Good afternoon and welcome to the CytoSorbents Second Quarter 2023 Financial and Operating Results Conference Call. Please be advised that the call will be recorded at the company's request. At this time, I'd like to turn the call over to our moderator, Taylor Devlin. Please go ahead, Taylor.

Thank you and good afternoon. Welcome to CytoSorbents Second Quarter 2023 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, Interim 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, Senior Vice President of Business Development; Dr. Irina Kulinets, Senior Vice President of Regulatory. 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 those discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the SEC. Any projections as to the company's future performance represented by management include estimates today as of August 1, 2023, 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 operating and financial highlights for the second quarter of 2023 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. And now it's my pleasure to turn the call over to Dr. Phil Chan.

Thank you very much, Taylor, and good afternoon. Today, I have the pleasure of being able to update you on our most recent operational progress. We recently announced that the pivotal STAR-T trial completed enrollment ahead of internal projections with strong performance amongst our 30 clinical centers in the United States and Canada. This followed the second independent data and safety monitoring board evaluation in June on unblinded safety data on 80 patients, where the DSMB recommended the completion of the trial without modification. In the second quarter of 2023, we achieved total revenue of $9.4 million, including product sales of $8.1 million versus $7.3 million in product sales a year ago, representing the third consecutive quarter of sequential product sales growth. Product gross margins grew 700 basis points to 74% from 67% a year ago. And we have now exceeded 212,000 cumulative human treatments delivered across 75 countries worldwide. We announced the appointment of Alex D'Amico as the new Chief Financial Officer to start next week, August 7, 2023. Alex brings 20 years of broad finance, SEC reporting, M&A, fundraising, and accounting experience to the company. And our outgoing Chief Financial Officer, Kathy Bloch, will stay on as a consultant and help to manage the transition. We also introduced Michael Bator as the new Chairman of the Board at the Annual Meeting in June. Michael has been a Board Director since 2015 and currently serves as a founder and partner of Court's Advisory Group, the Capital Markets Investment Bank. Michael was also the former Managing Director of Healthcare Research at Jennison Associates, a very large family of funds with more than $175 billion in assets under management. Last but not least, we announced a theranostic collaboration with Humedics. Humedics is the manufacturer of the EU-approved LiMAx liver function test that is used in liver patients to evaluate the functioning of the liver. We announced a 1-year joint marketing agreement, where their sales force and ours in respective territories will cross-market CytoSorb as a superior extracorporeal liver support technology and LiMAx as a unique liver function test for the treatment of liver disease. As we've discussed previously, we are focused on 3 major objectives for 2023. The first is opening the U.S. and Canadian markets with DrugSorb-ATR. The second is a return to sales growth of CytoSorb. And the third is to reduce our cash burn and to have tight control over expenses. In terms of opening the U.S. and Canadian markets with DrugSorb-ATR, I would like to note again that DrugSorb-ATR and STAR-T, which stands for the safe and timely Antithrombotic Removal of Ticagrelor trial, remain the core focus of our clinical efforts and the vehicle expected to open the U.S. and Canadian markets. This leverages 2 FDA breakthrough device designations for DrugSorb-ATR to remove blood-thinning medications in patients undergoing cardiac surgery. One of these breakthrough device designations is for the removal of Brilinta, commonly known as Ticagrelor. The second one is for the direct oral anticoagulants, of which Eliquis and Xarelto are the leading ones in that category. In addition, following the independent Data Safety Monitoring Board review of the first 80 patients' safety data in the STAR-T trial and the recommendation to continue the trial without modifications, we are pleased to announce that STAR-T enrollment has now completed. This helps to validate the decision to forgo the interim analysis at 80 patients that we discussed on the last earnings call. We expect the trial to complete imminently following the last 30-day patient follow-up. We believe this sets us up for near-term milestones that are rapidly approaching, which is why I have this picture of a mirror that says objects in the mirror are closer than they appear. First, we expect to get the database lock in the next several months, followed by statistical data analysis. This should hopefully lead to top-line data targeted by year-end, and if positive, regulatory submission to the U.S. FDA and Health Canada to follow. We also expect to present data at a major cardiovascular conference next year. And pending visibility, we plan to begin executing on our precommercialization strategy and begin building a direct sales and marketing infrastructure in 2024. One thing that we really haven't discussed extensively in the past are the dynamics that may actually help expand Ticagrelor market share in the United States and Canada, but particularly in the United States. The more Ticagrelor use means potentially more DrugSorb-ATR use should we get approved. As we've discussed in the past, patients with acute coronary syndrome who come into the emergency room with symptoms of having a heart attack often receive dual antiplatelet therapy. This consists of aspirin plus one of the P2Y12 platelet inhibitors, such as Brilinta or Ticagrelor; Plavix