Cytosorbents Corporation (NASDAQ:CTSO) Q1 2024 Earnings Call Transcript

Cytosorbents Corporation (NASDAQ:CTSO) Q1 2024 Earnings Call Transcript May 9, 2024

Cytosorbents Corporation beats earnings expectations. Reported EPS is $-0.11717, expectations were $-0.12. Cytosorbents Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon and welcome to CytoSorbents’ First Quarter 2024 Financial and Operating Results Conference Call. [Operator Instructions] Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the company’s request. At this time, I’d like to turn the call over to our moderator, Eric Ribner. Please go ahead, Mr. Ribner.

Eric Ribner: Thank you and good afternoon. Welcome to CytoSorbents’ first quarter 2024 financial and operating results conference call. Joining me from the company are Dr. Phil Chan, Chief Executive Officer; Vincent Capponi, President and Chief Operating Officer; Kathleen Bloch, Chief Financial Officer; Dr. Makis Deliargyris, Chief Medical Officer; Dr. Christian Steiner, Executive Vice President of Sales and Marketing; Christopher Cramer, Senior Vice President of Business Development. Before I turn the call over to Dr. Chan, I’d like to remind listeners that during the call, management’s prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties. Management may make additional forward-looking statements in response to your questions today.

Therefore, the company claims protection under Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from the results discussed today and therefore we refer you to more detailed discussion of these risks and uncertainties in the company’s filings with the SEC. Any projections as to the company’s future performance represented by management include estimates today as of May 9, 2024 and we assume no obligation to update these projections in the future as market conditions change. During today’s call, we will have an overview presentation covering the operating and financial highlights for the first quarter of 2024 by Dr. Chan and Ms. Bloch. Following that presentation, we will open the line to your questions during the live Q&A session with the rest of the management team.

And now, it is my pleasure to turn the call over to Dr. Phillip Chan.

Phil Chan: Thank you very much, Eric and good afternoon, everyone. We are pleased to announce the achievement of $9 million in product sales in the first quarter of 2024, which is a 14% increase from $7.9 million a year ago and a 22% increase sequentially from $7.3 million in the fourth quarter of 2023. Another major accomplishment for the quarter was the expansion of our product gross margins to 76%. up 800 basis points from 68% in Q1 of 2023, excluding a one-time non-recurring inventory adjustment recorded in the first quarter of this year. This was squarely within our previous guidance of achieving 75% to 80% product gross margins during this year and highlights the scalability and efficiency of our state-of-the-art manufacturing facility and processes.

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Q&A Session

As you will hear from Makis later, our STAR-T data was presented for the first time by Principal Investigator, Dr. Michael Mack, at the 104th Annual Meeting of the American Association for Thoracic Surgery, or AATS, in Toronto, Canada, one of the most prestigious cardiothoracic surgery conferences in the world. We also hosted a virtual KOL and Analyst Investor Day earlier this week, featuring a review of the STAR-T pivotal trial results and real-world experience with blood thinner removal in Europe with a replay available by clicking this link here. Based on our current status, we believe we are on track to submit marketing applications in parallel for the investigational DrugSorb-ATR system to FDA as a de novo application and Health Canada in the third quarter of this year.

We have now cumulatively delivered more than 237,000 devices and expect to reach a quarter million devices this year. Later this quarter, we also expect to take delivery of and launch our PuriFi hemoperfusion pump in select international countries. We already have strong interest from customers in many countries, where dialysis is not well established and where an easy-to-use machine like PuriFi enables the treatment of patients with CytoSorb. In more established countries, like Germany, the availability and simplicity of PuriFi is expected to spur early usage of CytoSorb in the disease processes and may enable more types of treatment, such as the treatment of chronic liver disease. We are seeing strong customer responses to the new positive data being published on CytoSorb in a wealth of applications, such as acute liver disease, the first proof-of-concept randomized trial in a heart transplant, the first use cases in hemorrhagic shock, septic shock and fluid balance, improved survival in burn patients with sepsis and kidney injury, and a review article summarizing the benefit of CytoSorb in the treatment of acute respiratory distress syndrome, just to highlight a few.

