Cerus Corporation (Nasdaq: CERS) today announced financial
results for the second quarter ended June 30, 2019.
Recent developments and highlights include:
- Total second quarter revenue of $22.5 million
- Record quarterly product revenue of $18.2 million, an 18%
increase compared to the prior year quarter
- Government contract revenue of $4.3 million
- Worldwide disposable kit demand increased 23% in the quarter
compared to the prior year quarter
- Raising 2019 full year product revenue guidance to a range of
$72 million to $75 million from $71 million to $74 million given
the strong demand for INTERCEPT
- Cash, cash equivalents, and short-term investments of $96.2
million at June 30, 2019
- Received European CE Mark approval for INTERCEPT plasma with
DEHP-free plastic disposable kits
“We are pleased to report another strong quarter of commercial
execution and record product revenues. Increasing customer adoption
of INTERCEPT Blood Systems continues to be driven by the clinical,
operational, and economic benefits conferred by our pathogen
inactivation technology,” said William ‘Obi’ Greenman, Cerus’
president and chief executive officer. “Robust demand for INTERCEPT
kits was reported across multiple geographies with the greatest
volume increase in the U.S. as blood centers and hospitals
implement pathogen reduction in advance of the expected FDA final
guidance document on bacterial risk control strategies for platelet
collection and transfusion. In the face of increasing demand for
our products from blood centers, we are continuing to invest in
working capital, particularly in inventory.”
“Pathogen-reduced cryoprecipitate continues to be an exciting
pipeline opportunity and a product which could have a meaningful
impact on improving patient outcomes. We now believe that we will
be able to optimize the availability of plasma in order to realize
manufacturing efficiencies for cryoprecipitate production with our
blood center partners, potentially affording us with improved
economics,” continued Greenman.
Revenue
Product revenue during the second quarter of 2019 was $18.2
million, compared to $15.4 million during the same period in 2018.
Revenue growth in the quarter benefited from the higher INTERCEPT
kit demand in the U.S. and select international markets, partially
offset by product mix in France and the strengthening of the U.S.
dollar relative to the Euro compared to prior year exchange rates.
Year-to-date product revenue totaled $35.7 million, an increase of
23% compared to the same period in 2018.
Government contract revenue from the Company’s Biomedical
Advanced Research and Development Authority (BARDA) agreement was
$4.3 million during the second quarter of 2019, compared to $4.0
million during the same period in 2018, as a result of increasing
INTERCEPT red blood cell clinical and development activities.
Year-to-date government contract revenue totaled $8.7 million
compared to $7.5 million in the first half of 2018. The total
potential value of the current BARDA agreement is $201 million with
$34 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 second quarter of
2019 were 55%, compared to 50% for the second quarter of 2018. The
increase in gross margin was tied to economies of scale realized
for our cost of goods sold and additional manufacturing
efficiencies. Gross margins during the first half of 2019 were 54%
compared to 48% reported in the first half of 2018.
Operating Expenses
Total operating expenses for the second quarter of 2019 were
$31.2 million compared to $24.3 million for the same period the
prior year. Year-to-date, operating expenses totaled $60.8 million
compared to $47.4 million for the first half of 2018.
Selling, general, and administrative (SG&A) expenses for the
second quarter of 2019 totaled $16.7 million, compared to $14.4
million for the second quarter of 2018. The year-over-year increase
in SG&A expenses was tied to higher investments in our
manufacturing and supply chain capabilities. Year-to-date SG&A
expenses totaled $32.9 million compared to $28.0 million for the
first half of 2018.
Research and development (R&D) expenses for the second
quarter of 2019 were $14.4 million, compared to $9.9 million for
the second quarter of 2018. The increase in year-over-year R&D
expenses was largely due to additional activities tied to the
development of our INTERCEPT red blood cell system, including BARDA
activities and initiatives aimed at ensuring supply and
compatibility for our platelet and plasma products. Year-to-date
R&D expenses totaled $27.9 million compared to $19.3 million
for the first half of 2018.
Net Loss
Net loss for the second quarter of 2019 was $17.6 million, or
$0.13 per diluted share, compared to a net loss of $13.3 million,
or $0.10 per diluted share, for the second quarter of 2018.
Year-to-date net loss was $36.4 million or $0.26 per diluted share
compared to $27.2 million, or $0.21 per diluted share in the first
half of 2018.
