Good day, everyone, and welcome to the CytoSorbents Second Quarter 2015 Financial Results Conference Call. As a reminder, today’s call is being recorded. And at this time I’d like to turn it over to our moderator, Lee Roth. Please go ahead, sir.

Thanks, Aaron, and good afternoon everyone. And once again, welcome to the CytoSorbents second quarter 2015 operating and financial results conference call. Joining me today from the company are Dr. Phillip Chan, Chief Executive Officer and President; Kathleen Bloch, Chief Financial Officer; and Dr. Christian Steiner, our VP of Sales and Marketing from Germany. Before turning the call over to Dr. Chan, I’d like to remind listeners that during the call, management’s prepared remarks as well as answers to your questions 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 within the Private Securities Litigation Reform Act of 1995. Our actual results may differ from those discussed today and therefore, we refer you to a more detailed discussion of the risks and uncertainties listed in the company’s filings with the SEC. Any projections as to future performance represented by management include estimates as of today, August 13, 2015 and we assume no obligation to update these projections in the future as market conditions change. During today’s call, we will have an overview presentation covering the financial and operational highlights for the second 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 full management team. At this time, it’s now my pleasure to turn the call over to President and CEO, Dr. Phillip Chan. Dr. Chan, go ahead, please.

Thank you very much, Lee, and thank you everyone for joining the call today. It’s a pleasure to be here and welcome. Following the presentation, we’ll have a live Q&A session and an official transcript of today’s call will be available within the next week on our website at www.cytosorbents.com. For those of you who like to learn more about our flagship product, CytoSorb, I would encourage you to visit www.cytosorb.com. CytoSorbents is a leader in critical care immunotherapy and we are leading the prevention or treatment of life-threatening inflammation in the ICU and cardiac surgery using CytoSorb blood purification. Rather than go through some introductory slides on what we do, I’d like to show you a video that was produced independently of us, so we had nothing really to do with this, by one of the major television studios in Germany about a patient who is treated with CytoSorb at the University of Rostock. We did, however, have it tagged at the end. But for those of you on the call today, there may be a slight wait time at the end of the video before we go back into the presentation, while others with slower internet speeds finish watching the presentation. [Advertisement] Great, I think we’re back. I apologize if anyone had some technical difficulties, there are no video controls for this particular platform, and so I think the video may have restarted for some. So apologize for that. But I think hopefully you found this video interesting, because it really speaks to the complexity of the patients that we treat and shows how CytoSorb is being used to help regain control of the patient. So as you saw from the video, CytoSorb removes the fuel to the fire of deadly inflammation and the purpose of controlling this deadly inflammation is to prevent or treat the organ failure that is often caused by the inflammation in order to improve patient outcome and survival, while decreasing the massive costs of these critical illnesses. We continue to advance as one of the most promising revolutions in critical care medicine. So with that, I’d like to turn it over to Kathy to talk about our operating and financial highlights. Kathy?

Thank you, Phil, and good afternoon, everyone. For today’s call, I will be providing an update regarding CytoSorbents’ second quarter 2015 financial results, including product sales, as well as an update around our working capital and cash runway. Turning to our financial results for the second quarter of 2015, our CytoSorb product sales were approximately $773,000, which is a 17% increase over second quarter 2014 product sales of approximately $663,000. The decrease in the euro had the impact of reducing sales in the second quarter of 2015 by approximately $147,000 or 19% of total product sales. In other words, if we eliminate the impact of the decline in the euro relative to the dollar, second quarter 2015 product sales would have been approximately $920,000. Our grant and other income was $190,000 for the second quarter of 2015, as compared to approximately $361,000 for the second quarter of 2014 and that’s as a result of the conclusion of several significant grants. We also note that we were able to achieve gross product profit margins of approximately 63% in the second quarter of 2015, compared to 65% for the second quarter of 2014, and this was despite the drop in the euro that we experienced. Next, a quick review of our six-month revenue results. Our CytoSorb product sales for the six months ended June 30, 2015, were approximately $1.5 million, which is a 20% increase over the first half of 2014 product sales of approximately $1.2 million. In the first half of 2015, the value of the euro averaged $1.12 as compared to the first half of 2014 when the euro value averaged $1.37. The decrease in the euro had the impact of reducing sales in 2015 by approximately $259,000, or 19% of total product sales. Trailing 12-month product revenue for the…

