Cytosorbents Corp (CTSO) 2024 Q1 法說會逐字稿

Good afternoon, and welcome to CytoSorbents first quarter 2024 financial and operating results conference call. (Operator Instructions)

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.

Thank you and good afternoon. Welcome to CytoSorbents first quarter 2024 financial and operating results conference call. Joining me from the company are Dr. Phillip 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 a 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 changed.

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 our presentation, we will open the line to your questions during the live Q&A session with the rest of the management team.

Now it is my pleasure to turn the call over to Dr. Phillip 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 is squarely within our previous guidance of achieving 75% to 80% product gross margin during this year and highlights the scalability and efficiency of our state-of-the-art manufacturing facility and processes.

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 -- 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 hemoprofusion pump in select international countries.

We already have strong interest from customers in many countries where dialysis is not well established, and we are 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 treatments such as the treatment of chronic liver disease.

We are seeing strong customer response 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 heart transplant, the first use cases in hemorrhagic shock, septic shock and fluid balance improves 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's 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?

Thank you, Phil, and hello to everyone on the call today. I will be discussing our first quarter financial results, including revenue and gross margin. 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 periods 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, these uses -- usage fees 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 see that post COVID-19 12 month periods ending March 31, 2023 and 2024 continue to show positive growth in our core non-COVID-19 -- COVID-19 product sales. The post-COVID market has been challenging for reasons we've 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 six years ended March 31, 2024 is a respectable 13.3%.

Next slide. So I'll 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 indicate that the 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 margins in 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 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 continue 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'm pleased to be able to turn the call over to my esteemed colleague, our Chief Medical Officer, Dr. Makis Deliargyris. Makis?

Thank you, Kathy. Next slide, please, and 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 US and Canada that will hopefully provide you the necessary visibility into our efforts to make DrugSorb-ATR available to North American health care 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 Eliquis, and rivaroxaban or Xarelto, for the same intended application. 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 criteria is that the device provides for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human diseases or conditions.

For the second criterion, the device must meet at least one of the following considerations. It represents a breakthrough technology, but there are no approved or cleared alternatives. It offers significant advantages over existing approved or cleared alternatives, and 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/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 brands for U.S. submissions. Finally, breakthrough designations submissions, undergo priority review and need to meet the FDA rigorous standards for safety and effectiveness.

Next slide, please. As we have stated in 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. You can follow the link provided to you that has presentations by all three STAR-T principal investigators and also an overview of the increasing adoption of antithrombotic removal in European cardiac surgical practice by the STAR registry principal investigator by Dr. Michael Schmoeckel.

Let's now review the highlights of the STAR-T results. First of all, the study metrics. There were 140 subjects randomized in the study. However, eight of the subjects did not receive the study device and therefore, the overall population comprises of 132 subjects. Among them, 92% underwent isolated coronary artery bypass grafting or CABG surgery, while 8% underwent other types of cardiac operations. The enrollment was split approximately 2/3 of the subjects came from United States investigative sites and approximately 1/3 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 endpoint of -- the primary safety endpoint in 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 assess efficacy in the trial by looking postoperative bleeding. That was done via two composite endpoints that comprise of the universal definition of perioperative bleeding events and also by the chest tube drainage collected from each of the patient in the study. In addition, we executed on 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 protocol -- major protocol deviation in the so-called isolated CABG per-protocol population, we observed the following findings. The prespecified 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 one suggest a treatment effect for the investigational device. However, that WIN ratio was not significant with a p value of 0.202. The prespecified 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 UDPB 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, performance sensitivity, blinded review of the events 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 are 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 only includes severe events was not impacted by the sensitivity analysis since all severe events would deem to be clinically meaningful events relating to significant bleeding.

Finally, the exploratory major bleeding analysis looked at the total of major events that three subjects suffered either according to the UDPB definitions or according to chest tube drainage by accounting for patients that ended up with more than one liter of blood in the chest tube that are placed in the chest after surgery.

What we saw that there were three major UDPB events in the DrugSorb arm, 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 not in the DrugSorb arm. There were four additional in the control arm, for a total of three events from DrugSorb 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 a 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 our 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.

To state, we have been working with CytoSorbents on the development of their regulatory strategy for the DrugSorb-ATR device. Based on the data the company has shared with us and the extensive experience we have in the 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 than Novo application review times. Accordingly, we will be proceeding with parAllel FDA De Novo and Health Canada submissions 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 one year.

Next slide, please. So to summarize, Ticagrelor is an FDA-approved drug that is widely used as standard of care in the US and Canada, but does confer an increased risk of severe perioperative bleeding for patients who require urgent surgical treatments. DrugSorb-ATR is an investigational device that has FDA Breakthrough status for this application, highlighting the large unmet medical need and the lack of available alternatives.

We believe that the STAR-T inform the regulatory path -- the regulatory pathway by providing the necessary safety information -- information on the proposed target intended population, which in our case would be CABG surgery and the proposed indication for use, which would be for the reduction of bleeding severity. Based on the benefit-to-risk profile observed with STAR-T, regulatory experts recommend FDA submission for 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 six to 12 months following Q3 submission. In parallel, we'll be also submitting to health care.

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

Thank you, Makis. We see tremendous opportunity fueled by important demographic trends such as the aging baby boomer generation wo 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 and 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 margins, 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.

Thank you. (Operator Instructions) Yuan Zhi, B. Riley Securities.

