sense that we -- could we see patient-level data or maybe single-center data in the -- sometime in 2020?

We believe we will, and -- we believe we will. So CytoSorb is approved in the European Union, and we leveraged that EU approval as an extracorporeal cytokine adsorber, so as a treatment of cytokine storm, in 58 countries around the world that recognizes European Union approval. And we are in many countries that are being afflicted by the COVID-19 infection today. And so in Germany, yes, it is -- because we have a very broad indication for use, we can be used in any situation where cytokines are elevated, the cytokine storm. So COVID-19 in treatment is absolutely on label. And what we're seeing right now is more acute cases coming in Germany. Their mortality rate has been relatively low but has been climbing as the outbreak -- as the pandemic spreads through Germany. And physicians are -- so we're pleased that they're using this now for the treatment of these patients.

Sorry, Phil, I had you on mute there for a second. I was going to just ask about Iran. I think you'd mentioned previously either on the fourth quarter call or in a press release that there has been some utilization in Iran as well. I assume that data collection is challenging, as challenging there as other areas. But any sense or any updates from Iran that you can provide?

Well, what we know from order patterns and reorder patterns is that, yes, there is likely to be usage in Iran as well, which has -- early on has taken a really hard hit with the coronavirus infection in the country. And so we do not, at the current moment, have reports yet about that. But I would -- based upon what we know, it would appear that there should be reports coming out in the future.

Right. And maybe just -- I know the United States is -- in the United States, is there a possibility for emergency use in some of the FDA's Expanded Access Program? We've seen some therapies and diagnostic tests being brought forward in the Emergency Use Authorization program. Is that a pathway that you've considered?

Absolutely. And so CytoSorb -- so the FDA has a program called the Expanded Access Program that consists of 2 subgroups. One is emergency use treatment, and one is compassionate use treatment. Emergency use treatment is typically a request by a hospital for a specific patient. So it's very patient-specific on a case-by-case basis. They have to -- the hospital has to confirm that standard of care therapy has been exhausted in the patient and that the patient will likely die or have permanent disability if something else is not done. And in those types of situations, CytoSorb can be used under emergency use. It is a process that the FDA has established to enable rapid response to these types of emergencies. So it does not require FDA preapproval, but it does require FDA notification within 5 days of initial treatment. So CytoSorb has, in fact, been used in the pre-COVID era on more than a dozen patients in the United States in many centers throughout the country. And so we know the process very well. So in this current environment, we have received more than 40 emergency use requests from major hospital centers throughout the country and where they are requesting its use in the United States for patients, either on specific patients or in anticipation of patients coming. And so we've set up a task force inside the company to help respond to these requests. These are all donated devices. And -- but that being said -- so we can only do so on a select basis. But that being said, our goal is to help wherever we can on a humanitarian basis, even though we are not yet approved in the United States. So the second path for investigational devices in the United States under this Expanded Access Program is the compassionate use program, and this provides a more formal way of treating patients under an FDA-preapproved protocol. And so basically, the FDA would preapprove compassionate use at many centers. Those centers would then have a protocol that is similar to a trial protocol, clinical trial protocol with the inclusion and exclusion criteria, but not as rigorous because the whole goal here is to open up the therapy to as many people who could benefit as possible. But then under a preapproved FDA protocol, then these institutions would be allowed to treat. And this is of tremendous advantage potentially because under emergency use, it is a tremendous administrative burden on both the hospital as well as the company. And the compassionate use is able to streamline that process. And so we've been in active discussions with the FDA. And they have been extremely collaborative with us to try to make our therapy more available to try to help patients, particularly those with very severe lung injury and also those -- and have very severe lung injury. Our hope is that with more information and more data that CytoSorb will be used earlier in the process, so that patients don't have end-stage lung disease, where the risk -- where the chance of survival is very low and where we can actually intervene and potentially prevent either people from getting on mechanical ventilation, that would be our hope, but at least those who are on mechanical ventilation to try to reduce the severity of the inflammation, the severity of the cytokine storm, the severity of the lung injury and capillary leak syndrome that is happening in the lungs, to reduce the severity injury of their lung injury and get them off the ventilator faster because that is the key bottleneck today. That is what they've seen in China. They see it in Italy. They see it in all places like especially here in New York City, that they just don't have enough ICU beds. They don't have enough ventilators. And the problem with patients who wind up going on mechanical ventilation is, one, the viral pneumonia that they get and the ARDS, the acute respiratory distress syndrome, which is one of the worst forms of lung injury that they get, is amongst the worst that many people -- many physicians have reported seeing, in places like Italy, for example. They say that this viral pneumonia is more severe than any viral pneumonia, flu and otherwise, that they've seen. And what happens is that these patients wind up on mechanical ventilation for 2 to 4 weeks, many of whom don't survive. And recent reports have seen that those who are very sick, half of patients on mechanical ventilation do not survive in COVID-19 infection. And so if we are able to help with that by reducing the severity of injury, getting people off the ventilator, not -- or potentially even preventing them from needing the ventilator, that would be a great advance in the treatment of this illness. And so that's what we're working on now.

