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Cytosorbents Corp (NASDAQ:CTSO)
Q1 2020 Earnings Call
May 5, 2020, 4:45 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the CytoSorbents First Quarter 2020 Financial and Operating Results Conference Call. [Operator Instructions] Following the formal remarks, we will open the call for your questions. [Operator Instructions]

At this time, I'd like to turn the call over to your moderator, Jeremy Feffer. Please go ahead, Mr. Feffer.

Jeremy Feffer -- Investor Relations

Thank you and good afternoon. Welcome to CytoSorbents first quarter 2020 financial and operating results conference call. Joining me today from the company are: Dr. Phillip Chan, Chief Executive Officer; Vincent Capponi, Chief Operating Officer; Kathleen Bloch, Chief Financial Officer; Dr. Efthymios Makis Deliargyris, Chief Medical Officer; Dr. Christian Steiner, Senior Vice President of Sales & Marketing from Germany; and Christopher Cramer, 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 to risks and uncertainties. Management may make additional forward-looking statements in response to your questions today. [Technical Issues] the company claims [Technical Issues] harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of [Technical Issues] in 1995. [Technical Issues] may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the company's [Technical Issues] the SEC. Any projections as to the company's future performance represented by management include estimates today as of [Technical Issues] May '20, and we assume no obligation to update these projections in the future as market conditions change.

During today's [Technical Issues] covering the operating and financial highlights for the first quarter 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.

At this time, it's now my pleasure to turn the call over to Dr. Phil. Phil?

Phillip P. Chan -- Chief Executive Officer

Thank you very much, Jeremy and good afternoon, everyone. Before we get started, I'd like to congratulate Vince Capponi, who has now been promoted to President and Chief Operating Officer. As you saw from my comments in yesterday's press release, Vince has done an outstanding job here in his 18 years of service to the company. And I just want to thank him here publicly for all that he has done.

Turning to the operational highlights for the first quarter. In the first quarter, we achieved 88,000 or more CytoSorb treatments delivered, up from 61,000 a year ago. In the first quarter, total revenue grew 68% to $8.7 million, and product sales grew 78% to $8.2 million over the first quarter in 2019. We ended the first quarter of 2020 with $2.7 million in CytoSorb order backlog and have ramped production to near-full capacity with the ability and flexibility to go up or down with the current situation.

We achieved blended product gross margins of 76% in the first quarter of 2020, up from 74% a year ago, but lower than Q4 2019 due to expenses of rapid scale up to respond to the COVID-19 pandemic. CytoSorb is now EU approved to remove ticagrelor during on-pump cardiothoracic surgery with an expanded CE Mark label. And we have now treated the -- and in the first quarter, we treated the first 70 COVID-19 patients, including the very first patients treated in China with partner China Medical Systems Holding Limited of now more than 750 patients treated, including 25 under the US FDA Emergency Use Authorization.

During the quarter, two case reports came out on the first successful CytoSorb treatments of Grade 4 or life threatening Cytokine Release syndrome, or CRS, in two CAR T-cell immunotherapy patients. And we also completed the 250 patient REMOVE endocarditis randomized controlled trial in Germany that is expected to read out in mid-2020. That was done as an investigator initiated study in 15 centers throughout Germany. We also have achieved marketing approval of CytoSorb in Mexico with our partner Fresenius Medical Care.

Now to talk a little bit more about ticagrelor and our recent Breakthrough Designation, I'd like to introduce you to our new Chief Medical Officer, Dr. Efthymios Deliargyris, who also goes by the name Makis. Makis, could you give a little background on yourself and give your thoughts as a subject matter expert in this area on this application?

Efthymios N. Deliargyris -- Chief Medical Officer

Thank you, Phil and good afternoon, everyone. It is my absolute pleasure to be joining CytoSorbents at such an exciting time of incredible growth and tremendous potential. My background is a triple board certified physician in internal medicine, cardiology and interventional cardiology. In the first part of my career, I had the opportunity to practice interventional cardiology and cardiology in the United States and in Europe. And approximately 10 years ago, I joined the industry with a role at The Medicines Company and later on at PLx Pharma. Throughout my career, I had a research interest in thrombosis and acute cardiac care, and I've been very lucky to be involved in the development and support commercialization of two of the most important antithrombotics in the market today, namely bivalirudin and cangrelor.

In that light, I've been very excited with the developments that Phil has already shared in the two recent FDA milestones. First off, I would like to comment on the recent Emergency Use Authorization in the critical COVID-19 cases. For many, this may seem as an opportunity to stick developments, almost as an aha moment for the cytokine storm narrative. However, what is important to clarify is that for CytoSorbents, this is a validation of the long-standing thesis that quenching the uncontrolled surge of cytokines can be a life-saving intervention for many critically ill patients. Now it's COVID-19, but this is also relevant for patients with septic shock, patients having acute trauma or those on bypass undergoing cardiac surgery.

The second development, which is actually closer to my heart, is the recent Breakthrough Designation for ticagrelor removal in patients requiring urgent or emergent cardiac surgery. Anti-platelet drugs are especially fundamental for patients with acute coronary syndromes, especially those that receive stents as part of their treatment. Ticagrelor is viewed as the best agent in its class, and its use is growing steadily around the world. It is estimated that today, its market share in the United States is close to 50% among patients surviving a heart attack. However, there is one downside, important one to ticagrelor and the rest of these antithrombotic agents, and that is that they put these patients at higher risk for bleeding. Now that risk can become life-threatening when these patients, while on treatment, require urgent or emergent surgery.

