On February 28, 2023 Cerus Corporation (Nasdaq: CERS) reported financial results for the fourth quarter and full year ended December 31, 2022 (Press release, Cerus, FEB 28, 2023, View Source [SID1234627835]).
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Recent highlights include:
Fourth quarter 2022 and full-year 2022 total revenue was comprised of (in thousands, except %):
Three Months Ended
Twelve Months Ended
December 31,
Change
December 31,
Change
2022
2021
$
%
2022
2021
$
%
Product Revenue
$
44,034
$
39,865
$
4,169
10
%
$
162,048
$
130,859
$
31,189
24%
Government Contract Revenue
7,287
10,223
(2,936)
(29%)
26,267
28,659
(2,392)
(8%)
Total Revenue
$
51,321
$
50,088
$
1,233
2
%
$
188,315
$
159,518
$
28,797
18
%
The Company is reiterating its full-year 2023 annual product revenue guidance range of $165 million to $170 million.
Cash, cash equivalents, and short-term investments were $102.2 million at December 31, 2022.
"Throughout 2022, Cerus continued to make significant progress towards its goal of safeguarding the global blood supply and advancing the complete INTERCEPT product portfolio. The Company’s efforts to establish INTERCEPT as the standard of care in various regions, most recently in the U.S., are evident in our financial results," said William "Obi" Greenman, Cerus’ president and chief executive officer. "The success of the INTERCEPT platelet business in the U.S. continued in the fourth quarter, with growth fueled by effective commercial and operational efforts. As the business has grown significantly over the last five years, Cerus has efficiently managed the ongoing expansion of its contracted manufacturing capacity to provide the certainty that our customers demand."
"The successful deployment of the INTERCEPT Blood System for platelets in the U.S. has driven a record-breaking year for the Company. Cerus’ remarkable growth over the past five years has enabled it to lead a transformation in transfusion medicine," Greenman continued. "Cerus remains optimistic about its core business franchise and the potential for future growth. We have multiple opportunities ahead of us, and our improving financial profile and focus on cashflow breakeven will enable Cerus to self-fund these opportunities. We look forward to updating our stakeholders on our progress throughout the year."
Revenue
Product revenue during the fourth quarter of 2022 was $44.0 million, compared to $39.9 million during the prior year period. Product revenue growth during the quarter and full year was driven by increased sales of INTERCEPT platelet kits to blood center customers across the U.S.
Fourth-quarter 2022 government contract revenue was $7.3 million, compared to $10.2 million during the prior year period. Reported government contract revenue in the fourth quarter 2022 decreased versus the prior year period primarily due to the fact that, in Q4 of 2021, we realized a cumulative true up in revenue resulting from reaching mutual resolution on an outstanding item with a government agency partner. 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 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.
Product Gross Profit & Margin
Product gross profit for the fourth quarter of 2022 was $24.5 million, the highest in the Company’s history, increasing by 20% over the prior year period. Product gross margin for the fourth quarter of 2022 was 55.7% compared to 51.1% for the fourth quarter of 2021. The fourth quarter of 2022 represents the highest product gross margin achieved.
Full-year 2022 product gross profit was $87.1 million and reflected growth of 29% over the prior year. Product gross margin for the full-year 2022 was 53.7% compared to 51.5% for the prior year. The product gross margins were driven by the distribution of product sales across different regions, with U.S. kit sales showing higher growth compared to other regions, and, to a lesser extent, by the product mix. During the year, the sales of platelet kits accounted for a larger share of overall sales compared to the prior year period.
Operating Expenses
Total operating expenses for the fourth quarter of 2022 were $41.8 million compared to $37.6 million for the same period of the prior year, reflecting a year-over-year increase of 11%. For the full year, 2022 total operating expenses totaled $147.4 million, representing an increase of 2% from 2021 total operating expenses of $145.0 million. On both a quarterly and full-year basis, higher R&D expenses and higher selling, general, and administrative (SG&A) expenses drove operating expenses higher year over year.
SG&A expenses for the fourth quarter of 2022 totaled $23.2 million, compared to $22.0 million for the fourth quarter of 2021. For the full-year 2022, SG&A expenses totaled $83.3 million, compared to $81.3 million for the full-year 2021. The year-over-year increase in SG&A expenses for the fourth quarter and full year was tied to costs associated with non-cash stock-based compensation, increased hiring, legal and commercialization efforts.
R&D expenses for the fourth quarter of 2022 were $18.6 million, compared to $15.6 million for the fourth quarter of 2021. For the full year 2022, R&D expenses totaled $64.1 million, compared to $63.7 million for the full-year 2021. For both the fourth quarter and full year, the Company’s R&D expenses continued to advance key pipeline programs, including development of the LED illuminator and INTERCEPT Red Blood Cell program, both domestically and in EMEA, and increased slightly year over year due to the timing of activities related to new product development.
Net Loss Attributable to Cerus Corporation
Net loss attributable to Cerus Corporation for the fourth quarter of 2022 was $13.6 million, or $0.08 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $9.1 million, or $0.05 per basic and diluted share, for the fourth quarter of 2021.
For the full-year 2022, net loss attributable to Cerus Corporation was $42.8 million, or $0.24 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $54.4 million, or $0.32 per basic and diluted share, for the full year 2021.
Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted EBITDA for the fourth quarter of 2022 was negative $3.7 million, compared to non-GAAP Adjusted EBITDA of negative $4.3 million for the fourth quarter of 2021. Full-year 2022 non-GAAP Adjusted EBITDA was negative $12.4 million, compared to non-GAAP Adjusted EBITDA of negative $29.5 million for full year 2021. 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, 2022, the Company had cash, cash equivalents and short-term investments of $102.2 million, compared to $103.8 million at September 30, 2022, and $129.4 million at December 31, 2021.
As of December 31, 2022, the Company had $54.9 million outstanding on its term loan and $14.9 million drawn on its revolving credit facility. The Company continues to have access to $5 million under its revolving line of credit.
For the fourth quarter of 2022, net cash used in operating activities totaled $1.8 million as compared to $1.2 million during the prior year period, while for the full year 2022, net cash used in operating activities totaled $25.6 million, compared with $33.9 million for the full year 2021. The full-year decrease in net cash used in operating activities was driven by increased product sales and underlying gross profit, as well as by the timing of payments and continued inventory related purchases and payments related to incentive compensation.
Reiterating 2023 Product Revenue Guidance
The Company expects full-year 2023 product revenue will be in the range of $165-$170 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 14, 2023.