Cytosorbents Crp's Fda Submission Delays, Germany Sales Timelines Clash in 2026 Q2 Earnings Call

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $9.6 million, consistent with the prior year and up 9% sequentially
• EPS: $0.07 net loss per share, compared to $0.03 net income per share in the prior year period (Adjusted net loss of $0.05 per share, improved 22% YOY)
• Gross Margin: 73%, up from 69% in Q1 2026 and 71% in Q2 2025
• Operating Margin: Operating loss narrowed to $2.6 million, a 27% improvement from $3.6 million in the prior year period; Adjusted EBITDA loss improved 38% to $1.6 million

Guidance:

• Remain on track to achieve operating cash flow breakeven in the second half of 2026.
• Expect to add three to five sales representatives in Germany through early 2027 to restore country coverage and accelerate revenue growth.
• Plan for improved gross margins as volumes increase.
• Expect continued improvement in adjusted EBITDA and operating cash burn in the second half of the year.

Business Commentary:

Operational and Financial Improvements:

• Cytosorbents reported revenue of $9.6 million for Q2 2026, consistent with the prior year and up 9% sequentially.
• Gross margins improved to 73%, up from 69% in Q1 2026 and 71% in Q2 2025.
• Operating cash burn decreased to approximately $200,000, excluding restructuring costs.
• These improvements were driven by manufacturing optimization, improved sourcing and production efficiencies, and disciplined cost management.

Germany Market Challenges and Strategy:

• Sales in Germany were lower due to a smaller, more focused sales team as the company continues to restructure.
• The company plans to add three to five sales representatives through early 2027 to improve territory coverage and accelerate revenue growth.
• The goal is to restore country coverage and drive growth in a market that has been impacted by headcount restrictions.

DrugSorb-ATR Regulatory and Clinical Progress:

• The STAR-T trial showed a 58% risk reduction in major bleeding events with the DrugSorb-ATR device.
• The FDA denied the initial de novo application, but the agency agreed there were no major issues with device use.
• Cytosorbents plans to resubmit the application after obtaining additional mechanistic data and real-world evidence analysis.
• The company is also exploring a parallel de novo submission for the removal of DOACs, with a pre-submission meeting scheduled with the FDA.

HemoDefend-BGA Development:

• HemoDefend-BGA development is complete and has been validated by multiple blood centers and government and industry players.
• The technology is focused on creating universal plasma and blood products, with potential applications in trauma, emergency, and military transfusion.
• The company is seeking government funding and strategic partnerships to advance the clinical trial process and bring the product to market.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated 'one word comes to mind, progress' and that the company is 'materially stronger' than a year ago. CFO noted 'disciplined execution' led to a 38% improvement in adjusted EBITDA loss and a 27% reduction in operating loss. Management highlighted 'positive 12-quarter trend line' towards operating cash flow breakeven and expressed confidence in four independent value drivers to create shareholder value over the next 16-18 months.

Q&A:

• Question from Tom Kerr (Zacks SCR): Can you clarify the timing of the submissions if you do a parallel submission for DrugSorb-ATR DOAC removal? Does that drag it on an extra two or three, four months?
  Response: The two submissions (ticagrelor and DOAC) are intended to be parallel, not sequential. The timing is largely dependent on FDA review clock and collecting additional information, with a pre-submission meeting for DOAC scheduled for late August 2026.

• Question from Tom Kerr (Zacks SCR): Were you implying that there’s still operational efficiencies on the cost of goods sold side where maybe the second half of the year could get above the 73.1% gross margin?
  Response: Gross margin expansion opportunity exists as volumes increase, but the current 73% level is not necessarily a steady state.

• Question from Sean Lee (H.C. Wainwright): For Germany, do you expect these new reps to become accretive to the revenues? Do you think they’ll be sufficient to return the country to growth?
  Response: New sales reps are expected to become productive quickly (3-6 months) in territories with existing customer hospitals. Initial revenue growth will come from improved execution of the current smaller team, with contributions from new hires expected in the second half of 2027.

• Question from Sean Lee (H.C. Wainwright): On DrugSorb-ATR, have you discussed with the FDA or whether they’ve pre-agreed to the data source for these real world evidence, and also the comparator and the statistical analysis to be used?
  Response: FDA guidance on real world evidence has been reviewed. Management believes they have appropriate data sources and a rigorous statistical analysis plan, but final FDA questions will come after they review the data.

