Cerus Corporation (Nasdaq: CERS) today announced financial
results for the second quarter ended June 30, 2020.
Recent developments and
highlights include:
- Q2 2020 Total Revenue of $26.8 million - driven by robust
year-over-year platelet kit sales growth in the U.S. and strong
plasma and illuminator sales in our EMEA region. Total revenue
comprised of (in millions, except %):
Q2 2020
Q2 2019
Change $
Change%
Product
Revenue
$ 21.5
$ 18.2
$ 3.3
18.1%
Government Contract Revenue
5.3
4.3
1.0
23.3%
Total
Revenue
$ 26.8
$ 22.5
$ 4.3
19.1%
- Reaffirming 2020 full year product revenue guidance range of
$89 million to $93 million - an approximately 20% to 25% increase
over 2019 reported product revenue.
- Submitted a pre-market approval supplement (PMA-S) to the FDA
for pathogen reduced cryoprecipitated fibrinogen complex with 5-day
post-thaw storage.
- Finalized INTERCEPT Red Cell CE Mark modular submission
schedule, in agreement with our notified body, under new MDR
submission pathway, providing clarity on the timing and pathway for
red blood cells, the most frequently transfused blood component
globally.
- Reached agreement with FDA on chronic transfusion clinical data
required for PMA submission and submitted clinical protocol
amendment for the existing Phase 3 RedeS study to allow for
enrollment of sickle cell and thalassemia patients.
- Announced study results demonstrating that the INTERCEPT Blood
System inactivates SARS-CoV-2, the causative agent for COVID-19, in
plasma components intended for transfusion.
- Awarded a five-year tender by the Hong Kong Red Cross Blood
Transfusion Services for INTERCEPT Blood System for platelets.
- Cash, cash equivalents, and short-term investments of $136.5
million at June 30, 2020.
“The benefits of pathogen reduced blood products have never been
so prominent as they are now during the COVID-19 pandemic. Our Q2
results reflect the highest quarterly product revenue we have
recorded to date at $21.5 million. This pandemic has made clear to
us not only the resilience of our business during this time, but
also the essential role that pathogen inactivation plays in helping
ensure the security and safety of the blood supply chain. It has
also resulted in greater focus on strategic planning and pandemic
preparedness by blood centers,” said William ‘Obi’ Greenman, Cerus’
president and chief executive officer. “Demand for INTERCEPT
platelet kits continued to be strong in the U.S. as blood centers
and hospitals adopt pathogen reduction to be compliant with the FDA
guidance document on platelet safety, which has a compliance
deadline that is now less than 8 months away.”
“Our development programs continued to make progress during the
quarter. In May, we submitted our PMA-S for pathogen-reduced
cryoprecipitated fibrinogen complex, which could result in
potential FDA approval by the end of this year. In addition,
meetings with the European and U.S. regulatory agencies in the
quarter resulted in more expedited and clear pathways to
potentially gain regulatory approvals of the INTERCEPT red blood
cell system,” continued Greenman.
Revenue
Product revenue during the second quarter of 2020 was $21.5
million, compared to $18.2 million during the same period in 2019.
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 and an increase in illuminator sales in our EMEA region.
Year-to-date product revenue totaled $40.1 million, an increase of
12% compared to the same period in 2019.
Government contract revenue from the Company’s Biomedical
Advanced Research and Development Authority (BARDA) agreement was
$5.3 million during the second quarter of 2020, compared to $4.3
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 $11.4 million,
compared to $8.7 million in the first half of 2019. The total
potential value of the current BARDA agreement is $214 million with
$55 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 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 second quarter of
2020 were 55% and consistent with the prior year period. Gross
margins during the first half of 2020 were 55% compared to 54%
reported in the first half of 2019.
Operating Expenses
Total operating expenses for the second quarter of 2020 were
$31.7 million compared to $31.2 million for the same period the
prior year. Year-to-date, operating expenses totaled $63.5 million
compared to $60.8 million for the first half of 2019.
Selling, general, and administrative (SG&A) expenses for the
second quarter of 2020 totaled $16.1 million, compared to $16.7
million for the second quarter of 2019. The year-over-year decline
was due to lower travel and marketing related expenses as a result
of the COVID-19 pandemic. Year-to-date SG&A expenses totaled
$32.0 million compared to $32.9 million for the first half of
2019.
