CONCORD, Calif.--(BUSINESS WIRE)--
Cerus Corporation (Nasdaq: CERS) today announced financial results for
the fourth quarter and year ended December 31, 2017.
Recent developments and highlights include:
-
Reported record fourth quarter product revenue of $16.2 million, an
increase of 60% compared to the same period in the year prior.
-
Established 2018 annual product revenue guidance of $51 million to $53
million, which would represent a 17% to 22% increase over 2017
reported product revenue.
-
Successfully met primary safety and efficacy endpoints in SPARC,
Cerus’ European Phase 3 clinical trial evaluating INTERCEPT red cell
transfusions in thalassemia patients.
-
Completed an underwritten public offering of common stock raising
gross proceeds of $57.5 million.
-
Advanced release assay for commercial manufacturing of the S303
compound used in the INTERCEPT red blood cell system to enable H2 2018
CE Mark submission.
“As we reported in our January 8, 2018 press release, we experienced a
strong finish to 2017 with fourth quarter results exceeding our
expectations. We saw robust sales activity in multiple geographies
including France, the U.S., and the Middle East. In addition, we
continue to make progress on the final CMC activities needed for the
planned INTERCEPT red blood cell system CE Mark submission which will
include data from the SPARC clinical study. In the U.S. we received IDE
approval from the FDA to initiate our second Phase 3 RBC study,” said
William ‘Obi’ Greenman, Cerus’ president and chief executive officer.
“With the $57.5 million of gross proceeds and the remaining borrowing
availability under our growth capital facility, combined with BARDA
funding, we believe we are now well capitalized to focus on commercial
execution and on progressing our pipeline opportunities from late stage
development to potential market launch.”
Revenue
Product revenue for the fourth quarter of 2017 was $16.2 million,
compared to $10.1 million during the same period in 2016. Product
revenue for the year ended December 31, 2017 was $43.6 million, compared
to $37.2 million for the year ended December 31, 2016. The increases in
reported product revenue were driven by year-over-year increases in
platelet kit demand, both in international and domestic markets,
partially offset by declines in plasma kits and illuminator sales.
Growth in sales from France and the U.S. were the primary drivers of the
increased platelet kit sales in both periods. Demand for platelet kits
was up more than 100% when comparing the fourth quarter of 2017 to the
same period in 2016, and up almost 40% for the full year 2017 compared
to 2016.
Government contract revenue from our Biomedical Advanced Research and
Development Authority (BARDA) agreement was $2.4 million in the fourth
quarter of 2017 compared to $1.8 million during the same period in 2016.
Government contract revenue from our BARDA agreement for the year ended
December 31, 2017 was $7.8 million, compared to $2.1 million for the
year ended December 31, 2016.
Gross Margins
Gross margins on product revenue for the fourth quarter of 2017 were
44%, compared to 45% for the fourth quarter of 2016. Gross margins for
the year ended December 31, 2017 were 48%, compared to 45% in the same
period in 2016.
Despite the more than a 100% increase in demand for platelet kits, gross
margins on product revenue for the fourth quarter of 2017 was relatively
consistent compared to the same period in 2016 due to fewer illuminator
sales in the fourth quarter of 2017 compared to the same period in 2016,
as well as the impact of pricing from higher volume platelet contracts.
Gross margin on product revenue for the full-year 2017 increased due to
the increase in demand for higher margin platelet disposable kits and
favorable foreign exchange rates. Going forward, the Company expects to
continue to realize economies of scale and lower cost of goods sold from
its primary kit manufacturing agreement due to tiered pricing, which
declines as production volume tiers are achieved.
Operating Expenses
Total operating expenses were $20.3 million and $86.3 million for the
quarter and year ended December 31, 2017, compared to $21.5 million and
$80.4 million for the quarter and year ended December 31, 2016,
respectively.
Selling, general, and administrative (SG&A) expenses for the fourth
quarter of 2017 were $12.5 million compared to $12.4 million for the
fourth quarter of 2016. SG&A expenses for the year ended December 31,
2017 were $52.4 million compared to $48.8 million in the same period in
2016. The increase in SG&A expenses was due largely to increased
commercial activity in the U.S.
Research and development (R&D) expenses for the fourth quarter of 2017
were $7.8 million compared to $8.8 million for the fourth quarter of
2016. R&D expenses in the quarter declined primarily due to the timing
of activities related to the BARDA agreement. R&D expenses for the year
ended December 31, 2017 were $33.7 million compared to $31.3 million in
the same period in 2016. The increase in R&D expenses was primarily tied
to increased headcount costs and costs tied to the clinical development
of our INTERCEPT red blood cell program, the pursuit of supplemental
approvals for the platelet and plasma systems, and activities related to
our BARDA agreement.
