Cerus Corporation Announces Record Third Quarter 2021 Financial Results and Raises Full-Year Product Revenue Guidance

Cerus Corporation (Nasdaq: CERS) today announced financial results for the third quarter ended September 30, 2021.

Recent developments and highlights include:

  • Third quarter 2021 total revenue of $42.1 million, reflecting a 44% increase over the prior year period. Total revenue was composed of (in thousands, except %):

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

Change

2021

2020

Change

Product revenue

$

36,131

23,607

53

%

$

90,994

63,721

43

%

Government contract revenue

5,970

5,584

7

%

18,436

16,938

9

%

Total revenue

$

42,101

29,191

44

%

$

109,430

80,659

36

%

 
  • As of the date of this release, the Company is increasing its 2021 annual product revenue guidance range to $127 million to $129 million (from the prior guidance of $118 million to $122 million), representing an approximate 38% to 40% increase over full year 2020 reported product revenue.
  • On October 1, 2021, the U.S. Food and Drug Administration’s (FDA) final guidance document on bacterial risk control strategies for platelet collection and transfusion was made effective. This guidance for the industry identifies FDA-approved pathogen reduction as a means of compliance.
  • Cerus achieved cumulative sales for the INTERCEPT Blood System for platelets and plasma that have surpassed 10 million treatable doses globally since the products were first commercially launched.
  • Cash, cash equivalents, and short-term investments were $120 million at September 30, 2021.

“Cerus’ third quarter results represent a strong commercial achievement for the Company, in particular with regard to the U.S. platelet business. With quarterly product revenue of $36.1 million and sales momentum that continues into the fourth quarter, I am pleased that adoption of the INTERCEPT Blood System for platelets is establishing a new standard of care,” said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. “With solid visibility to continued demand for the balance of the year, we are raising our product revenue guidance and look forward to finishing this breakout year for Cerus on a strong note.”

Revenue

Product revenue during the third quarter of 2021 was $36.1 million, compared to $23.6 million during the same period in 2020. Product revenue growth during the quarter was driven by increased sales of INTERCEPT platelet products to blood center customers across the U.S.

Third quarter government contract revenue was $6.0 million, compared to $5.6 million during the same period in 2020. Third quarter government contract revenue was comprised of funding associated with research and development (R&D) activities related to the INTERCEPT Blood System for Red Cells as well as sponsored efforts related to the development of next generation pathogen reduction technology to treat whole blood.

Product Gross Profit & Margin

Product gross profit for the third quarter 2021 was $18.5 million and was the highest in company history, reflecting a nearly $6 million increase over the same period in 2020. Product gross margin for the third quarter 2021 was 51.3% compared to 53.6% for the third quarter of 2020 and flat compared to the second quarter of 2021. The anticipated decrease in product gross margin compared to the third quarter of 2020 was tied to higher sales to U.S. customers during the quarter, who at present, primarily use the Company’s single dose platelet kits, which provide a lower product gross margin percentage compared to our double dose kits that are more frequently used internationally.

Operating Expenses

Total operating expenses for the third quarter of 2021 were $35.6 million compared to $32.2 million for the same period of the prior year. In general, the increase in operating expenses compared to the prior year period were driven by higher commercial expenses, due to sales incentive compensation and partially offset by lower R&D expenses.

Selling, general, and administrative (SG&A) expenses for the third quarter of 2021 totaled $20.4 million, compared to $16.3 million for the third quarter of 2020. The year-over-year increase in SG&A expenses was tied to increased sales costs and continued investments in our therapeutics business unit.

R&D expenses for the third quarter of 2021 were $15.3 million, compared to $15.9 million for the third quarter of 2020. Continued investments in a variety of R&D pipeline projects continued during the quarter, including those related to the Company’s LED illuminator, but were offset by lower R&D costs versus the prior year period associated with mature projects that have been completed.

Net Loss Attributable to Cerus Corporation

Net loss attributable to Cerus Corporation for the third quarter of 2021 was $12.4 million, or $0.07 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $14.1 million, or $0.08 per basic and diluted share, for the third quarter of 2020.

Balance Sheet

At September 30, 2021, the Company had cash, cash equivalents and short-term investments of $120.0 million, compared to $122.8 million at June 30, 2021 and $133.6 million at December 31, 2020. Despite continued investments in inventory to meet the anticipated growth in demand, cash used from operations continued to decline as the Company realized increased revenue contribution and significant leverage in SG&A spend.

As of September 30, 2021, the Company carried $55 million of notes due and a balance on its revolving line of credit of $10 million. The Company continues to have access to another $15 million under its term facility and capacity for an additional $10 million under its revolving line of credit.