Excellent. And this may be a tough question. It's just in terms of, have you thought about a patient that is either COVID-19 patient that was potentially moving towards a cytokine storm or even a sepsis patient. I mean is there an ideal time to institute CytoSorb therapy or -- in your opinion? Or is that -- I mean I know it's -- there's probably not a set target but just a question for you there.

So I think that -- yes, the short answer is yes. As I mentioned before, inflammation is your body's way of dealing with injury and infection and plays a very important role in viral clearance. And in most patients, percent of patients, who get COVID-19 infection, the disease is survivable. They will recover spontaneously. Many have very mild symptoms. Many, on the other hand, have very severe symptoms. But ultimately, they will survive because their immune system stays in check, and they do not progress to this very severe acute respiratory distress syndrome and respiratory failure. And so in those patients who are otherwise okay, we would not want to intervene on those patients too early because, again, the immune system is helping them fight the virus and helping them get better. Where we would help -- where we would treat patients, and I think this is happening in ICUs not in the United States but elsewhere, is when they begin to develop rapidly progressive respiratory failure, they have high levels of inflammatory toxins and -- such as IL-6, such as ferritin, CRP, C-reactive protein, D-dimers and other types of inflammatory markers. It would be in those patients that it would be probably most helpful to intervene when they are at that early stage. I always liken it to walking away from home. The further you walk away from home, the longer it takes to get back. And that is very similar to critical illness. The further away that -- the longer you have worsening organ injury, it takes just a long time to repair all of that. So the key is to try to prevent all that from happening, prevent the kidney failure, prevent the shock, prevent the lung -- severe lung injury. And in doing so, if you can intervene early enough, there may be a real possibility of being able to really turn around the disease to a point where these patients get better faster. And so I think this is beginning to be practiced earlier in the process in many places that we've heard about. I think the one issue is that in order to do our therapy, you do need blood access. So you do need to put a temporary dialysis catheter into a major vein. And what we saw in Italy was that at the beginning of the crisis, when they were overwhelmed with people on mechanical ventilators, that they just -- they weren't even thinking about trying to make it more complicated by putting someone on blood purification. But I think as they realize that nothing that they were doing was able to help, more and more physicians were saying, "Look, putting someone on dialysis, putting someone on blood purification is not a big deal." And it's turned out not to be a big deal. We've heard from many centers that it's very easy to do, it doesn't really complicate much. And certainly, if there's a potential to help, which is what they've generally seen in the experience to date, then that would justify that earlier intervention.

Excellent. I just had a question. So there's some therapeutics that are in development, some anti-IL-6s. And is the -- whether that treatment algorithm that includes an anti-IL-6 with CytoSorb be used before or after a therapeutic treatment with anti-IL-6s?

