Good afternoon, and welcome to the CytoSorbents’ 2020 Financial and Operating Results Conference Call. [Operator Instructions] Please be advised that the call will be recorded at the company's request. At this time, I would like to turn the call over to our moderator, Amy Vogel. Please go-ahead Ms. Vogel.

Thank you. And good afternoon. Welcome to CytoSorbents' 2020 financial and operating results conference call. Joining me today from the company are Dr. Phillip Chan, Chief Executive Officer; Vincent Capponi, President and Chief Operating Officer; Kathleen Bloch, Chief Financial Officer; Dr. Efthymios Deliargyris, Chief Medical Officer; Dr. Christian Steiner, Executive Vice President of Sales and Marketing and Managing Director of CytoSorbents Europe Gmbh; Christopher Cramer, VP of Business Development. Before I turn the call over to Dr. Chan, I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties. Management may make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the SEC. As projections as to the company's future performance represented by management include estimates today as of March 9, 2021, 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 operating and financial highlights for 2020 by Dr. Chan, Dr. Efthymios Deliargyris, Chris Cramer 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 my pleasure to turn the call over to Dr. Phillip Chan.

Thank you very much, Amy and good afternoon, everyone. Despite the backdrop of COVID-19 we had an outstanding 2020. We announced record 2020 CytoSorb sales of $39.5 million versus $22.8 million in 2019 a 73% increase. We also announced record Q4 2020 product sales of $11.5 million versus $6.6 million a year ago, a 74% increase. Our blended product gross margins were record 82% in the fourth quarter, and 76% for the year. We had a solid balance sheet with $71.4 million in cash as of the end of the year, and no long-term debt. And we delivered more than 121,000 cumulative CytoSorb cartridges to date, which was up 51% from 80,000 a year ago, with distribution across 67 countries. In addition, we treated more than 5,000 COVID-19 patients in more than 30 countries, including here in the United States under FDA emergencies authorization granted in 2020. We received EU approval to remove ticagrelor and rivaroxaban during emergent cardiothoracic surgery. And we are also granted FDA breakthrough designation for the removal of ticagrelor for this application. We also received European Union approval for our new product called the ECOS-300CY cartridge to remove inflammatory toxins during ex vivo perfusion of solid organs for organ transplants. And we also were awarded $8.4 million in contracts from DoD to complete HemoDefend-BGA preclinical development that will enable universal plasma as well as whole blood transfusions. One of the topics that we wanted to cover today is our sales growth strategy in the new normal. With our strong financial performance and solid cash position coupled with solid current and anticipated demand for CytoSorb, we're executing a number of key initiatives to drive growth. First, it is to maximize what remains of the COVID-19 opportunity and then it is to return to our pre-COVID-19 growth strategy,…

Thank you, Phil. And good afternoon, everyone. I'd like to spend the next few minutes giving you an update on our clinical progress and the clinical programs we're running, obviously with a priority on U.S. approval as Phil already mentioned. So, some highlights first relating to the execution of the clinical plan that we discussed on previous earnings calls. Over the past few months, we have been scaling up our clinical operational capabilities. We hired eight new clinical experience members to the team in 2020 in an effort to execute our studies in a cost efficient and timely manner with increasing sponsor involvement. We will continue that expansion of the team in 2021. A very important addition worth mentioning is David Cox, a new VP of Global Regulatory, who dramatically increases our bandwidth when it comes to regulatory submissions. Going forward, we'll focus on generating rigorous, adequately powered, multicenter company sponsored trials. These are the trials that will help us get us regulatory approvals, and establish our treatments a standard of care and inclusion in treatment guidelines. We will do so by partnering with top academic institutions and world-renowned investigators. And we'll take a complimentary approach of RCTs, randomized clinical trials registries, but also real-world evidence and health economic projects, since the ability to demonstrate the value proposition is critical in the adoption of our device. As Phil mentioned, the COVID-19 pandemic had impact on all aspects of the business, including in our clinical operations. There's no surprise that multiple clinical programs around the world suffered during the pandemic. And we experienced similar headwinds. And we saw that in two different ways, either delayed or post enrollment of studies not related to COVID; a specific example for us was the TISORB study that's executed in the UK that suffered from…

Thank you very much, Makis. Now turning over to Chris, one of the questions that we've been getting a lot of is about our new partnership with B. Braun. This was just announced very recently. Chris, could you please give an overview of our partnership there? Thank you.

