Cerus Corporation (NASDAQ:CERS) today announced financial
results for the third quarter ended September 30, 2017.
Recent developments include:
- Announced national German reimbursement
for pathogen-inactivated platelets starting January 1, 2018.
Germany is the largest platelet market in Europe with approximately
575,000 units manufactured each year.
- Entered into a new supply agreement for
the INTERCEPT Blood System for platelets with Centro de Transfusión
de la Comunidad (CTCM), one of the largest blood banks in
Spain.
- Entered into new Italian distribution
agreement for INTERCEPT with Kedrion, a global manufacturer and
distributor of plasma derivatives, headquartered in Italy.
- Announced first Biologics License
Application (BLA) approval for U.S. blood center customer.
“I am encouraged by the commercial progress we are making as an
organization. The highlight of the third quarter was clearly the
rapid deployment of illuminators by the Établissement Français du
Sang (EFS), the French National Blood Service,” said William ‘Obi’
Greenman, Cerus’ president and chief executive officer. “With
Illuminators now deployed at all French regional blood centers, it
gives us greater conviction on our ability to potentially drive
revenue growth in the coming quarters. Coupled with the recent
national German reimbursement for pathogen-inactivated platelets,
we believe we are gaining significant momentum in Europe’s two
largest markets for platelets. In addition, with the continued
market adoption of INTERCEPT in the U.S., we believe that we are
well positioned to grow the business globally. We are also
tightening our 2017 product revenue guidance to $41 million to $43
million compared to our previous guidance range of $40 million to
$46 million.”
Product Revenue
Product revenue for the third quarter of 2017 was $10.8 million,
up 6% compared to $10.2 million recognized during the same period
in 2016. The increase in reported product revenue for the quarter
was driven primarily by a 12% increase in worldwide demand for
platelet kits and an increase in illuminator sales, which were
partially offset by a decline in plasma kit sales.
Product revenue for the first nine months of 2017 was $27.3
million, up 1% compared to the first nine months of 2016 of $27.1
million. In addition to an increase in illuminator sales,
year-to-date demand for platelet kits was up 15%. These increases
were offset by declines in plasma kit sales.
Gross Margins
Gross margins on product revenue for the third quarter of 2017
were 50%, compared to 46% for the third quarter of 2016. Gross
margins for the first nine months of 2017 were 51%, compared to 46%
for the first nine months of 2016. Gross margins in the quarter
benefitted from the increased demand for INTERCEPT platelet
products which generate higher gross margins than plasma products,
and favorable Euro foreign exchange rates quarter-over-quarter and
year-over-year.
Operating Expenses
Total operating expenses for the third quarter of 2017 were
$20.1 million, compared to $19.2 million for the third quarter of
2016. Total operating expenses for the first nine months of 2017
were $66.0 million, compared to $59.0 million for the first nine
months of 2016. Selling, general and administrative expenses were
flat in the third quarter compared to the comparable period in the
prior year. Selling, general, and administrative expenses increased
for nine months ended September 30, 2017, over the comparable
period in 2016, primarily driven by increased commercial activity
in the U.S. Research and development expenses increased in both
periods primarily due to clinical development activities of our
INTERCEPT red blood cell system, and in particular, activities
related to our BARDA contract.
Operating and Net Loss
Operating losses during the third quarter of 2017 were $12.4
million, compared to $14.3 million for the third quarter of 2016,
and $46.7 million compared to $46.3 million for the nine months
ended September 30, 2017 and September 30, 2016, respectively.
Net loss for the third quarter of 2017 was $13.4 million, or
$0.12 per diluted share, compared to a net loss of $14.4 million,
or $0.14 per diluted share, for the third quarter of 2016. Net loss
for the first nine months of 2017 was $49.1 million, or $0.46 per
diluted share, compared to a net loss of $49.4 million, or $0.49
per diluted share, for the same period of 2016.
Net loss for the nine months ended September 30, 2017 was
positively impacted by the gain of approximately $3.5 million, due
to the sale of the Company’s marketable equity investment in Aduro
Biotech, Inc (“Aduro”). This gain was offset by non-cash income tax
expense of $3.9 million recorded in the nine months ended September
30, 2017, due to the sale of the Company’s shares of Aduro.
Cash, Cash Equivalents and Investments
At September 30, 2017, the Company had cash, cash equivalents
and short-term investments of $59.6 million compared to $71.6
million at December 31, 2016.
QUARTERLY CONFERENCE CALL
The Company will host a conference call and webcast at 4:15 p.m.
Eastern time today to discuss its 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 82994688. The replay will be
available approximately three hours after the call through November
16, 2017.
