CONCORD, Calif.--(BUSINESS WIRE)--
Cerus Corporation (NASDAQ: CERS) today announced financial results for
the third quarter ended September 30, 2016.
Recent developments include:
-
The U.S. Food and Drug Administration’s (FDA) revised recommendations
for protecting blood components from Zika virus was expanded to
recommend use of pathogen reduction technology and/or an
investigational blood screening test to all U.S. blood centers.
-
The first Cerus U.S. blood center customers have submitted biologics
license applications to the FDA to request allowance for the
interstate transport of INTERCEPT-treated platelet components.
-
Hemolife Fundacion Banco Nacional de Sangre became the first blood
center to enter into routine use with the INTERCEPT Blood System in
Colombia.
-
Cerus’ global commercial leadership was strengthened with the
appointment of Vivek Jayaraman as chief commercial officer.
“U.S. momentum continues to build, with the number of customers
initiating INTERCEPT production accelerating from just three at the
beginning of the year to 17 customers to date. With another 22
contracted customers slated to begin production, we are in a healthy
position for growth,” said William 'Obi' Greenman, Cerus’ president and
chief executive officer. “Beyond platelets and plasma, we are also
moving forward with activities related to our red cell program, with
plans to submit for European CE Mark approval and to initiate a U.S.
Phase III trial.”
Revenue
Product revenue for the third quarter of 2016 was $10.2 million, up 26%
from the $8.0 million recognized during the same period in 2015. The
increase in reported product revenue for the quarter was primarily
driven by a year-over-year increase in INTERCEPT disposable kit demand
of 30% in our EMEA and U.S. commercial regions. Product revenue for the
first nine months of 2016 was $27.1 million, up 10% from the first nine
months of 2015, driven primarily by increased kit sales in our EMEA
region and sales to U.S. customers.
Revenue from our Biomedical Advanced Research and Development Authority
(BARDA) agreement for the three and nine months ended September 30,
2016, was $0.3 million. We did not recognize any revenue from our BARDA
agreement during the three and nine months ended September 30, 2015.
The Company continues to expect 2016 global product revenue in the range
of $37 million to $40 million with anticipated growth supported by new
business opportunities in both its European and U.S. markets.
Gross Margins
Gross margins on product revenue for the third quarter of 2016 were 46%,
compared to 31% for the third quarter of 2015. Gross margins on product
revenue for the first nine months of 2016 were 46%, compared to 30% for
the first nine months of 2015. Gross margins on product revenue for the
three and nine months ended September 30, 2016, increased primarily due
to the Company’s disposable kit manufacturing agreement with Fresenius
Kabi AG, entered into during the fourth quarter of 2015, and
efficiencies realized in 2016 related to inventory management.
Operating Expenses
Total operating expenses for the third quarter of 2016 were $19.2
million, compared to $18.7 million for the third quarter of 2015. Total
operating expenses for the first nine months of 2016 were $59.0 million,
compared to $53.3 million for the first nine months of 2015. Selling,
general and administrative expenses increased for the three and nine
months ended September 30, 2016, primarily due to increased spending
related to selling and marketing activities associated with the
commercialization of INTERCEPT in the U.S. market. Research and
development expenses drove the majority of the reported increase for the
nine months ended September 30, 2016, primarily due to activities
associated with clinical development of the red blood cell system, the
pursuit of potential premarket applications supplement approvals for the
platelet and plasma systems and the initial activities under the BARDA
agreement.
Operating and Net Loss
Operating losses during the third quarter of 2016 were $14.3 million,
compared to $16.2 million for the third quarter of 2015, and $46.3
million compared to $46.1 million for the nine months ended September
30, 2016 and September 30, 2015, respectively.
Net loss for the third quarter of 2016 was $14.4 million, or $0.14 per
diluted share, compared to a net loss of $15.7 million, or $0.17 per
diluted share, for the third quarter of 2015. Net loss for the first
nine months of 2016 was $49.4 million, or $0.49 per diluted share,
compared to a net loss of $41.1 million, or $0.48 per diluted share, for
the same period of 2015.
Net loss for the third quarter 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 $1.1 million and $4.7
million during the third quarter of 2015 and first nine months of 2015,
respectively. 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 September 30, 2016, the Company had cash, cash equivalents and
short-term investments of $81.2 million compared to $107.9 million at
December 31, 2015.
At September 30, 2016, the Company had approximately $19 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 63181301. The replay will be available
approximately three hours after the call through November 17, 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.