Sure. Thanks, Phil. I'm very excited to welcome our newest partner B. Braun to the Cytosorbents partner network. This agreement represents a strategic win for the company by extending our marketing efforts for CytoSorb to a larger audience, ensuring ongoing access to the B. Braun OMNI platform and helping to validate and differentiate CytoSorb versus competing technologies. Privately held and based in Melsungen, Germany, B. Braun is one of the leading healthcare companies in the world with operations in 64 countries and over 64,000 employees. B. Braun develops medical devices, pharmaceutical products, and services for users around the world. In 2019, it generated sales of €7.5 billion. B. Braun Avitum, the renal therapies division manufactures and distributes products for patients with kidney disease, including continuous renal replacement therapy or CRRT, dialyzers, needles and syringes in chronic and acute hemodialysis systems like the OMNI and the OMNIset bloodline pictured here on this slide. Amongst top players like Baxter and Fresenius Medical Care, B. Braun is recognized as a global leader in renal replacement therapy and intensive care medicine. B. Braun is the market leader in South America and has a strong presence in hospitals throughout the world. Next slide, please. In February, 2021, Cytosorbents and B. Braun executed a global co-marketing agreement, officially adding B. Braun to our partner network. I'm proud to say that along with FMC, CytoSorbents is now partnered with two of the largest and most respected strategic partners in acute care. The goal of this partnership is to leverage the world-class marketing and sales organizations of B. Braun and CytoSorbents to significantly increase the visibility, and awareness of CytoSorb and OMNI promote access to care for critical care physicians using CytoSorb and OMNI and to generate new sales leads per CytoSorb and OMNI. As part of the…

Thank you very much, Chris, for that overview. Now I'll turn it over to Kathy to talk about 2020 financial highlights. Kathy?

Thank you, Phil, and greetings to everyone. For today's call, I'll provide an update regarding Cytosorbents fourth quarter and full year 2020 now audited financial results. In addition, I'll provide some color around our working capital and cash runway. CytoSorb product sales for the fourth quarter of 2020 were approximately $11.5 million, which represents a 74% increase when compared to product sales of approximately $6.6 million for the fourth quarter of 2019. The fourth quarter of 2020 represents a new company record for quarterly product sales. It should be noted that the increase in the average Euro to dollar exchange rate did have a positive impact of approximately $800,000 on the fourth quarter 2020 sales. Our total revenues, which product sales and grant revenue was approximately $12 million for the fourth quarter of 2020, as compared to approximately $7.4 million for the fourth quarter of 2019, representing an increase of approximately 61%. Q4 2020 gross profit grew to approximately $9.4 million, an increase of approximately 77% over gross profits of Q4 2019. And as Phil mentioned, importantly, our gross profit margins on product sales were a record high 82% in the fourth quarter of 2020, compared to 80% for the fourth quarter of 2019. Next slide, please. Now turning to our annual results for 2020. Product sales for 2020 were approximately $39.5 million, representing a 73% increase over product sales of $22.8 million for 2019. And this increase was driven by an increase in direct sales of approximately $8.9 million, and additionally, an increase in distributor sales of approximately $7.8 million. We also benefited from our first sales of CytoSorb in the United States under EUA, emergency use authorization, for the treatment of COVID-19 patients. Those sales contributed $1.3 million of product revenues in 2020. 2020 grant revenue was approximately…

Thank you very much, Kathy. 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 and not withstanding on several key related to the COVID-19 pandemic. We expect our product sales for Q1 of this year will exceed those of Q1 of last year. We also expect that 2021 will represent another year of growth. That concludes our prepared remarks. Operator, if you will, please open up the call for the live Q&A session.