or clopidogrel; or Effient, also known as prasugrel. Brilinta has superior antithrombotic efficacy to Plavix, but Plavix is generic and cheap, and Brilinta today is still a branded drug. However, this is expected to change as Brilinta will go generic in 2024 to become just generic Ticagrelor with multiple competitors with tentatively approved abbreviated NDAs that have already been approved by the FDA. The price of Ticagrelor is expected to fall, potentially enabling market share gains against clopidogrel and the more expensive branded Effient. A recent publication in the well-respected journal, JAMA Network Open, highlights U.S. prescribing physician preference for Ticagrelor versus other antiplatelet agents following acute coronary syndrome and percutaneous coronary intervention, in other words, for example, stent placement in more than 62,000 patients that were studied between 2010 to 2019. And what you can see in the graph in the lower right is that during that period of 2010 to 2019, Ticagrelor has steadily gained in prescribing preference for physicians following acute coronary syndrome and PCI to the point where, at least in 2019, 60.4% of patients who were intervened upon in the cath lab received Ticagrelor or Brilinta, while the rate of Plavix prescription has been declining to only about 30% in 2019. Prasugrel is a distant third at 10% of prescriptions, leading the authors to conclude that Ticagrelor has emerged as the most commonly prescribed P2Y12 platelet inhibitor. In addition, the approval of DrugSorb-ATR would make Ticagrelor the only one of these antiplatelet drugs reversible during CABG surgery, a potentially powerful marketing advantage to take market share. One can imagine given that 5% to 10% of patients are not eligible for stent placement and wind up in surgery that being able to reverse the drug used in dual antiplatelet therapy would be an extremely valuable marketing advantage that we could confer to Ticagrelor. Ultimately, this sets us up for an initial market in the United States for removal of Brilinta in cardiac surgery patients of approximately $250 million. Adding Canada increases the total addressable market to roughly $300 million to $350 million in additional share against Plavix and Effient. The number of patients on Brilinta or Ticagrelor in the future could rise to give us an opportunity of about a $500 million total addressable market. As we told you in the past, once STAR-T is completed, we're looking to resume the STAR-D trial, which is looking at the removal of the direct oral anticoagulants, the Factor Xa inhibitors, Eliquis and Xarelto. If we can add on that indication, this could double our total addressable market to $1 billion. If we can now open it up from not just cardiac surgery but to all kinds of surgeries and potentially being able to be used in the emergency room, we estimate that this could, again, double the total addressable market here in the United States. So a second major goal for the company is a return to sales growth for CytoSorb. Again, this has been the third consecutive quarter of sequential product sales growth with 10% quarterly product sales growth year-over-year in the second quarter. We're seeing continued gradual recovery of hospital markets post-COVID with continued strong customer engagement and enthusiastic response to our new data and marketing strategies. Our product gross margins rose 700 basis points to 74%, reflecting volume production from our new Princeton manufacturing facility, a trend consistent with prior guidance of returning to 75% to 80% profit quarterly base year. The following messages: one that we need to be able to treat the right patient with the right timing and the right dose. We also need to hit hard and hit early. This incorporates our evolving understanding of how best to treat patients with CytoSorb. In particular, when CytoSorb is used early and aggressively and during documented hyperinflamed patients, we have seen outstanding results. This includes the recently published CTC therapy registry result in the Journal Critical Care, detailing the clinical outcomes in 100 critically ill COVID-19 patients with severe inflammation and refractory lung failure using CytoSorb with ECMO to achieve enhanced lung rest. Overall, 90-day survival was high at 74%. In the post hoc analysis, patients treated before the median treatment time of 87 hours had even higher survival at 82% compared to 66% survival in patients treated after 87 hours. Those treated in the early group had significantly shorter median duration times on mechanical ventilation, ECMO, and ICU stay. Overall, our results compare favorably to the approximately 50% survival reported by ELSO or the Extracorporeal Life Support organization and their COVID-19 registry survival data, where they looked at ECMO use alone in this population. Our data supports the strategy of early combined usage mode to treat severe ARDS or acute respiratory distress syndrome, and refractory lung failure, exemplifying our 'hit early, hit hard' treatment philosophy. To this end, our current company-sponsored trials, such as the PROCYSS refractory septic shock randomized controlled trial and the International COSMOS Critical Illness Registry, incorporate our evolving understanding of how to achieve better and more consistent results with CytoSorb. We've also been working to drive earlier usage of CytoSorb in the appropriate patients through a number of different ways, including, for example, pursuing a theranostic strategy, meaning using a diagnostic test to guide patient selection and timing of CytoSorb therapy as we're doing in our collaboration with Humedics in the field of liver disease, or selling a simple-to-use multilocal hemoperfusion machine as we're doing with the PureADJUST platform from Nikkiso that can run CytoSorb without needing to wait for patients to develop kidney failure and go on dialysis. So with that, I'd like to turn it over to Kathy to now cover financial highlights for the quarter. Kathy?