In such scenarios, the doctor struggle with a choice of sending these patients to the OR, at risk of serious bleeding, or delaying the needed surgery until these drugs wash out, a process that can take up to a week. This can be an impossible situation. Unfortunately, it's also pretty frequent. As you can see on the slide, it is estimated that one in five cardiac surgeries is either urgent or emergent. If we talk specifically for coronary artery bypass grafting operations, that is approximately 80,000 patients in the US alone and approximately another 50,000 urgent or emergent cases in Europe. Among those on ticagrelor, they have the choice to either proceed to surgery while on therapy and risk having excess bleeding or to wait for this drug to wash out. And currently, a lot of clinicians opt for bridging these patients with short-acting injectable agents that require hospitalization.

However, we now have a new solution. CytoSorb effectively removes ticagrelor during cardiac surgery, thereby mitigating any excess risk of bleeding. The problem is solved. Patients can stay on ticagrelor until surgery or get bridged to surgery with ticagrelor if they were previously treated with other agents such as Plavix or Effient. This is a simple, effective and safe solution. Furthermore, the value proposition of eliminating pre-op hospitalization and postoperative bleeding complications is truly enormous. This indication, as Phil noted, has already been approved in Europe, and we plan to support all the necessary education that will make this approach the new standard of care. We plan to work closely with the FDA to determine the data required to leverage the recent Breakthrough Designation and get this indication also approved in the US in the near future.

Thanks, and now we'll turn it back to Phil.

Phillip P. Chan -- Chief Executive Officer

Thank you very much, Makis. And just to give you a little bit of overview about CytoSorb and COVID-19. CytoSorb has now been used to treat more than 750 critically ill COVID-19 patients in Italy, China, Germany, US and in many other countries, resulting in preliminary positive reports of the reduction in cytokine storm in inflammatory mediators such as IL-6, ferritin and CRP, also improved respiratory function in acute respiratory distress syndrome with signs of improved oxygenation, improved PF ratios, improved lung compliance and most importantly, weaning from ECMO and mechanical ventilation. And last but not least, we have also heard many reports about an improved hemodynamic stability of patients and a reversal of shock, one of the hallmark features of CytoSorb treatment.

CytoSorb is now specifically recommended in Italy and Panama COVID-19 treatment guidelines with blood purification to treat cytokine storm, and the China COVID-19 guidelines as well. And on April 10, 2020, CytoSorb received FDA Emergency Use Authorization, enabling CytoSorb to be commercially sold to all hospitals in the US for use in critically ill COVID-19 patients 18 years of age or older with imminent or confirmed respiratory failure. We are currently prioritizing nearly 200 inquiries that we've received in a very short period of time, with now 30 active hospital accounts with CytoSorb shipped or in use in more than half of these with multiple reorders and approximately 25 patients treated to-date in the United States.

In Germany, which has treated the most COVID-19 patients to-date, a major effort is under way to obtain clinical data in many centers, including randomized controlled trials, registry data as well as the report of case reports in case series. I think it's important to note that we are a COVID-19 play but not a COVID-19 company. And as Makis has mentioned, COVID-19 has spotlighted our company, CytoSorb, and the role in treating cytokine storm and believe it can be a long-term catalyst for our business.

And finally, I'd like to -- I'd normally break out clinical activity at this point. However, in this unprecedented environment, most clinical trial activity around the world has been put on hold in favor of making room for potential COVID-19 patients and preventing the infection of non-essential personnel and patients. Because of this, there's not currently much to report. However, when activity begins to pick up, we will make sure to report that out to you.

With that, I would like to turn the call over to Kathy for our financial overview. Kathy?

Kathleen Bloch -- Chief Financial Officer

Thank you, Phil and good afternoon, everyone. For today's call, I'll be providing an update regarding CytoSorbents March 31, 2020 financial results. And in addition, an update around our working capital position and our cash runway. So starting with product sales for the first quarter of 2020, they were approximately $8.2 million, which is an increase of $3.6 million or 78% over first quarter 2019 product sales of approximately $4.6 million. This increase was primarily driven by an increase in direct sales from both new customers and repeat orders from existing customers as well as an increase in distributor sales.

And in the middle of March, sales demand rose as a result of the COVID-19 pandemic. Grant revenue was $551,000 in the first quarter of 2020 as compared to $615,000 in the first quarter of 2019, and our total revenues, which include product sales and grant income, increased by 68% to $8.7 million for Q1 2020 as compared to $5.2 million for the first quarter of 2019. Q1 2020 product gross margins were 76% compared to 74% for Q1 2019.

And let's look at our quarter-over-quarter product sales. First quarter 2020 represents another record quarter with product sales of $8.2 million. On a constant currency basis, product sales for Q1 2020 would have actually been $8.4 million. Newly created demand for CytoSorb to treat COVID-19 patients in the ICU contributed to this increase in sales. Though difficult to quantify, management estimates that approximately $1.5 million to $1.7 million of first quarter 2020 sales were related to the COVID-19 pandemic. We also note that we entered the second quarter with a sales order backlog of approximately $2.7 million, which we believe positions us well for sales growth in Q2 in the second quarter of 2020.

