CONCORD, Calif.--(BUSINESS WIRE)--
Cerus Corporation (NASDAQ:CERS) today announced financial results for
the second quarter ended June 30, 2016.
Recent developments include:
-
With confirmation of local Zika cases in Florida, the FDA has advised
blood establishments in the affected counties to either cease local
blood collections, implement pathogen reduction technology, and/or
implement testing via an investigational donor screening test.
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The Biomedical Advanced Research and Development Authority (BARDA)
awarded Cerus a 5-year contract with potential funding of up to $181
million to support the development of the INTERCEPT Red Blood Cell
System in the U.S.
-
A total of 14 U.S. blood centers are now routinely producing
INTERCEPT-treated products, including the American Red Cross.
-
Blood Centers of America (BCA) members representing 54% of the
aggregate volume of platelets produced by the whole BCA membership
have executed participation agreements for adoption of the INTERCEPT
Blood System under a master framework agreement.
-
Received Health Canada approval for use of the INTERCEPT Blood System
for plasma.
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Donated INTERCEPT Blood System kits to HEMORIO intended to help combat
against potential transmission of viruses such as Zika, dengue fever,
and chikungunya via blood transfusion during the summer Olympic Games
in Rio de Janeiro.
-
The Swiss Red Cross Humanitarian Foundation awarded a grant of 2
million Swiss Francs to Cerus, the University Hospital of Basel, and
the Swiss Transfusion SRC to complete clinical studies to develop a
whole blood pathogen inactivation system for use in Africa.
“As anticipated, a growing number of our contracted customers are
entering into routine use with INTERCEPT, and we are focused on
converting the remaining contracted customers into routine use
throughout the remainder of 2016. Of particular significance, the
American Red Cross has gone live at their first facility,” said William
'Obi' Greenman, Cerus’ president and chief executive officer. “Moreover,
having secured the BARDA funding for the INTERCEPT red cell program, we
are now in a position to more aggressively fund the development and
launch of the full INTERCEPT portfolio globally.”
Revenue
Revenue for the second quarter of 2016 was $9.3 million, up 5% from the
$8.8 million recognized during the same period in 2015. The increase in
reported revenue for the quarter was primarily driven by increased
utilization of platelet kits in our European markets, contribution from
our U.S. commercial launch, and to a lesser extent, slightly favorable
foreign exchange rates. Revenue for the first six months of 2016 was
$16.9 million, up 2% from the first six months of 2015, similarly driven
by increased platelet sales in our European markets and sales to U.S.
customers.
The Company continues to expect 2016 global revenue in the range of $37
million to $40 million with anticipated second half growth supported by
new business opportunities in both its European and U.S. markets.
Gross Margins
Gross margins for the second quarter of 2016 were 46%, compared to 20%
for the second quarter of 2015. Gross margins for the first six months
of 2016 were 45%, compared to 29% for the first six months of 2015.
Gross margins for the three and six months ended June 30, 2016 were less
affected by the volatile foreign exchange rates seen during the three
and six months ended June 30, 2015, which resulted in a compression of
margins during that time. In addition, a higher ratio of platelet units
were sold during the three and six months ended June 30, 2016, compared
to that of 2015. Further, the elimination of the royalty previously owed
to Fresenius Kabi AG in the fourth quarter of 2015 also drove improved
gross margins when comparing 2016 results to those in 2015.
Operating Expenses
Total operating expenses for the second quarter of 2016 were $21.0
million, compared to $17.3 million for the second quarter of 2015. Total
operating expenses for the first six months of 2016 were $39.7 million,
compared to $34.7 million for the first six months of 2015. Research and
development expenses drove the majority of the reported increase due to
activities to support our platelet label claim extension efforts,
required post marketing platelet studies in the U.S., and preparation of
the anticipated 2016 CE Mark submission for the red blood cell system.
To a lesser extent, selling, general and administrative expenses were
also up, driven by increased 2016 U.S. commercialization costs,
partially offset by current year efficiencies realized from other
administrative areas.
Operating and Net Loss
Operating losses during the second quarter of 2016 were $16.7 million,
compared to $15.5 million for the second quarter of 2015, and $32.1
million compared to $29.9 million for the six months ended June 30, 2016
and June 30, 2015, respectively.
Net loss for the second quarter of 2016 was $18.2 million, or $0.18 per
diluted share, compared to a net loss of $16.0 million, or $0.17 per
diluted share, for the second quarter of 2015. Net loss for the first
half of 2016 was $35.0 million, or $0.35 per share on a fully diluted
basis, compared to a net loss of $25.4 million, or $0.30 per share on a
fully diluted basis, for the same period of 2015.
Net loss in the prior year period was negatively impacted by the
mark-to-market adjustments of the Company’s previously outstanding
warrants, which resulted in non-cash charges of $2.7 million during the
second quarter of 2015.
Net loss for the first half of 2015 was positively impacted by the
mark-to-market adjustments of the Company’s previously outstanding
warrants, which resulted in non-cash gains of $3.6 million during the
first half of 2015. The Company has no remaining outstanding warrants
and as such, does not expect mark-to-market adjustments going forward.
