CONCORD, Calif.--(BUSINESS WIRE)--
Cerus Corporation (NASDAQ:CERS) today announced financial results for
the third quarter ended September 30, 2015.
Recent company highlights include:
-
Signed INTERCEPT platelet and plasma supply agreements with:
-
OneBlood, Inc.
-
Community Blood Center of the Carolinas
-
Bonfils Blood Center
-
Unyts
-
Entered into a long-term strategic agreement in October 2015 with
Fresenius Kabi for the production of INTERCEPT Blood System under
which the Company is no longer required to pay royalties to Fresenius
Kabi on INTERCEPT disposable kits sales.
“Our progress in the U.S. continues, including most recently a contract
with OneBlood, one of the three largest American blood centers, and also
publication of pathogen reduction specific P-codes from the Centers for
Medicare and Medicaid Services for 2016 outpatient hospital billing. U.S
customers are also beginning to supply INTERCEPT-treated platelets to
their hospitals,” said William 'Obi' Greenman, Cerus’ president and
chief executive officer. “Based on unexpectedly strong headwinds in
Russia, and more broadly, in the Commonwealth of Independent States
(CIS) region, in the second half of 2015, we now expect 2015 annual
revenue for our core European and Middle Eastern markets to be in the
range of $34 to $36 million.”
Revenue
Product revenue for the third quarter of 2015 was $8.0 million. This
reflects the impact of a declining Euro exchange rate and a 7% year over
year decrease in INTERCEPT disposable kit demand, combining for a 22%
year over year decrease in reported third quarter revenue. Product
revenue for the first nine months of 2015 was $24.6 million, and
represented an 8% decrease from the same period in 2014. INTERCEPT
disposable kit demand for the first nine months of 2015 was up 13%
compared to the nine month period for the prior year. Because revenue
for the three and nine months ended September 30, 2015 was predominantly
driven by Euro denominated markets, reported revenue was negatively
affected by a significant weakening of the Euro compared to the US
dollar, the Company’s reporting currency.
The Company expects 2015 annual revenue for its core European and Middle
Eastern markets of $34 to $36 million, reflecting the continued weakness
in the Euro and increased headwinds in Russia and the CIS markets in the
second half of 2015.
Gross Margins
Gross margins for the third quarter of 2015 were 31%, compared to 45%
for the third quarter of 2014. Gross margins for the first nine months
of 2015 were 30%, compared to 46% for the first nine months of 2014.
The Company recorded period charges for expiring inventory and certain
minimum contractual purchase commitments which negatively impacted
margins by approximately 11% and 5% for the three and nine months ended
September 30, 2015, respectively. These types of charges impacted
margins by less than 1% during the same periods of 2014. In addition,
margins for the nine months ended September 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 by approximately 9% when comparing the nine
months ended September 30, 2015 to the comparable period in 2014.
In October, the Company and Fresenius Kabi entered into a ten year
amended and restated manufacturing agreement for the production of
INTERCEPT disposable kits. Under the revised agreement, the Company
expects the transfer pricing for finished INTERCEPT kits to remain
consistent in the near-term and to improve significantly with increased
production volumes. In addition, the Company is no longer obligated to
record and pay royalties on INTERCEPT disposable kits sales which were
10% and 3% of product sales for the platelet and plasma kits,
respectively. Through the three months ended September 30, 2015,
royalties were recorded as a component of cost of goods sold, negatively
impacting the Company’s reported gross margins and operating results.
Operating Expenses
Total operating expenses for the third quarter of 2015 were $18.7
million, compared to $16.0 million for the third quarter of 2014. Total
operating expenses for the first nine months of 2015 were $53.3 million,
compared to $43.8 million for the first nine 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 the Company’s Investigational
Device Exemption studies, and costs incurred in connection with the
Company’s efforts to potentially expand the Company’s label claims and
product configurations in the United States.
Operating and Net Loss
Operating losses during the third quarter of 2015 were $16.2 million,
compared to $11.4 million for the third quarter of 2014, and $46.1
million compared to $31.6 million for the nine months ended September
30, 2015 and 2014, respectively.
