Cerus Corporation (Nasdaq: CERS) today announced financial
results for the first quarter ended March 31, 2020.
Recent developments and highlights include:
- Total first quarter 2020 revenue of $24.6 million
- Quarterly product revenue of $18.6 million, a 6% increase
compared to the prior year quarter
- Global demand for INTERCEPT kits grew during the first quarter
with the calculated number of treatable platelet doses up 14%
compared to the same period in 2019
- Government contract revenue of $6.0 million
- Reaffirming 2020 full year product revenue guidance range of
$89 million to $93 million representing an approximately 20% to 25%
increase over 2019 reported product revenue.
- Strengthened balance sheet with a $63.3 million public offering
of common stock. At March 31, 2020, the Company had cash, cash
equivalents and short-term investments of $133.1 million.
- Announced strategic organizational changes to align teams
around key commercial growth and product portfolio pipeline
development targets.
- Formed a collaborative research group with the aim of
optimizing the characteristics and dosing of convalescent plasma as
a potential therapy for COVID-19 patients.
- Further strengthened the Company’s collaboration with the
Biomedical Advanced Research and Development Authority (BARDA) with
an incremental $14 million available under the contract.
“First quarter product revenue of $18.6 million exceeded our
internal expectations despite the tumultuous macro environment
created by the global COVID-19 pandemic. The emergence of
SARS-CoV-2 has highlighted the need for comprehensive preparedness
planning for healthcare systems and the corresponding obligation to
safeguard the blood supply chain. The INTERCEPT Blood System has
played a critical role for many blood centers by reducing the risk
of transfusion transmitted infections,” said William ‘Obi’
Greenman, Cerus’ president and chief executive officer. “In the
face of this crisis, I am proud of the actions taken by the Cerus
employees designed to make sure that the blood centers and
hospitals have access to INTERCEPT Blood System, even in the
regions hardest hit by the pandemic.”
“It is unclear as to the extent and duration that the COVID-19
impact will have on the global transfusion medicine industry and on
healthcare in general, but given the critical need for blood and
blood components, we are cautiously optimistic about the health of
our business and our ability to further our mission to make
INTERCEPT the standard of care,” continued Greenman.
Revenue
Product revenue during the first quarter of 2020 was $18.6
million, compared to $17.5 million during the same period in 2019.
Revenue growth during the quarter benefited from increased demand
for INTERCEPT platelet kit sales in the U.S., offset partially by
the year-over-year product mix shift in France and a decrease in
kit sales in the Middle East due to the timing of distributor
orders.
Government contract revenue from the Company’s BARDA agreement
was $6.0 million during the first quarter of 2020, compared to $4.5
million during the same period in 2019, as a result of increasing
INTERCEPT red blood cell development activities. With the recently
announced amendment, the total potential value of the current BARDA
agreement is now $214 million with $50 million recognized as
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 first quarter of
2020 were 55%, compared to 52% for the first quarter of 2019. Gross
margins during the quarter benefited from continued economies of
scale and resulting lower per unit costs, driven by increased
manufacturing production to meet existing and expected future
growth in demand for INTERCEPT.
Operating Expenses
Total operating expenses for the first quarter 2020 were $31.7
million compared to $29.6 million for the same period the prior
year.
Selling, general, and administrative (SG&A) expenses for the
first quarter of 2020 totaled $15.9 million, compared to $16.2
million for the first quarter of 2019. The year-over-year decline
was primarily due to lower marketing and travel related expenses,
both driven in part by the COVID-19 pandemic.
Research and development (R&D) expenses for the first
quarter of 2020 were $15.8 million, compared to $13.4 million for
the first quarter of 2019. The increase in year-over-year R&D
expenses were primarily due to increased costs associated with
initiatives for expanded INTERCEPT platelet label claims and costs
for our red blood cell program, namely activities under our BARDA
agreement.
Net Loss
Net loss for the first quarter of 2020 was $16.5 million, or
$0.10 per diluted share, compared to a net loss of $18.8 million,
or $0.14 per diluted share, for the first quarter of 2019.
Cash, Cash Equivalents and Investments
At March 31, 2020, the Company had cash, cash equivalents and
short-term investments of $133.1 million, compared to $85.7 million
at December 31, 2019.
At March 31, 2020, the Company had approximately $39.5 million
in outstanding term loan debt compared to $39.4 million at December
31, 2019.
2020 Product Revenue Guidance
The Company expects 2020 product revenue to be in the range of
$89 million to $93 million, unchanged from the prior guidance
originally provided on January 13, 2020. 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 and webcast at 4:30 P.M.
