Cytosorbents Corporation (CTSO) Earnings Call Transcript & Summary

Good morning, Dr. Chan. Phil, are you ready?

Yes, whenever you are, Jason. Thank you.

Good. Good morning, everyone. My name is Jason Kolbert. I am the senior biotechnology analyst, really the senior health care analyst at D. Boral Capital. One of the companies that I've been following for, got to be 10, maybe even 15 years, right, Phil?, is CytoSorbents. I'm fascinated by the company in part because, believe it or not, I have a background in chromatography going back many, many years. And when Phil first introduced the concept of what he was trying to achieve, it just made really good sense. From a mechanism of action from how the product works, the idea of a chromatic graphic-like filtration just made sense. Since that time, the company has made tremendous progress with two key products, CytoSorbents or CytoSorb and DrugSorb. One of the products removes deleterious bands of cytokines from the blood, and the other one actually can remove drugs. And in the case of what CytoSorbents is focused on today, blood thinners. The company, like all microcap companies, biotech companies, in particular, has had its share of hiccups. This is brand-new science and technology. It is an ever-evolving regulatory landscape. And it makes sense for us to do a check-in with Dr. Chan and understand kind of where the company is today, what are the next key events that investors should be focused on? And how will the company navigate their way through both the fact that they have revenues that they're pushing towards breakeven that they're managing both the distributor network, direct sales and the idea of launching a product in the U.S. And I think when we talk about that -- Pete, great to see you; their CFO, Pete Mariani, who has a lot of experience. Both of these guys, tremendous experience to understand the challenges of financing a company in the given environment. My advice to investors will be kind of the same thing that I hope to say when we close this call, and that is stay the course. You've been following this company for a long time. We are so close right now. That's my feeling that we are on the verge of success on multiple fronts. And I see the first success as paving the way for multiple other successes as we see the broad utility of a device like this that perfectly fits in the existing medical/surgical/emergency room paradigm, right? There are many, many indications. But for today, we're going to focus on a couple of them. So with that said, Dr. Chan very interested to hear what you have to say, your overview. I'll introduce you briefly, which is just, wow!, Yale-trained physician, residency at Harvard, internal medicine. I always love when I get to interact with management teams that are professionally trained because when you speak we can just hear, right, that it's from the direct experience. And I think that will come out during this webinar. So thanks, everyone, for joining us. Dr. Chan, please take it away.