So I think that what is important to note is that in cytokine storm, it is a spectrum of severity. You have the early inflammation, but then you have the walk, the massive ongoing cytokine storm involving not just 1 cytokine like IL-6, for example, but many, many cytokines that have overlapping function. And at that point, when you try to intervene on this 1 cytokine, 10 others can take its place. So you really need a broad-spectrum solution like CytoSorb, which removes a broad range of cytokines and other inflammatory toxins down at the same time, thereby really being a very effective way of treating a cytokine storm. But that being said, the early reports on tocilizumab, for example, in COVID-19 patients mirror as what we see in the CAR T-cell immunotherapy space. If I can digress for just one moment. CAR T-cell immunotherapy is one of the major innovations in cancer research to date. It's using a patient's own T cells, own immune cells out of their body, taking them out of the body, supercharging them with a gene that will allow them to recognize the cancer. Then they grow up these cells outside of the body, and then they reinfuse them into the patient. And what they found is that, remarkably, that these cells become hunter killer cells that can go out and kill the cancer cells. And it has led to virtual cures in patients with refractory leukemias and lymphomas. But the downside of the therapy is that it often triggers a cytokine storm because as you can imagine, you're putting and growing immune cells into the body, and it can unleash a inflammatory cytokine storm very rapidly such that before your eyes within hours to days, the patient will just precipitously decline and spiral into multi-organ failure, including lung failure, shock and other things. And in the approval studies for tocilizumab, that they saw a very good effect and to the point where now it is now the first-line treatment of cytokine release syndrome. The problem with tocilizumab, however, is that when it works, it works great. But when it doesn't work, which is in many instances, they often have to resort to steroids. And the problem with steroids is that steroids are a blunt hammer to the immune system. They do a good job at shutting off inflammation, but they do so by crippling the immune response. And that is something that you don't want to do with someone who's critically ill because it's your immune response that is helping you fight hospital-acquired infections. It is helping you to stay alive, and it's helping you heal. And so in -- as it relates to COVID-19, steroids are not recommended for the use in treatment of inflammation in COVID-19 because in many -- in a number of studies, in influenza, in SARS and in MERS, that the use of steroids has -- is believed to reduce viral clearance since you're compromising your body's ability to get the virus out of the body and clear the virus. And also in a number of studies such as ARDS, although giving steroids may temporarily make the person look better from a respiratory standpoint, ultimately, it has led to an increase in mortality because it puts people at higher risk of developing secondary bacterial pneumonias and other types of hospital-acquired infection. So in the COVID-19 treatment, we actually have heard of tocilizumab, particularly when given early, turning people around. And I think that is a nice validation of the concept that it is really your immune response that is driving this instability and driving this progression to acute respiratory distress syndrome. But we also have heard where tocilizumab doesn't work at all. And this is what they see in, again, cytokine release syndrome. And we had a patient who had -- a patient in Italy that underwent CAR T-cell immunotherapy. They got tocilizumab. They got steroids, and they still developed -- this 14-year-old boy, this is a published study, developed massive ARDS, very severe with a very significant lack of oxygen transfer, as measured by a PF ratio -- as measured by just some markers. But what -- but that person with CytoSorb was turned around, and his ARDS resolved and that boy survived. So we think that we are certainly compatible with tocilizumab. It's a 147-kilodalton size molecule. It's a IL-6 receptor antagonist, and we believe that CytoSorb will not remove that product. So patient can get tocilizumab first, easy infection, infusion. But if that doesn't work, that CytoSorb would be potentially useful to come in as the big gun to control the cytokine storm. And we're -- in cytokine release syndrome and CAR T-cell immunotherapy, this is how we envision its use, CytoSorb's use, and it may work the same way for COVID-19 infection.

Understood. Maybe if you just step back, we talked about -- you had some discussions with the FDA and the compassionate use program. I think as I understand it, there's a separate initiative for CytoSorb within BARDA. Any update there? And what is the -- what are those discussions like? And what is the goal for BARDA and for CytoSorbents?

So I think that BARDA is part of the joint COVID task force in the United States, along with HHS, FDA, NIH and other organizations. And so they represent kind of the gateway into -- and are organizing the evaluation of different therapies. And so we are absolutely in there and being evaluated. And our hope is to have an update soon on our interactions with BARDA.

Great. And then just as how -- as we think about COVID and the impact to businesses across the board, any updates just in terms of an impact to CytoSorbents, like manufacturing? You cited last week that the lines are running 24/7. Are there any challenges that you're facing over the last number of weeks as the U.S. has been inundated with COVID transmission?