Hi, good afternoon, Phil, and Cytosorbents team. Thanks for all the details on the update. It's clear that the COVID-19 utilization – drove utilization in 2020, and may create a comp headwind as you ahead in through 2021. Any way you can just help us think about I know there's a lot of unknowns around with the pandemic, but how trends have gone so far in the first quarter, and then maybe just help us think about the offsets. I think you called out return of elective procedures. There'll be more utilization. We have to think that with the increased utilization for COVID cases, critical care conditions are more comfortable using CytoSorb in inflammatory pathophysiologic states. You've got the ticagrelor indication, a couple of countries over in Europe with any other layers of growth that you would call out there that will help offset any decrease in the COVID utilization channel?

Yes. Thanks Josh. And I think that the point that we've been trying to get across is that the underlying core business that is non-COVID is very healthy. Again, it's 76% of our total product sales for last year, even with all the disruption that COVID caused, as Kathy mentioned. We still actually showed 32% growth. And so that was actually very nice growth alone. And on top of that, it was supercharged by COVID-19. That being said, I think that we've had a lot of growth initiatives that we had been putting into place prior to COVID. And our goal is to work on those now. And I mentioned a lot of those already in the presentation, but maybe to give a little bit more color, Christian would you mind maybe giving some commentary?

Yes. Thank you, Phillip, and thank you Josh for the question. It has been said already by Phil and also by Kathy, the year 2020 was very challenging, but nevertheless, it was very successful. So, it was very challenging for the commercialization teams because they've accessed and several restrictions. And as it has been said as well, there were less patients in our core business fields. And so, the 2020 was the most successful year with record sales and so on. And this was the result of all the block in the years before it was not just accidentally because of the pandemic. And this is reflected by the growth we had despite having treated less patients in our core business fields or less than we could have treated. So, the year 2021, I think will be challenging as well, but it will benefit from 2020. So, I have a number of points I want to share with you. Number one, there is increased awareness, and this with of course help to support the core applications. This increased awareness, one on the treatment call, which is systemic inflammation, but also on the therapy CytoSorb. Number two, the sales forces and support teams are really ready and motivated and trained to go out again and see the existing and new customers. This was not possible in the last year. And there's still a lot of restrictions for our sales people to meet customers and to look for new customers in the hospitals. Number three, the pandemic has forced us to additionally have digital platforms developed, and this of course we will not stop when the pandemic must stop, people use these formats in the future as now, and this will support the normal sales book with the one-to-one meetings order in…

Yes, thanks for reviewing all those layers and I'm proud and all that extra detail. I want to just one follow-up Phil, just congratulations on all the progress on the movement with the FDA and be on the cusp of the IDE approval of ticagrelor removal. I just wanted to hear your updated thoughts on the cardiac surgery indication. Now that refresh two trials going to be in the process of restarting and how do you see the U.S. regulatory timeline for cardiac surgery compared to the U.S. timeline for ticagrelor removal in terms of things go smoothly from here. Any timelines you can share for potential U.S. approvals for those two indications. Thanks for taking the questions.

Yes, thanks very much, Josh. I think that what we're focused on right now is that the ticagrelor removal application is the shortest, what we believe is the lowest risk and fastest route to commercialization in the United States. And that's why we'll be taking the top priority in our clinical program. Now REFRESH 2 has enrolled 153 patients into a 400-patient study. And it's just about to get going again, as Makis had mentioned. And so that trial will be – the completion of that trial is expected to be later out than what we should be able to do with ticagrelor. I think the good part about ticagrelor removals that this has the potential to be a very rapid study again intervention during the surgery and then a relatively short follow-up period, with hopefully very clear end points. But again, as we finalize and hopefully get the IDE approved by the FDA, we'll come back with more detail on the size of that study. And then we'll also be able to estimate better the timing of that study as well.

Understood. Makes sense. Thanks again, Phil.

Thanks very much, Josh.

And our next question is from Anthony Petrone with Jefferies.