Operating and Net Loss
Operating losses during the fourth quarter of 2017 were $10.9 million,
compared to $15.1 million during the fourth quarter of 2016, and $57.5
million compared to $61.4 million for years ended December 31, 2017 and
2016, respectively.
Net loss for the fourth quarter of 2017 was $11.5 million, or $0.10 per
diluted share, compared to a net loss of $13.5 million, or $0.13 per
diluted share, for the fourth quarter of 2016. Net loss for the year
ended December 31, 2017, was $60.6 million, or $0.56 per diluted share,
compared to a net loss of $62.9 million, or $0.62 per diluted share, for
the same period of 2016.
Cash, Cash Equivalents and Investments
At December 31, 2017, the Company had cash, cash equivalents and
short-term investments of $60.7 million compared to $71.6 million at
December 31, 2016.
At December 31, 2017, the Company had approximately $29.8 million in
outstanding debt under its loan agreement with Oxford Finance. The loan
agreement provides for an additional $10 million term loan and an
extension of the interest only period upon the Company achieving
pre-determined revenue levels.
In January 2018, the Company completed an underwritten public offering
of its common stock for gross proceeds of $57.5 million, before
deducting offering expenses payable by the Company.
QUARTERLY CONFERENCE CALL
The Company will host a conference call and webcast at 4:15 p.m. Eastern
time today to discuss its 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 3395359. The replay will be available approximately
three hours after the call through March 22, 2018.
ABOUT CERUS
Cerus Corporation is a biomedical products company focused in the field
of blood transfusion safety. The INTERCEPT Blood System is designed to
reduce the risk of transfusion-transmitted infections by inactivating a
broad range of pathogens such as viruses, bacteria and parasites that
may be present in donated blood. The nucleic acid targeting mechanism of
action of the INTERCEPT treatment is designed to inactivate established
transfusion threats, such as hepatitis B and C, HIV, West Nile virus and
bacteria, as well as emerging pathogens such as chikungunya, malaria and
dengue. Cerus currently markets and sells the INTERCEPT Blood System for
both platelets and plasma 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. See http://www.cerus.com
for information about Cerus.
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’
2018 annual product revenue guidance; Cerus’ planned INTERCEPT red blood
cell system CE Mark submission; potential future BARDA funding
commitments and the amount thereof; Cerus’ beliefs as to the sufficiency
of its capital to focus on commercial execution and on progressing its
pipeline opportunities; Cerus’ ability to progress its pipeline
opportunities from late stage development to potential market launch;
Cerus’ expectation that it will continue to realize economies of scale
and lower cost of goods sold from its primary kit manufacturing
agreement; the availability and funding of the remaining $10 million
term loan under Cerus’ loan agreement with Oxford Finance and extension
of the interest only period; 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 adjusted
revenue guidance for 2018, (b) grow sales in its European markets and/or
realize expected revenue contribution resulting from its European market
agreements, 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,
which will require additional regulatory approvals, (c) that Cerus may
be unable to file for CE Mark approval of the red blood cell system in
Europe on the anticipated timeframe or at all, and even if filed, Cerus
may be unable to obtain CE Mark approval, or any other regulatory
approvals, of the red blood cell system in a timely manner or at 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 in a
timely manner or at all, and (e) that anticipated clinical trials of the
INTERCEPT Blood System may not be initiated on the anticipated timing or
at all, or if initiated, may be extended, delayed, suspended or
terminated, including as result of safety concerns; 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;
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 sells
its products; Cerus’ reliance on third parties to market, sell,
distribute and maintain its products; Cerus’ ability to maintain an
effective 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; 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 Cerus’ ability to
achieve the pre-determined revenue levels necessary to access the final
$10 million term loan under Cerus' loan agreement with Oxford Finance
and to extend the interest only period, as well as Cerus’ ability to
maintain (and otherwise comply with the covenants in) such loan
agreement necessary to access the final $10 million term loan under that
agreement; 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 September 30, 2017, filed with the SEC on November 3,
2017. Cerus disclaims any obligation or undertaking to update or revise
any forward-looking statements contained in this press release.
