Cerus Corporation (Nasdaq: CERS) today announced financial
results for the third quarter ended September 30, 2020.
Recent developments and
highlights include:
- Q3 2020 Total Revenue of $29.2 million - driven by significant
year-over-year platelet kit sales growth in the U.S. as well as
plasma and platelet kit sales from the EMEA region. Total revenue
was composed of (in millions, except %):
Three Months Ended
September 30,
Change
2020
2019
$
%
Product Revenue
$
23.6
$
18.0
$
5.6
31.0
%
Government Contract Revenue
5.6
4.8
0.8
15.7
%
Total Revenue
$
29.2
$
22.8
$
6.3
27.8
%
- New technology add-on payment (NTAP) application submitted to
the Centers for Medicare and Medicaid Services for pathogen-reduced
cryoprecipitated fibrinogen complex (PR-Cryo)
- First two modules (Clinical data package and Safety and Quality
data package) submitted for CE Mark for INTERCEPT red blood
cells
- Entered into a five-year contract with the U.S. Food and Drug
Administration (FDA) for the development of next generation
compounds to optimize pathogen reduction treatment of whole blood
to reduce the risk of transfusion transmitted infections
- Presented 17 abstracts at the AABB 2020 Virtual Meeting
highlighting the clinical and operational benefits of the INTERCEPT
Blood System for platelets
- Narrowing full year product revenue guidance to a range of $89
million to $91 million given the adverse effects of the COVID-19
pandemic on the U.S. and EMEA blood supply
- Cash, cash equivalents, and short-term investments of $135.1
million at September 30, 2020
“We are pleased to report another record quarter with U.S.
platelet kit sales fueling top line growth as blood centers and
hospitals continue to embrace the INTERCEPT Blood System to comply
with the FDA guidance on bacterial safety,” said William ‘Obi’
Greenman, Cerus’ president and chief executive officer. “While
COVID-19 has successfully underscored the global importance of
pathogen reduction for pandemic preparedness, the potential for
additional disruptions to the blood supply this fall and winter
leads us to narrow our 2020 guidance range due to recent sharp
rises in new COVID cases in certain regions, including Europe. We
remain confident in our longer term growth opportunities,
especially in the U.S. and with an anticipated continued increase
in INTERCEPT adoption even beyond the March 2021 FDA compliance
deadline.”
Revenue Product revenue during the third quarter of 2020
was $23.6 million, compared to $18.0 million during the same period
in 2019, an increase of 31%. Revenue growth in the quarter
benefited from robust year-over-year platelet kit sales in the
U.S., in addition to strong plasma kit demand in our EMEA region.
Year-to-date product revenue totaled $63.7 million, an increase of
19% compared to the same period in 2019.
Government contract revenue from the Company’s Biomedical
Advanced Research and Development Authority (BARDA) agreement was
$5.6 million during the third quarter of 2020, compared to $4.8
million during the same period in 2019, as a result of increasing
INTERCEPT red blood cell clinical and development activities.
Year-to-date government contract revenue totaled $16.9 million,
compared to $13.6 million during the first three quarters of 2019.
The total potential value of the current BARDA agreement is $214
million with $61 million recognized as revenue to date. The Company
has not yet recognized any revenue to date from the recently
awarded whole-blood pathogen reduction FDA contract.
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 partially 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
third quarter of 2020 were 54% compared to 58% in the prior year
period. Gross margins during the quarter were negatively impacted
by an $870,000 non-routine period charge tied to certain
inventoried components that failed to meet the Company’s quality
standards. This non-routine period charge negatively impacted Q3
2020 gross margins by 3.7 percentage points. Gross margins during
the first nine months of 2020 were 55% and consistent with those
reported in the same period the prior year.
Operating Expenses Total operating expenses for the third
quarter of 2020 were $32.2 million and essentially flat compared
with the same period during the prior year. Year to date, operating
expenses totaled $95.7 million compared to $93.0 million for the
first nine months of 2019.
Selling, general, and administrative (SG&A) expenses for the
third quarter of 2020 totaled $16.3 million, compared to $16.1
million for the third quarter of 2019. Year-to-date SG&A
expenses totaled $48.3 million compared to $49.0 million for the
first nine months of 2019.
Research and development (R&D) expenses for the third
quarter of 2020 were $15.9 million, compared to $16.1 million for
the third quarter of 2019. Year-to-date R&D expenses totaled
$47.3 million compared to $43.9 million for the first nine months
of 2019 with the increase primarily tied to costs related to the
red blood cell program as well as increased costs tied to product
enhancements and expanded label claims for INTERCEPT-treated
platelets.
Net Loss Net loss for the third quarter of 2020 was $14.1
million, or $0.08 per diluted share, compared to a net loss of
$18.0 million, or $0.13 per diluted share, for the third quarter of
2019. Year-to-date net loss was $45.5 million, or $0.28 per diluted
share, compared to $54.3 million, or $0.39 per diluted share, in
the first nine months of 2019.
Cash, Cash Equivalents and Investments At September 30,
2020, the Company had cash, cash equivalents and short-term
investments of $135.1 million, compared to $85.7 million at
December 31, 2019.