Net loss for the third quarter of 2015 was $15.7 million, or $0.17 per
diluted share, compared to a net loss of $10.8 million, or $0.16 per
diluted share for the third quarter of 2014. Net loss for the first nine
months of 2015 was $41.1 million, or $0.48 per share on a fully diluted
basis, compared to a net loss of $18.6 million, or $0.44 per share on a
fully diluted basis for the same period of 2014.
Net losses for the third 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
gains of $1.1 million during the three months ended September 30, 2015,
compared to $1.7 million in non-cash gains during the comparable period
in 2014. Net losses for the third quarter of 2015 were also favorably
impacted by approximately $0.9 million of lower foreign exchange losses
during the third quarter of 2015, when compared to the corresponding
prior period.
Net losses for the first nine months 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 $4.7 million during the first nine months of 2015 compared to
$14.3 million in non-cash gains during the comparable period in 2014.
Net losses for the first nine months of 2015 were also impacted by
foreign exchange losses of $0.6 million during the first nine months of
2015, compared to $0.9 million of foreign exchange losses during the
first nine months of 2014.
Cash, Cash Equivalents and Investments
At September 30, 2015, the Company had cash, cash equivalents and
short-term investments of $107.4 million compared to $51.3 million at
December 31, 2014. Included in the 2015 short-term investments are
approximately $7.7 million of marketable equity securities, which had no
recorded value at December 31, 2014.
As of the third quarter of 2015, the Company has drawn down $20 million
of debt from its loan agreement with Oxford Finance, and has $10 million
in additional borrowing availability conditioned upon the Company
achieving consolidated trailing six months' revenue at a specified
level. During the three months ended September 30, 2015, the Company and
Oxford Finance entered into an amendment to the loan agreement which
extended the availability of the interest-only period on all advances
under the loan agreement through June 1, 2016, and extended the period
during which the Company can draw down the final $10 million to the
earlier of June 30, 2016 or 60 days after the date the Company achieves
the consolidated trailing six months' revenue threshold.
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 80904260. The replay will be available
approximately three hours after the call through November 19, 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; Cerus’ expectations
regarding its progress with respect to its U.S. commercialization
efforts, including with respect to U.S blood center customers completing
their implementation processes and supplying INTERCEPT-treated platelets
and plasma to their hospitals; Cerus’ expectations for future transfer
pricing under the amended and restated manufacturing agreement with
Fresenius Kabi; potential expanded label claims and product
configurations for the INTERCEPT plasma and platelet systems in the
U.S.; and the availability and funding of the remaining $10 million
tranche of term loans 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 Cerus may otherwise not experience 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 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 (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; 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 CIS and other 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; Cerus’ potential inability to realize the anticipated
transfer pricing benefits under the amended and restated manufacturing
agreement with Fresenius Kabi, including as a result of its inability to
cause increased production volumes; 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; 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 the final $10 million term loan under that
agreement; risks related to future opportunities and plans, including
the uncertainty of future revenues and other financial performance and
results, including with respect to Cerus’ potential inability to meet
its 2015 annual revenue guidance, as well as other risks detailed in
Cerus’ filings with the Securities and Exchange Commission, including
Cerus‘ Quarterly Report on Form 10-Q for the quarter ended June 30,
2015, filed with the SEC on August 7, 2015. Cerus disclaims any
obligation or undertaking to update or revise any forward-looking
statements contained in this press release.