Well, Jason, first of all, thank you. Those are very kind comments and certainly appreciate your invitation today to this fireside chat as well as D. Boral and their invitation. So just to give you a little bit of background, as you mentioned, CytoSorbents is a NASDAQ-traded medical device company that specializes in blood purification to treat life-threatening illnesses in the intensive care unit as well as cardiac surgery. Our technology is based on 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 extract toxic materials from blood and bodily fluids very efficiently, all without the need for any type of affinity agent, no antibodies, no biologics, no ligands of any kind. It's all solid-state porous polymer chemistry. And the nice thing about this technology -- and this is CytoSorb, our flagship product. Nice thing about the technology is that it's plug-and-play with the blood pumps that are found in hospitals today, whether or not it's a dialysis pump or in the intensive care unit, extracorporeal membrane oxygenation machine that oxygenates blood when mechanical ventilation fails; very relevant for today's discussion, the heart-lung machine used in the operating room for open heart surgery and just even a simple hemoperfusion machine, our therapy works on that equally as well. Now as you mentioned, there are really 2 major parts of our business. Our flagship product, CytoSorb, is sold in more than -- is EU approved and sold in more than 70 countries around the world. It has generated more than 300,000 human treatments to date across, again, more than 70 countries as a way to treat deadly inflammation and high levels of toxic substances in a wide variety of illnesses, such as sepsis and septic shock, burn injury, trauma, pancreatitis, liver failure. You name the illness, there's often a reason why CytoSorb can be used. In particular, we're expanding to liver failure. We're expanding to trauma and importantly, to blood thinner removal for which CytoSorb already has an approval to date, and we'll talk a little bit more about that in a minute. But as you mentioned, it is our core business, generating about $37 million in trailing 12-month revenue as of the end of the third quarter. This is a high-margin razor blade in someone else's razor business. Our product gross margins are about 71% on a trailing 12-month basis with the potential to be even higher, particularly as we bring, hopefully, the U.S. to the market. And so very excited about that part of our business. Second part of our business is, as you mentioned, a product that is currently investigational in the United States called DrugSorb-ATR that we are working to try to get approved through the de novo application process, and we'll talk more about that. But what that device does is it tries to address a major problem in modern medicine today in patients who are taking blood thinners. There are millions of people out there taking blood thinners. You your listeners probably are either on them or know someone on a blood thinner like Eliquis, Xarelto, Brilinta, Plavix, Pradaxa. People are on these blood thinners to reduce their risk of heart attack and stroke. And -- but if they need unscheduled surgery, particularly cardiac surgery, since most of these patients are vasculopaths, they have atherosclerotic disease, and they are likely to need cardiac surgery, they'll bleed. And particularly if they don't have time to stop taking the drug, which is the only way to reduce that bleeding risk. And we will talk a little bit more about that application today, but FDA has granted us 2 FDA breakthrough device designations for this application, highlighting the major unmet medical need out there that basically says that there are no approved products or products that effectively deal with this problem of perioperative bleeding. And what our technology does is that we remove the drug, we reduce the bleeding risk. It's very simple. So we'll talk a little bit more about that. And then finally, a third part is our pipeline. And we're excited by that, too. We have 2 approved products, one called VetResQ, which is CytoSorb for animals and dealing with the fact that 1 in every 10 households today have a dog, for example, that are prone to illness. We also have a product called ECOS-300CY that is there to help integrate into machines from TransMedics, from XVIVO, other folks that are focused on solid organ transplantation where we connect right into that system and can remove cytokines and inflammatory toxins that compromise the function of those organs such that we can recondition those organs to be ready to go, to be implanted into patients, helping to address a major unmet medical need of or short -- solid organ shortages. And then finally, we have a product called HemoDefend-BGA that is designed to create universal plasma. Plasma is a life-saving blood product that is often used in trauma patients. And we can actually create a product called Universal Plasma that can be given to anybody regardless of blood type. And when combined with freeze-dried plasma technology, we actually hope to be able to bring that product into every first responder vehicle in the world as a way to resuscitate trauma patients in the field as well as potentially in the hospital. So that's our core -- that's our business overview and happy to talk about anything that you wish, Jason.

So I think what we'd like to do now is focus a little bit on DrugSorb, kind of where is DrugSorb? And I guess it's important to talk a little bit about what are you doing in Europe? What are you selling in Europe today versus what is the focus on DrugSorb? And then we're going to get into your most recent regulatory interactions and what you think the regulatory pathway is forward. It seems to me that, that's the most critical event for the company over the next 12 to 18 months.

Sure. Yes. So what we're selling today in Europe is predominantly CytoSorb. It makes up the vast bulk of our revenue. And it is focused on really 2 verticals. One is critical care, which accounts for roughly 2/3 of all of our sales internationally and about 1/3 in cardiac surgery. In critical care, again, we're dealing -- our technology is specifically dealing with trying to treat life-threatening massive inflammation that results in high mortality and death -- high mortality and morbidity in patients with life-threatening critical illnesses like the ones we talked about earlier. And in cardiac surgery, the applications are often in high-risk cardiac surgery where they're on the table for a long time, which causes a lot of inflammation. We're also treating lots of patients with endocarditis, which is an infection of the heart valve. This is a big problem in the United States due to IV drug abuse, but also prosthetic heart valves in elderly patients, very prone to getting infected. So that's another major area. And then another major area, as I mentioned, is the removal of blood thinners that are causing potentially fatal or near-fatal bleeding in patients because there is currently no antidote out there today, and we provide that antidote with our device.

Different product, though, right, DrugSorb versus CytoSorb?