In the second quarter of 2020, we note that excluding clinical trial expenses, we achieved our first quarter of positive cash flow from operations of approximately $332,000. And as the impact of COVID-19 pandemic eases, we may experience a decrease in revenue in the second half of 2020 as compared to the first half of 2020 as the impact of this catalyst for revenue growth is reduced. However, our core business remains strong, and we believe that the underlying drivers of revenue growth remain robust. In fact, as Phil and Makis have already mentioned, as a result of the COVID-19 pandemic, there is a growing awareness of and interest in CytoSorb, and this is expected to fuel future sales growth even in our core markets once the pandemic passes.

Next, we'll look at our trailing 12-month product sales and blended gross margins. And as you can see by this chart, we continue to maintain strong year-over-year product sales growth. We note that our compound annual growth rate, or CAGR, was approximately 52% over the past four years, and we are maintaining a very positive trajectory of sales growth. And as sales grows, we continue to benefit from improvements in our gross margin as a result primarily of manufacturing efficiencies that we've been able to achieve.

And lastly, we'll review our working capital position. So as of March 31, 2020, we had approximately $26.4 million in cash. In addition, in April, the company received approximately $1.1 million in non-dilutive capital related to the sale of our New Jersey net operating losses and an additional approximately $1.7 million from unsettled March ATM transactions, further bolstering our working capital position. In the first quarter of 2020, we raised approximately $17.7 million through our at the market equity facility with co-agents, Jefferies and FBR B. Riley. However, given our current strong cash position, we have not utilized the ATM since April 2, 2020.

The company also intends to refinance its $15 million term loan facility with Bridge Bank with the goal of extending the interest-only period. Under the current loan agreement, principal payments are scheduled to begin in November 2020. And we believe we have a solid foundation which will enable us to execute on our operating plan and clinical trial strategy well into 2021. Management would like to remind our shareholders that we are shareholders as well, and we strive to do what is in our collective best interest. Finally, at March 31, 2020 we had approximately 41.8 million common shares on a fully diluted basis.

And at this time, I'd like to turn the call back to Phil. Phil?

Phillip P. Chan -- Chief Executive Officer

Thank you very much, Kathy. In terms of guidance, CytoSorbents has not historically given specific financial guidance on quarterly results until the quarter has been completed. However, provided that the current order pattern continues, with strength in our core business and global demand for CytoSorb to treat COVID-19 patients and our ability to continue to scale up and produce CytoSorb, we expect that second quarter 2020 product sales will exceed first quarter 2020 product sales.

That concludes our current prepared remarks. I would like to now open it up for a live Q&A session. Moderator?

Questions and Answers:

Operator

Thank you. [Operator Instructions] We will take our first question today from Andrew D'Silva from B. Riley & Co. You may proceed with your question.

Andrew D'Silva -- B. Riley & Co -- Analyst

Thank you very much and thanks for taking my questions. Also congrats on the great quarter, and I'm glad to hear everyone sounds healthy too. So just to get started with me, just talking about the CAGR. Can you give a little color on what kind of a trial or approval path we should think about PMA, de novo 510(k)? And can the study in the UK be relevant for the US? I'd also be interested in your thoughts with the Portola acquisition and what that means for your company, at least from your mindset.

Phillip P. Chan -- Chief Executive Officer

Sure. Well, thank you very much, Andy, and we certainly appreciate that. In terms of the regulatory path under the Breakthrough Designation for CytoSorb for the removal of ticagrelor in cardiac surgery, we are waiting guidance from the FDA on that particular issue, and we will give an update when we know. The second question in terms of the Alexion acquisition of Portola. This is a very interesting acquisition. As you know, Portola has the only factor Xa inhibitor reversal agent on the market called Andexxa. This had sales of roughly, I think, of $110 million. And Alexion, which is a company that focuses on orphan indications for antagonism of activated complement acquired them for $1.4 billion today.

So it's interesting that CytoSorb not only removes activated complement, but we also have the ability to remove factor Xa inhibitors such as rivaroxaban, as shown in the Hassan paper that we talked about last year that showed in an observational study that the removal of rivaroxaban and ticagrelor by CytoSorb could reduce postoperative bleeding events. So we don't quite have the revenue of Alexion just yet. But I think that shows -- we don't have the revenues of -- I'm sorry, Portola just yet, but I think it shows what the potential could be in this antithrombotic reversal agent space. And it's just curious that our product CytoSorb does what their products do together as well.

Andrew D'Silva -- B. Riley & Co -- Analyst

Right. And as it relates to rivaroxaban, you have an approval for a blood thinner, but obviously, anticoagulant in this situation. Is there like an in vitro study that you can do to expand your label in Europe or is that even something that you're focused on right now? Portola's product has a black box warning, and it would be interesting to see how a device would comp up against it in the field.

Phillip P. Chan -- Chief Executive Officer

Yes. So some of the pioneering work on the removal of these antithrombotic agents has been done by a colleague and collaborator of ours, Dr. George Angheloiu, who had published the initial in vitro data on the removal of a wide variety of these antithrombotics. And I believe just actually published another paper just recently, where he has also shown not only the removal of ticagrelor, but the removal of different factor Xa inhibitors, including rivaroxaban. So the interesting thing, I think, about Andexxa is, as you say, it has a pre-thrombotic risk as a black box warning. And it's a very expensive drug. It is somewhere in the range of $15,000 to $20,000 for a single dose. Some have quoted higher numbers than that.