Thank you, Phil, and greetings to everyone on today's call. Let's start with our first slide on second-quarter revenues. For the quarter ended June 30, 2023, total revenue, which includes product sales and grant revenue, was $9.4 million compared to total revenue of $8.5 million in the second quarter of 2022, which is an increase of approximately 11%. Product sales for the second quarter of 2023 were $8.1 million compared to approximately $7.3 million for the second quarter of the prior year. Our second-quarter 2023 product gross margins were 74% compared to 67% for the second quarter of 2022 and 68% in the first quarter of 2023. This predicted improvement in gross margins is expected to continue throughout the year as we fully complete all the start-up activities associated with our new manufacturing plant and continue to ramp up production. Our second-quarter grant revenue was $1.3 million compared to $1.2 million in the same quarter of the prior year. For the six months ended June 30, 2023, total revenue was $18.9 million, an approximately 10% increase over the $17.2 million in total revenue for the same period of 2022. First half 2023 product sales were $16 million compared with $15.3 million in the same period of 2022. Grant revenue was $2.9 million in the first half of 2023 compared to $1.9 million in the prior year. This next chart depicts our trailing 12-month product sales broken down into COVID-19-related and core non-COVID-19-related product sales. Our core product sales of $30.1 million in the trailing 12-month period ended June 30, 2023, are just slightly behind core product sales of $30.7 million in the trailing 12-month period ended June 30, 2022. This was due to difficult market conditions, including a shortage of healthcare workers, fewer hospital beds, fewer surgical procedures, as well as other factors that we have discussed in prior earnings calls. As Phil mentioned, we are continuing to see improvements in the marketplace, including our sales team's ability to better access healthcare workers in the hospital and a return to face-to-face discussions with physicians in the market. And this slide shows our quarterly product sales broken down again by COVID-19-related and non-COVID-19-related core product sales. As you can see, over the past 5 quarters, there have been no COVID-19-related sales. The most recent 3 quarters have demonstrated sequential consecutive quarter-over-quarter growth in product sales, with $8.1 million in quarterly sales in Q2 2023 representing the highest quarter of core non-COVID-19-related sales since the COVID-19 pandemic was contained. And I'd like to wrap up my remarks today with some comments about our cash position. As of June 30, 2023, we had approximately $14.8 million in cash and cash equivalents, which includes $1.7 million of restricted cash. This includes $5 million of loan proceeds received from our debt facility in December 2022. One of our key objectives for 2023 has been to reduce our cash burn and maintain tight control over expenditures, and I'd like to elaborate on our progress on this. Over the past year, we took strong actions to reduce our quarterly cash burn such that our quarterly cash burn over the first half of 2023 averaged approximately $4.5 million, which is down significantly from the average quarterly cash burn in the first half of 2022, which was approximately $11 million. We continue to maintain tight control over cash guided by a strict 2023 operating budget, prioritizing spend on key programs and pipeline products. Our spending is fully aligned with our strategic priorities, particularly the completion of our STAR-T clinical trial designed to obtain U.S. FDA marketing approval. So that will conclude my remarks for today. At this time, I would like to turn the call back to Phil for concluding comments. Phil?