Thank you very much, Kathy. As Kathy mentioned, if we disregard the effect of the euro, we had our second best quarter in terms of product sales in the history of our company. This was primarily driven by new orders and reorders in our direct sales territories, even with a sales force of four people. But we’re looking forward to an even stronger second half. As I mentioned in the press release, there are number of potential major catalysts coming up. First, we’ve strengthened the direct sales team with the addition of Steffen Martens, who is covering North East Germany, and Andreas Pendleder, who is covering Western Germany. In addition, we’re working with a cardiac surgery contract sales representative and before the end of this year, we hope to increase our sales team back to nine people and add a medical science liaison, an MD [indiscernible] who will help give lectures, educational sessions and provide support to the sales team. Another major catalyst is that we’re now selling in three new countries. We recently announced Saudi FDA approval and Medical Device Marketing Authorization, which enables sales in Saudi Arabia with a population of 29 million people via our partner Techno Orbits. Typically these orders are done through tenders and these tender orders can be substantial. It also potentially opens doors to the rest of the Middle East. In addition, we signed with TekMed for Australia and New Zealand and this targets a collective population of 28 million people. CytoSorb is registered already, so sales can begin immediately. In addition, Fresenius Medical Care looks to turn on in the second half of 2015. In fact, initial marketing to key opinion leaders in critical care plan in the third quarter of 2015 in France, Sweden, Norway, Finland, Denmark and Poland, with a…

Aaron, could you give the Q&A direction?

[Operator Instructions] And we’ll take our first question from Jonathan Aschoff with Brean Capital.

So after 2015, when you have the extra two in sales hired and a liaison, that will definitely be enough for your current direct sales territory and what will be the most likely next territory or territories if they are going to happen in a similar year or intermediate term and how many more sales people you think you need for that?

When you talk to a major dialysis companies in Germany, they typically have on the order of about 10 to 12 salespeople for the entire country. So in fact, even as a small company, having nine people hopefully by the end of the year we’ll be right up there with these major renal dialysis companies. So we feel comfortable that we will have enough people to cover our direct territories well. And as you know, we have a mixed revenue model with both direct sales as well as sales through both partners and distributors. And we felt at the beginning and we continue to feel this that Germany, Austria and Switzerland represent a great market for us to target directly with our sales force and it allows us to have our own destiny in our own hands and again Germany is a multi-billion dollar market in critical care, it’s $1 billion to $1.5 billion market alone. So if we are successful nowhere else in the world, we could do very well by just being successful in Germany. That being said, we are looking to leverage – because we are a small company, we cannot really have a direct sales force all over the world and that’s one of the reasons why we are leveraging the sales and marketing distribution network of our partners as well as our independent distributors. And really that is the strategy going forward. We are not looking to open up new territories for direct sales, but it will be a blend between Austria, Germany and Switzerland and the rest of the world.

I was just wondering with the clear value inflection with the US approval and we are all looking forward to that, what could delay the start of the REFRESH beyond September?

Right now, we feel very good about where we are. Clearly, legal negotiations with universities can take some time. And that is one of the things that is a pent-looming factor, but I think we are in very good shape here and with bringing on – Steven Sisk has been with us for whole of two weeks, but has really taken up the reins and will be a major positive for us for the REFRESH trial. We feel very confident about starting the trial in September. Now, not necessarily all sites will start at the same time, but the way that we are progressing, they should all come on very shortly one after another.

May I just have the cost for both of these REFRESH trials?

So the current REFRESH trial that we are looking to do here with 40 patients is under $2 million. The REFRESH II trial that we are looking at will be on the order of about $8 million to $10 million.

And we will go next to R. K. Ramakanth with HC Wainwright.

The sales of $773,000 that you reported today, could you help us understand what part of it comes from [indiscernible] comes from India, which seem to be two major geographies at this point?