But that being said, to be used as a reversal agent in cardiac surgery doesn't make sense, particularly given the fact that you don't want to inject anything into a patient that has a pre-thrombotic effect because when you're dealing with the arterial system as you are in cardiopulmonary bypass, it can potentially lead to a risk of stroke or risk of heart attack or risk of other embolic event, thromboembolic event to other organs. So we think that CytoSorb as an easily installed, easy to use fairly priced device that can remove these various agents from blood during cardiopulmonary bypass makes a much better solution. And that's one of the reasons why we feel confident that should we be able to move forward with our marketing plans and data plans that we could become the de facto standard of care for these agents.

And so in terms of the UK TISORB study, we will have another study ongoing in Germany as well called the citation study. But that being said, these data would all be very helpful to helping support the market for this particular application in ticagrelor removal. And hopefully, we'll have some more news on other agents in the future.

Andrew D'Silva -- B. Riley & Co -- Analyst

Okay. Thank you very much for the update on that. I just have two more quick questions. You provided an update in an 8-K, I believe it was last month. And at the end of that 8-K, you referenced expanding your -- or scaling your manufacturing capabilities. I was just a little bit curious on what we should be thinking about there. Would you be looking to establish a new facility or just add capacity within the existing facility? Any color on that would be useful. And also if you could just tie in where you are in your capacity utilization right now, that would be interesting too.

Phillip P. Chan -- Chief Executive Officer

Sure. Let me turn it over to Vince Capponi, who's been doing a great job in terms of managing that uptick in capacity. Vince?

Vincent Capponi -- President and Chief Operating Officer

Yeah. Thank you, Phil. So just let me take that in just a couple of parts here. First, the capacity we're currently at, obviously, with this surge in requirements related to COVID-19, we've really cranked up to seven days a week, 24 hours a day right now in order to meet the demand. As Kathy and Phil mentioned, we had a backlog at the end of Q1. And obviously, the orders are still coming in. So we're working very rapidly to fulfill that. We said we could supply essentially an $80 million business. I won't give exact percentages, but we're using a significant portion of the capacity of the plant.

Obviously, we're taking a look at potentially what the next level of expansion is going to be, given what we've just experienced now and the fact that Christian is continuing to drive sales in Germany in the core business and treating sepsis, etc., we need to take a look at that. And we would probably not do it within this existing facility because it's starting to get pretty large from a scale standpoint, and this is really not quite designed to do that kind of work here. So we would be looking outside this facility. But we're currently evaluating that. And obviously, looking very closely what the trend is in the market for us to best determine what that path will be going forward.

Andrew D'Silva -- B. Riley & Co -- Analyst

Okay. Great. And just last question for me. As it relates to seasonality, would you -- would it be fair to assume that we shouldn't look at traditional seasonality in 2020 given just how tumultuous things are or do you believe that, that should be a fair proxy for 2020 as far as seasonality in past years? Thank you very much and congrats on the quarter.

Phillip P. Chan -- Chief Executive Officer

Yeah. Thanks, Andy. I think then in terms of seasonality, it really depends on what happens with COVID-19. As countries contemplate a reversal of social distancing that has been so effective in the recent past in preventing further infections, there is expected to be potentially a second surge of infections and potentially even a third surge of infections, particularly, as we move into the flu season, where flu and COVID-19, they coexist together and they just exacerbate the burden on hospitals and the risk to people all over the world. So currently, right now, we're at the beginning of May. We are just starting to get back to thinking about getting back to a normal way of life.

I think some states in the United States have already tried to do that and have seen sharp upticks in new cases of COVID-19 infection as well as increase in mortality. And -- but I know that there is a pressing economic need to get back to work. So I think that in Europe, and maybe we could get Christian's perspective on this, but everybody has been working remotely since mid-March and whether or not there will be a traditional Q3 slowdown in Europe remains to be seen, particularly, if everyone winds up going back to work during that time after being at home for so long. Maybe, Christian, do you want to maybe give a little bit of color on what you're thinking in terms of the European business and seasonality that we typically see in Q3?

Christian Steiner -- Senior Vice President of Sales and Marketing

Yeah. Certainly, Phil. Thank you, and good afternoon to everyone. Good evening to those from Europe. I think a number of points have to be considered when we think about seasonality or not. Altogether, I think that the business we have is very healthy, and there might be a part which is a onetime effect. But as Phil said, this will depend very much on how the situation with COVID-19 evolves. But also, I think there's a number of very sustainable effects. So I think the experiences and the results we have in treating COVID-19 patients will be translated into other diseases. So this is obviously septic shock patients, but this also involves or includes influenza patients.

Then because of this pandemic, we have got a number of new customers, and also those who are treating quite a while with CytoSorb, they are treating patients earlier and using more absorbers. So all these effects, I think, will add to the normal business. And number three, I think that we have a wide awareness of our therapy and of our company. And also the lifting of lockdown in the different countries leads to another phenomenon. With the rise of the pandemic, a lot of elective programs have been postponed. And obviously, those have to be started again, and we see that the hospitals are starting their normal programs at the moment or within the next two or three weeks. So we expect a very robust business even after the pandemic has been solved.

Andrew D'Silva -- B. Riley & Co -- Analyst

Thanks again.

Operator

And our next question is from Josh Jennings from Cowen and Company. Please proceed with your question.