Yes. So thank you very much, Kathy. I apologize for that. Today, CytoSorb drives our growth. CytoSorb forms the foundation of our company with an EU-approved product that is sold around the world that has generated approximately $200 million in sales since launching more than 200,000 human treatments around the world. It is a high-margin razor-blade business model with industry top-tier 80-plus percent blended product gross margins. It has had strong validation by customers, partners, and government agencies, with current sales supporting near breakeven, less clinical trial costs, which we believe helps to derisk the company and the investment opportunity. We believe CytoSorb represents the fuel for strong future growth targeting the $20 billion to $30 billion worldwide total addressable market of major unmet medical needs in critical care, cardiac surgery, as well as liver and kidney disease. We believe this gives CytoSorbents the potential upside of a biotechnology company with a lower-risk profile of a high-margin medical device company with sales. But soon, we believe that the story could change with CytoSorb and DrugSorb-ATR representing dual growth engines for the company. We are raising to the finish of STAR-T, where we are rapidly nearing the completion of the study expected imminently with top-line data expected later this year. For STAR-T to be successful and DrugSorb-ATR to achieve U.S. FDA and Health Canada regulatory approval, we intend to commercialize DrugSorb-ATR in both the U.S. and Canada, a potentially major second engine of growth working in tandem with CytoSorb to drive sales. DrugSorb may open an expected initial U.S. and Canadian total addressable market of $300 million to $350 million for Brilinta alone, which could expand should Brilinta go generic as Ticagrelor, where we expect significant penetration given that major unmet medical need indicated by our FDA breakthrough device designation. If successful, this could transform CytoSorbents into a dual U.S. and international growth company that current and prospective institutional and retail shareholders are excited about and have been waiting for and that can create potentially significant value. With that, the formal remarks, operator, please open the Q&A session.

And our first question will come from Joshua Jennings of TD Cowen.

Congratulations on completing the enrollment for STAR-T. And Kathy, congratulations on your retirement. I was hoping to get a recap, and I apologize for this basic question, but Phil, could you remind us about the differences between the DrugSorb-ATR and CytoSorbents devices? The reason I’m asking is related to the study regarding CytoSorb’s absorption during emergency cardiac operations in patients at high risk of bleeding. I believe CytoSorb has EU approval or CE Mark approval for use in removing antithrombotic agents during cardiothoracic surgery. With that data out there, I’m trying to gauge its implications for the prospects of success for STAR-T. I just want to be reminded of the differences between those two devices.

Yes. Thanks very much, Josh. So the DrugSorb uses an equivalent polymer technology to CytoSorb. But DrugSorb-ATR is more of a drug removal system with blood lines and other things that allow us to connect to the heart-lung machine. So from a technical perspective, what CytoSorb can do, DrugSorb can do. So if that is helpful.

Absolutely. Considering the interim analysis and any adjustments to the study protocol, there is a clear positive signal on the safety aspect. However, are there any clinical signals you would highlight from real-world experience with CytoSorb in Europe or from clinical data, including the study I mentioned earlier, regarding the efficacy for STAR-T that investors should take into account as they evaluate the potential success of the STAR-T study?

I can turn that over to Makis. Makis, would you like to handle that? And I can add color.

Thank you, Phil, for the question. As mentioned previously, we announced in our last earnings call that we would skip the interim analysis due to the rapid enrollment. Completing the study so quickly did not provide enough time for the interim analysis to be conducted. As a result, neither we nor the Data Safety Monitoring Board have gained any additional insights into the efficacy. Currently, the data is fully blinded while it is being collected by the sites. It will go through validation and cleaning before the database lock occurs. As you've heard, after that, we will conduct the final analysis and release the top-line results of the study. Until then, we only have the DSMB's review of the safety data from the trial, which we discussed today. We had two reviews, both of which were unremarkable, with no findings or recommendations for changes in the trial. Therefore, the data remains blinded at this stage, but we do have positive feedback regarding the study's safety.

