On October 30, 2024 Cerus Corporation (Nasdaq: CERS) reported financial results for its third quarter and nine months ended September 30, 2024 (Press release, Cerus, OCT 30, 2024, View Source [SID1234647535]).
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Total revenue for the three and nine months ended September 30, 2024 was comprised of ( in thousands, except %) :
Three Months Ended
Nine Months Ended
September 30,
Change
September 30,
Change
2024
2023
$
%
2024
2023
$
%
Product Revenue
$
46,017
$
39,772
$
6,245
16
%
$
129,461
$
109,599
$
19,862
18
%
Government Contract Revenue
4,639
7,479
(2,840
)
-38
%
15,109
23,856
(8,747
)
-37
%
Total Revenue
$
50,656
$
47,251
$
3,405
7
%
$
144,570
$
133,455
$
11,115
8
%
Recent highlights include:
Partnered with U.S. Biomedical Advanced Research and Development Authority (BARDA) for new, six-year contract with value up to $248 million designed to support advancement of INTERCEPT Blood System for Red Blood Cells (RBCs) beyond U.S. Phase 3 studies through potential PMA licensure and into commercialization.
CE Mark review for INTERCEPT RBCs concluded without approval; assessing strategy for potential future regulatory submission in collaboration with Notified Body, TÜV-SÜD.
Further expanded U.S. manufacturing capacity for INTERCEPT Fibrinogen Complex (IFC) following receipt of three additional biologics license application (BLA) approvals by Cerus IFC production partners.
Multiple presentations across the INTERCEPT product portfolio at this month’s 2024 Association for Advancement of Blood & Biotherapies (AABB) Annual Meeting, including real-world case studies for IFC and clinical data from the U.S. Phase 3 ReCePI trial.
Submitted CE Mark dossier for LED illuminator in Europe to TÜV-SÜD.
Narrowed GAAP net loss attributable to Cerus Corporation to $2.9 million and generated positive non-GAAP adjusted EBITDA of $4.4 million for the third quarter.
Generated positive operating cash flows for the third straight quarter of 2024 bringing year-to-date positive operating cash flows to $6.4 million.
"Our performance, both commercially and financially, was very strong for the third quarter," stated William "Obi" Greenman, Cerus’ president and chief executive officer. "In addition to the organic growth in our North American INTERCEPT platelet business, we are pleased to have secured meaningful additional U.S. manufacturing capacity for IFC with the new BLA approvals, which will allow us to address the growing demand for the product. As a result of our strong performance during the first three quarters coupled with our expectations for future growth in our business segments, we are raising our full year product revenue guidance and increasing the lower end of our IFC guidance. Beyond the top-line, we have also delivered on our bottom-line and cashflow targets for Q3. We believe we are on track to hit our full-year 2024 goals as the year wraps up."
"With respect to our development pipeline, we are pleased to have submitted our LED illuminator regulatory filing in Europe in the third quarter," continued Greenman. "This much-anticipated new technology platform will enable operational improvements alongside the dependability that our customers have grown to expect from the INTERCEPT System. As we reported earlier this month, our RBC program remains a key focus for us in both the U.S., with the new BARDA contract accelerating a number of initiatives, as well as in the EU, where we anticipate an enhanced regulatory submission that we expect will incorporate the ReCePI Phase 3 clinical data."
Revenue
Product revenue during the third quarter of 2024 was $46.0 million, compared to $39.8 million during the prior year period. This year-over-year increase of 16% was driven primarily by growth in the Company’s platelets business, particularly in North America. Third-quarter product revenue included sales of IFC, which were $2.3 million, up from $1.7 million during the prior year period.
Third-quarter 2024 government contract revenue was $4.6 million, compared to $7.5 million during the prior year period. The Company’s government contract revenue was comprised of funding associated with research and development (R&D) activities related to the INTERCEPT Blood System for RBCs as well as efforts related to the development of next-generation pathogen reduction technology to treat whole blood and development of a lyophilized IFC. Reported government contract revenue during the third quarter of 2024 decreased versus the prior year period, primarily due to completion of the U.S. Phase 3 ReCePI clinical trial for INTERCEPT RBCs.
Product Gross Profit & Margin
Product gross profit for the third quarter of 2024 was $26.2 million, increasing by 20% over the prior year period. Product gross margin for the third quarter of 2024 improved to 56.9% compared to 54.9% for the prior year period. Absent any unanticipated factor, Cerus expects product gross margin levels to remain relatively consistent for the fourth quarter.
Operating Expenses
Total operating expenses for the third quarter of 2024 were $31.8 million, compared to $34.5 million for the same period of the prior year, reflecting a decrease of 8%. This decline resulted from decreases in R&D, partially offset by increases in selling, general and administrative (SG&A) expenses.
R&D expenses for the third quarter of 2024 were $14.0 million, compared to $16.8 million for the prior year period. The primary drivers for the decrease in R&D expenses were the completion of the Company’s ReCePI Phase 3 clinical trial during the first quarter of 2024 and the full impact of the previous year’s restructuring.
SG&A expenses for the third quarter of 2024 were $17.8 million, compared to $16.2 million for the prior year period. The primary driver for the increase in SG&A expenses was non-cash stock-based compensation. The Company continues to expect SG&A expenses will be relatively consistent for the balance of the year, driving increased leverage at these levels.
Net Loss Attributable to Cerus Corporation
Net loss attributable to Cerus Corporation for the third quarter of 2024 was $2.9 million, or $0.02 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $7.3 million, or $0.04 per basic and diluted share, for the third quarter of 2023. Net loss attributable to Cerus Corporation for the first nine months of 2024 was $18.4 million, compared to a net loss attributable to Cerus Corporation of $36.2 million for the first nine months of 2023.
Non-GAAP Adjusted EBITDA
Non-GAAP adjusted EBITDA for the third quarter of 2024 was a positive $4.4 million, compared to a loss of $1.0 million for the third quarter of 2023. Non-GAAP adjusted EBITDA was a positive $2.5 million for the first nine months of 2024, compared to a loss of $15.5 million for the first nine months of 2023. The Company continues to focus on achieving non-GAAP adjusted EBITDA breakeven for the full-year 2024. 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 Flows
At September 30, 2024, the Company had cash and cash equivalents and short-term investments of $75.6 million, compared to $71.2 million at June 30, 2024, and $65.9 million at December 31, 2023.
As of September 30, 2024, the Company had $65.0 million outstanding on its term loan and $18.5 million drawn on its revolving credit facility. The Company’s revolving line of credit allows for an additional $16.5 million, which is dependent on eligible assets supporting the borrowing base.
For the third quarter of 2024, the Company generated positive cash flows of $4.1 million from operations compared to cash used in operations of $10.5 million during the prior year period. These improvements were in line with the Company’s expectations and will continue to be a focus area going forward.
Raising 2024 Product Revenue Guidance
The Company is raising its full-year 2024 product revenue guidance to a range of $177 million to $179 million from the prior range of $175 million to $178 million. Alongside this raise in guidance, the Company is raising the bottom end of its full-year 2024 IFC revenue guidance to a new range of $9 million to $10 million from $8 million to $10 million.
Quarterly Conference Call
The Company will host a conference call at 4:30 P.M. EDT 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 November 20, 2024.