Cerus Corporation (Nasdaq: CERS) today announced financial
results for the first quarter ended March 31, 2021.
Recent developments and highlights include:
- First quarter 2021 total revenue of $29.6 million, reflecting a
20% increase over the prior year period. Total revenue was composed
of (in millions, except %):
Three Months Ended
March 31,
2021
2020
Change
Product revenue
$
23.4
$
18.6
26
%
Government contract revenue
6.2
6.0
3
%
Total revenue
$
29.6
$
24.6
20
%
- Increasing 2021 annual product revenue guidance range to $110
million to $114 million (from prior guidance of $106 million to
$110 million), representing an approximately 20% to 24% increase
over full year 2020 reported product revenue.
- Multiple blood center partners have completed validation
efforts and are now manufacturing INTERCEPT Fibrinogen Complex,
with inventory ready for release to hospital customers.
- The Centers for Medicare and Medicaid Services (CMS) published
the Fiscal Year 2022 Hospital Inpatient Prospective Payment System
(IPPS) Proposed Rule, which recommended that Intercept Fibrinogen
Complex be eligible for incremental payment via a New Technology
Add-On Payment (NTAP) when performed in the hospital inpatient
setting.
- Third module (CMC Data) submitted for CE Mark for INTERCEPT red
blood cells. Fourth and final module (Manufacturing) submission
anticipated by end of Q2:21.
- Cash, cash equivalents, and short-term investments of $132
million at March 31, 2021.
“On the heels of our strong 2020 performance, product revenue in
the first quarter of $23.4 million exceeded our expectations,” said
William ‘Obi’ Greenman, Cerus’ president and chief executive
officer. “As our U.S. customers continue to prepare for compliance
with FDA’s guidance around the bacterial safety of platelets,
demand for the INTERCEPT Blood System continues to build. The
momentum we have in the U.S. market in particular gives us
confidence that 2021 will be another year of strong growth for
Cerus and we are increasing our full year product revenue guidance
accordingly.”
Revenue
Product revenue during the first quarter of 2021 was $23.4
million, compared to $18.6 million during the same period in 2020.
Product revenue growth during the quarter benefited from increased
demand for INTERCEPT platelet products in the U.S., led by adoption
from the top five blood center networks in the country.
First quarter government contract revenue was $6.2 million,
compared to $6.0 million during the same period in 2020. First
quarter government contract revenue is primarily comprised of
funding from the Biomedical Advanced Research and Development
Authority (BARDA) agreement for the development of the INTERCEPT
Blood System for Red Cells. The total potential value of the
current BARDA agreement is $214 million, with $72.7 million
cumulatively invoiced to BARDA through March 31, 2021.
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
2021 were 52.5% compared to 55.3% for the first quarter of 2020.
The decrease in gross margin was tied to increased sales to our
U.S. customers, who typically use our single dose platelet kits,
which carry a less favorable gross margin contribution compared to
our double dose kits, which are used more broadly outside of the
U.S.
Operating Expenses
Total operating expenses for the first quarter of 2021 were
$34.9 million compared to $31.7 million for the same period of the
prior year.
Selling, general, and administrative (SG&A) expenses for the
first quarter of 2021 totaled $19.2 million, compared to $15.9
million for the first quarter of 2020. The year-over-year increase
in SG&A expenses was tied to incremental expenses associated
with the launch of our INTERCEPT Fibrinogen Complex product as well
as increased non-cash stock-based compensation expense.
Research and development (R&D) expenses for the first
quarter of 2021 were $15.7 million, compared to $15.8 million for
the first quarter of 2020. The Company continues to expect to incur
costs associated with the development and testing of a new
generation of INTERCEPT devices and disposable kits as well as the
clinical development and pursuit of regulatory approval for the red
blood cell system, among others.
Net Loss
Net loss for the first quarter of 2021 was $17.5 million, or
$0.10 per basic and diluted share, compared to a net loss of $16.5
million, or $0.10 per basic and diluted share, for the first
quarter of 2020. Non-cash stock-based compensation was higher by
approximately $1.6 million during the first quarter of 2021
compared to the prior year period, contributing to the slightly
higher net loss.
Balance Sheet
At March 31, 2021, the Company had cash, cash equivalents and
short-term investments of $131.7 million, compared to $133.6
million at December 31, 2020.
Despite continued increased investments in inventory to meet
customer demand, cash used for operations during Q1 2021 was
narrower at $18.0 million compared to $19.8 million used during the
prior year period. Offsetting this lower use were $15 million in
term loan draws and $1.4 million in incremental draws from its
revolving line of credit. At March 31, 2021, the Company had
approximately $54.6 million in outstanding term loan debt and $9.9
million of borrowings under its revolving loan credit agreement,
compared to $39.6 million in outstanding term loan debt and $8.5
million of borrowings under its revolving loan credit agreement at
December 31, 2020.
Increasing 2021 Product Revenue Guidance
The Company now expects 2021 product revenue to be in the range
of $110 million to $114 million, as compared to the prior range of
$106 million to $110 million. The revised guidance range represents
approximately 20% to 24% growth compared to 2020 reported product
revenue.
Quarterly Conference Call
The Company will host a conference call 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, 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 Cerus’ website, or by dialing
(855) 859-2056 (U.S.) or (404) 537-3406 (international) and
entering conference ID number 8668508. The replay will be available
approximately three hours after the call through May 18, 2021.