EDT this afternoon, during which management will discuss the
Company’s financial results and provide a general business overview
and outlook. To access 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 8484403. The replay will be available
approximately three hours after the call through May 19, 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 and follow us on LinkedIn.
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; the
therapeutic potential of convalescent plasma for COVID-19 patients;
the total potential value of Cerus’ agreement with BARDA; actions
taken by the Cerus’ employees designed to make sure that the blood
centers and hospitals have access to INTERCEPT Blood System; Cerus’
cautious optimism about the health of its business and its ability
to further its mission to make INTERCEPT the standard of care; 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 the scale,
duration and evolving effects of the COVID-19 pandemic and
resulting global economic and financial disruptions, and the
current and potential future negative impacts to Cerus’ business
operations and financial results; 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; risks
related to the uncertain and time-consuming development and
regulatory process, including the risks (a) that the INTERCEPT
Blood System does not have approved label claims for SARS-CoV-2
inactivation and may not successfully inactivate SARS-CoV-2; (b)
that convalescent plasma therapies are unproven in treating, and
may be ineffective in treating, patients with COVID-19, (c) that
Cerus will continue to experience delays in successfully
initiating, conducting or completing clinical trials as a result of
the COVID-19 pandemic, (d) 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, (e) 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, (f) 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, (g) 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
(h) that 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 that may adversely
affect the availability of funding under Cerus’ BARDA agreement
and/or BARDA’s exercise of any potential subsequent option periods,
including in connection with the general economic environment and
uncertainty associated with the COVID-19 pandemic, 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 continued or more
severe weakening in economic conditions resulting from the evolving
effects of the COVID-19 pandemic or otherwise 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 risks that (a)
Cerus’ supply chain could be negative impacted as a result of the
evolving effects of the COVID-19 pandemic, (b) Cerus’ manufacturers
could be unable to comply with extensive FDA and foreign regulatory
agency requirements, and (c) Cerus may be unable 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’ Annual Report on Form 10-K for the year ended December 31,
2019, filed with the SEC on February 21, 2020. In addition, to the
extent that the COVID-19 pandemic adversely affects Cerus’ business
and financial results, it may also have the effect of heightening
many of the other risks and uncertainties described above. Cerus
disclaims any obligation or undertaking to update or revise any
forward-looking statements contained in this press release.
CERUS CORPORATION
REVENUE BY REGION
(in thousands, except
percentages)
Three Months Ended
March 31,
Change
2020
2019
$
%
Europe, Middle East and Africa
$
12,220
$
12,653
$
(433
)
-3
%
North America
6,077
4,551
1,526
34
%
Other
314
300
14
5
%
Total product revenue
$
18,611
$
17,504
$
1,107
6
%
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED STATEMENTS OF OPERATIONS
(in thousands, except per
share information)
Three Months Ended
March 31,
2020
2019
Product revenue
$
18,611
$
17,504
Cost of product revenue
8,320
8,432
Gross profit on product revenue
10,291
9,072
Government contract revenue
6,030
4,461
Operating expenses:
Research and development
15,810
13,440
Selling, general and administrative
15,913
16,161
Total operating expenses
31,723
29,601
Loss from operations
(15,402
)
(16,068
)
Non-operating expense, net:
(1,007
)
(2,664
)
Loss before income taxes
(16,409
)
(18,732
)
Provision for income taxes
57
60
Net loss
$
(16,466
)
$
(18,792
)
Net loss per share:
Basic and diluted
$
(0.10
)
$
(0.14
)
Weighted average shares used for
calculating net loss per share:
Basic and diluted
157,405
137,108
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED BALANCE SHEETS
(in thousands)
March 31,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
33,679
$
34,986
Short-term investments
99,426
50,732
Accounts receivable
18,165
16,882
Inventories
21,684
19,490
Prepaid and other current assets
5,365
6,018
Total current assets
178,319
128,108
Non-current assets:
Property and equipment, net
14,654
14,898
Goodwill and intangible assets, net
1,398
1,448
Operating lease right-of-use assets
14,080
14,122
Restricted cash and other assets
6,912
6,959
Total assets
$
215,363
$
165,535
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
37,383
$
43,136
Debt – current
4,813
5,017
Operating lease liabilities – current
1,751
1,613
Deferred product revenue – current
1,142
570
Total current liabilities
45,089
50,336
Non-current liabilities:
Debt – non-current
39,458
39,414
Operating lease liabilities –
non-current
18,005
18,406
Other non-current liabilities
403
327
Total liabilities
102,955
108,483
Stockholders' equity
112,408
57,052
Total liabilities and stockholders'
equity
$
215,363
$
165,535
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200505005911/en/
Tim Lee – Investor Relations Director Cerus Corporation
925-288-6137
Cerus (NASDAQ:CERS)
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