One of the reasons we believe there is so much more room to grow is because CytoSorb addresses the core problem of severe uncontrolled inflammation in these life-threatening conditions that can otherwise lead to organ failure and death. At this time, I’d like to turn the call over to Kathy to cover financial highlights. Kathy?

Kathleen Bloch: Thank you, Phil and hello to everyone on the call today. I will be discussing our first quarter financial results, including revenue and gross margins and I will also be providing an update on our working capital and cash runway. Next slide, please. CytoSorb product sales were approximately $9 million in the first quarter of 2024 compared to $7.9 million in the first quarter of 2023, an increase of approximately $1.1 million or 14%. Our first quarter 2024 grant revenue was approximately $797,000 as compared to $1.5 million in the first quarter of 2023. And this decrease was due to the conclusion of several grants, which we completed in 2023. Our total first quarter 2024 revenue, which includes both product sales and grant revenue, was approximately $9.8 million as compared to $9.4 million in 2023 and product gross margin was 76% in 2024, an 800 basis point increase compared to product gross margin of 68% in 2023.

We do note that first quarter 2024 product gross margin calculations exclude the impact of a one-time inventory adjustment recorded during the quarter. Next slide, please. The blue bars of this chart represent our annual product sales for the trailing 12-month period ended March 31 for each year 2018 to 2024. We know that 2021 and 2022 product sales were favorably impacted, because CytoSorb was used extensively to treat COVID-19 patients. And of course, this usage ceased following the containment of the pandemic in the years ending March 31, 2023 and 2024. If we take a look at the orange trend arrow, which tracks along core non-COVID-19 revenue, we can say that post-COVID-19 12-month periods ending March 31, 2023 and 2024 continue to show positive growth in our core non-COVID-19 product sales.

The post-COVID market has been challenging for reasons we have already articulated. However, we are seeing improvements in the marketplace. Our year-over-year growth for the trailing 12 months ended March 31, 2024 increased by 10% compared to the previous 12 months. Additionally, exclusive of the impact of the COVID-19 sales in 2021 and ‘22, our overall CAGR for the 6 years ended March 31, 2024 is a respectable 13.3%. Next slide, please. Go back to that slide, I apologize. I also wanted to point out the green line, which tracks our year-over-year gross margins. This indicates a decline in 2023 and this was of course due to transitioning of full manufacturing operations from our old facility over to our new facility. In the first quarter of 2024, gross margins were 76%, excluding the impact of the one-time inventory adjustment and they are on par with our margin levels prior to the move to our new facility.

And we believe that we will be able to show further improvement in the 2024 gross margins as we continue to scale up production and realize additional manufacturing efficiencies. Next slide, please. This next slide shows our quarter-over-quarter product sales results. We already noticed that first quarter of 2024 product sales increased approximately 14% over first quarter 2023 product sales. We also want to point out here that first quarter product sales rose $1.6 million or 22% over the immediately prior quarter. Our first quarter 2024 product sales of $9 million represents the highest post-COVID-19 poor product sales quarter in our history. Next slide, please. As of March 31, 2024, we have $10.1 million in cash, which includes $1.5 million of restricted cash.

We believe that cash on hand is sufficient to fund the company’s operations into the fourth quarter of 2024. We continue to work to strengthen our balance sheet and reduce operating expenses through tight control over working capital, in particular, management of accounts receivable and inventory levels. Conservation of cash is a top corporate priority. We have reduced our headcount, adjusted our budgeted spending, and taken other measures to reduce our quarterly cash burn in 2024. We have also instituted and continued to maintain tight controls over spending and these actions are all expected to help preserve our cash runway. In addition, the company is actively pursuing alternative sources of capital. Our immediate focus is on non-dilutive debt financing and we are currently in active discussions with multiple debt lenders on this front.

So, that will conclude my remarks for today. And at this time, I am pleased to be able to turn the call over to my esteemed colleague, our Chief Medical Officer, Dr. Makis Deliargyris. Makis?