Yes. So I think that when the COVID-19 outbreak happened, we anticipated a potential surge in demand potentially for CytoSorbents. So we began ramping up our manufacturing to now be around the clock, 7 days a week. I have been asked by shareholders, "Does that mean you're at max capacity?" We are not at max capacity yet. We have the ability to produce about 80 million to 100 million -- 80 -- I'm sorry, more than 80,000 devices a year, which would translate to sales of more than $80 million. And -- but our sales last year were $23 million. So that being said, but we are -- we have scaled up, and we have been producing many more devices. And I think that we -- unlike most companies, where their businesses have shut down because of this social distancing and lack of customers in, for example, in retail and restaurants, for example. For us, the -- net-net, COVID-19 has been a positive force in terms of our business. And it is because cytokine storm is exactly what we treat, right? And this is at the heart of why people are getting very sick in COVID-19 infection. But I think what it is also doing is raising awareness of cytokine storm. I was just revising our shareholder letter, and I was just writing in the shareholder letter that when did we ever think that social distancing, ARDS and cytokine storm, when did we ever think that would become part of the common vernacular? Many, many more people, including many more physicians and others around the world, are talking about cytokine storm and the importance of cytokine storm. But hopefully, COVID-19 will go away. But what we should be left with, however, is a much broader understanding that cytokine storm is deadly. And that as one of the few treatments to treat cytokine storm out there, that we should benefit in our business going forward. So -- and that includes in the treatment of sepsis and life-threatening infection, but trauma, burn injury, pancreatitis, liver failure, key respiratory distress syndrome and many, many other illnesses that kill people every single day in ICUs all over the world in a pre-COVID environment and a post-COVID environment. So we believe that it will ultimately have a positive, lasting impact on us but in the near term, certainly seeing an increase in demand.

Great. And I just had a question come in just around, I guess, the practicality of -- in an ICU overload, that's overloaded and understaffed, to use CytoSorb and potentially need to hook a patient up through dialysis catheter and to an acute renal replacement therapy system or what have you. Has that been a hurdle? Or is that -- how would you answer that question?

So as I mentioned, the experience has been to date that it's actually very easy to implement. It is easy to implement into a dialysis machine or what's called a continued renal replacement therapy machine that is used to treat patients with kidney failure. So based on statistics coming out of a study from China on the COVID-19 population, roughly 8% to 10% of patients wind up on kidney failure in the intensive care unit with COVID-19 infection. So it's a very easy population to treat. Also, ECMO, this machine that oxygenates blood outside of the body when the lungs cannot, is also being widely used as a rescue therapy to help treat patients who fail mechanical ventilation. And again, CytoSorb has been used on thousands of ECMO treatments pre-COVID-19. But using thousands of ECMO treatments, and we have a lot of experience with that, particularly given that our former Chief Medical Officer, Dr. Robert Bartlett, the Pioneer of ECMO, was our Chief Medical Officer for 10 years, and we continue to benefit from his guidance and wisdom today. And so in those 2 scenarios, very easy to set up in patients who do not have vascular access, just a little bit more complicated. But in skilled hands, a skilled person can put in a temporary dialysis catheter in 15, 20 minutes. And so it is not a major barrier. The machines are there, and they cannot be used to treat everybody as there is a shortage of ventilators. There -- if this became widely used, there would be a shortage of dialysis machines. But that being said, I think that -- we aren't looking to treat everybody. We're just looking to do our part to help those who are the sickest of the sick.

Great. And then just another question that's come in. Just with the COVID patients that have been treated where CytoSorb has been part of the treatment regimen, how many CytoSorb treatments each patients are getting? How many cartridges or CytoSorb cartridges are employed per patient? Is it a similar average as in other less severe inflammatory states and indications? Thanks.

So we have, again, very little patient-level data, although we have anecdotal reports. So we have a report from China, for example, someone on ECMO required 8 treatments to get off ECMO. We have a report from Germany that a patient with shock, who was also COVID-19 infected with ARDS, on ECMO, reversed the shock in 3 treatments. And so there's this kind of huge variability depending on how sick the patient is and how early you intervene. And again, just to be clear, CytoSorb is not effective -- has not been effective in some patients who have died on a therapy. It's not the cure-all, but I think that when used appropriately and used early, that our goal is to demonstrate a reproducible benefit of the therapy in terms of what we've been talking about, getting patients off of the ventilator potentially or getting them off ECMO, reversing shock and reducing the cytokine storm and, in doing so, helping the lungs to heal, right? And that is what currently isn't being done today. The lungs are not being given a chance to heal because they're constantly being bombarded with inflammatory toxins and viral replication and all of that. And by allowing the lungs to rest and to heal, by protecting it actively through blood purification, this is the overall goal of our therapy in lung injury.