• Question from Sean Lee (H.C. Wainwright): With HemoDefend-BGA development complete, are there any plans to start a clinical study by yourself, or is it more a case of waiting for the right partner or the government grant?
  Response: Focus is on CytoSorb and DrugSorb-ATR. HemoDefend-BGA clinical trials are not being funded by Cytosorbents currently; the company is seeking non-dilutive government funding or a strategic partner to move forward.

Contradiction Point 1

Clarity and Timeline for FDA DOAC Submission

Contradiction on the level of FDA alignment and required data for DOAC submission, impacting the predictability of the regulatory pathway.

Tom Kerr (Zacks SCR) - Tom Kerr (Zacks SCR)

2026Q2: The DOAC submission will be discussed in an upcoming pre-submission meeting with the FDA later this month, which will help clarify the required data path forward. - [Dr. Mikas Deliargyris](Chief Medical Officer)

Will a parallel submission for DOAC delay the DrugSorb-ATR timeline by an additional 2–4 months? - Michael Sarcone (Jefferies)

2026Q1: The goal of the pre-submission meeting is to gain FDA clarity and alignment on the requirements... They hope to leverage existing data and determine if additional information is needed to move forward efficiently. - [Dr. Makis Deliargyris](Chief Medical Officer)

Contradiction Point 2

Timeline for New Sales Reps to Become Productive in Germany

Contradiction on when new sales reps will start contributing revenue, affecting expectations for market recovery and growth.

Sean Lee (H.C. Wainwright) - Sean Lee (H.C. Wainwright)

2026Q2: Revenue contributions from the new hires are expected to begin in the second half of 2027. - [Dr. Philip Chan](CEO) and [Pete Mariani](CFO)

How do you expect the new sales reps (3–5 by early 2027) to drive accretion and restore growth in Germany? - Sean Lee (Analyst)

2026Q1: The Q1 performance in Germany was encouraging with a smaller sales force... The company believes the sales force can become profitable quickly... - [Dr. Phillip Chan](CEO)

Contradiction Point 3

FDA Submission Strategy and Timeline for DrugSorb-ATR

Contradiction on the approach to FDA submission timing and readiness, shifting from a cautious, uncertain stance to a confident, parallel processing plan.

Tom Kerr (Zacks SCR) - Tom Kerr (Zacks SCR)

2026Q2: The company intends to pursue the two submissions (for ticagrelor/BRILINTA and for DOAC removal) in a parallel fashion, meaning one should not impact the timing of the other. - [Dr. Mikas Deliargyris](CEO)

What is the timeline for DrugSorb-ATR submissions, and would a parallel DOAC submission delay it by 2–4 months? - Michael Sarcone (Jefferies)

20260326-2025 Q4: The company is... focused on defining those details with the FDA to avoid surprises. Updates will be provided when there is more certainty. - [Phillip Chan](CEO)

Contradiction Point 4

Gross Margin Expectations

Contradiction on the potential for near-term gross margin improvement, shifting from a target range to a dependency on volume.

Tom Kerr (Zacks SCR) - Tom Kerr (Zacks SCR)

2026Q2: Gross margin improvement is volume-dependent. As sales volumes increase, the company has the opportunity to see further margin expansion. - [Pete Mariani](CFO)

Are gross margins (73.1% in Q2) expected to improve in H2 or have they reached a steady-state level? - Thomas Kerr (Zacks SCR)

20260326-2025 Q4: The company aims to maintain gross margins in the low 70% range (71%-74%) near term. - [Peter Mariani](CFO)

Contradiction Point 5

Gross Margin Normalization and Future Outlook

Contradiction on whether current gross margin is steady-state or allows for further improvement, indicating a shift in strategic outlook.

Tom Kerr (Zacks SCR) - Tom Kerr (Zacks SCR)

2026Q2: Gross margin improvement is volume-dependent. As sales volumes increase, the company has the opportunity to see further margin expansion. - [Pete Mariani](CFO)

Is the Q2 gross margin of 73.1% indicative of remaining operational headroom for improvement in H2, or does it represent a steady-state level? - Brian Lantier (Zacks Small-Capital Research)

20251114-2025 Q3: The company is pleased with the 70% gross margin level and sees opportunities for further improvement... With higher volumes and eventual DrugSorb approval, there is potential for future gross margin expansion. - [Peter Mariani](CFO)