CONCORD, Calif.--(BUSINESS WIRE)--
Cerus Corporation (NASDAQ: CERS) today announced financial results for
the second quarter ended June 30, 2015.
Recent company highlights include:
-
Second quarter disposable kit demand increased 32% year over year.
-
Signed INTERCEPT platelet and plasma supply agreements with Unyts and
Bonfils Blood Center.
-
Suncoast Blood Bank produced the first INTERCEPT pathogen reduced
platelet components distributed in the continental United States.
-
Appointed Richard J. Benjamin, MD, PhD as chief medical officer.
-
Received FDA approval of Phase IV PIPER study protocol.
-
Presented at AABB Symposium on Implementation of Pathogen-Reduced
Blood Components (April 27-28, Bethesda, Maryland).
“The first INTERCEPT-treated platelet components have now been
distributed to hospitals in the continental US, and we are continuing to
build our US customer base. The addition of Dr. Richard Benjamin, the
former chief medical officer of the American Red Cross, significantly
enhances our team as we make further progress in the US and advance the
INTERCEPT red blood cell system toward a potential CE Mark submission,”
said William 'Obi' Greenman, Cerus’ president and chief executive
officer. “Our 2015 revenue continues to be driven by our core European
and Middle Eastern markets, for which we are maintaining revenue
guidance of $36-38 million. Our guidance anticipates approximately
15-20% growth in kit demand in these core markets for 2015, offset by a
continued weak Euro exchange rate, which negatively impacts revenue as
reported in US dollars."
Revenue
Product revenue for the second quarter of 2015 was $8.8 million. This
reflects a 32% year over year increase in INTERCEPT disposable kit
demand, offset in part by a declining Euro exchange rate, resulting in a
3% year over year increase in reported second quarter revenue. Product
revenue for the first six months of 2015 was $16.5 million, slightly up
from the first six months of 2014. INTERCEPT disposable kit demand for
the first six months of 2015 was up 25% compared to the six month period
in the prior year. Because revenue for the three and six months ended
June 30, 2015, was predominantly driven by the European and Middle
Eastern markets, reported revenue was negatively affected by a 19%
weakening of the average Euro rate compared to the US dollar, the
Company’s reporting currency.
The Company continues to expect 2015 annual revenue for its core
European and Middle Eastern markets of $36 to $38 million.
To date, the Company has signed five contracts with customers in the
United States. As anticipated, early adopters will need to complete
their implementation processes and hospital roll-outs prior to Cerus
realizing meaningful US revenue contributions.
Gross Margins
Gross margins for the second quarter of 2015 were 20%, compared to 45%
for the second quarter of 2014. Gross margins for the first six months
of 2015 were 29%, compared to 46% for the first six months of 2014.
Margins for the three and six months ended June 30, 2015, were
negatively impacted by the decline in the value of the Euro relative to
the Company‘s reporting currency, the US dollar, negatively impacting
reported gross margins during the three and six months ended June 30,
2015, by more than 11% and 14%, respectively. In addition, the Company
recorded charges for obsolete inventory and minimum purchase commitments
which negatively impacted second quarter 2015 margins by approximately
6%. These types of charges were not recorded in the second quarter of
2014.
Operating Expenses
Total operating expenses for the second quarter of 2015 were $17.3
million, compared to $14.9 million for the second quarter of 2014. Total
operating expenses for the first six months of 2015 were $34.7 million,
compared to $27.8 million for the first six months of 2014. The increase
in operating expenses was primarily due to increased selling, general
and administrative expenses incurred in support of the commercialization
of INTERCEPT in the United States, increased research and development
costs associated with ongoing studies in support of two Investigational
Device Exemption studies, and increased development costs incurred in
connection with the Company’s efforts to potentially expand the
Company’s label claims and product configurations in the United States.
As the Company continues to build out its commercial sales, marketing
and support teams for the US market, it expects selling, general and
administrative expenses to increase. Research and development expenses
are expected to increase in 2015, as the Company seeks to potentially
expand the label claims for the INTERCEPT Blood System in the US and
elsewhere, and seeks a potential CE Mark submission for the red blood
cell system in the second half of 2016.
Operating and Net Loss
Operating losses during the second quarter of 2015 were $15.5 million,
compared to $11.0 million for the second quarter of 2014, and $29.9
million compared to $20.2 million for the six months ended June 30, 2015
and 2014, respectively.