So we have not broken out the direct sales versus distributor sales in the past. Right now, these are very lumpy, they vary quarter to quarter. What I can say is and what I will reiterate is what I said in the prepared remarks, is that the strength was really in direct sales and despite having a small sales force of only four people, we were able to achieve our second strongest quarter in our history in terms of product sales. But going forward, we expect that India will be a very important player. They have already sent us their plans for their clinical trials that they will be funding and they are expanding in Sri Lanka and also throughout all of India with their direct sales force. And so we expect that India will become – it already is an important partner, but Biocon will become an even more important partner going forward. And so I think as Kathy mentioned, we did not have the benefit of initial orders from distributors, but we continue to have negotiations with independent distributors and as well strategic partners and look to help boost the distributor and partner side going forward.

So as you said with four sales folks, you are doing quite good. So you should get to this sales team of nine that you are expecting in the second half. How directly coordinated will that be or how long will it take for the new folks to come in and learn the business before you can actually get to see the full potential of having the full team together?

Normally what we’ve seen in the past is that it takes salespeople roughly 3 to 6 months to get started. But I think the two sales people that we just added in July and August are well known to our team, they worked together before and they are veterans in critical care medicine. And so they have established networks, they’re very smart guys as well and they’ve come up to speed very quickly. We’ve also been preparing them ahead of time as well with materials and other things to help get them up to speed quickly. So we think that they will be productive very soon. And I think that it’s important to note that we have talked previously about what is the potential value of a single hospital customer, right? And we have said that based on the incidents of sepsis and other critical care illnesses, a hospital, if we became standard of care, CytoSorb became standard of care for sepsis or for other critical care illnesses, could command potentially a revenue generation of $1 million to $2 million per hospital. Now, there are more than 400 hospitals in Germany that are 400 beds or more. In fact, there are 2,100 acute care hospitals throughout the country. So you could see how the numbers could get very big very quickly and how hospitals within each of the individual salespeople’s territories can become much bigger than what we are even seeing now. One hospital could [for our] entire revenue – for our entire product revenue for this quarter as a matter of fact. So I think that there is still a lot more productivity that we expect out of the sales people, there are still a lot more that they can do individually and we expect the new sales people to come online very quickly.

So even when you hire the sales folks, I don’t know sales folks are being with you for a while, so what is stopping you or what is stopping your sales force from getting to the point where you’re just discussing about getting like a full possible order?

I think Christian can comment on this as well. But I think what we’re seeing in the marketplace is that there is a tremendous amount of enthusiasm in the marketplace amongst physicians. I think that is very clear. We are with the major key opinion leaders in critical care medicine in Germany, Austria and Switzerland and in fact in many countries around the world. And I think that enthusiasm is really key to our visibility and our confidence going forward that this is a real business that will be successful. I think sometimes where we get stuck is in reimbursement, so we are spending a lot of resources in achieving reimbursement in different countries. We are working heavily on targeting the hospital administration also. Sometimes the hospital administration will say, well, that’s fine that you want this product, but show me the data, show me something that says that this is helping save lives and improve outcomes? So we are for the very focused on generating that data. As I’ve talked to you already, there are going to be many case series that will be presented with a lot of data in many different areas in both cardiac surgery and critical care that will help address that concern. And so I think that’s one of the areas that we are heavily focused on and trying to fix. But I think the message to hospital administrators is this. When you look – CytoSorb is not just another loss item on their P&L, right. CytoSorb is one of those therapies that has the ability to change the potential economics in that hospital, because it’s addressing such a big issue. Now, if you read the literature and you talk to hospital administrators, somewhere on the order of 10% to 20% of a hospital’s…

It’s like complex situation [indiscernible] like this, actually it’s a product shift what we help to bring to the hospitals and this is very difficult task to work on. As an example, [indiscernible] owning a Tesla motorcar, so I guess very few of you. Despite the message and the idea about this was really compelling and everyone can normally understand that this driving an electric car is good for the environment, so same is true in our situation. So a lot of those people are in the study, but they are obviously caught in a situation where they have to care about the cost, they have to care about the risk, and the data we have at the moment is limited. So the decision process in the hospital is very difficult and lot of stakeholders had to be convinced. I think that is describing best why it takes its time.