|
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|
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CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
Product revenue
|
|
|
$
|
16,240
|
|
|
$
|
10,125
|
|
|
$
|
43,568
|
|
|
$
|
37,183
|
|
Cost of product revenue
|
|
|
|
9,129
|
|
|
|
5,605
|
|
|
|
22,531
|
|
|
|
20,295
|
|
Gross profit on product revenue
|
|
|
|
7,111
|
|
|
|
4,520
|
|
|
|
21,037
|
|
|
|
16,888
|
|
Government contracts revenue
|
|
|
|
2,378
|
|
|
|
1,831
|
|
|
|
7,758
|
|
|
|
2,092
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
7,783
|
|
|
|
8,815
|
|
|
|
33,710
|
|
|
|
31,322
|
|
Selling, general and administrative
|
|
|
|
12,506
|
|
|
|
12,439
|
|
|
|
52,413
|
|
|
|
48,753
|
|
Amortization of intangible assets
|
|
|
|
51
|
|
|
|
51
|
|
|
|
202
|
|
|
|
202
|
|
Impairment of long-lived assets
|
|
|
|
-
|
|
|
|
150
|
|
|
|
-
|
|
|
|
150
|
|
Total operating expenses
|
|
|
|
20,340
|
|
|
|
21,455
|
|
|
|
86,325
|
|
|
|
80,427
|
|
Loss from operations
|
|
|
|
(10,851
|
)
|
|
|
(15,104
|
)
|
|
|
(57,530
|
)
|
|
|
(61,447
|
)
|
Non-operating (expense) income, net
|
|
|
|
(709
|
)
|
|
|
399
|
|
|
|
832
|
|
|
|
(1,284
|
)
|
Loss before income taxes
|
|
|
|
(11,560
|
)
|
|
|
(14,705
|
)
|
|
|
(56,698
|
)
|
|
|
(62,731
|
)
|
(Benefit) provision for income taxes
|
|
|
|
(74
|
)
|
|
|
(1,204
|
)
|
|
|
3,887
|
|
|
|
175
|
|
Net loss
|
|
|
$
|
(11,486
|
)
|
|
$
|
(13,501
|
)
|
|
$
|
(60,585
|
)
|
|
$
|
(62,906
|
)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.56
|
)
|
|
$
|
(0.62
|
)
|
Diluted
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.56
|
)
|
|
$
|
(0.62
|
)
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used for calculating net loss
per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
114,342
|
|
|
|
103,470
|
|
|
|
108,221
|
|
|
|
101,826
|
|
Diluted
|
|
|
|
114,342
|
|
|
|
103,470
|
|
|
|
108,221
|
|
|
|
101,826
|
|
|
|
|
|
|
|
|
CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
13,683
|
|
$
|
22,560
|
Short-term investments and marketable equity securities
|
|
|
|
|
47,013
|
|
|
49,068
|
Accounts receivable
|
|
|
|
|
12,415
|
|
|
6,868
|
Inventories
|
|
|
|
|
14,457
|
|
|
12,531
|
Other current assets
|
|
|
|
|
2,330
|
|
|
3,078
|
Total current assets
|
|
|
|
|
89,898
|
|
|
94,105
|
Non-current assets:
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
2,119
|
|
|
2,985
|
Goodwill and intangible assets, net
|
|
|
|
|
1,852
|
|
|
2,054
|
Restricted cash and other assets
|
|
|
|
|
4,375
|
|
|
4,332
|
Total assets
|
|
|
|
$
|
98,244
|
|
$
|
103,476
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
$
|
22,686
|
|
$
|
19,805
|
Debt - current
|
|
|
|
|
-
|
|
|
6,934
|
Deferred product revenue - current
|
|
|
|
|
445
|
|
|
149
|
Total current liabilities
|
|
|
|
|
23,131
|
|
|
26,888
|
Non-current liabilities:
|
|
|
|
|
|
|
Debt - non-current
|
|
|
|
|
29,798
|
|
|
12,441
|
Manufacturing and development obligations - non-current
|
|
|
|
|
5,766
|
|
|
4,770
|
Other non-current liabilities
|
|
|
|
|
609
|
|
|
1,590
|
Total liabilities
|
|
|
|
|
59,304
|
|
|
45,689
|
Stockholders' equity
|
|
|
|
|
38,940
|
|
|
57,787
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
98,244
|
|
$
|
103,476
|
View source version on businesswire.com:
http://www.businesswire.com/news/home/20180308006079/en/
Cerus Corporation
Tim Lee, 925-288-6137
Investor Relations
Director
Source: Cerus Corporation