Barely a week ago shares of Cytosorbents Corporation (CTSO) looked to be in the midst of collapse after an earnings report indicated that the company was still working at a methodical pace to advance CytoSorb onto the European market - a pace, as we've seen, that the more impatient investors do not feel is quick enough.
On the other hand, many believe that, for a company its size, Cytosorbents has made steady, if not remarkable progress in bringing attention to the company and its blood purification technology since receiving a European marketing approval just over a year ago. It's those investors that likely took advantage of last week's price drop that saw shares slip to seven cents again for a short period of time during intra-day trading on the 16th.
Even for those who missed the most dramatic moments of the price dip, CTSO continued trading for under a dime for the remainder of the week, still a good level to add for those that believe this company still holds all the potential that it had when shares ran to three times their current levels last year after the approval announcement. Those opportune buyers are also likely a good part of the reason why shares quickly rebounded this week and are again trading at nearly thirteen cents, right back to the lower end of the trading range from before the drop.
Although the revenue stream has not materialized as quickly as the impatient investors how likely bailed out when volume was over three million shares for a day last week, Cytosorbents is trucking along for a company its size and a technology that may be so good that doctors have to see it to believe it - and given that the European regulators were convinced to approve CytoSorb even before the final trial results were in, there's a strong case to be made that the believers are out there.
Since the approval, the company has moved into a slow launch phase in Germany, with the rest of Europe also in sights once the launch starts to gain traction. Comments from company officials last week indicate that the first phase of that plan is underway while preparations are also being made to complete the necessary measures to bring Cytosorbents through approval in other markets, such as the United States.
While moving forward with the commercial launch, Cytosorbents has made progress on other fronts, too.
The HemoDefend blood purification technology could help the company land a partner and lead to revenue while CytoSorb continues its roll-out, and the US Army has also jumped on board to support the company with the awarding of a grant late last year.
As those events unfold and pay dividends, 2012 could easily turn into another milestone year for CytoSorbents. The quick rebound from last week's drop is a good indicator that there is a solid foundation of patient investors that believe the same and are willing to stick this one out.
With an approved product intended to launch into a lucrative market, the risk/reward is there for investors of Cytosorbents. Because severe sepsis and indications of high cytokines have been so hard to effectively treat for decades - or forever, for that matter - the company will face some challenges of convincing the medical community that it works. The evidence is there, however, that believers are being methodically born, and that is how momentum is started.
Not only is Cytosorbents building momentum, but the company is also doing so while conserving resources as much as possible, also a solid consideration for shareholders. A quick-to-market launch that would flood the market with a sales force would burn through cash quicker than the Mets throw players on the Disabled List. Doing so before the infrastructure and conviction of the medical community were in place could be a futile move due to the immediate stock dilution that would be necessary to carry out such a scheme.
Every once in a while CTSO investors need to be reminded that this is an exercise in patience.
On numerous occassions before that patience has already been rewarded with spikes into the twenties, thirties and forties.
Should CytoSorb reach its full market potential, then spikes much higher than those are possible.
For now, investors should be satisfied with the foundations being built with Cytosorbents - because a business plan that does not put the most consideration into the foundation will often fail.
Granted, in this day and age of day and swing trades, it could get pretty monotonous watching this stock day after day move along at a snail's pace, but history shows that when this one moves, it moves quick.
Still worth watching and potentially adding into that speculative portfolio, but as always - ya gotta exercise patience with this one.
Disclosure: Long CTSO.
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