Makis Deliargyris: Thank you, Kathy. Next slide, please. Good afternoon to everyone on the call today. In the next few minutes, I will review the current state of our clinical and regulatory activities for the upcoming submissions to regulators in the U.S. and Canada that will hopefully provide you the necessary visibility into our efforts to make DrugSorb-ATR available to North American healthcare providers. First, I would like to remind everyone that DrugSorb-ATR is a breakthrough device. In fact, the FDA has granted two separate breakthrough designations for DrugSorb-ATR. First, for the removal of ticagrelor in patients undergoing urgent or emergent surgery and a second one for the removal of the two market-leading anticoagulants, apixaban, or Eloquist and rivaroxaban, or Xarelto for the same intended applications.

We believe that having breakthrough status is an important component of the DrugSorb-ATR regulatory strategy and let me explain why. First, the breakthrough program is specifically designed to provide timely access of novel devices addressing large unmet medical needs by speeding up both the development and the review phases of the process. The required criteria for a breakthrough device designation are listed on this slide. The first criterion was that the device provides for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions. For the second criterion, the device must meet at least one of the following considerations that it represents a breakthrough technology that there are no approved or cleared alternatives, that it offers significant advantages over existing approved or cleared alternatives and that the device availability is in the best interest of patients.

Since 2015, the FDA has granted breakthrough device designation status to 192 cardiovascular and 83 GI and urology devices or diagnostics. This is relevant because the intended target population for DrugSorb-ATR are cardiovascular patients and GI urology will be the FDA review branch for our submissions. Finally, breakthrough designation submissions undergo priority review and need to meet the FDA rigorous standards for safety and effectiveness. Next slide, please. As we have stated on our press release and you just heard from our CEO, Dr. Phil Chan, the STAR-T results were recently presented at AATS and were also reviewed during our recent webinar, Key Opinion Leader and Analyst Investor Day, by study Principal Investigator, Dr. Michael Mack.

I urge you to listen to the webinar replay that you can find on the link provided to you that has presentations by all three STAR-T principal investigators and also an overview of the increasing adoption of anti-thrombotic removal in European cardiac surgical practice by the STAR Registry Principal Investigator, Dr. Michael Smoko. Let’s now review the highlights of the STAR-T results. First of all, the study matrix. There were 140 subjects randomized into the study. However, eight of those subjects did not receive a study device, and therefore the overall population comprises of 132 subjects. Among them, 92% underwent isolated coronary bypass grafting, or CABG surgery, while 8% underwent other types of cardiac operations. The enrollment was split approximately two-thirds of the subjects came from United States investigative sites and approximately one-third from Canadian investigative sites.

The study protocol was well executed with less than 10% of study subjects experiencing a major protocol deviation. Finally, study follow-up was 100% complete with zero patients lost to follow-up. Reviewing the safety in the overall population, the primary safety endpoint of the study was met as evidenced by three separate independent data safety monitoring board reviews that occurred after 40, 80, and 140 patients went into the trial. In each one of those reviews, the DSMB recommended continuation of the study and voiced no concerns around safety. Overall, adverse events were balanced between the device and the control arms in the trial. There were zero device-related serious adverse events reported. There were zero unanticipated device adverse events reported.

And there were zero device-related adverse events that led to discontinuation of the study. Turning now to efficacy, we assessed efficacy in the trial by looking postoperative bleeding. That was done via two composite endpoints that comprised of the universal definition of peripartic bleeding events and also by the chest tube drainage collected from each of the patients in the study. In addition, we executed an exploratory assessment of major bleeding. As we have reported previously, the primary composite endpoint in the overall population was not met. However, In the isolated CABG population, among patients who did not have any critical major protocol deviations, the so-called isolated CABG per protocol population, we observed the following findings.

