Cerus Corporation (Nasdaq: CERS) today announced financial
results for the third quarter ended September 30, 2019.
Recent developments and highlights include:
- FDA issued its final guidance document on strategies to
mitigate the risk of bacterial contamination in transfused platelet
components
- Total third quarter revenue of $22.8 million
- Quarterly product revenue of $18.0 million, a 17% increase
compared to the prior year quarter
- Government contract revenue of $4.8 million
- Worldwide demand for INTERCEPT continued to increase;
calculated number of treatable platelet doses increased nearly 20%
worldwide compared to the prior year quarter
- 2019 product revenue guidance reaffirmed at $72 million to $75
million, up 18-23% over 2018, driven by strong global demand for
INTERCEPT platelets
- Over 20 posters and abstracts presented at the 2019 AABB
Conference, highlighting the clinical and operational benefits of
INTERCEPT
“The recent finalization of the FDA guidance document is great
for patients, transfusion medicine and Cerus,” said William ‘Obi’
Greenman, Cerus’ president and chief executive officer. “INTERCEPT
is uniquely positioned to provide a solution for blood centers to
comply with the final guidance that confers optimal operational
simplicity, clinical efficacy, and economic value to blood centers
and hospitals. In this regard, the American Red Cross and many
other large U.S. blood centers have stated that pathogen reduction
is their preferred solution to safeguarding the platelet
supply.”
“We have built a strong foundation of awareness for INTERCEPT as
evidenced by another quarter of strong commercial execution with
the calculated number of treatable platelet doses in the U.S. up
nearly 70% compared to the prior year. With this solid base of
existing blood center customers scaling their production of
INTERCEPT platelets, we are ramping our efforts to support U.S.
blood centers and hospitals to be compliant with the FDA’s final
guidance document by the end of Q1 2021,” continued Greenman.
Revenue
Product revenue during the third quarter of 2019 was $18.0
million, compared to $15.4 million during the same period in 2018.
Revenue growth in the quarter benefited from continued demand for
INTERCEPT platelet kits in the U.S. and the timing of large plasma
kit orders in EMEA, which were partially offset by the conversion
to our double dose platelet kits in France and a 4% negative impact
of foreign currency exchange rates. Year-to-date product revenue
totaled $53.7 million, an increase of 21% compared to the same
period in 2018.
Government contract revenue from the Company’s Biomedical
Advanced Research and Development Authority (BARDA) agreement was
$4.8 million during the third quarter of 2019, compared to $3.9
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 $13.6 million
compared to $11.4 million in the first nine months of 2018. The
total potential value of the current BARDA agreement is $201
million with $39 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 third quarter of
2019 were 58%, compared to 47% for the third quarter of 2018. The
increase in gross margin was tied to economies of scale realized
for our cost of goods sold, favorable platelet product mix, namely
the French conversion to double dose platelet kits and additional
manufacturing efficiencies. Gross margins during the first nine
months of 2019 were 55% compared to 48% reported in the same period
the year prior.
Operating Expenses
Total operating expenses for the third quarter of 2019 were
$32.2 million compared to $24.8 million for the same period the
prior year. Year-to-date, operating expenses totaled $93.0 million
compared to $72.2 million for the first three quarters of 2018.
Selling, general, and administrative (SG&A) expenses for the
third quarter of 2019 totaled $16.1 million, compared to $14.0
million for the third quarter of 2018. The year-over-year increase
in SG&A expenses was tied to increased non-cash stock
compensation, higher investments in our supply chain capabilities
and focused investments on preparatory activities for our
anticipated cryoprecipitate launch. Year-to-date SG&A expenses
totaled $49.0 million compared to $42.0 million for the first nine
months of 2018.
Research and development (R&D) expenses for the third
quarter of 2019 were $16.1 million, compared to $10.8 million for
the third quarter of 2018. The increase in year-over-year R&D
expenses was largely due to product enhancements and initiatives
for expanded label claims, development activities to support our
anticipated cryoprecipitate PMA supplement, as well as additional
activities tied to the development of our INTERCEPT red blood cell
system. Year-to-date R&D expenses totaled $43.9 million
compared to $30.1 million for the first nine months of 2018.