Brian -- Cowen and Company -- Analyst

This is Brian [Phonetic] here for Josh. Thank you for taking my questions. I have a two-part question on COVID-19 to start. First, can you share the average number of cartridges used per COVID-19 patient in the first quarter and the trends you saw for stocking for COVID-19 specifically in the quarter? And then regarding backlog, do you expect backlog to become a normal dynamic going forward where you'll exit each quarter with excess demand, specifically for COVID-19? And then I have a follow-up question as well. Thank you.

Phillip P. Chan -- Chief Executive Officer

Yes. So I think that the usage of CytoSorb has varied from center to center. It's also varied based on the patients that they're treating. I think where doctors and physicians have been having the most success is the early treatment of patients with COVID-19 infection soon after they're put on mechanical ventilation or soon after they develop shock. I think that when they are far gone, and patients have had long stays on mechanical ventilation, it is much harder to bring those patients back. We've seen the usage of CytoSorb vary, again, the numbers of cartridges vary all across the world.

In one of the case reports, a case series that was published in -- that was presented in our webinar several weeks ago, for example, they only used one -- they only use 24 hours of treatment. We typically are recommending about four cartridges per patient with a flexibility to do more treatment, if necessary, if the patient is improving. I think that's how most physicians are looking at it that if they are seeing an initial positive response, they will continue until one of a number of different clinical outcomes that they're observing happens, either a reduction in inflammatory mediators down to more normal levels or a reversal of shock or an ability to get someone off of mechanical ventilation or other types of clinical outcomes.

In terms of your question about backlog, so I think that the demand for CytoSorb at the very -- in the third month of our first quarter was actually quite robust, and we were just scaling up at that time. We had already, as I mentioned in the press release, began the scale-up process and the planning early in Q1. And we were just meeting the needs of our business and then trying to build an excess inventory to meet the needs of COVID-19 patients. So in Q1, I think that the demand got a little ahead of supply. I think that we've done -- the team -- just want to congratulate our production team, quality, R&D and engineering that Vince has managed to really scale up this production so that we can try to get ahead of the curve.

But the good part about our manufacturing process is that it is very flexible. We have the ability to scale up and scale down very quickly without incurring a lot of different fixed expenses. And we can be very flexible. So I think that as we get ahead of the curve, the likelihood of backlog would be less, but that remains to be seen. And of course, our guidance is predicated upon our ability to continue to produce at the rate that we are. So I think the backlog is just an indicator. I think that there's a lot of demand out there, and that backlog -- we're going to do whatever we can to meet that backlog because it means that this is patient's in need. And so obviously, our goal is to be able to make sure that, that need is fulfilled.

Brian -- Cowen and Company -- Analyst

That's helpful. Thank you. And staying on the topic of COVID-19, a competitor recently discussed the possibility of seeking a permanent US approval that would allow the product to remain in the market past the emergency use interval for COVID-19. Is this something you're considering? And if so, can you discuss the clinical data you need to make this happen?

Phillip P. Chan -- Chief Executive Officer

Yeah. I think it would be premature to be able to speculate on what the FDA would be willing and not willing to do. So I don't think that, that is something that I'd like to comment on at this time.

Brian -- Cowen and Company -- Analyst

Okay. Thanks.

Operator

And our next question is from Jason McCarthy from Maxim Group. Please proceed with your question.

Dave -- Maxim Group -- Analyst

Hi, everyone. It's Dave [Phonetic] on the line for Jason. Thanks for taking my question. Just wanted to kind of switch gears here briefly. And just wanted to see if you can give us an update on where you were with respect to the REFRESH 2 kidney injury studies and where you were in meeting the recommendations outlined by the DMC. Thanks.

Phillip P. Chan -- Chief Executive Officer

I apologize. I couldn't hear that last part. Would you -- could you please repeat that last part of your question?

Dave -- Maxim Group -- Analyst

Just like where you were with respect to the REFRESH 2-AKI studies and where you were in terms of meeting the prior recommendations outlined by the DMC?

Phillip P. Chan -- Chief Executive Officer

Okay. Very good. Yeah. I think that we are on track. I think the one issue with the COVID-19 pandemic is that many hospitals, including all of our trial sites have excluded nonessential outside people, including people who work for our contract research organization from entering the building and from any nonessential activities within the hospital. I think that you're hearing a lot of hospitals now beginning to open up selective procedures and other things. And at the time that this lockdown happened, our CRO was done through the majority of the data scrubbing and qualification and validation of that data among the 150-plus patients that we've done to date.

And they have -- they've been also working remotely to try to scrub that data at certain centers remotely. But again, there's not that much work that needs to be done. And I think that provided that centers are open -- are able to open up to finish just some of that last data scrubbing, we should be able to get that done in fairly short order. I think the goal would be sometime this summer that we would address the needs of the DMC in terms of data quality and data analysis and hopefully have the issue put to bed shortly thereafter.

Dave -- Maxim Group -- Analyst

Great. That's helpful. And just wanted to kind of quickly circle back here. You mentioned that you had a sort of like an order backlog going into the second quarter. What's that number again? I think I missed it. Sorry.

Phillip P. Chan -- Chief Executive Officer

It was $2.7 million.

Dave -- Maxim Group -- Analyst

Okay. $2.7 million. All right. Great. Thank you. Appreciate it.

Phillip P. Chan -- Chief Executive Officer

Sure.

Operator

And our next question is from Sean Lee from H.C. Wainwright. Please proceed with your question.