Sorry, I'm categorizing the safety reviews as interim analysis. As for the plans for STAR-T and possibly starting that study for Xarelto and Eliquis removal, we need to see success in STAR-T before we consider or initiate the STAR-T trial.

Let me respond to that. The STAR-T trial indicates a larger addressable population compared to the Ticagrelor population. This insight comes not only from our literature review but also from direct feedback from the site. We believe the potential for Xarelto and Eliquis is even greater than that for Brilinta, making this an opportunity worth pursuing. As for STAR-D, we are now well-prepared with the necessary resources to carry out the study. Our internal clinical team, alongside our vendors and partners, is set to execute the study, and particularly, the site network from STAR-T has proven to be highly effective. They excelled in STAR-T, and we are confident that once we resume STAR-D, it will be executed efficiently and we will quickly enroll participants. The results from STAR-T will be beneficial, especially concerning the device's safety, since the application is quite similar. The STAR-D trial aims for the same use of the device during cardiac surgeries. There are many parallels between the two trials we've discussed, and crucially, we now have the right partners and sites to swiftly conduct the STAR-D trial.

And our next question will come from an analyst at B. Riley.

Maybe I can start with a high-level question first, and then I have a follow-up. So first, during your market research, Phil, can you remind us of the trend of using antidotes for anticoagulants such as AndexXa and Praxbind in the U.S. and EU?

Sure. And actually, Makis, this is an ideal question for you.

Sure. Thank you for the question. The use of these reversal agents that are approved in the marketplace now, specifically Andexanet, that is indicated for the reversal of the drugs we referenced before, the direct oral anticoagulants like Xarelto and Eliquis, are approved in the presence of severe life-threatening bleeding. Those drugs are used where someone has suffered a life-threatening bleed. The usual measures are not successful in stopping the bleeding, and then these drugs are applied. The population that we are addressing is actually much larger. These are patients at risk for bleeding. Imagine these are patients who are coming in with a heart attack; they have their cardio angiogram, and they realize they need surgery, but because they receive these drugs, they are waiting for the drug to wash out at risk of having a second heart attack, for example, but they're not bleeding. In that population, as of now, there are no available solutions to help them have a timely operation, a safe and timely operation. These patients now are waiting in the hospitals for a long time. The drugs we're referencing would only be indicated if there were bleeding. In addition, some case reports indicate that these drugs interfere with the necessary anticoagulation when people are put on a heart-lung machine, which poses a complicating factor that may put the operation at risk. And therefore, these agents are not widely used in this setting and are certainly not approved for that application.

I'm curious about the U.S. market when you have third-party distributors. Can you clarify how you split the responsibility? Will you handle marketing and education while they manage face-to-face interactions with the surgeon?

Vince, do you want to take that?

Sure, Phil. I'll take that. Thanks. In the U.S., we plan to use a blended approach of direct sales and distributors. We've developed some strong distributors during the COVID period when we were selling CytoSorbents or CytoSorbents under EUA. We will use those distributors in those select regions since they have very close relationships with cardiac surgeons. The rest of the U.S., we intend to focus on direct sales, specifically with a sales force of about 19 people.

Our next question will come from Christopher Campbell of JEF.

This is Chris on for Mike. I was wondering if you could elaborate a little more on the trends you're seeing in the core German market and how that's trended so far through the third quarter.

Yes, thank you very much, Chris. Christian, would you like to share your thoughts on that? We can only discuss our third quarter results to a certain extent. However, Christian, please go ahead.

Yes. Thank you, and thank you for the question. As Chris said, we cannot obviously comment on the third quarter. However, as you've seen already in the first and second quarter, there's a significant improvement compared to last year. This is primarily because we have much better access to the hospital, but also I think we'll be carried in the next half year by a number of publications we have received over the first half. All this together has to balance. There is still a critical or complicated situation in the hospitals. There are still ICU capacities blocked because there's not enough staff, and there are still fewer cardiovascular interventions compared to before the pandemic. The charts shown by Kathy indicate that we are already much higher with the core business compared to the business before the pandemic, considering core business during the pandemic. I think it's a stable improvement. The second half, I believe, will show further stabilization.

Our next question will come from Jim with Alliance Global Partners.