ABOUT CERUS
Cerus Corporation is a biomedical products company focused in
the field of blood transfusion safety. The INTERCEPT Blood System
is designed to reduce the risk of transfusion-transmitted
infections by inactivating a broad range of pathogens such as
viruses, bacteria and parasites that may be present in donated
blood. The nucleic acid targeting mechanism of action of the
INTERCEPT treatment is designed to inactivate established
transfusion threats, such as hepatitis B and C, HIV, West Nile
virus and bacteria, as well as emerging pathogens such as
chikungunya, malaria and dengue. Cerus currently markets and sells
the INTERCEPT Blood System for both platelets and plasma 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. See http://www.cerus.com for information about
Cerus.
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
concerning Cerus’ 2017 annual product revenue guidance; Cerus’
ability to drive revenue growth in future periods and to grow its
business globally; Cerus’ belief as to its commercial momentum in
Europe; 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
adjusted revenue guidance for 2017, (b) grow sales in its European
Markets and/or realize expected revenue contribution resulting from
its expanded supply agreement with EFS or from its other European
market agreements, and/or (c) realize meaningful 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; 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 commercialize the INTERCEPT Blood System in the
United States without infringing on the intellectual property
rights of others; 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
and (b) related to Cerus’ ability to expand the label claims and
product configurations for the INTERCEPT platelet and plasma
systems in the United States, which will require additional
regulatory approvals; 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 sells its products; Cerus’
reliance on third parties to market, sell, distribute and maintain
its products; Cerus’ ability to maintain an effective manufacturing
supply chain, including the ability of its manufacturers to comply
with extensive FDA and foreign regulatory agency
requirements; 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 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 June 30,
2017, filed with the SEC on August 4,
2017. Cerus disclaims any obligation or undertaking to
update or revise any forward-looking statements contained in this
press release.
CERUS CORPORATIONCONDENSED
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS(in
thousands, except per share information)
Three Months Ended Nine Months Ended
September 30, September 30, 2017
2016 2017
2016 Product revenue $ 10,797 $ 10,175 $
27,328 $ 27,058 Cost of product revenue 5,348
5,451 13,402 14,690 Gross profit
on product revenue 5,449 4,724
13,926 12,368 Government contracts revenue
2,285 261 5,380
261 Operating expenses: Research and development 7,886 7,033
25,927 22,507 Selling, general and administrative 12,180 12,161
39,907 36,314 Amortization of intangible assets 50
50 151 151 Total
operating expenses 20,116 19,244
65,985 58,972 Loss from operations
(12,382 ) (14,259 ) (46,679 ) (46,343 )
Non-operating (expense) income, net (986 ) (533 )
1,541 (1,683 ) Loss before income taxes
(13,368 ) (14,792 ) (45,138 ) (48,026 ) Provision (benefit) for
income taxes 50 (416 ) 3,961
1,379 Net loss $ (13,418 ) $ (14,376 ) $ (49,099 ) $
(49,405 ) Net loss per share: Basic $ (0.12 ) $ (0.14 ) $
(0.46 ) $ (0.49 ) Diluted $ (0.12 ) $ (0.14 ) $ (0.46 ) $ (0.49 )
Weighted average shares outstanding used for calculating net
loss per share: Basic 109,846 102,769 106,159 101,273 Diluted
109,846 102,769 106,159 101,273
CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED
BALANCE SHEETS(in thousands)
September 30, December 31, 2017
2016 ASSETS Current assets: Cash and cash equivalents
$ 16,985 $ 22,560 Short-term investments and marketable equity
securities 42,645 49,068 Accounts receivable 10,476 6,868
Inventories 14,250 12,531 Other current assets 4,078
3,078 Total current assets 88,434 94,105 Non-current assets:
Property and equipment, net 2,342 2,985 Goodwill and intangible
assets, net 1,903 2,054 Restricted cash and other assets
4,407 4,332 Total assets $ 97,086 $ 103,476
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable and accrued liabilities $ 23,182 $ 19,805 Debt -
current - 6,934 Deferred product revenue - current 686
149 Total current liabilities 23,868 26,888 Non-current
liabilities: Debt - non-current 29,780 12,441 Manufacturing and
development obligations - non-current 5,623 4,770 Other non-current
liabilities 632 1,590 Total liabilities 59,903
45,689 Stockholders' equity 37,183 57,787
Total liabilities and stockholders' equity $ 97,086 $ 103,476
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version on businesswire.com: http://www.businesswire.com/news/home/20171102006539/en/
Cerus CorporationTim Lee, 925-288-6137Investor Relations
Director
Cerus (NASDAQ:CERS)
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