Cash, Cash Equivalents and Investments
At June 30, 2016, the Company had cash, cash equivalents and short-term
investments of $88.5 million compared to $107.9 million at December 31,
2015.
At June 30, 2016, the Company had approximately $20 million in
outstanding debt under its loan agreement with Oxford Finance.
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 7506644. The replay will be available approximately
three hours after the call through August 18, 2016.
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
potential funding under Cerus’ contract with BARDA; Cerus’ expectation
regarding the conversion of contracted customers into routine use during
2016 and its expectation that the American Red Cross will initiate
production with INTERCEPT at additional distribution sites; Cerus’ 2016
annual revenue guidance; Cerus’ platelet label claim extension efforts;
and Cerus’ anticipated 2016 CE Mark submission for the red blood cell
system. 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 meet its revenue guidance
for 2016 and/or realize meaningful revenue contributions from U.S.
customers in 2016 or otherwise, 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 U.S. 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 U.S., 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 Cerus’ ability to commercialize
the INTERCEPT Blood System in the U.S. 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, 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 U.S., which will require additional regulatory approvals
and (c) that Cerus may be unable to file for CE Mark approval of the red
blood cell system in Europe in 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; 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; 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’ contract with
BARDA and/or BARDA’s exercise of any potential subsequent option
periods, such that the total actual value of the BARDA contract to CERUS
may be substantially less than anticipated; that BARDA is entitled to
terminate the BARDA contract at any time for its convenience and is not
otherwise obligated to provide continued funding beyond current year
amounts from Congressionally approved annual appropriations; 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 produce, market and distribute its
products; risks related to future opportunities and plans, including the
uncertainty of future revenues and other financial performance and
results, as well as other risks detailed in Cerus’ filings with the
Securities and Exchange Commission, including in Cerus‘ Quarterly Report
on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on
May 6, 2016. 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
June 30,
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Six Months Ended
June 30,
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2016
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2015
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2016
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2015
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Revenue
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$
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9,251
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$
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8,830
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$
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16,883
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$
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16,522
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Cost of revenue
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4,976
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7,028
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9,239
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11,742
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Gross profit
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4,275
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1,802
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7,644
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4,780
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Operating expenses:
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Research and development
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8,557
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5,213
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15,474
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10,794
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Selling, general and administrative
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12,406
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12,063
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24,153
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23,781
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Amortization of intangible assets
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51
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51
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101
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101
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Total operating expenses
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21,014
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17,327
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39,728
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34,676
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Loss from operations
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(16,739
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)
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(15,525
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)
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(32,084
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)
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(29,896
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)
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Non-operating (expense) income, net
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(444
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)
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(2,482
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)
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(1,150
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)
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2,448
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Loss before income taxes
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(17,183
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)
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(18,007
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)
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(33,234
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)
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(27,448
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)
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Provision (benefit) for income taxes
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983
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(2,035
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)
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1,795
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(2,016
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)
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Net loss
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$
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(18,166
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)
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$
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(15,972
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)
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$
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(35,029
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)
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$
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(25,432
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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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(0.18
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)
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$
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(0.17
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)
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$
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(0.35
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)
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$
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(0.27
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)
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Diluted
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$
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(0.18
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)
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$
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(0.17
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)
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$
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(0.35
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)
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$
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(0.30
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)
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Weighted average shares outstanding used for calculating net loss
per share:
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Basic
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101,563
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95,728
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100,517
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94,576
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Diluted
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101,563
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95,728
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100,517
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95,682
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CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED
BALANCE SHEETS
(in thousands)
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June 30,
2016
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December 31,
2015
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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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7,704
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$
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71,018
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Short-term investments and marketable equity securities
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80,837
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36,861
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Accounts receivable
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5,149
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5,794
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Inventories
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12,111
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10,812
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Prepaid expenses and other current assets
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6,411
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5,921
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Total current assets
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112,212
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130,406
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Non-current assets:
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Property and equipment, net
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3,216
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3,549
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Goodwill and intangible assets, net
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2,155
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2,256
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Restricted cash and other assets
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2,868
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3,191
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Total assets
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$
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120,451
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$
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139,402
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable and accrued liabilities
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$
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16,629
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$
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15,070
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Manufacturing and development obligations – current
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2,221
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3,282
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Debt – current
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6,127
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2,956
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Deferred revenue – current
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767
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554
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Total current liabilities
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25,744
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21,862
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Non-current liabilities:
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Debt – non-current
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13,726
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16,848
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Deferred income taxes
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140
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|
122
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Manufacturing and development obgliations – non-current
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4,844
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4,542
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Other non-current liabilities
|
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1,356
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1,263
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Total liabilities
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45,810
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44,637
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Stockholders’ equity
|
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74,641
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|
|
94,765
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Total liabilities and stockholders’ equity
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|
$
|
120,451
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$
|
139,402
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160804006185/en/
Source: Cerus Corporation