The pre-specified composite endpoint that included both moderate and severe bleeding events demonstrated a win ratio of 1.33. And for the audience, let me remind you that any win ratio above 1 suggests a treatment effect for the investigation in the device. However, that win ratio was not significant with a p-value of 0.202. The pre-specified composite endpoint that only included severe bleeding events demonstrated a win ratio of 1.59, which was significant with a p-value of 0.041. Since the [indiscernible] definition allows for events to be declared simply by transfusions, the principal investigators of the study wanted to ensure that only clinical bleeding events were included in the analysis and therefore performed a sensitivity-blinded review of the event where they identified a number of cases that were included in the original analysis simply on the basis of transfusions but without any evidence of clinical bleeding.

The results of the sensitivity analysis as shown at the bottom of the table were now the composite endpoint that includes the moderate or severe bleeding events has a win ratio of 1.65, which is also significant with a p-value of 0.026. You will note that the composite that only includes severe events was not impacted by the sensitivity analysis, since all severe events were deemed to be clinically meaningful events relating to significant bleeding. Finally, the exploratory major bleeding analysis looked at the total of major events that these subjects suffered either according to the UTBB definition or according to chest tube drainage by accounting for patients that ended up with more than 1 liter of blood in the chest tubes that are placed in the chest after surgery.

What we saw that there were three major UTBB events in the drug zone bar while there were nine in the control arm. And when it comes to major chest tube drainage bleeds over a liter, there were none of those noted in the drug zone bar there were four additional in the control arm for a total of three events with drug-absorbed and 13 in the control arm. That translated to rates of 6% versus 22% between the two arms, which was significant with a p-value of 0.028. The number needed to treat to prevent the major bleed in the trial, according to this exploratory analysis, was six. Otherwise said, for every six patients treated, there was one major bleeding event averted. Next slide, please. With STAR-T data available, we have worked closely with both internal and external regulatory experts to formulate a regulatory strategy leading up to submissions.

Included on the top of this slide is a direct quote from one of our senior regulatory experts, Mr. Mark DuVal, J.D., President and CEO of DuVal & Associates. We have been working with Cytosorbents on the development of the regulatory strategy for the DrugSorb-ATR device. Based on the data the company has shared with us and the extensive experience we have in preparation of de novo submissions, it is our opinion this device is appropriate for the de novo pathway. More specifically, the de novo pathway is for low to moderate risk devices for which special controls, for example the availability of clinical data, provide reasonable assurance of safety and effectiveness, but there is no other approved predicate device. The de novo pathway puts heavy emphasis on the probable benefit and risk of the device in the intended population.

Importantly, based on the priority review received by breakthrough devices, a recent analysis reported a 25% faster de novo application review time. Accordingly, we will be proceeding with parallel FDA de novo and health cannabis admissions in the third quarter of this year. And finally, FDA review times for de novo applications are stated as 150 days. However, in the post-COVID era, such reviews are averaging approximately 1 year Next slide, please. So, to summarize, ticagrelor is an FDA-approved drug that’s widely used as standard of care in the U.S. and Canada, but does confer an increased risk of severe perioperative bleeding for patients who require urgent surgical treatment. DrugSorb-ATR is an investigational device that has FDA breakthrough status for this application, highlighting the large unmet medical needs and the lack of available alternatives.

We believe that the STAR-T data inform the regulatory pathway by providing the necessary safety information, information on the proposed target intended population, which in our case will be CABG surgery, and information the proposed indication for use, which would be for the reduction of bleeding severity. Based on the benefit to risk profile observed in STAR-T, regulatory experts recommend FDA submission for drugs DrugSorb-ATR use in CABG surgery under the de novo pathway. And finally, pending FDA agreement of the de novo pathway, breakthrough designation status is expected to facilitate a priority review with a potential FDA decision between 6 to 12 months following a Q3 submission. In parallel, we’ll be also submitting to Health Canada.

And that concludes my prepared statements, and now I’d like to turn it over back to Phil for his concluding remarks.