That's right. So CytoSorb has that indication today in Europe. And in the United States, DrugSorb uses an equivalent polymer technology, but with a specific application that we seek for blood thinner removal in patients undergoing, particularly CABG surgery.

Right. And so there's a lot of strategy -- regulatory strategy in what you're talking about. But let me kind of step back and ask kind of a really basic question. How is it possible that CytoSorb is approved being used, being sold in Europe, but it's not available for those indications in the U.S.?

No, it's a great question. I think that in Europe, we actually pursued CytoSorb with the indication as a tool indication, first to remove cytokine storm and to treat deadly inflammation. So that is our indication: to reduce cytokines in inflammatory diseases; to remove bilirubin, for example, in acute liver disease; to remove myoglobin in acute trauma; and to remove blood thinners in patients undergoing cardiothoracic surgery. In the United States, FDA has a higher standard where they are looking for rather than a tool indication, they're looking for a treatment for a disease. And for example, a therapy for the treatment of sepsis that reduces 30-day all-cause mortality, which is a very high bar, which no company has really been able to hit throughout decades of research and development. So we decided to try to get into the U.S. market in a more straightforward way focused on the removal of blood thinners and the reduction in perioperative bleeding risk. And as I mentioned before, there's lots of different blood thinners out there, many different classes, right? There's the antiplatelets agents like aspirin, Plavix, Brilinta, Effient; there's the direct thrombin inhibitors like Pradaxa; and then there's the blockbuster drugs used predominantly to treat patients with atrial fibrillation, but also peripheral vascular disease and other things. These are called the direct oral anticoagulants like Eliquis and Xarelto. Eliquis, I think, is a top 10 pharmaceutical in the world and blood thinners in general are one of the biggest categories of pharmaceuticals in the world. So what we focus -- so we can remove all of those agents.

What I hear you saying is that the regulatory complexities between Europe and the U.S. are quite different and that the U.S. requirements wants you to be very indication-focused and the complexities of running that kind of trial like, for example, sepsis or liver failure, you talk about bilirubin removal. That's a very complex trial to run because as we know, sepsis is a tricky disease, right? And people, unfortunately, when they become septic, the clock is ticking. So from a regulatory strategy point of view, it made more sense to focus on DrugSorb in the U.S. and take advantage of the fact that you're not only selling product in Europe, but accumulating data in Europe. Is that fair?

Absolutely. That's exactly right. And for the first drug that we are talking...

One more quick thing, which is establishing the safety profile. So how important is the safety profile in your discussions with U.S. regulators? They -- how aware are they of the patient data experience that you have? And how many patients have actually used the product so far?

Well, CytoSorb was actually given emergency use authorization by FDA during COVID, recognizing the long history of usage in Europe, and this was used around the United States, actually commercialized and sold for the treatment of COVID. And for another day, we can talk about our results in COVID, which were outstanding, where 73% of patients, the sickest of the sick patients survived with our therapy. In terms of DrugSorb ATR...

By the way, that's huge, Phil. I mean that's huge. So you would think that the combination of European experience, COVID experience would create a very positive regulatory framework for approval today. How has that influenced your regulatory discussions with the agency?

Well, I think FDA has always been very supportive of the technology and particularly in COVID. I think we were one of the first therapies to receive FDA breakthrough, one of the first -- actually the second by 12 hours, blood purification technologies, to receive FDA emergency use authorization. And so I think that -- FDA, I think, sees the promise of this. But again, running a large-scale randomized controlled trial requires an immense amount of resources and funding, et cetera, and takes a long time. And again, we opted to choose a more straightforward path, but still addressing a large unmet medical need. Like we -- we'll talk today a little bit about the use in one particular blood thinner called Brilinta that already has an immediate market opportunity for us of -- total addressable market opportunity of about $300 million that could grow to over $1 billion over time as we add on additional blood thinners and as we add on additional surgeries. So very exciting opportunity and addressing, again, a big unmet medical need. So maybe we could talk about that a little bit and the use case of Brilinta. So...

And just one quick question. There are no reversal agents that can be administered for these thinners. Is that right?