Excellent. I mean COVID-19 has been a focus, and we spent nearly an entire hour on that and deservedly so. There are a number of other indications that CytoSorbents is working on, and we only have a couple of minutes left until we get to the top of the hour here. But maybe we could just touch on one of them, such as the removal of ticagrelor in patients undergoing emergency cardiac surgery. In that indication, there was some strong data out of St. George, Germany -- St. George Hospital in Germany that was published last year, there was the TISORB trial in the U.K. Any updates in terms of that trial or how the European cardiac surgery community is reacting to that publication?

So I think that the -- this is one of the indications where in talking with many cardiac surgeons, the word no-brainer has come up many more times than I would have expected. This -- there are millions of people on these blood thinners, often called antithrombotics, whether or not they're the P2Y12 platelet inhibitors that are used widely in people who show in a hospital with heart attacks and need to go to the cath lab for a stent, or if they are not eligible for a stent, then they wind up going to emergency CABG, or coronary artery bypass graft surgery. But there are also millions of people on these blood thinners for things like atrial fibrillation, for deep vein thrombosis, for peripheral artery disease and many who are on these agents for history of heart attacks and strokes. So the problem with these blood thinners is that if you get cut or if you get injured or if you need emergency cardiac surgery, you look like a hemophiliac, you bleed. And the only solution is to wait for the drug to wash out of the body, and that has been demonstrated to reduce the risk of bleeding. However, in patients who are having a heart attack or who have come out of the cath lab and were not eligible for stent placement, for example, because they have multivessel disease or they have a left vein lesion that cannot be -- a stent cannot be placed there, otherwise they risk sudden death if it clots off, or patients who have coronary artery injury or any -- or a number of reasons, that they wind up going to -- they have to go to CABG as quickly as possible, that leads to the best outcome. But again, they risk bleeding in the postoperative period. And many wind up having to go back for an exploratory surgery called re-thoracotomy where they need to crack open the chest and try to figure out, is the loss of blood that they're seeing because of the blood thinner on board, leading to just oozing of blood? Or is it because there was a surgical error and something was nicked? And these patients -- this is not something that a cardiac surgeon ever wants to do because they've done a technically perfect surgery, and the patient is just -- often just oozing from having this blood thinner on board. And so this the study that you've referred to, in fact, it was an observational study on patients on ticagrelor and rivaroxaban, another blood thinner, and showed that there was a statistically significant reduction in bleeding events, need for blood transfusions, need for re-thoracotomy, need for -- I mean, the amount of surgical drainage, et cetera. And in Europe -- in England, they actually projected a cost savings of about $5,000 for every case because you're -- you've reduced these bleeding complications that are very costly. And it didn't even take into account the fact that there are many patients who are just sitting in the hospital waiting for surgery and utilizing expensive hospital resources for no reason as they wait for the drug to leave their body and wait for surgery. These patients, we envision, will be able to be -- go to surgery right away. And in fact, we've received EU label expansion for this application for the removal of ticagrelor. That was just very recent, and we believe that this will be a significant growth driver for our business in the EU and the 58 countries where we are today. And what we have said is that this is also the pathway that we are looking to try to get early U.S. approval or U.S. approval in parallel to our REFRESH 2-AKI trial that is a second path for U.S. approval. And so there's a lot of excitement around this application. And we believe that CytoSorb can be used in those patients -- will be used widely in patients who are on these blood thinners requiring emergency cardiac surgery.

Fantastic. Sorry, we didn't get to dive a little bit deeper into that pipeline development. But it's -- well, actually not necessarily pipeline anymore in Europe, but that's another exciting indication on the list here. Well, we've run up into the 2:00 hour. Phil, thanks so much for spending time with us today. Thanks to the audience for dialing in. That was a great download and some exciting progress you guys are making, and thanks for contributing to the fight against this COVID-19 virus.

Thanks very much, Josh. We greatly appreciate the opportunity, and we look forward to giving you an update in the future.

Outstanding. Have a great weekend, everyone.

That concludes the conference call. Thank you. Enjoy the rest of your day.