Increasing 2021 Product Revenue Guidance

Based on the strong product revenue year to date and updated demand estimates heading into the remainder of the Company’s fourth quarter, the Company now expects 2021 product revenue to be in the range of $127 million to $129 million, compared to the prior range of $118 million to $122 million. The revised guidance range represents approximately 38% to 40% growth over 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 3970817. The replay will be available approximately three hours after the call through November 16, 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 the production of INTERCEPT 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’ expectation of continued demand for the balance of 2021; Cerus establishing the INTERCEPT Blood System as a standard of care; Cerus’ ability to access additional funding under its term loan facility and revolving line of credit; 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 updated 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, (e) effectively expand its commercialization activities into additional geographies and/or (f) 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 distribute the INTERCEPT Blood System for Cryoprecipitation may not be obtained in a timely manner or at all, and (c) Cerus may 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 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 access additional funds under its term loan facility and revolving line of credit and 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’ Quarterly Report on Form 10-Q, filed with the SEC on August 3, 2021, and future filings and reports by Cerus. 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,

2021 vs. 2020

2021 vs. 2020

Platelet Kit Growth

U.S.

168%

127%

International

5%

5%

Worldwide

82%

58%

 

Change in Calculated Number of Treatable Platelet Doses*

U.S.

162%

124%

International

5%

5%

Worldwide

69%

50%

* Dose treatable 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

2021

2020

$

%

2021

2020

$

%

North America

$

20,860

$

8,465

$

12,395

146

%

$

45,171

$

20,942

$

24,229

116

%

Europe, Middle East and Africa

14,965

14,527

438

3

%

44,473

41,210

3,263

8

%

Other

306

615

(309

)

-50

%

1,350

1,569

(219

)

-14

%

Total product revenue

$

36,131

$

23,607

$

12,524

53

%

$

90,994

$

63,721

$

27,273

43

%

CERUS CORPORATION

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

(in thousands, except per share information)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Product revenue

$

36,131

$

23,607

$

90,994

$

63,721

Cost of product revenue

17,582

10,953

44,000

28,978

Gross profit on product revenue

18,549

12,654

46,994

34,743

Government contract revenue

5,970

5,584

18,436

16,938

Operating expenses:

Research and development

15,288

15,921

48,119

47,349

Selling, general and administrative

20,357

16,299

59,285

48,324

Total operating expenses

35,645

32,220

107,404

95,673

Loss from operations

(11,126

)

(13,982

)

(41,974

)

(43,992

)

Total non-operating expense, net

(1,238

)

(89

)

(3,033

)

(1,292

)

Loss before income taxes

(12,364

)

(14,071

)

(45,007

)

(45,284

)

Provision for income taxes

73

68

248

192

Net loss

(12,437

)

(14,139

)

(45,255

)

(45,476

)

Net loss attributable to noncontrolling interest

-

-

-

-

Net loss attributable to Cerus Corporation

$

(12,437

)

$

(14,139

)

$

(45,255

)

$

(45,476

)

 

Net loss per share attributable to Cerus Corporation:

Basic and diluted

$

(0.07

)

$

(0.08

)

$

(0.27

)

$

(0.28

)

Weighted average shares outstanding:

Basic and diluted

171,904

166,572

170,666

162,800

CERUS CORPORATION

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(in thousands)

September 30,

December 31,

2021

2020

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

$

78,460

$

36,594

Short-term investments

41,501

97,000

Accounts receivable

22,439

21,166

Current inventories

29,420

23,254

Prepaid and other current assets

6,232

5,417

Total current assets

178,052

183,431

Non-current assets:

Property and equipment, net

12,684

13,867

Goodwill

1,316

1,316

Operating lease right-of-use assets

12,409

13,122

Other assets

14,485

9,679

Total assets

$

218,946

$

221,415

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

52,371

$

48,966

Debt – current

9,986

8,516

Operating lease liabilities – current

1,616

1,915

Deferred product revenue – current

744

577

Total current liabilities

64,717

59,974

Non-current liabilities:

Debt – non-current

54,675

39,588

Operating lease liabilities – non-current

16,079

16,873

Other non-current liabilities

2,400

1,174

Total liabilities

137,871

117,609

Cerus Corporation stockholders' equity

80,075

103,806

Noncontrolling interest

1,000

-

Total liabilities and stockholders' equity

$

218,946

$

221,415

 

Contacts:

Matt Notarianni – Senior Director, Investor Relations
Cerus Corporation
925-288-6137

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