So in catastrophic bleeding for the DOACs, there is a product called Andexxa that is approved, but that has -- comes with high risk. There's a roughly 17% risk of rebound heart attack and stroke. So you're trying to reverse a blood thinner, but then it is associated with a high risk of new onset heart attack and stroke. So it's for people undergoing -- for people with like a GI bleed or massive trauma from a car accident, it makes sense, right? Otherwise, they're going to bleed out. Because when you're on a blood thinner, it's like being a hemophiliac, right? You just ooze and bleed. So in those high-risk scenarios, it makes sense. But for cardiac surgery: one, Andexxa cannot be used in cardiac surgery because it interferes with the anticoagulation that is necessary to put someone on a heart-lung machine blood pump; and two, the goal here, you don't want to cause additional heart attack in stroke, right? Because that's what you're trying to treat a heart attack typically or some other event. And so that is not an eligible therapy. So American Heart Association and American College of Cardiology say that the only really effective therapy for reducing the bleeding risk is to stop taking the drug, let it wash out of the system for 3 to 5 days at a minimum to reduce that bleeding risk. The problem here is that in most patients, that need unscheduled surgery. So something happens. And now they need to go to the hospital.

Yes, I don't want to wait 3 to 5 days to have a potential heart attack or a bypass or a CABG procedure. Oh my God! I would think there's a lot of mortality associated with trying to just keep a patient stable, plus what's the cost of that waiting 3 to 5 days? Do they wait in the hospital?

Yes. They wait in the hospital, particularly if they're severely ill, they wait in the ICU at $6,000 a day. So you're talking about $18,000 to $30,000 of waiting just to wash out a drug, right? Or in the step down at $4,000 a day or in a hospital ward at $2,000 to $3,000 a day. These patients are waiting at risk something bad can happen and has happened during this interim period of waiting, but it also clogs up and takes a valuable resources in the hospital. So it's a big problem, right? So -- but coming back, I think for your viewers, I think I can communicate, I think, the use case of this for the drug that we're going after first, which is the drug Brilinta, also known as ticagrelor. So someone's having a heart attack, right? The conventional wisdom, call 911, take an aspirin, right? Aspirin is a weak antiplatelet agent that prevents platelets from sticking together, making that clot in the coronary artery worse, right, to prevent that from getting worse. And it's actually been shown to improve outcomes. And that's exactly what happens when the patient goes to the emergency room. They get loaded on aspirin and a super aspirin and the 3 types of super aspirins are Brilinta, Plavix and Effient. But Effient and Plavix bind irreversibly to the platelet, you can't reverse it. Brilinta comes on and off the platelet, and we have the opportunity to grab the drug and remove it to reverse the bleeding risk. So all these patients are now loaded on the super aspirin. They go to the cath lab. 90% of them will get a stent, but 5% to 10% won't be eligible for a stent because they have multivessel disease. They have left main artery disease. They may have had a complication putting in the stent, causing a dissection of the coronary artery. They may have intractable ischemia or blood pressure. These patients now need to go to urgent or emerging coronary artery bypass graft surgery, better known as CABG surgery. And -- but they can't, right, because they just got loaded on this blood thinner in the emergency room. And if they go there, all the data show that there's a high rate, anywhere from 30% to 65% rates of potentially severe to fatal bleeding, right? This is really serious stuff. And when you talk to cardiac surgeons, they do this all the time. They have to take patients to the surgery, but they hate it. And every cardiac surgeon that we've talked to has a horror story where a patient -- they couldn't close the patient because they were bleeding so badly, so they had to ship them to the ICU, where they had to take a patient back to the OR after thinking they had solved the bleeding to try to figure out why they kept losing blood or the patient that drain the hospital's blood bank of that patient's blood type. These are all...

I mean you just made me realize that there are 2 different things happening here at the same time. The emergency room comes in and kind of standard protocol gives them a platelet blocker. And then it turns out that they need surgery. And so that platelet blocker just kind of -- forgive the language, but kind of screwed them in terms of the surgery. So -- and yes, very interesting. So from a regulatory point of view, how do you get DrugSorb? How do you -- what are regulators looking for to demonstrate that DrugSorb is the answer to this problem?