Net loss for the second quarter of 2015 was $16.0 million, or $0.17 per
diluted share, compared to a net loss of $7.6 million, or $0.16 per
diluted share, for the second quarter of 2014. Net loss for the first
half of 2015 was $25.4 million, or $0.30 per share on a fully diluted
basis, compared to a net loss of $7.8 million, or $0.28 per share on a
fully diluted basis, for the same period of 2014.
Net losses for the second quarter of 2015 were impacted by the above
discussed operating losses and mark-to-market adjustments of the
Company's outstanding warrants to fair value, which resulted in non-cash
charges of $2.7 million during the second quarter of 2015 compared to
$3.5 million in non-cash gains during the comparable period in 2014. Net
losses for the second quarter of 2015 were also impacted by foreign
exchange gains of $0.5 million during the second quarter of 2015,
compared to $25,000 of foreign exchange losses during the second quarter
of 2014.
Net losses for the first half of 2015 were impacted by the above
discussed operating losses and mark-to-market adjustments of the
Company's outstanding warrants to fair value, which resulted in non-cash
gains of $3.6 million during the first half of 2015 compared to $12.5
million in non-cash gains during the comparable period in 2014. Net
losses for the first half of 2015 were also impacted by foreign exchange
losses of $0.6 million during the first half of 2015, compared to $4,000
of foreign exchange losses during the first half of 2014.
Cash, Cash Equivalents and Investments
At June 30, 2015, the Company had cash, cash equivalents and short-term
investments of $122.9 million compared to $51.3 million at December 31,
2014, and $111.9 million at March 31, 2015.
During the second quarter of 2015, the Company drew down an additional
$10 million of debt from its loan agreement and has up to $10 million in
additional borrowing availability conditioned upon the Company achieving
consolidated trailing six months' revenue at a specified level. In
addition, the Company held a marketable equity investment valued at June
30, 2015 at approximately $12 million while previously this investment
was held at a zero cost on the Company’s balance sheet. This investment
is reflected in the Company’s short-term investments on its unaudited
condensed consolidated balance sheet at June 30, 2015.
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 (US) or 631-291-4549 (international).
A replay will be available on the company’s web site, or by dialing
855-859-2056 (US) or 404-537-3406 (international) and entering
conference ID number 80901719. The replay will be available
approximately three hours after the call through August 20, 2015.
ABOUT CERUS
Cerus Corporation is a biomedical products company focused in the field
of blood 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’
expectations regarding 2015 annual revenue and product demand growth
guidance and its expectations for increased operating expenses
and the reasons therefor; the potential CE mark submission for the
INTERCEPT Red Blood Cell system and the timing thereof; Cerus’
expectations regarding its progress with respect to its U.S.
commercialization efforts and realizing U.S. revenue contributions;
potential expanded label claims and product configurations for the
INTERCEPT plasma and platelet systems in the U.S. and elsewhere; and the
availability and funding of the remaining $10 million tranche of term
loans available under Cerus‘ loan agreement with Oxford Finance. 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 risk that
the negative sales impact from the strategic changes to Cerus’
distributor relationships could last longer or be more severe than
anticipated and that Cerus may otherwise not resume revenue growth in
future periods; 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; risks related to Cerus‘
ability to commercialize the INTERCEPT Blood System in the United States
without infringing on the intellectual property rights of others; 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 complete the
additional development and other activities necessary to support the
potential CE Mark submission for the INTERCEPT Red Blood Cell system in
a timely manner or at all, and may otherwise be unable to obtain any