This is Lora Real calling in for Jim Loy. With enrollment now complete for the STAR-T trial and top-line data set to be announced by the end of the year, what type of data are you specifically anticipating in order to submit your regulatory submissions to both the FDA and Health Canada?

Thank you, Lora. Makis and Irina, would you like to take that?

Yes, I can take that. We consider that at this point, we don't know the results of the clinical study, STAR-T. However, it is in the mid-control study, and data is blinded until the final analysis is completed. This data would be sufficient to support regulatory filing in the United States and Canada. This data might also be used in some other territories. However, at this point, the United States and Canada regulatory submissions would be reliant.

And maybe, Makis, you can talk about the primary endpoint and some of the secondary endpoints as well.

Sure. Thanks for the question. Like with any regulatory review, the agency will have to perform a benefit-risk analysis for this proposed new intervention. The STAR-T is designed to provide all that information. First of all, the safety, and we already talked about this on this call; we had some interim reviews and we'll have a final review as well. Safety will certainly be supported by the data for STAR-T for the necessary review by the agency. For efficacy, we are looking at 2 specific things in STAR-T. First of all, we want to establish the mechanism of action. We're looking for the drug removal of the drug to actually be validated in vivo. We're going to measure the levels of the drug before surgery and after surgery. That's the key secondary endpoint of the trial to show that the drug is effectively removed from circulation compared to the control arm when the device is not used. The second piece of efficacy, which is actually the primary endpoint of the trial, is a composite endpoint looking at various events that cause bleeding or perioperative bleeding. We are measuring things like transfusions and the amount of blood that comes out of the chest after the operation. This will give us a picture of the overall bleeding rates between the intervention and the control arm. I believe the overall information from the STAR-T trial will be sufficient for the agency to review in order to come up with the necessary benefit-risk analysis.

Understood. Can you also go over the joint marketing agreement that you mentioned with Humedics and the LIMAX diagnostic tool? What might you expect in terms of increased customer awareness and use for both of the products involved?

Yes. Chris, could you address that question?

Yes. Thank you, Phil. Thank you for the question. As Phil had mentioned, Humedics has a really innovative, noninvasive liver function test. Basically, what it helps physicians do is assess how much liver function a patient may have. Ideally, we hope to leverage this test and, as Phil had mentioned, use it as a diagnostic test to help stratify and identify the right patients who would ultimately be best suited for our treatment. So I would categorize that as maybe a near mid- to later objective of the partnership. But today, we're leveraging the commercial organizations to get in front of key customers for our product, such as hepatologists, hepatic surgeons, and others. I think the real near-term benefit of this partnership could be valuable because it will help introduce us to customers who may not yet be familiar with CytoSorb but could be good buyers of the product. This is just another way for us to accelerate our commercial efforts in the field of liver therapy.

And our next question will come from Sean Lee of H.C. Wainwright.

My first question is about the potential U.S. market for DrugSorb-ATR. You've mentioned a $250 million opportunity. How many cardiac surgeries each year involving patients on Ticagrelor do you think could benefit from DrugSorb-ATR?

Thanks, Sean. Makis, would you like to take that one?

Sure. What Phil demonstrated today is that patients with acute coronary treatment syndrome, which account for over a million admissions in the U.S. each year, require antiplatelet medications. Aspirin is one option, but they also need a P2Y12 inhibitor. The standing of Ticagrelor in that market is steadily improving due to its strong efficacy data, particularly in comparison to Plavix. The number of patients using Ticagrelor has been on the rise in recent years, and we anticipate that this trend will persist with the introduction of generics and, hopefully, the launch of DrugSorb. Out of those 1 million patients, approximately 100,000, or about 10%, will require surgery. These surgeries are performed in hospitals since these patients aren't stable enough to stop the medication and return for surgery without experiencing a risk of bleeding. They remain in the hospital under monitoring. Currently, hospitals are often waiting several days before surgery can be performed. We estimate that around half of the patients from those 100,000 are on Ticagrelor, and this market share may increase in the future. These are the foundations for the total addressable market figure that Phil mentioned earlier regarding this device.

Great. My second question is on your commercial planning in the U.S. and Canada. You mentioned that you expect to start building out a direct sales team starting next year. I was wondering if you would be pursuing an entirely direct sales model or a hybrid model where you have some direct sales surgeons and some distributors? In terms of personnel, what's the size of the sales team that you're looking at?

