On March 5, 2024 Cerus Corporation (Nasdaq: CERS) reported financial results for the fourth quarter and full year ended December 31, 2023 (Press release, Cerus, MAR 5, 2024, View Source [SID1234640772]).
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Recent highlights include:
Fourth-quarter 2023 and full-year 2023 total revenue was comprised of (in thousands, except %):
Three Months Ended
Twelve Months Ended
December 31,
Change
December 31,
Change
2023
2022
$
%
2023
2022
$
%
Product Revenue
$
46,768
$
44,034
$
2,734
6
%
$
156,367
$
162,048
$
(5,681
)
-4
%
Government Contract Revenue
6,574
7,287
(713
)
-10
%
30,430
26,267
4,163
16
%
Total Revenue
$
53,342
$
51,321
$
2,021
4
%
$
186,797
$
188,315
$
(1,518
)
-1
%
The Company is reiterating its full-year 2024 annual product revenue guidance range of $172 million to $175 million. Included in this range is full-year 2024 guidance for INTERCEPT Fibrinogen Complex, which is expected to be between $8 million to $10 million.
Cash and cash equivalents and short-term investments were $65.9 million at December 31, 2023.
"Our fourth quarter performance sets the stage well for what we expect will be sustainable growth, beginning in 2024. On the commercial side, we continue to expect double-digit product revenue growth in 2024, rooted in both the expansion of our INTERCEPT platelet and plasma systems in both the U.S. and internationally, as well as the growth of INTERCEPT Fibrinogen Complex through large national blood center partnerships," stated William "Obi" Greenman, Cerus’ president and chief executive officer. "It is encouraging to see that pathogen inactivation has secured its position as a foundational technology for blood safety and availability across the globe, and we are excited about the opportunities ahead of us for expanding its reach."
"For the fourth quarter, reported net loss attributable to Cerus Corporation narrowed to $1.3 million. In addition, our fourth quarter achievement of reaching and surpassing adjusted EBITDA breakeven is a meaningful milestone for Cerus, and one that we are committed to sustaining and improving upon going forward. We also remain on track to announce the top-line readout soon from ReCePI, the first of our two U.S. Phase 3 studies for INTERCEPT Red Blood Cells," continued Greenman.
Revenue
Product revenue during the fourth quarter of 2023 was $46.8 million, compared to $44.0 million during the prior year period, driven by growth of INTERCEPT platelets across North America, including in both the U.S. and Canada. Product revenue for the full year 2023 was $156.4 million, in line with the Company’s 2023 product revenue guidance range of $155-$158 million, compared to $162.1 million for the full year 2022 driven by previously detailed customer ordering patterns, market dynamics, and timing of national sales agreements for INTERCEPT Fibrinogen Complex.
Fourth-quarter 2023 government contract revenue was $6.6 million, compared to $7.3 million during the prior year period. Our government contract revenue was comprised of funding associated with research and development (R&D) activities related to the INTERCEPT Blood System for Red Blood Cells (RBCs) as well as efforts related to the development of next-generation pathogen reduction technology to treat whole blood and development of a lyophilized INTERCEPT Fibrinogen Complex. Reported government contract revenue during the fourth quarter 2023 decreased versus the prior year period primarily due to completion of enrollment across sites in our U.S. Phase 3 ReCePI study for the INTERCEPT Blood System for RBCs.
Product Gross Profit & Margin
Product gross profit for the fourth quarter of 2023 was $26.0 million, increasing by 6% over the prior year period. Product gross margin for the fourth quarter of 2023 was relatively stable year over year at 55.5% compared to 55.7% for the fourth quarter of 2022.
Full-year 2023 product gross profit was $86.4 million, comparable to the prior year. Product gross margin for the full year 2023 was 55.3% compared to 53.7% for the prior year. The improvement in product gross margins was driven by a relatively higher percentage of U.S. sales and increased platelet sales as a relative percentage of total product revenue.
Operating Expenses
Total operating expenses for the fourth quarter of 2023 were $31.6 million compared to $41.8 million for the same period of the prior year, reflecting a year-over-year decrease of 24%. For the full year, 2023 total operating expenses totaled $146.9 million, comparable to 2022 total operating expenses of $147.4 million.
R&D expenses for the fourth quarter of 2023 were $14.3 million, compared to $18.6 million for the fourth quarter of 2022. For the full year 2023, R&D expenses totaled $67.6 million, compared to $64.1 million for the full year 2022. The year-over-year increase in R&D expenses for the full year relate to increased costs associated with development of our next generation illuminator and increased clinical activities which, combined, were partially offset by the impact of our June 2023 restructuring initiatives and lower non-cash stock-based compensation expense.
Selling, general, and administrative (SG&A) expenses narrowed for the fourth quarter of 2023 and totaled $17.3 million, compared to $23.2 million for the fourth quarter of 2022. For the full year 2023, SG&A expenses totaled $75.5 million, compared to $83.3 million for the full year 2022. The year-over-year decrease in SG&A expenses for the fourth quarter and full year was tied to the impact of our June 2023 restructuring initiative and lower non-cash stock-based compensation.
Net Loss Attributable to Cerus Corporation
Net loss attributable to Cerus Corporation for the fourth quarter of 2023 was $1.3 million, or $0.01 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $13.6 million, or $0.08 per basic and diluted share, for the fourth quarter of 2022.
For the full year 2023, net loss attributable to Cerus Corporation was $37.5 million, or $0.21 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $42.8 million, or $0.24 per basic and diluted share, for the full year 2022.
Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted EBITDA for the fourth quarter of 2023 was positive $4.7 million, compared to non-GAAP Adjusted EBITDA of negative $3.7 million for the fourth quarter of 2022. Full-year 2023 non-GAAP Adjusted EBITDA was negative $10.7 million, compared to non-GAAP Adjusted EBITDA of negative $12.4 million for full year 2022. For additional information, please see definitions and the reconciliation of this non-GAAP measure to net loss attributable to Cerus Corporation accompanying this release.
Balance Sheet & Cash Use
At December 31, 2023, the Company had cash and cash equivalents and short-term investments of $65.9 million, compared to $79.0 million at September 30, 2023, and $102.2 million at December 31, 2022.
As of December 31, 2023, the Company had $60.0 million outstanding on its term loan and $20.0 million drawn on its revolving credit facility. The Company’s revolving line of credit allows for an additional $15.0 million.
For the fourth quarter of 2023, net cash used in operating activities totaled $15.2 million as compared to $1.8 million during the prior year period, while for the full year 2023, net cash used in operating activities totaled $43.2 million, compared with $25.6 million for the full year 2022. Throughout 2023, the Company invested in working capital, namely increased inventory and a significant paydown of its accounts payable and accrued liabilities. The Company plans to bring down reported December 31, 2023 inventory levels and manage other working capital items closely, in order to move closer to generating operating cash flows based on its stated product revenue guidance.
Reiterating 2024 Product Revenue Guidance
The Company expects full-year 2024 product revenue will be in the range of $172 million to $175 million. Included in this range is full-year 2024 INTERCEPT Fibrinogen Complex revenue guidance between $8 million to $10 million.
Quarterly Conference Call
The Company will host a conference call at 4:30 P.M. EST this afternoon, during which management will discuss the Company’s financial results and provide a general business overview and outlook. To listen to the live webcast, please visit the Investor Relations page of the Cerus website at View Source
A replay will be available on Cerus’ website approximately three hours after the call through March 19, 2024.