regulatory approvals for the INTERCEPT Red Blood Cell system, (b) that
Cerus may be unable to comply with the FDA’s post-approval requirements
for the INTERCEPT platelet and plasma systems, which could result in a
loss of U.S. marketing approval for the INTERCEPT platelet and plasma
systems and (c) related to Cerus‘ ability to expand the label claims and
product configurations for the INTERCEPT platelet and plasma systems
in the U.S. and elsewhere, which will require additional regulatory
approvals; 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 sell 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;
the impact of legislative or regulatory healthcare reforms that may make
it more difficult and costly for Cerus to obtain regulatory approval of
its products and to produce, market and distribute its products after
approval is obtained; that Cerus may be unable to satisfy the trailing
six months‘ revenue condition to the funding of the final $10 million
term loan tranche under Cerus' loan agreement with Oxford Finance and
may otherwise be unable to maintain (and otherwise comply with the
covenants in) such loan agreement necessary to access additional term
loans under that agreement; 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 three months ended March 31, 2015,
filed with the SEC on May 8, 2015. 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,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
8,830
|
|
|
$
|
8,601
|
|
|
$
|
16,522
|
|
|
$
|
16,467
|
|
|
Cost of revenue
|
|
|
7,028
|
|
|
|
4,752
|
|
|
|
11,742
|
|
|
|
8,909
|
|
|
Gross profit
|
|
|
1,802
|
|
|
|
3,849
|
|
|
|
4,780
|
|
|
|
7,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
5,213
|
|
|
|
4,722
|
|
|
|
10,794
|
|
|
|
9,364
|
|
|
Selling, general and administrative
|
|
|
12,063
|
|
|
|
10,080
|
|
|
|
23,781
|
|
|
|
18,316
|
|
|
Amortization of intangible assets
|
|
|
51
|
|
|
|
51
|
|
|
|
101
|
|
|
|
101
|
|
|
Total operating expenses
|
|
|
17,327
|
|
|
|
14,853
|
|
|
|
34,676
|
|
|
|
27,781
|
|
|
Loss from operations
|
|
|
(15,525
|
)
|
|
|
(11,004
|
)
|
|
|
(29,896
|
)
|
|
|
(20,223
|
)
|
|
Non-operating (expense) income, net
|
|
|
(2,482
|
)
|
|
|
3,459
|
|
|
|
2,448
|
|
|
|
12,491
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before income taxes
|
|
|
(18,007
|
)
|
|
|
(7,545
|
)
|
|
|
(27,448
|
)
|
|
|
(7,732
|
)
|
|
(Benefit) provision for income taxes
|
|
|
(2,035
|
)
|
|
|
44
|
|
|
|
(2,016
|
)
|
|
|
82
|
|
|
Net loss
|
|
$
|
(15,972
|
)
|
|
$
|
(7,589
|
)
|
|
$
|
(25,432
|
)
|
|
$
|
(7,814
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.17
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.11
|
)
|
|
Diluted
|
|
$
|
(0.17
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding used for computing net
loss per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
95,728
|
|
|
|
72,899
|
|
|
|
94,576
|
|
|
|
72,495
|
|
|
Diluted
|
|
|
95,728
|
|
|
|
74,517
|
|
|
|
95,682
|
|
|
|
74,927
|
|
|
|
|
CERUS CORPORATION
|
|
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
|
|
(in thousands)
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2015
|
|
2014(1)
|
|
|
|
|
|
|
|
Cash & cash equivalents
|
|
$
|
35,059
|
|
$
|
22,781
|
|
|
Short-term investments
|
|
|
87,886
|
|
|
28,513
|
|
|
Accounts receivable and other current assets
|
|
|
7,845
|
|
|
8,635
|
|
|
Inventories
|
|
|
13,681
|
|
|
14,956
|
|
|
Property and equipment, net
|
|
|
3,816
|
|
|
3,781
|
|
|
Goodwill and intangible assets
|
|
|
2,357
|
|
|
2,458
|
|
|
Other assets
|
|
|
762
|
|
|
652
|
|
|
Total assets
|
|
$
|
151,406
|
|
$
|
81,776
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
15,146
|
|
$
|
18,326
|
|
|
Deferred revenue
|
|
|
577
|
|
|
376
|
|
|
Debt current
|
|
|
2,523
|
|
|
--
|
|
|
Warrant liability
|
|
|
3,978
|
|
|
10,485
|
|
|
Debt – non-current
|
|
|
17,371
|
|
|
9,872
|
|
|
Other non-current liabilities
|
|
|
1,282
|
|
|
1,196
|
|
|
Total liabilities
|
|
|
40,877
|
|
|
40,255
|
|
|
Stockholders’ equity
|
|
|
110,529
|
|
|
41,521
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
151,406
|
|
$
|
81,776
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts derived from audited consolidated financial statements
included in the Company’s 2014 Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150806006185/en/
Source: Cerus Corporation