Thank you for hosting the KOL call. I have a couple of questions here. I'm curious about the decision to pursue this De Novo applications versus pre-market approval. What has changed since the last discussion?

Yes. Thanks, Yuan. Maybe let me turn that over to Makis to discuss. Makis?

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 -- on the slides that we just looked 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 results. So that was the main determinant in addition to, of course, input from both our internal regulatory resource and of course, external regulatory experts.

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

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 culminated in the presentation, obviously at AATS. So there's been a lot of work along the way up to get ready for these submissions.

And we're now entering the final phase, which is preparing the documents now that the regulatory pathway is more clear to have the exact necessary materials from the submission. Our FDA interactions have always been starting with the breakthrough designation application have always been very collaborative and very productive. So we anticipate and hope that they continue that way now that we have also this STAR-T data available that will be a central centerpiece and the submission.

Maybe another clarification question here is, before you submit made this De Novo application, is FDA requiring a pre-submission meeting to make sure everything is in line with their expectations? Thank you.

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

Got it. That's all I have. I will hop back on the queue.

Sean Lee, H.C. Wainwright.

Hey, good afternoon, guys. And thanks for taking my questions. I might just have to -- my first is on the a 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?

Yes, Christian, would you like to answer that?

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

Thanks for that.

-- sufficient (multiple speakers)

Yes. I do expect this to sort of quick follow-up, and do you expect this growth to continue for the rest of the year?

So I think that the stabilization and the big markets in Central Europe will continue. Of course, the underlying market situation versus post pandemic situation is not clearing overnight, but there's 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 that continue to develop nicely.

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

I think that the PuriFi pump is really a means to an end, right? As I mentioned in my comments, it 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're actually using for the vet market in the United States, and how we've gotten lots of feedback that it's very easy to use pump that requires very little in the way of maintenance.

So we're 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 tried to catch this deadly inflammation more rapidly before it has time to cause destructions of vital organs, outcomes are typically much more reliable and much better. And so again, we think that having this PuriFi pump out there, we'll be able to really -- is actually a major key driver of -- of growth. Hopefully going forward.

We haven't made our expectations public on what we expect that pump to be,, to do. But again, the goal here is an enabling technology to sell more CytoSorb devices. It's very similar to the printer -- the printer cartridge model.

Thanks. That's all the questions I have.

Tom Kerr, Zacks Investment Research.

Hi, guys. A quick question on the DrugSorb submissions. I understand it will be submitted roughly the same time to FDA and Health Canada, but are the approvals independent? Or are they done in conjunction? Or put another way, is that Health Canada approval timeline also six months to a year?

Vince, maybe you'd like to answer that.

Sure. So, this is Vince Capponi. So the approvals are independent. They're not dependent. The Canada -- Health Canada is not dependent upon the US approval. We'll use the same data, but we will structure the submissions slightly different as required by Health Canada than what the US FDA requires. So they can be done in parallel and independently.

So it's possible you could start in Canada in six months and the US in a year, and they were to be just different timeframes in that regard?

Yes, that's correct. I mean, you know, Health Canada has timelines as well. I mean, they follow closely to the US, but they are generally faster and then the US, but it is possible that it could be introduced in the U.S. It could be introduced, excuse me, in the Canada sooner than the US.

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. Can you break that down between the U.S. and Canada?

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 amongst any illness. And so the major use case is not to go in for one of these more severe surgeries, right?

If you think -- if a person is thinking that they're 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 you know, far fewer will be actually having a different diagnosis like a a ruptured valve or a dissecting aorta. So the fact that we're going after the isolated CABG market is and we have data to -- 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 the US to Canada, a split, it's roughly a -- a 10 to one split. The US market is 10 times 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 -- to again reiterate 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've 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 antiplatelet therapy is because you're trying to temporize them and trying to prevent that heart attack from getting worse by sending the blood and trying to prevent that clot from from propagating and getting bigger.

And on -- 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're in transit. And this is one of the reasons why the use of dual antiplatelet therapy and the heart attack patients is so high because they need to be protected as they get transported to these major cardiac surgery centers.

So cardiac - so Canada we believe will be a actually 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.

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 adapt best therapies that quickly come with national guidelines and they implement them.

And ticagrelor 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're hearing is that one of the major issues is a bottleneck that is created in some of these large volume institutions.

So we are very enthusiastic about a solution that, you know, can potentially alleviate that congestion that patients are just sitting there waiting, are [causing] in their -- in their care pathways. Now in regards to the total addressable market and the number that you quoted, I mean if you want, we can take a discount similar that we saw in the breakdown of surgeries in STAR-T where are you now at 92% of patients were isolated CABG, which obviously will be the the target intended population in our submissions.

But on the other hand, you may want to counter with the fact that this is the year that exclusivity ends for ticagrelor, which would mean you know, an ongoing reduction in price which has been one of the reasons why ticagrelor -- clopidogrel or Plavix an older-generation, not as effective medications 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.

Great. Thanks for the extra color on that. One more quick financial question for me, 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 a steady state you received this quarter? Or do we get back up $1million the rest of the year or per quarter for the rest of the year?

Kathy, would you like to answer that?

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's a grant income is lower is just because we completed three grants last year. And so the backlog is still strong at $5 million, and we are expecting to build to that backlog. So we'll see with more with success on gaining some new grants, we would see that number likely come up again.

Great. That's all the questions I have for now. Thank you.

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

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, 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.

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