Cerus Corporation (Nasdaq: CERS) today announced complete
financial results for the fourth quarter and year ended December
31, 2019.
Recent developments and highlights include:
- Total fourth quarter revenue of $26.5 million.
- Record fourth quarter product revenue of $20.9 million, a 27%
increase compared to the prior year quarter.
- Government contract revenue of $5.6 million.
- Continued increase in worldwide demand for INTERCEPT kits
during the fourth quarter with the calculated number of treatable
platelet doses up 23% during the quarter compared to the same
period in 2018.
- Provided 2020 annual product revenue guidance of $89 million to
$93 million, representing an approximately 20% to 25% increase over
2019 reported product revenue.
- Strengthened balance sheet with an upsized public offering of
common stock in January 2020 raising gross proceeds of $63.3
million.
- Received CE mark approval for pathogen-reduced 5-day thawed
plasma.
- Entered collaboration with the National Trauma Institute to
supply INTERCEPT plasma for the PROpOLIs clinical study, a U.S.
Department of Defense funded clinical trial evaluating use of
INTERCEPT plasma in traumatic burn resuscitation in 94 patients at
5 U.S. sites.
“We exited 2019 on a high note with record quarterly product
revenue and anticipate the momentum that we experienced this past
year will continue into 2020,” said William ‘Obi’ Greenman, Cerus’
president and chief executive officer. “We are looking forward to
another successful year, as we expect many U.S. blood centers and
hospitals to opt for INTERCEPT platelets as a strategy to comply
with the final FDA guidance document on platelet safety. These
institutions are on the clock and have just 13 more months to
become compliant with the FDA Guidance.”
The FDA guidance document on bacterial risk control strategies
for platelets calls for all blood centers and hospitals to be
compliant with new safety requirements by March 31, 2021.
“In addition to our commercial objectives goals for the year, we
are looking forward to important regulatory milestones throughout
2020, led by our expected PMA-supplement submission for
pathogen-reduced cryoprecipitate in the first half of the year,”
continued Greenman.
Revenue
Product revenue during the fourth quarter of 2019 was $20.9
million, compared to $16.5 million during the same period in 2018.
Product revenue growth in the quarter benefited from strong
continued demand for INTERCEPT platelet kits in the U.S. and
platelet and plasma kit demand in EMEA, which were partially offset
by the conversion to the double dose platelet kits in France and a
2% negative impact of foreign currency exchange rates. For the full
year, product revenue totaled $74.6 million, an increase of 23%
compared to the same period in 2018.
As a result of increased INTERCEPT red blood cell clinical and
development activities, government contract revenue from the
Company’s Biomedical Advanced Research and Development Authority
(BARDA) agreement was $5.6 million during the fourth quarter of
2019, compared to $3.7 million during the same period in 2018. Full
year 2019 government contract revenue totaled $19.1 million
compared to $15.1 million in the same period the year prior. The
total potential value of the current BARDA agreement is $201
million, with $44 million cumulatively recognized as government
contract revenue to date.
BARDA is part of the Office of the Assistant Secretary for
Preparedness and Response within the U.S. Department of Health and
Human Services. The development of the INTERCEPT red blood cell
program has been funded in whole or in part with Federal funds from
the Department of Health and Human Services; Office of the
Assistant Secretary for Preparedness and Response; Biomedical
Advanced Research and Development Authority, under Contract No.
HHSO100201600009C.
Gross Margins
Gross margins on product revenue during the fourth quarter of
2019 were 56%, compared to 49% for the fourth quarter of 2018. The
increase in gross margin was tied to economies of scale realized
for our cost of goods sold, favorable platelet product mix, namely
the French conversion to double dose platelet kits and additional
manufacturing efficiencies. Gross margins on product revenue for
the full year 2019 were 55% compared to 48% reported in the same
period the year prior.
Operating Expenses
Total operating expenses for the fourth quarter of 2019 were
$33.6 million compared to $27.3 million for the same period the
prior year. Full year 2019 operating expenses totaled $126.6
million compared to $99.4 million for the full-year 2018.