Thanks. Congratulations, everyone. I hope everyone's staying healthy. Maybe to start Phil with the CTC registry, you mentioned in the prepared slides that a publication in the U.S. is being prepared at the moment. So maybe just a little bit of timing update on the CTC registry publication in the U.S., and then how we should be thinking about that trial expanding into Europe. And as we think about 2021 under a scenario where that data is positive, how do we think about potentially that adding to COVID related sales in 2021 and maybe offsetting some of that headwind and I'll have a few follow-ups.

Yes, I'll turn it over to Makis. And thanks, Anthony. I'll turn it over to Makis for some additional color on that. I think that the good part is that the CTC registry has been rolling relatively quickly. It's been doing so I think based on enthusiasm by centers, but also by active management by the current clinical team, which I think is very good. I think that we've been accumulating particularly in ECMO many cases of ECMO in CytoSorb, again as a way to rust the lungs and promote lung healing to try to resolve the very significant lung injury that occurs in these patients. And again prior to COVID, CytoSorb had already been using thousands of ECMO treatments and to Christian's point is one of the reasons why we were able to get really going very rapidly here in the COVID pandemic. But in terms of talking about the implications of any type of analysis let me turn it over to Makis who can give a little additional color. Makis?

Thank you, Phil. Anthony, thanks for the question. So just wanted to mention, in addition to the CTC data coming out of the U.S., we have a substantial experience now from around the world. And there's been publications coming out from different countries reviewing those outcomes. And we have internally formed a task force that we're collating all the international experience that were planned to submit for review manuscript, look at the ex-U.S. experience COVID-19, which is in numbers far greater than the one in the U.S. Now regarding the CTC registry, as Phil mentioned, we are seeing that the use of CytoSorb under the EUA is frequently favored in patients on ECMO, simply because it does allow for this unique therapeutic strategy of allowing for lung injury. And we are focusing on getting on capturing that experience and getting into publication. We do believe we are approaching now the numbers that are what would constitute a meaningful experience. We do plan, like I said, to submit in the very near future. Now we are going to be a part of a peer review process that in some regard, it’s hard to estimate, but most of the journals have been working pretty quickly when it comes to COVID-19 related research. So, we're hoping we might get, some sort of an expedited four to six weeks review versus the traditional two to three months review. So it's hard to exactly give you a timeline, but we're working very hard to throw it over the wall at one of those journals and hopefully ask them to have an expedited review. So we're optimistic that, come late spring, early summer, we should have that data out, maybe even sooner based on the willingness of the journal to work with us to publish quickly.

That's helpful, maybe a couple of follow-ups. Second one on the data front would just be the specific timelines on REMOVE endocarditis. I know you said that's coming relatively soon, is that sounds like potentially that's the first half event, or is it more like mid-2021? And then just in terms of Germany, maybe a high-level update on how many of the 400 mid-size hospitals with a big focus on sepsis where that penetration sits heading into 2021. And as you think about now that that 20-person salesforce being in a position now to sort of proactively go after accounts potentially post shutdowns in Germany. How should we’d be expecting 2021 to play out in terms of new center adds? And then, as a quick follow-up to that, just on the penetration from existing accounts how should we be thinking about how that will trend in 2020? Thanks.

So, I'll just give you a quick answer about REMOVE and then I'll turn it over probably to Christian to give you the answers related to penetration in Germany. So, REMOVE is a German government funded trial and run independently by an academic research organization. So in that regard, we don't have any involvement at any level, and therefore we're just basically waiting for updates ourselves. Our understanding is that all the COVID-19 related updates [indiscernible] took us to where we are now, but now we're really, really close. So we do anticipate it would be in the first half of this year for every information we getting for the investigators, they should be having the data, the top line results by the first half of this year. Christian, you want to take the second one?

Yes. Well, Christian, let me turn it over to you in a second. Yes. I think in terms of, we've not disclosed, we're in hundreds and hundreds of hospitals throughout the country. These are large university public hospitals. These are mid-tier hospitals, and these are many small hospitals as well. And so, this number continues to grow actually last year. However, most of our orders, I think in our existing business in Germany, was related to reorders given that, our sales reps were not able to go out there and open new hospitals. Christian mentioned that there were some, but I think the vast majority of the revenue came from reorders. Maybe Christian, you can comment on that.