Cash, Cash Equivalents and Investments
At June 30, 2019, the Company had cash, cash equivalents and
short-term investments of $96.2 million, compared to $117.6 million
at December 31, 2018.
At June 30, 2019, the Company had approximately $39.3 million in
outstanding term loan debt and $4.5 million of borrowings under its
revolving loan credit agreement, compared to $29.9 million in
outstanding term loan debt at December 31, 2018.
Revised 2019 Product Revenue Guidance
The Company now expects 2019 product revenue to be in the range
of $72 million to $75 million compared to our previous guidance
range of $71 million to $74 million. The new guidance range
represents 18% to 23% growth compared to 2018 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 2898719. The replay will be available
approximately three hours after the call through August 15,
2019.
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
concerning Cerus’ 2019 annual product revenue guidance and
anticipated increasing customer demand; Cerus’ expectation for the
FDA final guidance document on bacterial risk control strategies
for platelet collection and transfusion; Cerus’ efforts to enhance
supply chain security and ensure availability of INTERCEPT kits;
the prospects for pathogen-reduced cryoprecipitate as a pipeline
opportunity and the potential for pathogen-reduced cryoprecipitate
to have a meaningful impact on improving patient outcomes; the
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 revenue guidance for 2019, (b) grow
sales globally, including in its U.S. and European markets, 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 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 INTERCEPT-treated
extended storage cryoprecipitate from plasma, which require
additional regulatory approvals, (c) that Cerus may be unable to
submit anticipated regulatory submissions, such as the anticipated
premarket approval application supplement for INTERCEPT-treated
extended storage cryoprecipitate from plasma in a timely manner or
at all and even if submitted, such submissions may not be accepted
or approved in a timely manner or 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’
anticipated submission for INTERCEPT-treated extended storage
cryoprecipitate from plasma, in a timely manner or at all, (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, and
(f) that anticipated regulatory guidance documents may not be
issued 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 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; risk 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;
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 March 31, 2019, filed with the SEC on
May 7, 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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Product revenue
$
18,209
$
15,420
$
35,713
$
28,984
Cost of product revenue
8,111
7,720
16,543
15,050
Gross profit on product revenue
10,098
7,700
19,170
13,934
Government contract revenue
4,266
4,047
8,727
7,502
Operating expenses:
Research and development
14,417
9,881
27,857
19,318
Selling, general and administrative
16,740
14,437
32,901
28,044
Total operating expenses
31,157
24,318
60,758
47,362
Loss from operations
(16,793)
(12,571)
(32,861)
(25,926)
Non-operating expense, net
(708)
(652)
(3,372)
(1,128)
Loss before income taxes
(17,501)
(13,223)
(36,233)
(27,054)
Provision for income taxes
61
59
121
113
Net loss
$
(17,562)
$
(13,282)
$
(36,354)
$
(27,167)
Net loss per share:
Basic and diluted
$
(0.13)
$
(0.10)
$
(0.26)
$
(0.21)
Weighted average shares outstanding used
for calculating net loss per share:
Basic and diluted
138,281
131,352
137,698
128,101
CERUS
CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED BALANCE SHEETS
(in thousands)
June 30,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
23,543
$
28,859
Short-term investments
72,659
88,718
Accounts receivable
13,432
8,752
Inventories
17,447
13,539
Other current assets
8,756
7,034
Total current assets
135,837
146,902
Non-current assets:
Property and equipment, net
15,345
8,130
Goodwill and intangible assets, net
1,549
1,650
Operating lease right-of-use assets
14,417
-
Restricted cash and other assets
7,479
6,778
Total assets
$
174,627
$
163,460
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
37,712
$
38,395
Manufacturing and development
obligations
6,198
5,928
Debt – revolving loan
4,496
-
Debt – term loan
-
7,857
Operating lease liabilities – current
1,711
-
Deferred product revenue – current
665
498
Total current liabilities
50,782
52,678
Non-current liabilities:
Debt – non-current
39,327
22,013
Operating lease liabilities –
non-current
18,722
-
Other non-current liabilities
164
4,250
Total liabilities
108,995
78,941
Stockholders' equity
65,632
84,519
Total liabilities and stockholders'
equity
$
174,627
$
163,460
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190801005988/en/
Tim Lee – Investor Relations Director Cerus Corporation
925-288-6137
Cerus (NASDAQ:CERS)
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