ABOUT CERUS
Cerus Corporation is dedicated solely to safeguarding the
world’s blood supply and aims to become the preeminent global blood
products company. Headquartered in Concord, California, the company
develops and supplies vital technologies and pathogen-protected
blood components to blood centers, hospitals, and ultimately
patients who rely on safe blood. The INTERCEPT Blood System for
platelets and plasma is available globally and remains the only
pathogen reduction system with both CE mark and FDA approval for
these two blood components. The INTERCEPT red blood cell system is
under regulatory review in Europe, and in late-stage clinical
development in the US. Also in the US, the INTERCEPT Blood System
for Cryoprecipitation is approved for production of Pathogen
Reduced Cryoprecipitated Fibrinogen Complex, a therapeutic product
for the treatment and control of bleeding, including massive
hemorrhage, associated with fibrinogen deficiency. 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’ updated 2021 annual product revenue guidance,
including Cerus’ expectations that 2021 will be year of strong
growth; the anticipated submission of the fourth CE Mark module for
INTERCEPT red blood cells and the anticipated timing thereof;
potential regulatory approval for the red blood cell system;
building demand for the INTERCEPT Blood System; the potential value
of the current BARDA agreement; and other statements that are not
historical fact. 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 2021 annual product revenue guidance, (b)
effectively launch and commercialize the INTERCEPT Blood System for
Cryoprecipitation, (c) 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, (d) 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 (e) realize any revenue
contribution from its pipeline product candidates, whether due to
Cerus’ inability to obtain regulatory approval of its pipeline
programs, 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 with the INTERCEPT Blood System for
Cryoprecipitation and in the United States generally, 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 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, including INTERCEPT
Fibrinogen Complex for the treatment and control of bleeding, 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 that (a) Cerus may be
unable to comply with the FDA’s post-approval requirements for the
INTERCEPT Blood System, including by successfully completing
required post-approval studies, which could result in a loss of
U.S. marketing approval(s) for the INTERCEPT Blood System, (b)
manufacturing site Biologics License Applications necessary for
Cerus to begin distributing the INTERCEPT Blood System for
Cryoprecipitation may not be obtained in a timely manner or at all,
(c) Cerus may be unable to obtain CE Mark approval, or any other
regulatory approvals, of the INTERCEPT red blood cell system in a
timely manner or at all, and (d) that Cerus may otherwise be unable
to obtain the requisite regulatory approvals to advance its
pipeline programs and bring them to market in a timely manner or at
all; 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 negatively 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 the INTERCEPT Blood
System for Cryoprecipitation; 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
under the heading “Risk Factors” in Cerus’ Annual Report on Form
10-K, filed with the SEC on February 25, 2021. 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
March 31,
2021 vs. 2020
Platelet Kit Growth
U.S.
51%
Rest of World
-7%
Worldwide
17%
Change in Calculated Number of
Treatable Platelet Doses*
U.S.
53%
Rest of World
-9%
Worldwide
13%
* 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
March 31,
Change
2021
2020
$
%
Europe, Middle East and Africa
$
13,277
$
12,220
$
1,057
9
%
North America
9,664
6,077
3,587
59
%
Other
438
314
124
39
%
Total product revenue
$
23,379
$
18,611
$
4,768
26
%
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED STATEMENTS OF OPERATIONS
(in thousands, except per
share information)
Three Months Ended
March 31,
2021
2020
Product revenue
$
23,379
$
18,611
Cost of product revenue
11,095
8,320
Gross profit on product revenue
12,284
10,291
Government contract revenue
6,187
6,030
Operating expenses:
Research and development
15,748
15,810
Selling, general and administrative
19,170
15,913
Total operating expenses
34,918
31,723
Loss from operations
(16,447
)
(15,402
)
Total non-operating expense, net
(912
)
(1,007
)
Loss before income taxes
(17,359
)
(16,409
)
Provision for income taxes
98
57
Net loss
$
(17,457
)
$
(16,466
)
Net loss per share:
Basic and diluted
$
(0.10
)
$
(0.10
)
Weighted average shares used for
calculating net loss per share:
Basic and diluted
168,824
157,405
CERUS CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
March 31,
December 31,
2021
2020*
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
57,607
$
36,594
Short-term investments
74,118
97,000
Accounts receivable
18,253
21,166
Inventories
24,285
23,254
Prepaid and other current assets
7,009
5,417
Total current assets
181,272
183,431
Non-current assets:
Property and equipment, net
13,283
13,867
Goodwill
1,316
1,316
Operating lease right-of-use assets
12,801
13,122
Restricted cash and other assets
11,910
9,679
Total assets
$
220,582
$
221,415
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
42,284
$
48,966
Debt – current
9,938
8,516
Operating lease liabilities – current
1,486
1,915
Deferred product revenue – current
1,056
577
Total current liabilities
54,764
59,974
Non-current liabilities:
Debt – non-current
54,616
39,588
Operating lease liabilities –
non-current
16,697
16,873
Other non-current liabilities
1,870
1,174
Total liabilities
127,947
117,609
Stockholders' equity
92,635
103,806
Total liabilities and stockholders'
equity
$
220,582
$
221,415
* Derived from the audited consolidated
financial statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504005944/en/
Matt Notarianni – Senior Director, Investor Relations Cerus
Corporation 925-288-6137
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