Selling, general, and administrative (SG&A) expenses for the
fourth quarter of 2019 totaled $17.2 million, compared to $14.8
million for the fourth quarter of 2018. The year-over-year increase
in SG&A expenses was tied to increased non-cash stock
compensation, higher investments in our supply chain capabilities
and focused investments on preparatory activities for our
anticipated pathogen-reduced cryoprecipitate launch. Full-year 2019
SG&A expenses totaled $66.2 million compared to $56.8 million
for the full-year 2018.
Research and development (R&D) expenses for the fourth
quarter of 2019 were $16.4 million, compared to $12.4 million for
the fourth quarter of 2018. The year-over-year increase in R&D
expenses was due in part to product enhancements and initiatives
for expanded label claims, development activities to support our
planned PMA supplement for pathogen-reduced cryoprecipitate, as
well as activities related to the development of our INTERCEPT red
blood cell system. Full-year 2019 R&D expenses totaled $60.4
million compared to $42.6 million for the full-year 2018.
Net Loss
Net loss for the fourth quarter of 2019 was $16.9 million, or
$0.12 per diluted share, compared to a net loss of $16.2 million,
or $0.12 per diluted share, for the fourth quarter of 2018.
Full-year 2019 net loss was $71.2 million or $0.51 per diluted
share compared to $57.6 million, or $0.44 per diluted share for the
same period in 2018.
Cash, Cash Equivalents and Investments
At December 31, 2019, the Company had cash, cash equivalents and
short-term investments of $85.7 million, compared to $117.6 million
at December 31, 2018.
At December 31, 2019, the Company had approximately $39.4
million in outstanding term loan debt and $5.0 million of
borrowings under its revolving loan credit agreement, compared to
$29.9 million in outstanding term loan debt at December 31,
2018.
In January 2020, the Company completed an underwritten public
offering of its common stock for gross proceeds of $63.3 million,
before deducting offering expenses payable by the Company.
2020 Product Revenue Guidance
The Company expects 2020 product revenue to be in the range of
$89 million to $93 million. The guidance range represents
approximately 20% to 25% growth compared to 2019 reported product
revenue.
QUARTERLY CONFERENCE CALL
The Company will host a conference call at 4:30 P.M. ET this
afternoon, during which management will discuss the Company’s
financial results and provide a general business overview and
outlook. To listen to the live webcast, please visit the Investor
Relations page of the Cerus website at http://www.cerus.com/ir.
Alternatively, you may access the live conference call by dialing
(866) 235-9006 (U.S.) or (631) 291-4549 (international).
A replay will be available on the Company’s website, or by
dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and
entering conference ID number 9268122. The replay will be available
approximately three hours after the call through March 5, 2020.
ABOUT CERUS
Cerus Corporation is dedicated solely to safeguarding the
world’s blood supply and aims to become the preeminent global blood
products company. Based in Concord, California, our employees are
dedicated to deploying and supplying vital technologies and
pathogen-protected blood components for blood centers, hospitals
and ultimately patients who rely on safe blood. With the INTERCEPT
Blood System, we are focused on protecting patients by delivering
the full complement of reliable products and expertise for
transfusion medicine. Cerus develops and markets the INTERCEPT
Blood System, and remains the only company in the blood transfusion
space to earn both CE Mark and FDA approval for pathogen reduction
of both platelet and plasma components. Cerus currently markets and
sells the INTERCEPT Blood System in the United States, Europe, the
Commonwealth of Independent States, the Middle East and selected
countries in other regions around the world. The INTERCEPT Red
Blood Cell system is in clinical development. For more information
about Cerus, visit www.cerus.com.
INTERCEPT and the INTERCEPT Blood System are trademarks of Cerus
Corporation.