Yes. So this is actually right. The situation led – or the circumstances led to a situation that it was very difficult to recruit or acquire new customers. Those who were in the process quite advanced and sometimes have the opportunity to treat COVID patients. They could be turned into customers and also successfully is reflected by the exemplar just have given. But in general, I think the acquisition of new customers was very difficult and it was far below what we have experienced in the past, and also what we have expected for last year without COVID because as you set already underneath the salesforce was increased massively towards the beginning of 2020. Actually the salesforce is a mix of actually sales representatives and support personnel like perfusionist, [indiscernible] and application specialist for cardiac and critical business. So, it's a very nicely functioning team and I expect a lot of new customers for this year, but also I expect that we will regain customer. We have – I wouldn't say last year, but because of the slowdown or the shutdown of different elective programs, they were just no patients in certain departments. And so, these departments have not all that over the last year or maybe over some of the quarters. So I expect strongly that they go online again when they get the patients coming from these different fields.

Thanks again.

Thanks, Anthony.

And our next question is from Danielle Antalffy with SVB Leerink. Danielle, your line may be muted. Unfortunately, we're not receiving any audio from her. So, the next question will be from Andrew D’Silva with B. Riley Securities. Andrew D’Silva: Good afternoon. Congrats on the progress last year. And thank you very much for taking my questions. So just a few quick ones, when you're looking at international health systems and hospitals, and new customers that were established due to COVID-19, anecdotally, is there like material evidence of use for CytoSorb in other indications, not related to COVID-19 basically our clinicians understanding Cystospore’s benefits and overlaps as it relates to just critical care in general?

Andy, I think that's absolutely right. What we've seen particularly in distributed territories, where we opened up new accounts, for example, Latin America, Middle East and other areas is that COVID was really the catalyst to get people to try to therapy. But once they understood, the concept of what it was trying to do in terms of reducing hyperinflammation, reducing cytokine storm, and reducing the severity of organ injury, an organ failure I think that this has translated into their interest in using it for other things such as sepsis, right. That is not related to COVID and other applications. Maybe Christian, I don't know if you can provide maybe some examples of that.

Yes, I think it's difficult. It's right what you said, everything is what you said. And it's difficult to pick out one or two examples. I think it's Latin America, in general, is showing exactly this happening. But also, markets, like, for example, Iran, which was a very strong market last year, has soon the same. Once the users understanding what is possible, they intellectually translate this into other indications. And this is not just true for the users, this is also true for our sales partners, because obviously, they want to build their business as well and get their investments returned. And so once they understand that there is a profound advantage for the user and the patients, they can go into other indications. And that's exactly what they do. Andrew D’Silva: Great, great, useful context. And then, obviously, the pandemic spurred a lot of R&D, in biopharma as it relates to therapeutics that can treat various aspects of the disease. I was curious, with the evolution of the space over the last 12 months now, have you seen anything that materially changes the competitive landscape for CytoSorb, as it would have been this time last year?