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CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED
STATEMENTS OF OPERATIONS
(in thousands, except per
share information)
|
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2015
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2014
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2015
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2014
|
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|
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|
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Revenue
|
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$
|
8,045
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$
|
10,362
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$
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24,567
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$
|
26,829
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|
Cost of revenue
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|
|
5,560
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|
|
5,689
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17,302
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14,598
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Gross profit
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2,485
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4,673
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7,265
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12,231
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Operating expenses:
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Research and development
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7,689
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7,250
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18,483
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16,614
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Selling, general and administrative
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10,932
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8,724
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34,713
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27,040
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Amortization of intangible assets
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50
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|
|
50
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|
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151
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151
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Total operating expenses
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18,671
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16,024
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53,347
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|
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43,805
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Loss from operations
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(16,186
|
)
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|
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(11,351
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)
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(46,082
|
)
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(31,574
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)
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Non-operating (expense) income, net:
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Gain from revaluation of warrant liability
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1,109
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1,738
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4,698
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14,263
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Foreign exchange loss
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(10
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)
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(941
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)
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(624
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)
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(945
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)
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Interest expense
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(505
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)
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(249
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)
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(1,061
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)
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(333
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)
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Other income, net
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7
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52
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36
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|
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106
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Total non-operating income, net
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601
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|
600
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3,049
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13,091
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Loss before income taxes
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|
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(15,585
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)
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|
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(10,751
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)
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(43,033
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)
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|
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(18,483
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)
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Provision (benefit) for income taxes
|
|
|
|
95
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|
|
|
8
|
|
|
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(1,921
|
)
|
|
|
90
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Net loss
|
|
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$
|
(15,680
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)
|
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$
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(10,759
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)
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$
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(41,112
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)
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$
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(18,573
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)
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Net loss per share:
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Basic
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$
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(0.16
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)
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$
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(0.14
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)
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$
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(0.43
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)
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$
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(0.25
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)
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Diluted
|
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$
|
(0.17
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)
|
|
$
|
(0.16
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)
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$
|
(0.48
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)
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|
$
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(0.44
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)
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Weighted average shares outstanding used in the calculation of net
loss per share:
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Basic
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96,864
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75,194
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95,347
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73,407
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Diluted
|
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97,605
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76,103
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96,340
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75,437
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CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED
BALANCE SHEETS
(in thousands)
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|
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September 30,
|
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December 31,
|
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|
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2015
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2014 (1)
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(Unaudited)
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ASSETS
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Current assets:
|
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Cash and cash equivalents
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$
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50,795
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|
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$
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22,781
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Short-term investments
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48,968
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28,513
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Investment in marketable equity securities
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7,684
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-
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Accounts receivable
|
|
|
|
5,646
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|
|
|
5,493
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|
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Inventories
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|
|
12,842
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|
|
|
14,956
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Prepaid expenses
|
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|
|
1,535
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|
|
|
1,210
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Other current assets
|
|
|
|
953
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|
|
|
1,932
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|
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Total current assets
|
|
|
|
128,423
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|
|
|
74,885
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Non-current assets:
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|
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Property and equipment, net
|
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|
|
3,712
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|
|
|
3,781
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|
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Goodwill
|
|
|
|
1,316
|
|
|
|
1,316
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|
|
Intangible assets, net
|
|
|
|
991
|
|
|
|
1,142
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|
|
Restricted cash
|
|
|
|
623
|
|
|
|
508
|
|
|
Other assets
|
|
|
|
123
|
|
|
|
144
|
|
|
Total assets
|
|
|
$
|
135,188
|
|
|
$
|
81,776
|
|
|
|
|
|
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|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
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Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
6,813
|
|
|
$
|
9,882
|
|
|
Accrued liabilities
|
|
|
|
8,108
|
|
|
|
8,444
|
|
|
Accrued taxes
|
|
|
|
818
|
|
|
|
-
|
|
|
Deferred revenue - current
|
|
|
|
306
|
|
|
|
376
|
|
|
Debt - current
|
|
|
|
1,449
|
|
|
|
-
|
|
|
Warrant liability
|
|
|
|
2,424
|
|
|
|
10,485
|
|
|
Total current liabilities
|
|
|
|
19,918
|
|
|
|
29,187
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Non-current liabilities:
|
|
|
|
|
|
|
Debt - non-current
|
|
|
|
18,407
|
|
|
|
9,872
|
|
|
Deferred income taxes
|
|
|
|
127
|
|
|
|
115
|
|
|
Other non-current liabilities
|
|
|
|
1,215
|
|
|
|
1,081
|
|
|
Total liabilities
|
|
|
|
39,667
|
|
|
|
40,255
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock
|
|
|
|
97
|
|
|
|
80
|
|
|
Additional paid-in capital
|
|
|
|
673,653
|
|
|
|
583,416
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
4,827
|
|
|
|
(31
|
)
|
|
Accumulated deficit
|
|
|
|
(583,056
|
)
|
|
|
(541,944
|
)
|
|
Total stockholders' equity
|
|
|
|
95,521
|
|
|
|
41,521
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
135,188
|
|
|
$
|
81,776
|
|
|
|
(1) The financial information in this column was derived from audited
consolidated financial statements included in the Company’s 2014 Annual
Report on Form 10-K.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151105006659/en/
Source: Cerus Corporation