NASDAQ:CTSO
READ THE FULL CTSO RESEARCH REPORT
On December 28, 2023, CytoSorbents (NASDAQ:CTSO) announced an update on the initial data analysis of the primary safety and effectiveness endpoints and the final independent Data and Safety Monitoring Board (“DSMB”) analysis for the important U.S. and Canadian STAR-T (Safe and Timely Antithrombotic Removal of Ticagrelor) randomized controlled trial that was completed in August 2023.
The DSMB met recently to perform the final review of the full unblinded data on all 140 patients in the STAR-T trial and concluded there were no issues with device safety, which met the primary safety endpoint of the study.
The company also performed the initial data analysis on the primary efficacy endpoint of STAR-T, which was a hierarchical composite endpoint that covered the spectrum of perioperative bleeding in cardiothoracic surgery including:
➢ Fatal bleeding within 48 hours
➢ Universal Definition of Perioperative Bleeding (UDPB >=2)
➢ Chest tube drainage in 24 hours
Based on this analysis, the study did not meet the primary effectiveness endpoint in the overall patient population that underwent different types of cardiac surgeries. However, the study did demonstrate evidence of reduced bleeding complications in patients in the prespecified isolated coronary artery bypass graft (“CABG”) surgery population, which represented more than 90% of the overall study population. This suggests a favorable benefit-to-risk profile in this population that represents the vast majority of ticagrelor-treated patients requiring cardiac surgery.
The company believes the STAR-T safety and effectiveness data may support the regulatory submission of DrugSorb-ATR to U.S. FDA and Health Canada specifically in patients on ticagrelor undergoing isolated CABG surgery, particularly as an FDA Breakthrough Device. FDA Breakthrough Device Designation for DrugSorb-ATR highlights the major unmet clinical need for which no approved or cleared alternatives exist in the U.S. and Canada and may help to expedite the regulatory review of the application.
We believe CytoSorbents disruptive blood purification technology will provide ample opportunities for high margin, double digit revenue growth going forward. The global addressable market for all of the company’s products could exceed $10 billion. This growth will also be driven by the company aggressively investing in therapeutic applications such as sepsis and septic shock, circulatory failure, respiratory failure, liver dysfunction, kidney protection, and organ transplant perfusion and protection.
The company is also seeing positive signs for restoring growth to its core CytoSorb device in European markets. There is a strong pipeline of positive data on the device from both critical care and cardiac surgery events. The company is also improving cross-functional synergy internally based on new therapy area vertical strategy and leadership. The company is also seeing increased opportunities outside of Germany such as the U.K., Israel and Turkey. Another important component in bottom line growth is the full transition to the new manufacturing facility which will increase total capacity and improve gross margins.
Based upon established FDA precedent, the apparent favorable benefit-to-risk profile of the DrugSorb-ATR therapy, its designation as an FDA Breakthrough Device, and the major unmet medical need to prevent perioperative bleeding due to ticagrelor in cardiac surgery patients, we believe CytoSorbents will find a receptive FDA and the potential for marketing approval of DrugSorb-ATR, despite missing the STAR-T pivotal trial primary efficacy endpoint.
The company’s current stock price does not likely reflect the potential level of profitable growth going forward or the potential for a favorable FDA review of DrugSorb-ATR, and we believe the stock to be significantly undervalued at this time.
We are not changing our estimates at this time as we await a possible financial outlook that may occur in late January or early February. Our price target remains at $4.00 per share.
We are still confident the company can generate substantial levels of free cash flow over time, particularly if the approval and commercialization of DrugSorb-ATR is successful.
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