Yes, I think, that as the concept of cytokine storm, hyper inflammation became readily apparent, basically, many companies just came out of the woodwork with potential immunomodulatory therapies. The most promising ones that have come out, I think, Cytosorb is one of them. But certainly, the use of dexamethasone, in COVID-19, related ARDS was demonstrated to show benefit. But still, even with the use of dexamethasone, a mortality of 29%, where nearly every one out of every three people die, have died on mechanical ventilation in the intensive care unit, despite steroids, there's still considerable room for improvement. The only other immunomodulator that has demonstrated a small benefit is the tocilizumab, which is an IL-6 receptor antagonist. Now, this is a biologic that is designed to block the activity of an important cytokine. But only one of literally more than 100 cytokines that regulates the immune response. And in this particular study, the early – the use of tocilizumab help shave off, I think, four percentage points or so, four or five percentage points in the recovery study, off of mortality. What that showed, I think, is that one, the concept of antagonizing cytokines can work. But two, given the magnitude, the relatively low magnitude of that effect, that – and what we've seen in sepsis and many other critical illnesses is that IL-6 antagonizing one cytokine is just not good enough. And I think that is the value of broad-spectrum absorber such as CytoSorb, that not just removes IL-6 efficiently, but removes a wide variety of inflammatory mediator cytokines, bacterial exotoxins, a lot of other molecules that can stimulate inflammation. And that's why I think CytoSorb has kind of carved its place out and particularly those patients who are very critically ill. So, the rest of it is, interesting, but unproven. And I think that there's not much out there else that that was out there. I mean, there was a new study, I think, that came out on Luvox, which is an antidepressant, and that for a very mild disease, or people with very mild disease that seemed to potentially prevent the progression of it, I think, in two small studies, and I think that that remains to be seen. But I think for those who are really in jeopardy of death, for example, you really need big guns, and that's what CytoSorb represents. Andrew D’Silva: Okay, perfect, useful. A couple of follow-ups, just as it relates to the blood thinner opportunity internationally, let's just use a market Germany, for example, how do you expect the label expansion to translate to a commercial rollout as we start seeing your sales team being able to actually get beat on the ground again, and maybe compare it to some of the other label expansions you've had, whether it be with bilirubin? And why you maybe think this one would be able to accelerate faster or slower, versus others you've seen in the past?

I think that in Germany, in particular, we're in most of the major heart centers today. But not necessarily for this application. CytoSorb has been used and used over the years, particularly for high-risk surgery and other applications. And we only got the approval last year for the removal of ticagrelor and rivaroxaban. And we have not really been able to fully exploit those approvals and launch this in the proper way to really drive sales. And so, I think that's the opportunity that we have in 2021, when COVID goes away, and when surgical volumes begin to improve. I think that this is a market where we've heard from many, many surgeons, it's a big pain point for them. And because of post-operative bleeding complications, really maars what was technically a perfect surgery. And we believe that this can rapidly become, standard of care for this particular application. And we believe that it will penetrate this market much more rapidly than other applications that we've had, for example, in myoglobin removal for trauma, or bilirubin removal for liver disease. So, I think that's – what you're hearing, I think, for me, and what you've heard from, Mike is, is that, this is a very compelling application and this is one of the reasons why we believe that we can – once we get going, we can capture the market in Europe. And Germany, obviously, is one of the largest cardiac surgery countries in all of Europe. They do the majority of gavages, actually. And this is a scenario where ticagrelor is typically used. And then in the United States as well, it's a big market for us. And again, I think, the enthusiasm that we've seen, going out to clinical trial centers to participate in this IDE study that we're looking to submit imminently is yet another indicator of the potential here in the United States. Andrew D’Silva: Okay. And the last question is for Kathy. As far as the B. Braun margin profile, should we expect that to be fairly similar to other strategic partnerships and distribution agreements? And then, the fourth quarter saw a fairly significant uptick in legal expenses, and SG&A. But there wasn't really as much stock-based comp and non-cash compensation. So, I was wondering if there was any sort of one-time expenses that were in there that we should be thinking about, or if as we go into the first part of 2021, is that the expense rate we should really build off of? Thank you very much.

Hi, Andy. Let me just take the second one first, because it's easy. There's really not any one-time legal SG&A thing. I think we did point out we made a lot of progress on some really important hires, including our new CMO, Efthymios, and also our VP of Regulatory that we brought in the first quarter this year, but we're recruiting for. So we did have some one-time recruitment fees, that we won't expect to recur. I think you can get that in the MD&A as to the amount of that. We did have in total cash compensation, which non-cash stock compensation Q categories. For the year, I don't know what the fourth quarter impact is, but for the year, the total of RSUs awarded to our executives, which we use as a form of compensation and then also, the stock compensation expense related to the options that we give out was about $4.7 million. So hopefully, that will help you with it. In terms of the B. Braun agreement, I think, it's has the potential to be a much broader driver of revenue, we'll have to see how it goes. It's new in in that we're co-marketing in many, many territories versus the distributor, the partner agreements that we've had in the past are generally limited in the territories with which we're working with those partners. Andrew D’Silva: Okay, thank you very, very much. Best of luck going forward this year.