Phil Chan: Thank you, Makis. We see tremendous opportunity fueled by important demographic trends, such as the aging baby boomer generation who are prone to critical illness, expanding global use of blood thinners by millions of people all over the world for stroke and heart attack prophylaxis, and the chronic liver disease epidemic in 20% of the world population due to alcoholism, hepatitis, and fatty liver. We are at the forefront in helping to fill the substantial treatment gaps that exist across a spectrum of critical conditions such as sepsis, shock, liver failure, acute respiratory distress syndrome, infective endocarditis, serious bleeding due to blood thinners, and organ transplant because of our ability to help control deadly inflammation and remove dangerous toxins and drugs that are often at the heart of life-threatening conditions.

And in the future, with products in advanced development like HemoDefend-BGA for universal plasma, our contribution could be even greater. We are excited by our near-term progress with sales, product gross margin, potential catalysts like PuriFi, our strategic partnerships like Fresenius, our goal to obtain debt financing, new clinical data, and importantly, the greatly increased visibility that we all now have on DrugSorb-ATR. By continually pushing boundaries and driving innovation, we are committed to expanding the dimension of blood purification, setting the stage for lasting transformation within the industry. And with that, this concludes our prepared remarks. So, operator, please open the call up for the Q&A session.

Operator: Thank you. [Operator Instructions] Questions now come in from the line of Yuan Zhi with B. Riley Securities. Please go ahead.

Yuan Zhi: Thank you for hosting the Q1 call. I have a couple of questions here. I am curious about the decision to pursue this de novo application versus pre-market approval, what has changed since the last discussion?

Phil Chan: Yes, thanks, Yuan. Maybe let me turn that over to Makis to discuss. Makis?

Makis Deliargyris: Yes, thank you for the question. The simple answer is the availability of the STAR-T data that we believe are very informative when deciding what the appropriate regulatory pathway is. And as reviewed on the slides that we just look at, the de novo pathway is specifically designed for devices of low to moderate risk, which again the STAR-T data provides a lot of visibility around that component as well in addition, obviously, to the efficacy result. So that was the main determinant in addition to of course input from both our internal regulatory resources and of course external regulatory experts.

Yuan Zhi: Got it. And then another follow-up here is for the targeted submission in 3Q, I am curious have you guys talked to FDA for this pre-submission? And what’s your confidence to have this submission on time as you are preparing the data package and the minutes after the FDA meeting?

Makis Deliargyris: So we are – as you know, the trial completed last year in 2023. So we have used the last few months, obviously, in doing a lot of the necessary work requiring on closing, cleaning and analyzing the data. That’s culminated in the presentation, obviously, a double ATS. So there has been a lot of work along the way to get ready for these submissions. And we are now entering the final phase, which is preparing the documents now that the regulatory pathway is more clear to have the exact necessary materials for the submissions. Our FDA interactions have always been starting with the breakthrough designation applications have always been very collaborative and very productive. So we anticipate and hope that they continue that way now that we have also the STAR-T data available that will be a centerpiece of the submission.

Yuan Zhi: Maybe another clarification question here is before you submit this de novo application, is FDA requiring a pre-submission meeting to make sure everything is in line with their expectation? Thank you.

Makis Deliargyris: It is our understanding based on the discussions with our regulatory experts that the pre-submission meeting is not required by the FDA.

Yuan Zhi: Got it. That’s all we have. I will hop back on the queue.

Operator: Your next question now comes in from the line of Sean Lee with H.C. Wainwright. Please go ahead.

Sean Lee: Hey, good afternoon, guys and thanks for taking my questions. I just have two of them. First is on the good product sales we saw this quarter. So, could you highlight what exactly were the pushes and pulls that helped you achieve the $9 million?

Phil Chan: Christian, would you like to answer that?

Christian Steiner: Yes, sure. Thank you for the question and good evening from Berlin, Germany. Yes, we had a very positive development in the first quarter in sales and as discussed at the last earnings meeting, there is a very positive development, especially in the direct sales in Europe and in many of the distributor countries. We still see the market challenges in the Central European countries like Germany, Austria, Switzerland, they have stabilized and we think the market stabilizes so that we can develop from here. But the major push as I have said come from the direct sales in Europe and this distributor countries.

Sean Lee: Thanks for that.

Christian Steiner: Sufficient.

Sean Lee: Yes, I do expect this, just as a quick follow-up and do you expect this growth to continue for the rest of the year?