Sean Lee -- H.C. Wainwright -- Analyst

Hi, guys. Congratulations on a great quarter and thank you for taking my questions. I just had two quick questions. The first is, on the US commercialization. You mentioned that you already have 30 active hospital accounts in the US and some facility has already started reordering the product. So I was wondering how is that handled right now and do you plan on building a separate commercial structure for the US compared to your European operations?

Phillip P. Chan -- Chief Executive Officer

So we've developed what we call a COVID task force within the company. As you know, all of our commercial operations are outside of the United States, primarily in Europe, but also spread out in 58 countries around the world. In Europe, we have a full complement of a sales team with all of the necessary functions needed to effectively commercialize the product. In the United States, it has been more focused on clinical studies and manufacturing. And we did not have the infrastructure set up ahead of time to be able to meet the new demand from the United States based on the FDA Emergency Use Authorization.

That said, I think that we have had a multidisciplinary effort at the company with people chipping in from all aspects of the company to help here in this commercialization effort that has been supported by the European operations as well. And so we've been working very hard to, again, prioritize the inquiries that have been coming in and to be able to start these sites up in a safe or responsible manner. So I think that we've been doing a good job so far. We're not relying on the US, obviously, to drive sales. But what it does represent is a way to introduce the therapy to hospital -- major hospital systems throughout the country and to key opinion leaders throughout the country.

And I have to say that there's been a lot of excitement about the therapy, a lot of enthusiasm and in fact, some early cases of -- with the therapy just getting started here in the United States, some early cases of success. So very excited about what's happening. And -- but I think that we will be able to manage without having to build a sales team here in the United States because we really don't need one at the moment. It's -- we're just utilizing what we have and making the most of it.

Sean Lee -- H.C. Wainwright -- Analyst

I see. My second question is on maybe a breakdown to sales. So I was wondering if you could provide a little bit more clarity on, since now CytoSorb is being approved for septic shock, for compact cardiac surgery, and now for ticagrelor removal. So maybe which indications are you seeing the biggest growth? And also, which areas -- geographies are you also seeing the biggest growth?

Phillip P. Chan -- Chief Executive Officer

So I think that of the 88,000 treatments that we've had to date, the split remains fairly stable, roughly two-thirds in critical care, one-third in cardiac surgery. Clearly, the ticagrelor application is in the area of cardiac surgery. And we were just getting started there before the COVID-19 pandemic hit. So that being said, as I mentioned in the press release, we believe that this is a potentially very large growth area for CytoSorbents. And as Makis has mentioned, in terms of quantitating some of the initial demand for the product, that this application alone could double the current revenues that we have in Europe over time. It won't be overnight, but we do believe that there's a very compelling case to be made for the therapy to become standard of care for this antithrombotic removal application.

And so I think that we'll -- that market will become clearer as time goes by. And hopefully, that will translate into significant increases in revenue. And so I think that direct sales continues to dominate our results. However, international sales, particularly demand from COVID-19, has been very brisk. And as Christian mentioned before, we think that that -- the need, the pull from the market for COVID-19 will result in many, many more physicians using the therapy. And in a post COVID-19 environment, we believe that if they are having good success with the therapy, that can lead to potentially long-term business -- non-COVID business for our company.

Sean Lee -- H.C. Wainwright -- Analyst

Thank you for the additional color and that's all I have.

Phillip P. Chan -- Chief Executive Officer

Thank you.

Operator

And our next question is from Anita Dushyanth from Zacks Investment Research. Please proceed with your question.

Anita Dushyanth -- Zacks Investment Research -- Analyst

Hi. Good afternoon. Congrats on the quarter and thank you for taking my questions. First one, maybe Dr. Makis can help me clarify this. As far as the ticagrelor trial goes, I know you mentioned that you'll be able to give better guidance after meeting with the FDA. In terms of the patient demographic, besides those who require the emergent surgery, what about patients who can actually wait for the elimination of ticagrelor, but they might be at risk of the ischemic complications? Would they be possibly part of the study too?

Phillip P. Chan -- Chief Executive Officer

Yeah. Makis, if you want to comment on that.

Efthymios N. Deliargyris -- Chief Medical Officer

Great. Thank you. Thank you for the questions. Great question. So the ability of the device to remove ticagrelor has been shown both in the model in the laboratory experiment and almost completely removed from circulation. And we also have now evidence from a study that in Hamburg in humans of very effective removal of the drug from the circulation and, in addition, return of platelet function while the patient is undergoing this therapy. So in that regard, the biological plausibility has already been proven. Why people need to have the drug removed, the indication for it, now that can be variable.

And as you mentioned, in addition to the acute patients presenting to the hospital with an acute event and already on ticagrelor therapy, which would be a very, very important target population for this therapy, you can also have this so-called urgent -- not emergent, like the first case, but urgent cases where people are in the outpatient, they get diagnosed with a need for cardiac operation, and they opt to stop their drugs and wait for a week. Within a week, the drug is washed out. So the bleeding risk can be managed that way. The problem is when you take these patients off these drugs, there's a rebound increase in ischemic events.

So imagine how somebody who has a diagnosis, has a treatment plan in place, knows that they need in operation, however, they have to stop their medication and they suffer an event as they're waiting for the operation. So with this -- with CytoSorb now and this indication, this will not be necessary anymore. They can march straight to the OR on ticagrelor therapy, thereby having zero excess ischemic risk during the waiting period for the surgery and, of course, have the very effective removal during surgery and mitigate any bleeding risk. Does that answer your question?

