CytoSorbents (NASDAQ:CTSO) reported positive operating cash flow for the third quarter of 2026 after excluding restructuring payments, meeting a goal management had set for the second half of the year. The medical technology company also reported higher revenue and product gross margins as it prepares a new U.S. regulatory submission for its DrugSorb-ATR device.
Operating cash flow was approximately $43,000 on the adjusted basis, compared with a burn of $200,000 in the second quarter and $2.7 million a year earlier, Chief Financial Officer Pete Mariani said on the company’s November 12 earnings call. Including restructuring payments, total cash burn was approximately $200,000 for the quarter.
Chief Executive Officer Phillip Chan said the result reflected manufacturing and sourcing improvements, tighter cost controls, a leaner organization and better working capital management. The company aims to remain at or near operating cash flow breakeven while investing selectively in growth, though Mariani cautioned that results will fluctuate with the timing of orders, collections and other working capital items.
Margins Improve as Losses Narrow
Third-quarter revenue rose 3% year over year to $9.7 million and increased 1% from the second quarter. Distributor and strategic partner sales grew 18% from a year earlier.
Product gross margin reached 75%, up from 73% in the second quarter and 70% a year earlier. Mariani attributed the improvement to production efficiencies and sourcing changes and said the company is targeting product gross margins consistently in the mid-70% range.
Operating expenses fell 11% year over year to $8.5 million, including $250,000 in restructuring charges. The operating loss narrowed to $1.2 million from $2.9 million, while the adjusted EBITDA loss declined to approximately $284,000 from $2 million. Net loss improved to $1.8 million, or $0.58 per share, from $3.2 million, or $1.01 per share.
CytoSorbents ended the quarter with $5.7 million in cash, cash equivalents and restricted cash. Mariani said the company was working to satisfy its remaining Nasdaq listing requirement and restructure its debt by year-end.
Rebuilding Sales Coverage in Germany
Chan said distributor and strategic partner sales and direct international sales outside Germany accounted for 76% of third-quarter sales. Direct international sales outside Germany rose 4% year over year, while sales in Germany, which represented the remaining 24%, fell approximately 20% to 21%.
Chan attributed the German decline principally to reduced sales staffing and territory coverage during restructuring. The company has added two German sales representatives, expects to add another in December and plans two more by early 2027, he said.
CytoSorbents also named Alex Tiefenbacher senior vice president of direct sales. His initial focus will include rebuilding German sales momentum and strengthening execution across the international direct sales organization, Chan said.
DrugSorb-ATR Submissions Planned for 2027
CytoSorbents plans to submit a new De Novo application to the U.S. Food and Drug Administration in early 2027 for DrugSorb-ATR to remove the blood thinner ticagrelor, marketed as Brilinta, during urgent cardiac surgery. The timing depends on completing necessary work and regulatory interactions, Chan said. A separate submission for direct oral anticoagulants, including Eliquis and Xarelto, is expected in 2027.
DrugSorb-ATR is not cleared or approved in the United States or Canada. Chan said the company is working with the FDA to finalize an animal study protocol for the ticagrelor submission.
The planned application will include an independent patient-matched analysis of 587 urgent bypass surgery patients that reported a 37% relative reduction in severe bleeding with intraoperative CytoSorb use, Chan said. He said the analysis would supplement previous trial, safety and other evidence.
During the question-and-answer session, Chief Medical Officer Makis Deliargyris said the company was working with an external partner on the animal study. Finalizing the experimental design and completing FDA discussions are taking most of the time, he said; once those steps are complete, he does not expect execution of the study to cause a major delay.
Chan said the statutory FDA review period is 150 days and that DrugSorb-ATR’s Breakthrough Device designation qualifies it for priority review. He added that the company would have to see whether the review could be accelerated.
Seeking Options for HemoDefend-BGA
CytoSorbents is also exploring non-dilutive funding, partnerships, licensing and other strategic alternatives for HemoDefend-BGA, a filtration technology designed to remove anti-A and anti-B antibodies from plasma and platelet products, Chan said. The aim is to unlock value without substantial investment from core operations.
The program has received approximately $16 million in prior non-dilutive U.S. government funding, and the company received FDA feedback on its anticipated clinical development pathway in July, according to Chan.
About Cytosorbents (NASDAQ:CTSO)
CytoSorbents Corporation is a medical device and healthcare company that develops blood purification technologies designed to remove harmful substances from the bloodstream. Its products use proprietary, porous polymer adsorbent materials that can bind and remove cytokines, inflammatory mediators, drugs, and other molecules during extracorporeal blood treatment. The company’s principal product is CytoSorb, an extracorporeal cytokine adsorber used in critical care and cardiac surgery applications.