One last one, with most of your revenue coming from euro-based, the dollar strengthening all the time, have you ever considered getting some of your manufacturing done in Europe either directly or through contract manufacturing so that it can help your contribution margin?

So let me say a few words and then turn it over to Kathy to talk about how we are hedging our currency risk currently. So there is a lot of know-how that goes into our technology. We have 32 issued US patents, multiple applications pending worldwide. And it’s very important for us to maintain that know-how, those trade secrets in terms of manufacturing to keep our competitive edge. In the meantime, we continue to innovate beyond what even CytoSorb is to come up with the next generation technologies to move forward. So in order to best control that, it is being in our favor to and in our best interest to maintain US manufacturing, it also allows us very strict control over the quality of our product, which is very strong. But from that standpoint, talking about the euro and the dollar, let me turn it over to Kathy for some of her comments.

We have a couple of just naturally build in hedges with regard to the euro. One is that probably approximately half of our sales are in dollars. So even though we are selling to some of the countries that are outside of the US, some of the larger relationships, those sales are in dollars. And then also we don’t see it in the revenue number which is what we are also focused on right now, but we still have substantial costs in Germany and while the revenues are coming down, the cost of doing business in Germany having our sales and marketing team and our support teams over there and our investigator-initiated studies, those costs are coming down as the euro comes down. Of course, since we are focusing on the revenue line, we don’t really see that benefit coming through.

And we will go next to Andrew D’Silva with Merriman Capital. Andrew D’Silva: I just got a couple of quick questions. A lot of them have already been answered. First off, as far as Germany goes, or with some of the hospitals that you’ve had time to really have some historic data, how sticky are you seeing CytoSorb be with doctors that are already utilizing it in various therapies?

Christian, this would be a good one for you to comment on.

Can you repeat the question, because... Andrew D’Silva: How sticky are you seeing the product in some of the hospitals that you had time historically to get that out of?

So I’m not a native speaker, so sticky means probably how good we are in these hospitals and have repeat business? Andrew D’Silva: Yes. So with a physician, after they’ve utilized the product one time, do you have any data as far as are they coming back and utilizing it over and over again?

I got you. Actually if you look at our business, the whole business we are doing is actually based on this, because at the moment the data we can present is limited and so every business we are doing at the moment is based on experience. So our goal is for every of those potential customers to bring them to the first patient, to choose with them together the perfect patient to succeed and then bring them – this is a positive experience to repeated use. And that’s what we are doing and we are improving our processes in doing so. We have improved our recommendations regarding patient selection, how to treat, when to treat or who to treat and so this more and more is successful, actually the patients are repeating, absolutely. Andrew D’Silva: So reused with doctors that have initially used the product is increasing, that’s the situation?

Absolutely.

I would say just as a comment to that, I mean the majority of our orders are actually pre-orders. One of the things that is interesting that we are seeing right now is in fact orders from smaller hospitals that’s around the big regional hospitals, the big major tertiary care hospitals and they’re curing word of mouth that the device is working, they are hearing from their colleagues in the larger hospitals how it’s being used and they are ordering now as well. So we are actually getting a very nice mix now of both reorders from existing customers as well as direct customers as well. Those first-time users, those new users, those new user accounts are typically small that they are just using the product initially, but they are at the beginning of the process and as the as they grow, those accounts will become more significant as well. So I think there is a very nice ecosystem that we are seeing based upon the successes that clinicians are having with CytoSorb in the market today. Andrew D’Silva: My next question is just around your sales process and trying to get a little bit more insight into what to expect out of some of the new markets like Australia and Saudi Arabia, first off, have sales began there and then if so are there any notable hospitals that are looking to utilize your product or utilizing your product? And if not, what is the step to get in the door with them so that they are aware of the potential that it offers?