Anita Dushyanth -- Zacks Investment Research -- Analyst

Yes. That was really helpful. Thank you. And as a follow-up, I just wanted to -- just curious to know if CytoSorb is being tested in clinical studies on other classes of antithrombotic agents besides the factor Xa and P2Y12 antagonist?

Phillip P. Chan -- Chief Executive Officer

Yeah. I think in the study that I mentioned before, the observational study from St. Georg Hospital in Hamburg, Germany authored by Hassan and colleagues, studied a population -- a mixed population of patients on ticagrelor as well as rivaroxaban, which is Xarelto, one of the factor Xa inhibitors. So -- and again, studies -- future studies have been done by George Angheloiu showing the effective removal of rivaroxaban, for example. And so I think that it represents a viable market for us going forward.

And as it relates to Portola and Alexion, I think it can show you what the potential of our product could be in that space, given that factor Xa inhibitors, the top two factor Xa inhibitors, apixaban and rivaroxaban, have about $16 billion in worldwide sales and very widely used, and these patients have a high risk of -- because they are cardiac patients or vascular patients or clotting or they have other evidence of PE, pulmonary embolism, or deep vein thrombosis, they're higher risk for developing the need for emergency cardiac surgery or other cardiac surgery. And so I think that's a very viable population for us.

Efthymios N. Deliargyris -- Chief Medical Officer

Phil, if I can add one more comment on this topic. I would comment on the Andexxa discussion and the parallels here. There is a very different clinical need that's being addressed with Andexxa versus CytoSorb. Andexxa is used after the occurrence of life-threatening bleeding. Think of Andexxa as being the airbag, right? It's deployed after the accident. Think of CytoSorb as being the seatbelt. CytoSorb will prevent any excess bleeding and therefore it will be used as a standard approach to anyone who has the drug circulating and they enter the operating room. So it's a very different size of the population, and it's also a very different clinical application of the therapy. Patients that will get the CytoSorb therapy will be preventing any bleeding from happening versus managing a catastrophic event, which Andexxa is doing right now. It requires patients to be having a catastrophic bleed before it can be used.

Phillip P. Chan -- Chief Executive Officer

That's a great distinction. Makis, thank you.

Anita Dushyanth -- Zacks Investment Research -- Analyst

Yeah. That distinction was very clear. Thank you for that. The other thing just relates to the approval that you recently got in Mexico. Could you give us some color on how the initial order looks like from Fresenius? And also a follow-up to that, like are you still waiting registration from South Korea?

Phillip P. Chan -- Chief Executive Officer

Sure. Let me turn that over to Chris Cramer, Vice President of Business Development. Chris?

Christopher Cramer -- Vice President of Business Development

Yes. Hi. Thank you for the question. Yeah. As you mentioned, CytoSorb was officially approved by the Mexican health authority at the end of March. And just for some context, Mexico is home to over 129 million people and is the second largest medical device market in Latin America after Brazil. As previously announced as well, Fresenius Medical Care, FMC, maintains the rights to distribute CytoSorb in Mexico. And so with this approval, they can import the product, and commercial sales of CytoSorb may now officially commence in Mexico. As we've also mentioned, they've got a very strong and motivated direct sales force in Mexico. And this is a group that has been excited to work with us from day one. Their management has made CytoSorb a top priority as well.

And I think working with these guys, we've noted that they've learned from their colleagues in Europe, and they've come up to speed very quickly, and they partnered very closely with our international sales and medical teams to prepare the market, and this includes promoting at several major medical conferences and building awareness and support among leading ICU docs in Mexico. One other thing that's worth mentioning is that they've recently brought in a new and dedicated head of sales to lead the CytoSorb Mexico business. And this is a person that comes with extensive commercial experience and network connections, specifically in ICU and hospital sales, which I think is really good and will help accelerate the introduction of the product.

To your question, FMC has indeed already placed its first order of CytoSorb, and the product has been shipped from our New Jersey warehouse. And on top of that, because of the work that they've been doing, they already have some preorders in place from several major institutions. And as Christian had mentioned, we also anticipate that they'll see increased demand for CytoSorb as COVID-19 washes over Mexico, as it has everywhere else. So overall, I'd say we're very pleased with how things are progressing, and I believe FMC and CytoSorb are well positioned for success.

Anita Dushyanth -- Zacks Investment Research -- Analyst

Thank you. And just one more regarding the sales in the European region. We know that Germany is a strong market. But what about Switzerland, like, do that territory, do they have a dedicated procedure code for the cytokine reduction?

Phillip P. Chan -- Chief Executive Officer

Christian, would you like to take that question?

Christopher Cramer -- Vice President of Business Development

Yes, certainly, Phil. Thanks. Yeah. Thank you for the question. In general, I think we can compare the two markets, Germany and Switzerland, in terms of infrastructure and also the grade of medical supply. As you know, in Germany, we have a dedicated reimbursement with the reimbursement code. And in Switzerland, this process is a little bit behind. So we have a dedicated code, but not yet the payment for that. And this is always like two years behind the code and has to be analyzed from the different health insurance data. Yeah. But other than this, I think it's a very comparable market.

Anita Dushyanth -- Zacks Investment Research -- Analyst

Yeah. Good. Thank you. And just one last question. Are we to expect the data from the REMOVE study sometime in the summer?

