Shares of CytoSorbents (NASDAQ:CTSO) were getting clobbered on Tuesday, with the stock sinking 15.9% as of 3:14 p.m. EDT. The big decline came after the maker of blood purification technologies announced a $40 million public offering late Monday afternoon.
It shouldn't be surprising in the least that CytoSorbents decided to sell additional shares to raise cash. The healthcare stock is up more than 150% year to date even with today's drop. Companies often take advantage of higher share prices to build their cash positions.
CytoSorbents doesn't desperately need additional money, though. The company announced preliminary second-quarter results on Monday. Its cash balance at the end of June was around $35.1 million. With a cash burn of only around $2.3 million during the first half of 2020, CytoSorbents appears to be in a strong financial position.
The COVID-19 pandemic has created robust demand for CytoSorbents' blood purification technology. Revenue in Q2 soared 58% to $9.8 million thanks largely to a surge in U.S. hospital sales of CytoSorb. The product, which adsorbs cytokines and reduces inflammation caused by "cytokine storms," received FDA emergency use authorization for use in treating COVID-19 patients in April.
Two key things to watch with CytoSorbents going forward are its Refresh 2-AKI clinical trial of CytoSorb and the launch of the product in nine Latin American countries. CytoSorbents hopes to provide top-line data from the Refresh 2-AKI study this quarter.