Cerus Reports Second Quarter 2017 Results
Published: Aug 04, 2017
CONCORD, Calif.--(BUSINESS WIRE)--Cerus Corporation (NASDAQ: CERS) today announced financial results for the second quarter ended June 30, 2017.
Recent developments include:
- Expanded INTERCEPT Blood Systems supply agreement with Établissement Français du Sang (EFS), the French National blood service, supporting INTERCEPT platelet production in potentially all EFS regional centers.
- Collaboration agreement with Central California Blood Center for the manufacture of pathogen-reduced cryoprecipitate as a novel biologic.
- Entered into $40 million amended growth capital agreement.
- INTERCEPT red cell program advances with additional BARDA funding to support clinical trials for a planned FDA submission and commercial manufacturing scale-up.
- CE Mark submission for INTERCEPT red cells estimated to be H2 2018 to accommodate new product release assay development; revised timing also allows for inclusion of Phase 3 clinical data in thalassemia patients.
“Our expanded supply agreement with the EFS, along with record platelet sales in the second quarter, provides us with increasing clarity for our revenue ramp for the coming quarters,” said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. “And while we have experienced challenges in our U.S. commercial rollout, the strength of our partnership with the American Red Cross and other large blood centers in the U.S. gives us confidence in the continued adoption of INTERCEPT Platelets.”
Product revenue for the second quarter of 2017 was $9.5 million, up 3% from the $9.3 million recognized during the same period in 2016. The increase in reported product revenue for the quarter was primarily driven by year-over-year growth for U.S. disposable kits and realized platelet orders for the EFS which were deferred from the first quarter. Product revenue for the first six months of 2017 was $16.5 million, compared to the first six months of 2016 of $16.9 million, driven by increased sales of INTERCEPT platelet kits in both our European and U.S. markets, partially offset by lower year-over-year sales of plasma kits in Europe and a weaker Euro relative to the U.S. dollar for the six months ended June 30, 2017, when compared to the six months ended June 30, 2016.
Gross margins on product revenue for the second quarter of 2017 were 54%, compared to 46% for the second quarter of 2016. Gross margins for the first six months of 2017 were 51%, compared to 45% for the first six months of 2016. Gross margins for the quarter and the first six months of 2017 benefitted from the increased demand for INTERCEPT platelet products which generate higher gross margins than plasma products and separately as a result of favorable manufacturing variances realized in the second quarter of 2017.
Total operating expenses for the second quarter of 2017 were $23.0 million, compared to $21.0 million for the second quarter of 2016. Total operating expenses for the first six months of 2017 were $45.9 million, compared to $39.7 million for the first six months of 2016. Selling, general and administrative expenses increased for the three and six months ended June 30, 2017 over the comparable period in 2016, primarily driven by increased commercial activity in the U.S. and to a lesser extent, the costs associated with administering our contract with BARDA for INTERCEPT red blood cell development. Research and development expenses also increased in both periods primarily due to clinical development activities of our INTERCEPT red blood cell system, and in particular, those activities related to our BARDA contract.
Operating and Net Loss
Operating losses during the second quarter of 2017 were $16.2 million, compared to $16.7 million for the second quarter of 2016, and $34.3 million compared to $32.1 million for the six months ended June 30, 2017 and June 30, 2016, respectively.
Net loss for the second quarter of 2017 was $17.1 million, or $0.16 per diluted share, compared to a net loss of $18.2 million, or $0.18 per diluted share, for the second quarter of 2016. Net loss for the first half of 2017 was $35.7 million, or $0.34 per diluted share, compared to a net loss of $35.0 million, or $0.35 per diluted share, for the same period of 2016.
Net loss for the three and six months ended June 30, 2017, was positively impacted by the realized gain of approximately $3.4 million and $3.5 million, respectively, due to the sale of the Company’s marketable equity investment in Aduro Biotech, Inc (“Aduro”). This was offset by the income tax expense of $3.9 million recorded for the three and six months ended June 30, 2017, primarily due to the sale of the Company’s shares of Aduro.
Cash, Cash Equivalents and Investments
At June 30, 2017, the Company had cash, cash equivalents and short-term investments of $50.9 million compared to $71.6 million at December 31, 2016.
At June 30, 2017, the Company had approximately $17.6 million in outstanding debt under its loan agreement with Oxford Finance. Subsequent to June 30, 2017, the Company amended its agreement with Oxford Finance providing up to $40 million of capital, an eighteen to twenty-four month interest only period and a full five years on the notes.
We expect 2017 product revenue to be in the range of $40 to $46 million compared to our previous guidance range of $38 to $46 million.
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 82994269. The replay will be available approximately three hours after the call through August 17, 2017.
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.