So we have pursued what's called the de novo 510(k) path. So as you are aware, there are 3 paths for medical devices. There's a 510(k) path where a product is already approved and exists on the market and you use it as a predicate for your approval, very easy, straightforward process...

Your product is equivalent or maybe even better than the existing product?

That's right. And then on the other end of the spectrum is a PMA or premarket approval pathway where it's a high-risk device like an implantable defibrillator, for example. And there, the bar is extremely high, and they're very focused on efficacy.

Risk versus benefit?

But sitting right in the middle is a de novo 510(k) and de novo means new, right? It means that there is no predicate. Nothing exists on the market that does what you do. But on the other hand, your device is a low to moderate risk device that does not qualify for -- does not need a PMA path, but it's not also as simple as a 510(k) and that's where we are. And the standard for authorization under the de novo is that the probable benefit has to outweigh the probable risk. That is what the standard for approval is. And that is what our job is to demonstrate to the FDA.

Good. So let's get into probabilities of success and kind of what data you have today. And I think the first question I have is what are the risks, right? What are the risks that if I run a patient's blood through this cartridge that there'll be some kind of effect or side effect -- unwanted side effect? And how are you able to demonstrate that, that's manageable?

So first of all, we -- for our technology, we have more than 300,000 human treatments where the device has been safe, particularly in post-market surveillance, first of all. Second of all, in the specific application of cardiac surgery, multiple randomized controlled trials have been used where our therapy has been used in open heart surgery where there are no safety concerns. And in particular, in this blood thinner application, our STAR-T trial, randomized controlled trial, which was a 140-patient randomized controlled trial in the United States and Canada, involving about 30 centers that showed no significant safety risk. And importantly, FDA has acknowledged the fact that they see no safety issues with our device. So coming back to this concept that the probable benefit has to outweigh the probable risk. When the probable risk is low, acknowledged by FDA, it is a low to moderate risk device. That means that the probable benefit that needs to be shown is not this high bar, but is a much lower bar, but we would contend that our data would suggest that, in fact, that effect is actually quite strong. And maybe I can tell you a little bit about the STAR-T trial, randomized controlled trial and kind of maybe give a little history on what it is that we've done. So the STAR-T trial, again, 140-patient randomized controlled trial in the United States and Canada, 30 centers, where the primary -- the goal of the therapy was to be used intraoperatively during open heart surgery either with CytoSorb or without CytoSorb in patients undergoing urgent or emerging cardiac surgery, where the last dose of the drug was 2 days ago -- within 2 days ago. And basically, the primary endpoint was looking at a composite, a hierarchical composite of all aspects of perioperative bleeding. And when I say hierarchical, it means that you first start with fatal bleeding, then you compare severe bleeding, then moderate bleeding and then mild bleeding, right? So you're looking at the full gamut of perioperative bleeding. And we use something called a win ratio, a statistical analysis to evaluate patients that were in those various buckets, very powerful statistical analysis method that is used now widely in a number of major trials throughout the world, a validated mechanism. And so what we found was that our trial, we actually included all comers. So we included not only our main use case patients, which are the CABG patients undergoing a heart -- who've had a heart attack and now need urgent CABG and need to go to surgery, but we also included high-risk surgeries as well, people who had like -- they thought they were having a heart attack, but we were really having an aortic dissection, right? Or they thought they were having a heart attack, but actually the heart valve blew out, and now they need a heart valve replacement. These are much more serious surgeries. The data would absolutely suggest higher-risk patients, higher bleeding rates. And unfortunately, in our trial, we had an imbalance of those types of patients where more of them were in the treatment arm than in the control. There was another imbalance also where there were more patients...

It was a very noisy trial, right?

It was not the optimal trial, let's put it that way.

Right. Because it's impossible to predict if somebody is having an aortic dissection, what factor blood loss was versus the anatomical challenge that the surgeon faced?