I think when we choose distributors and when we choose strategic partners, we are very careful in trying to find players that have existing networks in critical care or cardiac surgery is very important. Relationships at this stage for whenever you introduce new products is really key. And so that has been a requirement of all the distributors that we have. And what we’ve seen is that they will take the product to their closest customers, to the main customers, to the big key opinion leaders at major hospitals. And that will start with them first and then it grows from there. Now, unlike I think when we started off in Germany and really had no clinical experience, I think as we move forward with new territories and new distributors and new partners we have a much broader base of clinical understanding and clinical knowledge and clinical data to help support those launches in those countries. And so I think that what we will see from these new territories that are coming online is that they will kick off more quickly, benefiting from the data that is being generated elsewhere in the world both in the past and currently. Andrew D’Silva: And then as far as Biocon and India goes, couple of quarters ago they were really increasing their investment in getting the name out of CytoSorb, has there been an update in some of their efforts and has that translated to any increased use?

What we’ve seen from Biocon is that Biocon is very excited about the product. I think that – what they are trying to move the market to is using CytoSorb earlier during critical illnesses. So when it’s being used too late as it often sometimes is, unfortunately in India because of the cost of the device, as you know, device costs – the pricing is different. What I would say is that the cost of medical care is a lot cheaper in India than it is elsewhere in the world. So to come in with a premium product like ours which is not being discounted by the way in India, but to come in with a premium product like ours there is that economic issue. But I think what Biocon has been seeing is that when they get people to use it earlier as it is being used in other parts of the world, like Germany, Austria, Turkey, Netherlands et cetera, they are seeing much higher rates of success where they’re getting more comfortable in recommending the therapy earlier and recommending the therapy to patients’ families earlier. And so I think things continue to develop at Biocon, they continue to put forth a lot of resources towards this. We just had a call with them very recently, everybody is very excited, the team over there is very excited about what they are seeing in the marketplace. So again, as I mentioned to R.K., we expect that India will become a significant player, it is already, but will become an even more significant player in the future. Andrew D’Silva: Just a last question, will just Germany as proxy, what do you see as being the major catalyst for you to take CytoSorb in that region from a product that’s utilized from time to time or where you’ve got only in one hospital to a standard of care within the whole region? If you were to put a timeline window on how long it would be before it’s too long, could you maybe explain that and quantify that for me?

So I think that in Germany, I think of experience in Germany has been that – what we know is that there is nothing to help patients, nothing other than supportive care medicine to help patients who are critically ill. That means that for the markets that we serve which are severe sepsis and septic shock, trauma, burn injury, pancreatitis, severe liver disease, acute respiratory distress syndrome, complications of cardiac surgery, post-operative inflammation and many, many others, there is nothing that they can do. So the bar actually is very low in terms of trying to become standard of care in these areas. Clearly, you need data, you need experience, but what we found is that and what we will hopefully see in these case series during our International Users Meeting is that people have seen it work, they been refining how to treat and when to treat and who to treat with people with specific illnesses. And that they have success and they have increasing success as they revise their treatment protocols and that is becoming standard of care without – at that institution without it ever having gone through a multiple site randomized controlled trial for that indication. For example, we have some hospitals, a couple of hospitals right now that had so many experiences with rhabdomyolysis, that’s one of the case report studies that we talked about before, where it’s been used very effectively that they are telling us that they are using it on all of the rhabdomyolysis patients. We have some applications in cardiac surgery, for example, where the device is helping stabilize patients intra-operatively, some certain types of surgeries and they’re telling us that they are using it now on all those cases that involve this particular disease in cardiac surgery as well. Interestingly, we are seeing this grassroots standard of care movement with CytoSorb therapy. Clearly, we look to accelerate that and augment that with company-sponsored as well as investigator-initiated studies that’s specifically in a randomized-controlled fashion prove this to be the case. And we are absolutely committed to doing that. But what we are seeing right now is that it’s such a major unmet medical need, they’re seeing the success in their our own hands with the product that it’s becoming standard of care in these pockets in different hospitals around Germany. So hopefully that answers your question.

And you will go next to Jan Wald with Benchmark Company.

I guess I have a couple left. Phil, you talked in the call about registration and then reimbursement, how do we understand what was going to happen in the European countries and in Asia in terms of getting the registrations completed and then eventually having to get reimbursement?