Except for the historical statements contained herein, this press
release contains forward-looking statements concerning Cerus’ products,
prospects and expected results, including statements concerning the
potential approval by the FDA of biologics license applications (BLAs)
submitted to the FDA by certain Cerus blood center
customers and the potential for such approvals to make Cerus’
pathogen-reduced blood products more available to patients; Cerus’ 2016
annual revenue guidance and its expectation for anticipated growth; and
Cerus’ platelet label claim extension efforts. 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, grow sales in its European markets and/or
realize meaningful revenue contributions from U.S. customers for the
remainder of 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 the potential
inability of Cerus’ blood center customers to obtain approvals of BLAs
they have submitted to the FDA allowing for 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’ blood center
customers may be unable to obtain approvals by the FDA of BLAs they have
submitted to the FDA allowing for interstate transport of blood
components processed using the INTERCEPT Blood System in a timely manner
or at all, which could significantly delay or preclude Cerus’ ability to
successfully commercialize the INTERCEPT Blood System to those customers
for the portion of their business involved in interstate commerce; 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;
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 product 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 June 30, 2016, filed
with the SEC on August 5, 2016. 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue
|
|
$
|
10,175
|
|
|
$
|
8,045
|
|
|
$
|
27,058
|
|
|
$
|
24,567
|
|
|
Cost of product revenue
|
|
|
5,451
|
|
|
|
5,560
|
|
|
|
14,690
|
|
|
|
17,302
|
|
|
Gross profit on product revenue
|
|
|
4,724
|
|
|
|
2,485
|
|
|
|
12,368
|
|
|
|
7,265
|
|
|
|
|
|
|
|
|
|
|
|
|
Government contracts revenue
|
|
|
261
|
|
|
|
-
|
|
|
|
261
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
7,033
|
|
|
|
7,689
|
|
|
|
22,507
|
|
|
|
18,483
|
|
|
Selling, general and administrative
|
|
|
12,161
|
|
|
|
10,932
|
|
|
|
36,314
|
|
|
|
34,713
|
|
|
Amortization of intangible assets
|
|
|
50
|
|
|
|
50
|
|
|
|
151
|
|
|
|
151
|
|
|
Total operating expenses
|
|
|
19,244
|
|
|
|
18,671
|
|
|
|
58,972
|
|
|
|
53,347
|
|
|
Loss from operations
|
|
|
(14,259
|
)
|
|
|
(16,186
|
)
|
|
|
(46,343
|
)
|
|
|
(46,082
|
)
|
|
Non-operating (expense) income, net
|
|
|
(533
|
)
|
|
|
601
|
|
|
|
(1,683
|
)
|
|
|
3,049
|
|
|
Loss before income taxes
|
|
|
(14,792
|
)
|
|
|
(15,585
|
)
|
|
|
(48,026
|
)
|
|
|
(43,033
|
)
|
|
(Benefit) provision for income taxes
|
|
|
(416
|
)
|
|
|
95
|
|
|
|
1,379
|
|
|
|
(1,921
|
)
|
|
Net loss
|
|
$
|
(14,376
|
)
|
|
$
|
(15,680
|
)
|
|
$
|
(49,405
|
)
|
|
$
|
(41,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.14
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.43
|
)
|
|
Diluted
|
|
$
|
(0.14
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used for calculating net loss
per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
102,769
|
|
|
|
96,864
|
|
|
|
101,273
|
|
|
|
95,347
|
|
|
Diluted
|
|
|
102,769
|
|
|
|
97,605
|
|
|
|
101,273
|
|
|
|
96,340
|
|
|
CERUS CORPORATION
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
(in thousands)
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
12,880
|
|
$
|
71,018
|
|
Short-term investments and marketable equity securities
|
|
|
68,326
|
|
|
36,861
|
|
Accounts receivable
|
|
|
7,441
|
|
|
5,794
|
|
Inventories
|
|
|
12,202
|
|
|
10,812
|
|
Prepaid expenses and other current assets
|
|
|
7,180
|
|
|
5,921
|
|
Total current assets
|
|
|
108,029
|
|
|
130,406
|
|
Non-current assets:
|
|
|
|
|
|
Property and equipment, net
|
|
|
3,206
|
|
|
3,549
|
|
Goodwill and intangible assets, net
|
|
|
2,105
|
|
|
2,256
|
|
Restricted cash and other assets
|
|
|
2,785
|
|
|
3,191
|
|
Total assets
|
|
$
|
116,125
|
|
$
|
139,402
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
17,029
|
|
$
|
15,070
|
|
Manufacturing and development obligations – current
|
|
|
-
|
|
|
3,282
|
|
Debt – current
|
|
|
4,969
|
|
|
2,956
|
|
Deferred product revenue – current
|
|
|
892
|
|
|
554
|
|
Total current liabilities
|
|
|
22,890
|
|
|
21,862
|
|
Non-current liabilities:
|
|
|
|
|
|
Debt – non-current
|
|
|
14,382
|
|
|
16,848
|
|
Deferred income taxes
|
|
|
140
|
|
|
122
|
|
Manufacturing and development obligations – non-current
|
|
|
5,004
|
|
|
4,542
|
|
Other non-current liabilities
|
|
|
1,396
|
|
|
1,263
|
|
Total liabilities
|
|
|
43,812
|
|
|
44,637
|
|
Stockholders’ equity
|
|
|
72,313
|
|
|
94,765
|
|
Total liabilities and stockholders’ equity
|
|
$
|
116,125
|
|
$
|
139,402
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20161103006594/en/
Source: Cerus Corporation