Yes. So just to put it in a perspective, when you're doing a coronary artery bypass graft surgery, you're not actually cutting into the heart. What you're doing is you're bypassing surface coronary arteries and where the blood loss is coming from is the incision in the chest cutting down into the heart and just all that oozing from all that surface area. But when you talk about an aortic dissection, you're talking about cross clamping the aorta, cutting out the aorta, putting in a graft, cutting open for valve replacement, the heart, putting in -- you're actually cutting into the heart, much different profile. So they bleed a lot more. And the problem was is that in a randomized controlled trial, the 2 arms should be equal, but we had an imbalance. And so we missed the primary endpoint. That was one of the major causes of missing the primary endpoint. But when we looked at a...

And by the way, just -- I mean, that's what punished the stock, right? Missing that endpoint and a lot of investors here, well, you missed an endpoint, therefore, the product doesn't work, and they kind of move on. But that's not at all the case here. You have to go and look at what happened. And again, I just want to remind people, it's not a question of whether this cartridge works. It's a question -- in this case, I would argue it's not the product that failed. It was the clinical trial, the design of the trial maybe or just kind of the -- I mean, in a perfect world, obviously, you run a huge end value. You spend tons of money. It takes lots of time, but it reduces the noise level. And this is the challenge in the microcap world is you have to get by with moderate resources. You try to optimize the end value the best you can. But one of the factors going into that equation is how much -- what kind of resources and time you have. And unfortunately, that does sometimes result in a trial that gets results that are mixed?

Yes. And I think -- but I think the positive thing coming out of the study is that in a prespecified subgroup analysis, which is the use case of the patient, right, which is the patient who actually had a heart attack, who had to go to urgent emergent surgery, that -- actually in that prespecified analysis, we actually demonstrate a statistically significant reduction in the severity of bleeding, such that in the presentation by one of the principal investigators, Dr. Michael Mack, these are luminaries in the field of cardiac surgery trials, right? So our principal investigators were Dr. Michael Mack; Dr. Michael Gibson, who is involved in pretty much every blood thinner trial to date; and Dr. Richard Whitlock, who is the leader of cardiothoracic surgery trials in Canada. But in their analysis that they presented at AATS in a supplementary analysis where you look at patients who either by definition have serious bleeding or who have lost at least 20% of their blood volume in the first 24 hours, the relative risk reduction was more than 50%, the absolute risk reduction was 16%, which provided a number needed to treat of 6 patients to prevent serious bleed, right? And if you just put some -- the NNT into perspective of some very common things that people know about. For example, statins and Lipitor, for example, right, to prevent -- in a general population, you need to treat 100 patients to reduce nonfatal -- over 5 years to reduce nonfatal heart attacks, for example. Even in high-risk patients, that number is still 15% to 20%, right -- an NNT of 15% to 20%, right, or blood thinners to prevent heart attack and stroke, right? This is what we're talking about. Very common, but that NNT is 50 to 200 patients to prevent one heart attack or stroke. So when you're talking about an NNT of 6, that is quite powerful. And importantly, I think the real-world evidence coming from Europe all suggests that, that relative reduction is on the order of 30% to 50%, very consistent, showing our registry now, for example, that has in Europe that's collecting high-quality, high-fidelity data, 30 centers among 6 countries: Germany, Austria, Switzerland, Belgium, U.K. and Sweden. So high-quality cardiac surgery centers. When they use our therapy in these patients on blood thinners, consistently, they have low serious bleeding risk, right? And so all this data is out there helping to support the fact that our -- exactly what our STAR-T trial concluded -- our randomized controlled STAR-T trial concluded, which is low severity of bleeding risk, right?

Where does that leave you with regulators then? So from just listening to you, first of all, I hear your enthusiasm. I know your interpretation of the data is genuine. And it seems since we established safety, and it seems to me in a prespecified subgroup, you absolutely showed a clear signal. And it sounds like regulators are familiar, right, with the product and with kind of the bleeding risk and the risk associated with waiting, what happens now going forward?