So in terms of registration in Europe, technically the bar is very low to get registration in Europe because of our CE Mark approval. In fact, the registration process typically takes several months and so for example [indiscernible] case, all these countries are registered. So that’s not the issue. Outside of the European Union, however, they will accept CE Mark approval, but typically the process of registration is longer. They require more documentation, they have their own – each individual country typically has its own requirements in terms of documentation and some are very detailed and some just require different documents that we need to produce and that kind of thing. So from that standpoint, it’s a process that takes time. But the good part is that we are – with the Saudi FDA approval and the market authorization there, it’s a big leg up in the GCC countries and so we expect that those to continue to move very rapidly. In Russia, again, that’s taking a long time, but we do believe that we are nearing the end in terms of obtaining Russian registration. And then other countries, as they come along, Israel and others, I think we’re in the process now and will hopefully know that later. Reimbursement is a separate issue and reimbursement is something that often requires some amount of data to obtain reimbursement. As you know, we have reimbursement in both Germany and Austria today, in certain parts of India and certain hospitals, certain patient populations, there is private pay as well as government reimbursement. In Turkey, there are tender orders and there is certain ways to bundle things to obtain reimbursement. And there are also – its different ways where in different countries they’re finding ways to get paid. In the United States, of course, there’s the DRG which is one lump sum payment. So in the United States, for example, if we were to get approved here, we would just fall under that DRG. We could always apply for a separate code that would take time, but we would still be able to reimbursed under the DRG pretty much right away. So I think we are spending a lot of resources in terms of seeking reimbursement in different countries and that’s just a process that takes time. I think that going to the second half of this year, I’ve just talked about all the kinds of data that we are looking to generate in these case series, these investigator initiated studies and other things, I think that will be extremely helpful in obtaining and accelerating the reimbursement process all over the world.

And I guess one last question, if you don’t mind. When you talked about the opportunity to go through the expedited review, you talked about lesser endpoints and stronger endpoints or something along those lines. Would you just help me understand what’s the difference between lesser and a stronger endpoint might be that the FDA will value to use?

So for example, in the area of sepsis, the standard primary endpoint for all phase 3 pivotal clinical studies in the past has been 28-day all-cause mortality. And there has only been one company ever to achieve 28-day all-cause mortality improvement and that was Eli Lilly with their Xigris product that was the only product ever approved to treat sepsis. That has been subsequently taken off the market and there are currently no therapies that are approved to treat sepsis. Now, when we talk about lesser endpoints, we are talking about things like days in the intensive care unit, days on the ventilator, hemodynamic stability, use of vasopressors, these types of softer endpoints where we are clearly seeing benefit of CytoSorb today in our clinical usage throughout the world. And so we believe that if the FDA is willing and this is really the purpose of the EAP is that they are saying that they’re willing to accept these lesser endpoints. That means that these trials, because of the higher rate of efficacy in these lesser endpoints, it means that these trials can be smaller, they can be cheaper, they can be faster, thereby helping accelerate market approval.

And we will go next to Brian Marks with Zacks Investment Research.

Since we are on the subject of a potential EAP success trial, so can you talk about what you are thinking in terms of size of the trial and length of the trial and size in terms of potential enrollment?

Right now, the data designation plan is being set and it would be premature for me to talk about that right now. But suffice it to say, what we are – our aim in this data designation plan is that we are not looking to do an all-commerce trial, meaning we are not looking to take every step that patient that walks through the door or that’s in the ICU. I think that has been a major stumbling block and a major failure, a major problem in most of the success trials that have been done in the past. The heterogeneity of the success population is quite immense. It depends on what kind of bacteria that they are infected with, the site of infection, so you could have gram-positive, gram-negative bacteria, anaerobic bacteria, you have fungal infections, you got all sorts of viral infections et cetera, right, you can have, the site of infection is very important such as the lungs, the kidneys, the urinary tract, the abdominal cavity, cellulitis on the skin, and others, meningitis in the CNS, central nervous system, and others things, you can have the age of the patient which plays a major role in the prediction of mortality in these patients. There is patients also with high levels of cytokines versus those with lower levels of cytokines, that predicts mortality. So as you can imagine, a very complex set of variables and very complex to actually design clinical studies in sepsis. So that being said, we do believe that we have ideas based upon our clinical data, based upon the clinical usage in the marketplace, et cetera, we do have ideas on the particular trial design and that is what we are going with the FDA.