Yes, Vince, would you like to cover that?

Sure. Thanks, Sean, for the question. We do plan to do a hybrid model, Sean. We have some good distributors from the COVID EUA program that actually specialize in cardiopulmonary bypass equipment. We will combine that with a direct sales force of about 19 people. I believe with the distributors, they have the established relationships. We will obviously leverage their Rolodex to get into those accounts quickly to establish the use of DrugSorb-ATR. In the rest of the country, we will go in with a direct sales force, and that will be roughly about 19 people. Does that answer your question?

I think the other thing to note is that at the price points we're talking about in the United States, we've talked about a number of about $5,000 per cartridge compared to $1,000 for CytoSorb in the European Union. Our product gross margins for DrugSorb-ATR are expected to be well above 90%. With a highly profitable, high-margin disposable device such as DrugSorb-ATR, the payback on sales of that product is very quick. We have a lot of experience in terms of commercialization experience based upon what we've been doing in Europe. We have been in the market for now 11 years with CytoSorb and have a fully operational sales and marketing commercialization team that has sales and marketing folks, clinical support, clinical and medical affairs, application specialists, customer service, etc. We look to replicate that here in the United States and look forward to the opportunity to do that here.

Our next question will come from Tom Kerr of Zacks SCR.

I think most of my questions have been asked. Just a couple of quick ones and some financial ones. You guys don't talk about those programs under development much anymore. Any comment on that? The HemoDefend and the contrast and that sort of stuff, are you still working on those efforts?

Absolutely. The HemoDefend-BGA program has benefitted from more than $15 million in government grant funding, particularly from the Department of Defense. It is a priority for our R&D program outside of the work we're doing on CytoSorb and other key programs, and it is well funded. If you're seeing a lot of press releases we've put out on these technologies, we have funding to bring it to clinical studies and potentially even commercialization. We are active on that. I think we're making outstanding progress. We're looking to address multiple different markets, including military markets, civilian transfusion markets, as well as plasma processing markets with our technology because we believe that universal plasma has a place in each of those verticals. We really look forward to the day when a bag of freeze-dried universal plasma is in every ambulance in the world given that plasma is a life-saving product with lots of beneficial components, such as coagulation factors that are very useful for trauma patients, and are much better at resuscitating patients than what they're using today, which is simple saline. You can imagine how large this opportunity could be worldwide. It's one of the reasons why we're very excited about that program. We don't talk about it much, but be very clear that we are making some nice progress.

Okay. Great. A couple of quick financial questions, though. The burn rate is expected to remain around $4.5 million. You guys stated in the press release that you're funded through 2023, but you have substantially more liquidity than that. Just trying to get that data and figure that out.

Kathy, did you want to address that?

Yes, I'll take that. Thanks, Phil, and thank you for the question. Our cash burn moving forward is estimated to be around $4 million a quarter. That's just what we're expecting as we move out of 2023 and into 2024. Beginning with when we begin to have sales in the U.S. of DrugSorb-ATR, Phil already mentioned that it's a very quick payback. We are targeting average selling prices of around $5,000 versus the $1,000 that we sell CytoSorb for currently. Our gross margins will be very high 90% on those products, so they'll be very profitable. We do have an ATM in place, and we have the ability to borrow additional debt if need be to extend the cash runway.

Okay. I think I understand, but it seems like with that amount of liquidity and a $4 million burn rate, you'd be funded beyond 2023 instead of through 2023. But maybe I'm reading into that too much.

No, you're reading it right. It will be beyond 2023.

Well, if there are no questions, operator, sorry?

I'm sorry, there are no further questions. I'd like to turn the call back to you, Phil, for closing remarks.

Thank you, Tanya. Well, thank you, everyone, for joining the call today, and a special thanks to the analysts who asked some excellent questions. If you do have any other questions, please feel free to reach out to Kathy Bloch this week at [email protected] or me at [email protected], and we'll reply to your questions where possible. We look forward to our next quarterly call. Thank you, everyone, very much. Have a great evening.

Thank you. That concludes our conference for today. I'd like to thank everyone for their participation.