So many of your viewers may have followed the story for a while. And 2025 was a bit of a disappointment for us in that we went to the FDA, not only with the STAR-T trial data, but also initial data from our STAR registry from the European Union where, again, we're collecting this high fidelity data. And at the end of the day, it just wasn't enough, right? That FDA, I think, said that you missed your primary endpoint that we need to see more data to support your indication of -- that you seek of reducing the severity of perioperative bleeding related to the drug Brilinta in CABG patients. Now I think, though, that the upside of everything that we've done with FDA this year has been the following. One is that FDA continues to be extremely collaborative with us, actually resolving the majority of issues in our first de novo submission that we submitted in September of 2024. We knocked out pretty much most of those issues, including FDA's acknowledgment that I mentioned before of safety, right? They see no safety issues with our device, which is, again, that probable benefit outweighs the probable risk equation for the de novo. But what they said is that we need more data, right? And so they told us that they did not say that we needed to do another randomized controlled trial. We believe that...

By the way, that's -- I'd like to stop you right there. That is a key, key point. So short of not doing another trial, what do you do?

Well, I think that the de novo guidance as well as the breakthrough device guidance as well as the least burdensome guidance all state that for safe devices, you are able to -- FDA has set a precedent for shifting the burden of evidence for efficacy to the post market, meaning that you get a product, they will approve the product and then you do some type of post-market registry or some other study where your product is in the market, you're getting sales, you're doing all that. But you're also collecting data -- high-quality data on efficacy and safety in the post market. And so that path exists. And we believe that if the FDA -- that is a tried and true path that we could go on. But I think that what FDA -- after the last meeting that we had with the FDA, what they said was, we don't see any safety issues with your device. We need more data. So submit a new de novo submission because the way the FDA works is that once you submit for the de novo, you can't put any more new information in there, right? The last time we submitted -- the first time we submitted the de novo was September 2024. In the meantime, if you look at all of our press releases, all the conferences that have been done, there's been a lot of real-world evidence that has been presented outside in the community. The community is extremely receptive to our -- these data. We've gotten -- our speakers have gotten awards for this. There's a real strong interest in trying to solve this problem internationally. And we haven't been able to give them that data before, right? So what they've said to us is they said, come back with a new de novo and put that data in there so that we can see and evaluate all that data. And what that means is that, that's exactly what we're going to do. But importantly, the thing that they said to us is that they agreed with us. They said, look, we said -- we've done a huge analysis of the original de novo submission. We knocked out all these issues, including safety. Can we focus on just the remaining issues that are outstanding in the new submission. And based on our understanding and our discussion with them, they said yes, right? So that is very good, right? So now what do we do? We are now -- we have now submitted our pre-submission document to FDA. What is a presubmission document? Just what it says. -- before you file the official de novo, you're going to file a pre-submission document where you're laying out what -- the company is laying out what we are going to submit in the de novo. We expect to have that meeting in January. We actually have a date now set. And we hope to align with FDA on what it's going to take and how we analyze the data, the real-world evidence, et cetera, such that we can satisfy FDA's requirement for this additional efficacy data. And we'll know a lot more detail after we come out of that meeting. So once we do that, our goal is to submit our de novo as quickly as possible. Technically, if FDA took all the time, it would be 150 days because we're a breakthrough device, we are eligible for priority review. They have also said to us that they are not interested in a full-blown rehash of the submission that we're going to focus on specific items. Hopefully, we will be done earlier than later and be approved sometime mid-2026 or maybe even sooner.

Good. And I just -- I wanted to hear you say that. So we're actually looking at potential product approval in 2026. A new trial is not required. You're basically submitting a supplemental data package, right, to the original -- I understand it's a new application, but it's just -- it's the supplemental data that kind of shows -- demonstrates the efficacy and safety is not the issue. You don't have a safety hurdle here. That's very exciting. I don't think this is well understood by people. And I think that my challenge as an analyst is to help people understand that I think the risk reward ratio here is very favorable. Pete, what may be holding some people back is everybody is always worried about financings and financial overhang. So can you talk a little bit about kind of your thinking in terms of how the company manages through the next 12 months, while you're kind of hunting for this value inflection? Look, at the end of the day, you have to get there. And the value will come. And I think sometimes we get lost a little bit in the equation of dilution versus appreciation, right? But with that said, as the CFO, I'm sure you think about this every day?