Thanks, Danny.

Thanks.

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

Hi, guys. Thanks for taking my questions. So, my first question is on the process RCT study. So could you provide some more color on the design of study and what are its goals? Is it looking to set up some results for a future U.S. study?

Yes, thanks, Sean. Efthymios, would you like to comment on that?

Sure. Thanks Phil. So, the process study is a multicenter randomized clinical trial, we're targeting between 20 to 30 sites in Germany. But it's still a pilot study. We have been continuously receiving feedback from the use of CytoSorb. But one of the most consistent clinical benefits is the ability to provide rapid hemodynamic stabilization, which you can imagine is a key clinical goal in these people with sepsis and septic shock, and requiring multiple vasopressors to maintain their blood pressure. So this is something that we want for the first time to test in a rigorous, adequately powered way in a multicenter fashion. And that's what the process study will focus on. However, in addition to that, we're also going to look at other important clinical outcomes in that study, including ICU and ventilator-free days, we're also going to obviously, track mortality in this population. So, in that regard, the idea behind process study will be a definitive study in providing the evidence that we can produce rapid hemodynamic stabilization, but also a pilot study to inform potentially larger RCT, looking at more traditional clinical outcomes in substance shock.

Great, that was very helpful. My second question is on the HepOnFire. So, the liver failure seems to be another indication that you guys are pursuing this year. So I was wondering if you could provide some of the rationale behind that, what the design of the study could be? And what the treatment is like for liver failure right now? And how does CytoSorb fit into that?

I’ll let Phil chime in as well on this, but let me give you a couple of specific pieces about HepOnFire. HepOnFire is also going to be a pilot study, but much smaller, process is estimated to be 160-patient range. The HepOnFire will be substantially smaller into single arm studies, not a randomized clinical trial. But the idea is that you will recruit patients that have underlying liver dysfunction primarily related to alcoholic liver disease, but are in the midst of an acute exacerbation where in addition to the inability of the liver to clear the toxins and the accumulations of these toxins, you have this simultaneous hyper inflammatory response. So, the idea is a CytoSorb would go there and target both of those main drivers of morbidity and mortality in that population. So the background hypothesis is actually very strong. And the idea is that we'll be able to show both the biomarker modifications to this population, but also track the course of traditional risk scores used in these populations, demonstrated these patients do better than what is currently, the standard of care of treatment in that population. So, it's meant to be a pilot study, but we feel very strongly about the application based on the pathophysiological substrate of where CytoSorb should be able to generate a lot of benefit. I don’t Phill do you want to add any color to that?

Yes, I mean, liver dialysis has been out there for a while MARS actually remains one of the leading liver dialysis platforms in the world. But it hasn't really fulfilled its commercial potential, because, I think, it's difficult to use its multi cartridge system. And it does not, as Efthymios said, it removes liver toxins, but it doesn't remove the inflammatory toxins that are often driving a lot of the reasons why that person is in the hospital in the first place, and having such a bad exacerbation of their chronic liver disease. And so I think that CytoSorb, in a head-to-head study with MARS, that was published earlier this year actually demonstrated actually superiority and the ability to remove different things. And some of the things, including, for example, we can remove bilirubin extremely well, we can remove ammonia, bile acids, and a number of different things that are related to the pathophysiology of liver disease. And so, where we're going now, though, is that we believe that CytoSorb actually, has a single cartridge system, easy to implement, can potentially become the leader in this field. And that's one of the reasons why we're really excited by the opportunity and one of the reasons why we're pushing forward with the single arm HepOnFire study. But also, we'll be pushing forward on the application for commercial sales. Because, if you are someone who believes in liver dialysis, we believe that there's a lot of advantages that CytoSorb over existing albumin-based therapies like prometheus, and MARS, and SPAD, and others.

I see, thanks for the additional color now. That's all I have.

Thank you, Sean.