Research and development (R&D) expenses for the second
quarter of 2020 were $15.6 million, compared to $14.4 million for
the second quarter of 2019. The increase in year-over-year R&D
expenses was due to higher expenses associated with initiatives to
expand platelet label claims and development of our INTERCEPT red
blood cell system. Year-to-date R&D expenses totaled $31.4
million compared to $27.9 million for the first half of 2019.
Net Loss
Net loss for the second quarter of 2020 was $14.9 million, or
$0.09 per diluted share, compared to a net loss of $17.6 million,
or $0.13 per diluted share, for the second quarter of 2019.
Year-to-date net loss was $31.3 million, or $0.19 per diluted
share, compared to $36.4 million, or $0.26 per diluted share, in
the first half of 2019.
Cash, Cash Equivalents and Investments
At June 30, 2020, the Company had cash, cash equivalents and
short-term investments of $136.5 million, compared to $85.7 million
at December 31, 2019.
At June 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 expects 2020 product revenue to be in the range of
$89 million to $93 million, unchanged from the guidance originally
provided on January 13, 2020. The guidance range represents
approximately 20% to 25% growth compared to 2019 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 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 6681405. The replay will be available
approximately three hours after the call through August 18,
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; the
potential approval of Cerus’ PMA-S for pathogen-reduced
cryoprecipitated fibrinogen complex and the potential timing
thereof; the potential for marketing approvals of the INTERCEPT red
blood cell system; the potential to expand platelet label claims
and development of the INTERCEPT red blood cell system; 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; 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’ 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 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 March
31, 2020, filed with the SEC on May 5, 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.
CERUS CORPORATION
REVENUE BY REGION
(in thousands, except
percentages)
Three Months Ended
Six Months Ended
June 30,
Change
June 30,
Change
2020
2019
$
%
2020
2019
$
%
Europe, Middle East and Africa
$
14,462
$
12,748
$
1,714
13
%
$
26,682
$
25,400
$
1,282
5
%
North America
6,400
5,158
1,242
24
%
12,477
9,709
2,768
29
%
Other
641
303
338
112
%
955
604
351
58
%
Total product revenue
$
21,503
$
18,209
$
3,294
18
%
$
40,114
$
35,713
$
4,401
12
%
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED STATEMENTS OF OPERATIONS
(in thousands, except per
share information)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Product revenue
$
21,503
$
18,209
$
40,114
$
35,713
Cost of product revenue
9,705
8,111
18,025
16,543
Gross profit on product revenue
11,798
10,098
22,089
19,170
Government contract revenue
5,324
4,266
11,354
8,727
Operating expenses:
Research and development
15,618
14,417
31,428
27,857
Selling, general and administrative
16,112
16,740
32,025
32,901
Total operating expenses
31,730
31,157
63,453
60,758
Loss from operations
(14,608
)
(16,793
)
(30,010
)
(32,861
)
Total non-operating expense, net
(196
)
(708
)
(1,203
)
(3,372
)
Loss before income taxes
(14,804
)
(17,501
)
(31,213
)
(36,233
)
Provision for income taxes
67
61
124
121
Net loss
$
(14,871
)
$
(17,562
)
$
(31,337
)
$
(36,354
)
Net loss per share:
Basic and diluted
$
(0.09
)
$
(0.13
)
$
(0.19
)
$
(0.26
)
Weighted average shares used for
calculating net loss per share:
Basic and diluted
164,383
138,281
160,894
137,698
CERUS CORPORATION
CONDENSED CONSOLIDATED
UNAUDITED BALANCE SHEETS
(in thousands)
June 30,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
34,900
$
34,986
Short-term investments
101,570
50,732
Accounts receivable
17,624
16,882
Inventories
18,425
19,490
Prepaid and other current assets
6,452
6,018
Total current assets
178,971
128,108
Non-current assets:
Property and equipment, net
14,534
14,898
Goodwill and intangible assets, net
1,347
1,448
Operating lease right-of-use assets
13,768
14,122
Restricted cash and other assets
6,874
6,959
Total assets
$
215,494
$
165,535
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
35,696
$
43,136
Debt – current
4,950
5,017
Operating lease liabilities – current
1,793
1,613
Deferred product revenue – current
706
570
Total current liabilities
43,145
50,336
Non-current liabilities:
Debt – non-current
39,500
39,414
Operating lease liabilities –
non-current
17,611
18,406
Other non-current liabilities
713
327
Total liabilities
100,969
108,483
Stockholders' equity:
114,525
57,052
Total liabilities and stockholders'
equity
$
215,494
$
165,535
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200804005914/en/
Tim Lee – Investor Relations Director Cerus Corporation
925-288-6137
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