No, that's right. And look, from the beginning of the year, we've been talking about -- our plan was to bring our core business to cash flow breakeven as we were exiting this year and getting into 2026. And we looked at this a couple of different ways. One was what if we do get DrugSorb approval in '25. And then we also had a contingency plan that what if this gets pushed out a few quarters. And so we were prepared as we came through the end of this year to take another cut at our expenses in the organization, make sure that we're driving -- continuing to drive efficiencies in the organization. And we have taken some steps that will bring the company to cash flow breakeven in the first quarter. We were very pleased to be able to get a refinancing of our -- or an amendment of our credit agreement with Avenue Capital. We ended up giving us another $2.5 million of cash immediately. And importantly, it also extended our interest-only period another 6 months. So now we've got a full 12 months of interest only during 2026. And then we have -- that agreement also gives us an additional $2.5 million and a further extension of our interest-only period of another 6 months once we get DrugSorb approval. So you put all this together, and we're going to be running this business at cash flow breakeven. We'll have single-digit millions of cash on the balance sheet, and we're going to have flexibility with our debt agreement as we move towards approval to maintain financial independence as we're going through this process with the FDA. And then I think once we get FDA approval, it gives us the opportunity to be opportunistic about where we go from there from a longer-term financing perspective.

Well, and one of the things we haven't talked about is the potential for nondilutive capital, both -- from all kinds of places, but also partnering, right? And -- but I'm also thinking you have so much experience with what you've accomplished in Europe that I'm sure it's very tempting to think, well, can we launch this ourselves?

Yes. And I think from a commercial perspective, we are absolutely focused on launching this ourselves in a pilot phase in the U.S. We've got talent in the organization who has done a lot of work and is getting us ready. And once we get approval, we'll begin a very targeted, thoughtful launch process focused on our clinical sites and a handful of others who have shown interest. We're going to be able to get in those sites, I think, very quickly. We've seen tremendous interest. This is a significant problem. As Phil has outlined really well, this is a significant problem for these surgeons. And if they have an opportunity to normalize one of these surgeries with our product, and get this -- instead of this being a mess for 3- to 4-hour surgery that they can get back to a 60- to 90-minute normal CABG surgery, I think we're going to find a lot of interest very quickly. But again, we're not going to get out in front of ourselves on this. We're going to focus on our pilot accounts. I think we can get a lot of success in the first 3 to 6 months, and that's going to give us the opportunity to titrate how quickly we go with this launch and consider any potential opportunities if those make sense for us as well.

Phil, having known you for quite a while, I've always considered you to be conservative, right, in how you look at things and kind of preparing. It's -- one of the things I really enjoyed when we started talking this morning was you talked about the pipeline. And so approval here really kind of sets the stage for physician familiarity and kind of shifting almost a little bit of the medical paradigm around everything from liver failure to sepsis, and it's just let's get some experience here in this indication. But this really is a pipeline in a product? Good?

Yes. No, absolutely. Absolutely. We're very excited by the opportunities that are in front of us. And hopefully, we'll have some success to report to investors soon.

Good. Well, so I'll be working very closely to kind of follow the company. I'm going to try to stay in contact with you much more frequently here because I think 2026 is going to be the -- I believe, as an analyst that this is the year of CytoSorbents. And so you've been watching the stock for years, now is the time to stay focused. I want to thank Dr. Chan and Pete, thank you so much for joining me this morning and for kind of just sharing your outlook as we approach a new year. Thanks, guys, and I wish everybody a happy holidays.

Thanks so much, Jason.

Thank you. Thank you all.

Take care. Happy holidays, everyone.

Bye-bye.