At September 30, 2020, the Company had approximately $39.5
million in outstanding term loan debt, compared to $39.4 million in
outstanding term loan debt at December 31, 2019.
2020 Product Revenue Guidance The Company is narrowing
its previously stated product revenue guidance range. The Company
expects 2020 product revenue to be in the range of $89 million to
$91 million, compared to our previous guidance range of $89 million
to $93 million.
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 listen to the live webcast and view the
presentation slides, 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 7249794. The replay will be available
approximately three hours after the call through November 12,
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, including
Cerus’ reasons for narrowing its 2020 annual product revenue
guidance; Cerus’ belief in its longer term growth opportunities,
including its expectation of continued increase in INTERCEPT
adoption beyond the March 2021 FDA compliance deadline; 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 the
ultimate duration and severity 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 such as the current and potential additional disruptions
to the U.S. and EMEA blood supply resulting from the evolving
effects of the COVID-19 pandemic; 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) that Cerus may be unable to obtain U.S. marketing or
CE Mark approvals, or any other regulatory approvals, of the
INTERCEPT red blood cell system in a timely manner or at all, (f)
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 cryoprecipitated
fibrinogen complex, which will require additional regulatory
approvals, (g) that Cerus’ premarket approval supplement (PMA-S)
for pathogen-reduced cryoprecipitated fibrinogen complex may not be
accepted or approved in a timely manner or at all, (h) 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’ PMA-S for pathogen-reduced cryoprecipitated
fibrinogen complex, in a timely manner or at all, and (i) 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 evolving effects of the COVID-19
pandemic, such that the anticipated activities that Cerus expects
to conduct with the funds available from BARDA may be further
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’ Quarterly Report on Form 10-Q for the quarter ended June 30,
2020, filed with the SEC on August 4, 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.
Supplemental Tables
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020 vs. 2019
2020 vs. 2019
Platelet Kit Growth
U.S.
89%
57%
Rest of World
-2%
-7%
Worldwide
27%
13%
Change in Calculated Number of
Treatable Platelet Doses*
U.S.
80%
47%
Rest of World
1%
-2%
Worldwide
23%
12%
* Dose treated calculation based on the
number of kits sold and the product configuration (single, double,
and triple dose kits)
CERUS CORPORATION
REVENUE BY REGION
(in thousands, except
percentages)
Three Months Ended
Nine Months Ended
September 30,
Change
September 30,
Change
2020
2019
$
%
2020
2019
$
%
Europe, Middle East and Africa
$
14,527
$
12,806
$
1,721
13
%
$
41,210
$
38,207
$
3,003
8
%
North America
8,465
4,792
3,673
77
%
20,942
14,501
6,441
44
%
Other
615
421
194
46
%
1,569
1,024
545
53
%
Total product revenue
$
23,607
$
18,019
$
5,588
31
%
$
63,721
$
53,732
$
9,989
19
%
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED STATEMENTS OF OPERATIONS
(in thousands, except per
share information)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Product revenue
$
23,607
$
18,019
$
63,721
$
53,732
Cost of product revenue
10,953
7,583
28,978
24,126
Gross profit on product revenue
12,654
10,436
34,743
29,606
Government contract revenue
5,584
4,827
16,938
13,554
Operating expenses:
Research and development
15,921
16,081
47,349
43,938
Selling, general and administrative
16,299
16,140
48,324
49,041
Total operating expenses
32,220
32,221
95,673
92,979
Loss from operations
(13,982
)
(16,958
)
(43,992
)
(49,819
)
Total non-operating expense, net
(89
)
(949
)
(1,292
)
(4,321
)
Loss before income taxes
(14,071
)
(17,907
)
(45,284
)
(54,140
)
Provision for income taxes
68
60
192
181
Net loss
$
(14,139
)
$
(17,967
)
$
(45,476
)
$
(54,321
)
Net loss per share:
Basic and diluted
$
(0.08
)
$
(0.13
)
$
(0.28
)
$
(0.39
)
Weighted average shares used for
calculating net loss per share:
Basic and diluted
166,572
140,908
162,800
138,779
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED BALANCE SHEETS
(in thousands)
September 30,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
28,950
$
34,986
Short-term investments
106,174
50,732
Accounts receivable
16,236
16,882
Inventories
19,460
19,490
Prepaid and other current assets
6,479
6,018
Total current assets
177,299
128,108
Non-current assets:
Property and equipment, net
14,261
14,898
Goodwill and intangible assets, net
1,316
1,448
Operating lease right-of-use assets
13,470
14,122
Restricted cash and other assets
7,008
6,959
Total assets
$
213,354
$
165,535
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
38,789
$
43,136
Debt – current
4,982
5,017
Operating lease liabilities – current
1,857
1,613
Deferred product revenue – current
561
570
Total current liabilities
46,189
50,336
Non-current liabilities:
Debt – non-current
39,545
39,414
Operating lease liabilities –
non-current
17,263
18,406
Other non-current liabilities
1,122
327
Total liabilities
104,119
108,483
Stockholders' equity:
109,235
57,052
Total liabilities and stockholders'
equity
$
213,354
$
165,535
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029006148/en/
Tim Lee – Investor Relations Director Cerus Corporation
925-288-6137
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