Just wanted to step back to REFRESH and assuming that you go that way, can you talk about what the potential variety of biomarkers that you might be interested in looking at in REFRESH and are some of those potentially similar to the biomarkers that were in the small Germany trial, I think that was done or was published last year?

Yes, so there was a study done at the University of Munich, a 40-patient retrospective study 2020 using CytoSorb intra-operatively during complex cardiac surgeries and what they showed was that intra-operative treatment with CytoSorb led to a reduction in inflammatory mediators in the post-operative period compared to the control. And that was statistically significant for things like procalcitonin, interleukin-6, there were some statistical significance with fibrinogen and others. So we do know that in cardiac surgery, there is a number of things that are activated during cardiac surgery. So there is the activation of complement, complement is part of your body’s immune system that helps fighting section, but it forms porous, activated complement forms porous in cells and causes them to explode, if a cell is infected by something that they can actually kill the cell. So that’s just for example one mechanism. And so it is well known that complement is activated and can lead to adverse outcomes. It can actually cause increased mortality. It is very clear that a number of different cytokines are elevated, interleukin-6 being one of them, for example. It is very clear that free hemoglobin is elevated caused by hemolysis and the mechanism that we talked about before. And then there are all sorts of different inflammatory mediator markers like CREC protein, fibrinogen which is acute phase reactant and others that are indicative of an inflammatory response. And these are really the types of inflammatory mediators that we would be looking at in the REFRESH trial.

And with REFRESH in European Union, is that something what is done in assuming it’s positive, the results are positive, is that something that you think is publishable?

Absolutely. The ability to remove free hemoglobin has not been possible before intra-operatively during cardiac surgery or even post-operatively during cardiac surgery, nothing out there can remove free hemoglobin, except for the administration of haptoglobin, but that still doesn’t reduce the effects of free hemoglobin in the body. So that being said, we do believe that this would be actually a very important discovery linking the reduction of free hemoglobin with improvement in clinical outcomes and in this REFRESH study it’s about safety, it’s about free hemoglobin reduction, but in the pivotal study it could potentially be about free hemoglobin reduction alone or could be about free hemoglobin reduction and improvement in clinical outcomes as well. But I think it’s a very – it was interesting, the FDA in our conversations with them have said that it’s been well known that free hemoglobin has its dangerous problems and if we could show that it can actually improve clinical outcomes that would be a major advance in cardiac surgery. So we are very excited about what we are doing. I think it’s well acknowledged by a lot of the clinicians who are involved in this study. They all see these complications after complex cardiac surgery. So I think there is a lot of support there. If we were able to show benefit, it would be a very impactful study.

Let’s say that REFRESH comes out positive, you go to REFRESH II, can you talk about what REFRESH II that you envision entails in terms of the scope and enrolment size and number of sites? And then in terms of endpoints, is there additional endpoints that you layer on top of that or is it kind of the same endpoints in initial REFRESH?

What we have said before, I don’t think has changed. I think the FDA is looking at the results of this initial REFRESH I trial, looking at the values of free hemoglobin and other things, before we agreed to a trial protocol for REFRESH II. Now, it could be – they have left the door open for de novo 510(k) potential filing, which – where the endpoints would be a reduction in free hemoglobin, for example, and that would be a small trial. That would be less than 100 patient trial that we could execute upon very quickly. And that is using CytoSorb intra-operatively during cardiac surgery and just looking at free hemoglobin reduction. Now, the other trial that we would do would be a PMA trial and where we would be looking at clinical endpoints. So we would be looking at the incidence of acute kidney injury, or the time it took someone to get off of ventilator after cardiac surgery with or without our product. And that study would be roughly a 300 to 400 patient study, but it would be exactly the same design. It would be treating the patient intra-operatively, that’s all you do, right, and then you’re just following the patient post-operatively to look at clinical outcomes as well as free hemoglobin and other biomarkers. In the de novo trial, the primary endpoint is you’re just flipping the primary and secondary endpoints around in the two studies.

And that does conclude the Q&A portion of today’s call. I’d like to turn it back over to Dr. Chan for any comments and closing remarks.