Phillip P. Chan -- Chief Executive Officer

I think that notwithstanding any potential delays caused by COVID-19 at these hospitals, again, most hospitals and throughout Europe, and as you've seen in the United States, have limited hospital workers, do not -- few essential personnel. And so from all indications, we believe that they're still on track. And if we have an update on any kind of delays, we'll make sure to let that known. But as for right now, I think that the expectation is data by midyear.

Anita Dushyanth -- Zacks Investment Research -- Analyst

Okay. Great. Thank you for taking my question.

Phillip P. Chan -- Chief Executive Officer

Sure. Thank you.

Operator

And our next question is from Keith LaRose from Bradley Foster & Sargent, Inc. Please proceed with your question.

Keith LaRose -- Bradley Foster & Sargent, Inc -- Analyst

Hi. Thanks for taking my question and congratulations on the recent developments with the quarter. So the COVID crisis that, of course, the emergency and around trying to save lives, can you give me some color on the process of how and when the filter is used and in a way that can support and protect your objectives around data collection that supports your story going forward? Thank you.

Phillip P. Chan -- Chief Executive Officer

Sure. I think as I mentioned before, as with our other business in critical care around the world, we find that early intervention with the therapy is better than late intervention. My -- I have an analogy of organ failure being like walking away from home. The further you walk away from home, the longer it takes to get back and often bad things happen when that -- when you're coming back. And so I think the further out you go in organ failure, it's just very difficult to recover. No amount of cytokine reduction will bring back a necrotic cell, for example.

So I think that the goal here is to try to intervene early. And we are not trying to intervene on patients who are highly inflamed but otherwise OK. So some with fever, high white count, signs and symptoms of inflammation, fast heart rate, fast breathing, etc. We're not intervening on those patients. But when they start to develop organ dysfunction and organ failure, that is when we are intervening. So in COVID-19, I think it's very similar. When patients go on mechanical ventilation, is often a trigger point for some hospitals, particularly in Germany, where they're intervening early and seeing some very nice data, I think.

But also, when mechanical ventilation begins to escalate, that is another time when people are intervening with CytoSorb when patients are doing worse and rapidly deteriorating. So I think it runs the gamut. I think COVID-19 inception is so new and novel that we're learning a lot. Everybody is learning a lot as we are going forward. The pathogenesis of the disease appears to be very unique compared to other viral pneumonias. In Italy, they've called this the worst viral pneumonia they've ever seen. And so I think it is a process of learning how best to use these various treatments, whether or not they're antiviral therapies or immunomodulatory therapies.

Keith LaRose -- Bradley Foster & Sargent, Inc -- Analyst

Is there any type of comments you would make relative to how the application of CytoSorbents in that theater is -- can be controlled in a way or used in a way, like I said, to support efficacy? And/or do you think it's being -- sounds like it's being used in a whole range of different ways at different intervention points, and it might be difficult to draw significant conclusions from this COVID experience. Is that fair or do you have a different view?

Phillip P. Chan -- Chief Executive Officer

Well, I think that the first treatments that have ever been done with CytoSorb in COVID-19 patients was the experience in China, where they were really trying it on a wide variety of different patients, some early, some late, all of which had organ failure. So early is a relative term. I think that in the early treatment under the old Emergency Use, under the Expanded Access Pathway [Phonetic] here in the United States, for example, kind of relegated CytoSorb to be used as an end-of-life therapy of last resort treatment. However, the Emergency Use Authorization that we now have gives doctors the wide flexibility to treat when they think that it's important.

And I think that, to your point, I think a lot of our guidance has been to treat early, but there are also randomized controlled trials that are in process. One is out of the University of Freiburg using CytoSorb with ECMO, extracorporeal membrane oxygenation. But there are other studies ongoing that are randomized controlled trials, trying to get at a more standardized way of treating patients based upon the collective wisdom of the investigators and the most recent experience with CytoSorb in these COVID-19 patients. So the answer to your question is data is coming, and the best data will be that -- those coming from randomized controlled studies, and we are also looking to try to do such a study here in the United States.

Keith LaRose -- Bradley Foster & Sargent, Inc -- Analyst

Thank you very much. Very helpful.

Operator

And at this time, I would like to turn it back to management for any additional or closing remarks.

Phillip P. Chan -- Chief Executive Officer

Okay. Well, thank you, everyone, for taking the time this afternoon to listen to this call. We certainly appreciate all of the support. If you do have any other questions, please feel free to reach out to Jeremy Feffer at LifeSci Advisors. Until next time, thank you, everyone. Have a good night.

Operator

[Operator Closing Remarks]

Duration: 63 minutes

Call participants:

Jeremy Feffer -- Investor Relations

Phillip P. Chan -- Chief Executive Officer

Efthymios N. Deliargyris -- Chief Medical Officer

Kathleen Bloch -- Chief Financial Officer

Vincent Capponi -- President and Chief Operating Officer

Christian Steiner -- Senior Vice President of Sales and Marketing

Christopher Cramer -- Vice President of Business Development

Andrew D'Silva -- B. Riley & Co -- Analyst

Brian -- Cowen and Company -- Analyst

Dave -- Maxim Group -- Analyst

Sean Lee -- H.C. Wainwright -- Analyst

Anita Dushyanth -- Zacks Investment Research -- Analyst

Keith LaRose -- Bradley Foster & Sargent, Inc -- Analyst

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