And our next and final question is from Danielle Antalffy with SVB Leerink.

Hey, good afternoon, everyone. sorry about earlier. Can you hear me now?

Yes, we can. Hi, Danielle.

Okay, perfect. Sorry about that. So, I'm not sure if this question is for you, Phil, or Kathy. But just curious how sustainable the gross margin profile is, in the near term as the global ramp progresses? And over the near to medium term, what the drivers are of operating leverage? And then one quick follow-up.

Sure, maybe Vince, you can comment on sustainability of margins and where those are going and then I'll cover maybe the operating leverage question.

All right. Thanks, Phil. Thanks, Danielle, for the question. So, Danielle it is sustainable. Clearly, we are continuing to improve the efficiencies saw in Q4. And as we go to the next scale, we'll be able to improve that efficiency even further. The thing we always have to keep in mind, obviously, is volume, which has a big component of that, as well as, product mix between the more efficient – the more revenue efficient, direct sales versus distributor sales. So we believe it's sustainable, and we can continue to drive the gross margin for. In addition to that we're obviously looking at other second-generation devices, which will be more efficient to assemble and be more – more capable of being automated to be able to drive the volume with less labor and therefore, better cost. Phil?

Yes, when we discuss our operating margins, we think that we can be among the best in the industry, right. So the medical device margins, as you know, kind of are in that range of 15% to 20% operating margins. And some players like Edwards are in the 30%, but they've been as high as 50% in the past. And we believe that we're bringing a lot of innovation to the table that has tremendous value clinically, and we believe we have an excellent business model where we can be on the high end of that 30 to 50% operating margin range. When you think about the kind of the levers that we can pull on how we try to optimize our operating margins and improve our operating leverage, there’s really a number of big buckets right. So, one is obviously topline growth. And, if everything goes well, we believe that 30% to 50%, topline growth is possible. And if we get U.S. approval, we could potentially even exceed that growth rate. The second thing is that from a gross margin perspective, it's really based on a number of things. One is ASPs, right. So currently, our ASPs are relatively fixed. But in the United States, however, which is a fairly virgin territory, we believe that the ticagrelor application could potentially command a much higher ASP, than we're currently receiving in Europe, because of the – if we're able to demonstrate the health economics, benefits of decreased bleeding risk, and other types of decreased stay in ICU, et cetera, et cetera, this could have the overall effect is actually increasing our ASPs over time, which is a major component of gross margins. And then, as Vince mentioned, at 82%, blended product, gross margin, that mix is higher marketing, direct sales…

Okay, that's helpful. And then just a quick question, I appreciate this will be dependent upon timing. So I'm going to ask the question this way. And once you do secure U.S. approval, how we should think about the ramp trajectory? And how much you can leverage the existing hospital or the current hospital experience in light of COVID in the U.S. to drive a potentially faster ramp and maybe a normal product launch? Thanks so much.

Yes, thanks, Danielle. I think that we brought on some great resources. Vince is leading U.S. commercialization. We've now brought on Jim Komsa, who is VP of U.S. Sales, and Marketing. And I think the goal going forward is to try to find the best model to get the greatest coverage at the at the lowest cost. We have the resources to go direct throughout the entire country. But that may not be the ultimate strategy, because we know that the unit volume, the surgical volume is often highest in metropolitan centers. And we can absolutely focus in these areas while using distribution elsewhere to help supplement that. And we've been working with some great partners under the FDA emergencies, authorization for COVID-19 in the United States. And they may be in the mix, and so we'll see. But that being said, the opportunity to penetrate this market is rapidly we believe is very strong, provided that we have a successful study and we have the compelling both clinical and health economics data and make that happen

Thank you.

Thanks very much.

At this time, I'd like to turn it back to management for any additional or closing remarks.

Well, thank you, everyone, for joining today's call. If you have any additional questions, please reach out to Amy at a avogel@cytosorbents.com and we'll try to reply to your questions where possible. Thanks very much.

Thank you. That concludes our conference for today. I'd like to thank everyone for their participation. And have a great evening. Thanks.