Forward Looking Statements
Except for the historical statements contained herein, this
press release contains forward-looking statements concerning Cerus’
products, prospects and expected results, including statements
relating to Cerus’ 2020 annual product revenue guidance; Cerus’
expectation that the momentum Cerus experienced in 2019 will
continue into 2020; Cerus’ expectation that many U.S. blood centers
and hospitals will opt for INTERCEPT platelets as a strategy to
comply with the final FDA guidance document on platelet safety;
Cerus’ planned submission to the FDA of a premarket approval
application (PMA) supplement for pathogen-reduced cryoprecipitate
and the anticipated timing thereof; the anticipated launch of
pathogen-reduced cryoprecipitate; the total potential value of
Cerus’ agreement with BARDA; and other statements that are not
historical facts. Actual results could differ materially from these
forward-looking statements as a result of certain factors,
including, without limitation: risks associated with the
commercialization and market acceptance of, and customer demand
for, the INTERCEPT Blood System, including the risks that Cerus may
not (a) meet its 2020 annual product revenue guidance, (b) grow
sales globally, including in its U.S. and European markets, and/or
realize expected revenue contribution resulting from its U.S. and
European market agreements, (c) realize meaningful and/or
increasing revenue contributions from U.S. customers in the near
term or at all, particularly since Cerus cannot guarantee the
volume or timing of commercial purchases, if any, that its U.S.
customers may make under Cerus’ commercial agreements with these
customers, and/or (d) realize any revenue contribution from its
pipeline product candidates, whether due to Cerus’ inability to
obtain regulatory approval of its pipeline product candidates, or
otherwise; risks associated with Cerus’ lack of commercialization
experience in the United States and its ability to develop and
maintain an effective and qualified U.S.-based commercial
organization, as well as the resulting uncertainty of its ability
to achieve market acceptance of and otherwise successfully
commercialize the INTERCEPT Blood System for platelets and plasma
in the United States, including as a result of licensure
requirements that must be satisfied by U.S. customers prior to
their engaging in interstate transport of blood components
processed using the INTERCEPT Blood System; risks related to
Fresenius Kabi’s efforts to assure an uninterrupted supply of
platelet additive solution (PAS); risks related to how any future
PAS supply disruption could affect INTERCEPT’s acceptance in the
marketplace; risks related to how any future PAS supply disruption
might affect current commercial contracts; risks related to Cerus’
ability to demonstrate to the transfusion medicine community and
other health care constituencies that pathogen reduction and the
INTERCEPT Blood System is safe, effective and economical; the
uncertain and time-consuming development and regulatory process,
including the risks (a) that Cerus may be unable to comply with the
FDA’s post-approval requirements for the INTERCEPT platelet and
plasma systems, including by successfully completing required
post-approval studies, which could result in a loss of U.S.
marketing approval for the INTERCEPT platelet and/or plasma
systems, (b) related to Cerus’ ability to expand the label claims
and product configurations for the INTERCEPT platelet and plasma
systems in the United States, including for pathogen-reduced
cryoprecipitate, which will require additional regulatory
approvals, (c) that Cerus may be unable to submit its planned PMA
supplement to the FDA for pathogen-reduced cryoprecipitate in a
timely manner or at all, and even if submitted, such planned PMA
supplement may not be accepted or approved in a timely manner or at
all, (d) that applicable regulatory authorities may disagree with
Cerus‘ interpretations of the data from its clinical studies and/or
may otherwise determine not to approve Cerus’ regulatory
submissions, including Cerus’ planned PMA supplement submission for
pathogen-reduced cryoprecipitate, in a timely manner or at all, and
(e) even if Cerus’ regulatory submissions are approved, Cerus may
not receive label claims for all requested indications or for
indications with the highest unmet need or market acceptance; risks
associated with Cerus’ lack of experience in marketing products
directly to hospitals and expertise complying with regulations
governing finished biologics; risks associated with the uncertain