Christian Steiner: So, I think that the stabilization and the big market in Central Europe will continue. Of course, the underlying market situation with the post-pandemic situation is not clearing overnight, but there is a lot of very strong initiatives from our side where we address new customer groups and expand to different indications. So, I think that we can create growth out of this. And the growth we have seen in the direct sales countries in Europe and also distributor countries, I very much expect to continue to develop nicely.

Sean Lee: I see. Thank you for that. My last question is on the PuriFi system. So, with the launch imminent, I was just wondering how is the commercial structure for that set up and what sort of impact can we expect in this year or in the next several quarters?

Phil Chan: I think that the PuriFi pump is really a means to an end, right. As I mentioned in my comments, is meant to help to build an infrastructure of blood purification in distributor territories where they don’t have an existing strong infrastructure in dialysis or dialysis technicians for that matter. This is a pump that we are actually using for the vet market in the United States and we have gotten lots of feedback that it’s a very easy to use pump that requires very little in the way of maintenance. So, we are very excited about this because what it’s intended to do is to drive more sales of CytoSorb, obviously in places that have plenty of critically ill patients, but does not have that infrastructure. The other thing that it’s intended to do, as I mentioned, is to really drive earlier usage and more frequent usage of our technologies, because what we have found is that when you treat people early and you try to catch this deadly inflammation more rapidly before it has time to cause destruction to vital organs, outcomes are typically much more reliable and much better.

And so, again, we think that having this PuriFi pump out there will be able to really – is actually a major key driver of growth hopefully going forward. We haven’t made our expectations public on what we expect that pump to do, but again, the goal here is an enabling technology to sell more CytoSorb devices, it’s very similar to the printer or printer cartridge model.

Sean Lee: Thank you. That’s all the questions I have.

Phil Chan:

Sean:

Operator: Your last question now comes in from the line of Tom Kerr with Zacks Investment Research. Please go ahead.

Tom Kerr: Hi guys. Quick question on the DrugSorb submissions, I understand they will be submitted roughly at the same time to FDA and Health Canada. But are the approvals independent or are they done in conjunction, or put another way, is the Health Canada approval timeline also six months to a year?

Phil Chan: Vince, maybe you would like to try to answer that.

Vincent Capponi: Sure. So, this is Vince Capponi. So, the approvals are independent. They are not dependent. The Canada – Health Canada is not dependent upon the U.S. approval. We will use the same data, but we will structure the submission slightly different as required by Health Canada than what U.S. FDA requires. So, they can be done in parallel and independently.

Tom Kerr: So, it’s possible you could start in Canada in six months and U.S. in a year, and there would be just different timeframes in that regard?

Vincent Capponi: Yes, that’s correct. I mean Health Canada has timelines as well. I mean they follow closely to the U.S., but they are generally faster than the U.S. But it is possible that it could be introduced in the U.S. or it could be introduced – excuse me, into Canada sooner than the U.S.

Tom Kerr: Great. And one more on that topic, I think you had said in the past the addressable market is about $325 million for both countries. Is that still a good number, and can you break that down between the U.S. and Canada?

Phil Chan: Yes, that is still a good number. I think that although, as you heard from Makis, that our focus will be on the isolated CABG population. Recall that isolated CABG is the most common cardiac surgery in the world, right. This is being driven by coronary artery disease and people having heart attacks, which is one of the leading diagnoses in hospitals among any illness. And so the major use case is not to go in for one of these more severe surgeries, right. If a person is thinking that they are having a heart attack, most of them are really having a heart attack and will need if they don’t qualify for a stent, they will need CABG surgery. And far fewer will be actually having a different diagnosis like a ruptured valve or a dissecting aorta.