Net Loss
Net loss for the third quarter of 2019 was $18.0 million, or
$0.13 per diluted share, compared to a net loss of $14.2 million,
or $0.11 per diluted share, for the third quarter of 2018.
Year-to-date net loss was $54.3 million or $0.39 per diluted share
compared to $41.4 million, or $0.32 per diluted share in the first
nine months of 2018.
Cash, Cash Equivalents and Investments
At September 30, 2019, the Company had cash, cash equivalents
and short-term investments of $85.1 million, compared to $117.6
million at December 31, 2018.
At September 30, 2019, the Company had approximately $39.4
million in outstanding term loan debt and $5.0 million of
borrowings under its revolving loan credit agreement, compared to
$29.9 million in outstanding term loan debt at December 31,
2018.
2019 Product Revenue Guidance
The Company reaffirms its 2019 product revenue guidance to the
range of $72 million to $75 million. The guidance range represents
18% to 23% growth compared to 2018 reported product revenue and is
based on the strong global demand for INTERCEPT platelet kits.
QUARTERLY CONFERENCE CALL AND WEBCAST
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 2392137. The replay will be available
approximately three hours after the call through November 13,
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; INTERCEPT’s ability to
provide a solution for blood centers to comply with the final
guidance that confers optimal operational simplicity, clinical
efficacy, and economic value to blood centers and hospitals; 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, and (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; 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 June 30, 2019, filed with the SEC on
August 1, 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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Product revenue
$
18,019
$
15,399
$
53,732
$
44,383
Cost of product revenue
7,583
8,142
24,126
23,192
Gross profit on product revenue
10,436
7,257
29,606
21,191
Government contract revenue
4,827
3,928
13,554
11,430
Operating expenses:
Research and development
16,081
10,825
43,938
30,143
Selling, general and administrative
16,140
13,964
49,041
42,008
Total operating expenses
32,221
24,789
92,979
72,151
Loss from operations
(16,958)
(13,604)
(49,819)
(39,530)
Non-operating expense, net
(949)
(532)
(4,321)
(1,660)
Loss before income taxes
(17,907)
(14,136)
(54,140)
(41,190)
Provision for income taxes
60
56
181
169
Net loss
$
(17,967)
$
(14,192)
$
(54,321)
$
(41,359)
Net loss per share:
Basic and diluted
$
(0.13)
$
(0.11)
$
(0.39)
$
(0.32)
Weighted average shares
outstanding used for calculating net loss per share:
Basic and diluted
140,908
134,326
138,779
130,199
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED BALANCE SHEETS
(in thousands)
September 30,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
24,425
$
28,859
Short-term investments
60,686
88,718
Accounts receivable
14,502
8,752
Inventories
20,906
13,539
Prepaid and other current assets
5,798
7,034
Total current assets
126,317
146,902
Non-current assets:
Property and equipment, net
15,218
8,130
Goodwill and intangible assets, net
1,499
1,650
Operating lease right-of-use assets
14,110
-
Restricted cash and other assets
7,294
6,778
Total assets
$
164,438
$
163,460
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
38,413
$
38,395
Manufacturing and development
obligations
-
5,928
Debt – revolving loan
4,993
-
Debt – term loan
-
7,857
Operating lease liabilities – current
1,592
-
Deferred product revenue – current
561
498
Total current liabilities
45,559
52,678
Non-current liabilities:
Debt – non-current
39,371
22,013
Operating lease liabilities –
non-current
18,458
-
Other non-current liabilities
242
4,250
Total liabilities
103,630
78,941
Stockholders' equity
60,808
84,519
Total liabilities and stockholders'
equity
$
164,438
$
163,460
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191030005936/en/
Tim Lee – Investor Relations Director Cerus Corporation
925-288-6137
Cerus (NASDAQ:CERS)
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