nature of BARDA’s funding over which Cerus has no control as well
as actions of Congress and governmental agencies which may
adversely affect the availability of funding under Cerus’ BARDA
agreement and/or BARDA’s exercise of any potential subsequent
option periods, such that the anticipated activities that Cerus
expects to conduct with the funds available from BARDA may be
delayed or halted and that Cerus may not otherwise realize the
total potential value under its agreement with BARDA; risks related
to product safety, including the risk that the septic platelet
transfusions may not be avoidable with the INTERCEPT Blood System;
risks related to adverse market and economic conditions, including
continued or more severe adverse fluctuations in foreign exchange
rates and/or weakening economic conditions in the markets where
Cerus currently sells and is anticipated to sell its products;
Cerus’ reliance on third parties to market, sell, distribute and
maintain its products; Cerus’ ability to maintain an effective,
secure manufacturing supply chain, including the ability of its
manufacturers to comply with extensive FDA and foreign regulatory
agency requirements, and Cerus’ ability to maintain its primary kit
manufacturing agreement and its other supply agreements with its
third party suppliers; Cerus’ ability to identify and obtain
additional partners to manufacture pathogen-reduced
cryoprecipitate; risks associated with Cerus’ ability to meet its
debt service obligations and its need for additional funding; the
impact of legislative or regulatory healthcare reforms that may
make it more difficult and costly for Cerus to produce, market and
distribute its products; risks related to future opportunities and
plans, including the uncertainty of Cerus’ future capital
requirements and its future revenues and other financial
performance and results, as well as other risks detailed in Cerus’
filings with the Securities and Exchange Commission, including
Cerus’ Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019, filed with the SEC on October 30, 2019. Cerus
disclaims any obligation or undertaking to update or revise any
forward-looking statements contained in this press release.
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED STATEMENTS OF OPERATIONS
(in thousands, except per
share information)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2019
2018
2019
2018
Product revenue
$
20,917
$
16,525
$
74,649
$
60,908
Cost of product revenue
9,293
8,442
33,419
31,634
Gross profit on product revenue
11,624
8,083
41,230
29,274
Government contract revenue
5,571
3,713
19,125
15,143
Operating expenses:
Research and development
16,438
12,421
60,376
42,564
Selling, general and administrative
17,164
14,833
66,205
56,841
Total operating expenses
33,602
27,254
126,581
99,405
Loss from operations
(16,407
)
(15,458
)
(66,226
)
(54,988
)
Non-operating expense, net
(434
)
(687
)
(4,755
)
(2,347
)
Loss before income taxes
(16,841
)
(16,145
)
(70,981
)
(57,335
)
Provision for income taxes
82
60
263
229
Net loss
$
(16,923
)
$
(16,205
)
$
(71,244
)
$
(57,564
)
Net loss per share:
Basic and diluted
$
(0.12
)
$
(0.12
)
$
(0.51
)
$
(0.44
)
Weighted average shares outstanding used
for calculating net loss per share:
Basic and diluted
142,952
136,006
139,831
131,663
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED BALANCE SHEETS
(in thousands)
December 31,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
34,986
$
28,859
Short-term investments
50,732
88,718
Accounts receivable
16,882
8,752
Inventories
19,490
13,539
Prepaid and other current assets
6,018
7,034
Total current assets
128,108
146,902
Non-current assets:
Property and equipment, net
14,898
8,130
Goodwill and intangible assets, net
1,448
1,650
Operating lease right-of-use assets
14,122
-
Restricted cash and other assets
6,959
6,778
Total assets
$
165,535
$
163,460
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
43,136
$
38,395
Manufacturing and development
obligations
-
5,928
Debt – current
5,017
7,857
Operating lease liabilities – current
1,613
-
Deferred product revenue – current
570
498
Total current liabilities
50,336
52,678
Non-current liabilities:
Debt – non-current
39,414
22,013
Operating lease liabilities –
non-current
18,406
-
Other non-current liabilities
327
4,250
Total liabilities
108,483
78,941
Stockholders' equity
57,052
84,519
Total liabilities and stockholders'
equity
$
165,535
$
163,460
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200220005820/en/
Tim Lee – Investor Relations Director Cerus Corporation
925-288-6137
Cerus (NASDAQ:CERS)
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