So, the fact that we are going after the isolated CABG market is, and we have data that we believe supports a favorable benefit to risk assessment in that population is a really positive thing for us and positive for the overall market opportunity. Now, from U.S. to Canada split, it’s roughly a 10-to-1 split. The U.S. market is 10x larger than the Canadian market. However, what is very fascinating about the Canadian market and what you may have heard Dr. Whitlock say on the call, on the KOL analyst call on Monday, is that in the guidelines, and he again reiterates how data-driven the Canadian physicians are. So, in the official guidelines for blood thinner treatment in people having a heart attack, it is recommended that they only be placed on Brilinta and not on the major competitor in the United States, which is Plavix.

And we have also understood that, Effient, the only other major competitor in the United States to Brilinta and people having a heart attack is actually not distributed anymore by its manufacturer in Canada. So, pretty much everybody is on Brilinta in Canada. And Canada has some very interesting dynamics. One of the major reasons why you put someone on dual anti-platelet therapy is because you are trying to temporize them and trying to prevent that heart attack from getting worse by thinning the blood and trying to prevent that clot from propagating and getting bigger. And in Canada, the dynamics are such that there are far fewer major cardiac centers in Canada. And you find that many people are in far-flung areas of Canada that require transportation or intervention for a heart attack, either PCI or CABG, to these major cardiac surgery centers.

And so are out there suffering from these cardiac symptoms for a long time while they are in transit. And this is one of the reasons why the use of dual anti-platelet therapy in these heart attack patients is so high because they need to be protected as they get transported to these major cardiac surgery centers. So, Canada is a – we believe, will be actually a very strong market for us. And maybe with that, maybe, Makis, if you had any other color that you wanted to give, that might be helpful.

Makis Deliargyris: No. Thanks Phil. No, I completely agree with the remarks that you made already. Canada has a very uniform treatment paradigm that they actually have implemented on a national level where they try to adopt best therapies. They quickly come up with a national guidelines and [indiscernible]. And CABG is a great example. And again, I urge everyone to listen to our webinar and to hear directly from Dr. Whitlock. But there is a very, very systematic approach to care in Canada. And what we are hearing is that one of the major issues is a bottleneck that is created in some of these large volume institutions. So they are very enthusiastic about a solution that can potentially alleviate that congestion that patients are just sitting there waiting or causing in their care pathways.

Now, in regards to the total addressable market and the number that you quoted, I mean, if you want, you can take the discount similar to that we saw in the breakdown of surgeries in STAR-T, where 92% of patients wear isolated CABG, which obviously will be the target intended population in our submissions. But on the other hand, you may want to counter that with the fact that this is the year that exclusivity ends for ticagrelor, which would mean an ongoing reduction in price, which has been one of the reasons why ticagrelor – I am sorry, clopidogrel, Plavix and older generation, not as effective medication is still in use in some places due to a much more favorable price with clopidogrel being generic now for a long time. So, we think it’s going to be fluid, but probably the upside will be greater due to the greater adoption that is happening anyway and the availability of generic ticagrelor going forward after 2024.

So, it’s probably a solid number for you to anchor yourself on right now.

Tom Kerr: Great. Thanks for the extra color on that. One more quick financial question from me, and then I’ll jump back in the queue. How do we think about grant income the rest of the year? Is that sort of the grant income sort of the steady state you received this quarter or do we get back up a million the rest of the year or per quarter for the rest of the year?

Phil Chan: Kathy, would you like to answer that?

Kathleen Bloch: Yes, I’d be happy to. So I think we can expect to see similar quarterly results for the rest of the year as to what we saw in the first quarter. However, I will point out that we are applying for new grants. And the reason that the grant income is lower is just because we completed three grants last year. So, the backlog is still strong at $5 million and we are expecting to build to that backlog. So we will see with more – with success on gaining some new grants, we would see that number likely come up again.

Tom Kerr: Great. That’s all the questions I have for now. Thank you.

Operator: At this time, I would like to turn the call back to management for any additional or closing remarks.

Eric Ribner: Well, thank you and thank you everyone for joining the call today. If you do have any other questions, please feel free to reach out to Kathy at kbloch@cytosorbents.com and we will reply to your questions where possible. We look forward to our next quarterly call. Thank you everyone very much. Good night.

Operator: Thank you. That concludes our conference for today. I’d like to thank everyone for their participation.