On August 1, 2024 Cerus Corporation (Nasdaq: CERS) reported financial results for its second quarter and six months ended June 30, 2024 (Press release, Cerus, AUG 1, 2024, View Source [SID1234645254]).
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Total revenue for the three and six months ended June 30, 2024 was comprised of ( in thousands, except %) :
Three Months Ended
Six Months Ended
June 30,
Change
June 30,
Change
2024
2023
$
%
2024
2023
$
%
Product Revenue
$
45,079
$
38,853
$
6,226
16
%
$
83,444
$
69,827
$
13,617
20
%
Government Contract Revenue
5,440
8,875
(3,435
)
-39
%
10,470
16,377
(5,907
)
-36
%
Total Revenue
$
50,519
$
47,728
$
2,791
6
%
$
93,914
$
86,204
$
7,710
9
%
Recent highlights include:
Advanced efforts to expand the U.S. manufacturing capacity for INTERCEPT Fibrinogen Complex (IFC).
Achievement of 100% adoption of INTERCEPT platelets by Canadian Blood Services, resulting in the pathogen inactivation of the majority of platelets in Canada.
Narrowed GAAP net loss attributable to Cerus Corporation to $5.8 million and generated non-GAAP adjusted EBITDA of $0.8 million for the second quarter.
Generated positive operating cash flows for the second straight quarter of 2024 bringing year-to-date positive operating cash flows to $2.4 million.
Cash and cash equivalents and short-term investments were $71.2 million at June 30, 2024.
The Company is increasing its full-year 2024 annual product revenue guidance range from $172-175 million to $175-178 million which includes $8-10 million for IFC.
The Company continues to expect future improvements to GAAP net loss attributable to Cerus Corporation for the full-year 2024 and remains committed to adjusted EBITDA breakeven for the full-year 2024.
"We are very pleased to post another strong quarter to continue our growth trajectory in 2024. North American sales in our platelet business led the way, including both organic U.S. sales growth and 100% adoption by Canadian Blood Services. Given our expectations for continued momentum in the business, we are raising our full-year 2024 product revenue guidance today," stated William "Obi" Greenman, Cerus’ president and chief executive officer. "Our IFC business is accelerating with respect to the increasing recognition of its pivotal early role in the care of bleeding patients and its improved operational ease of use for hospital transfusion services. Two recent publications spotlighting the hospital experience with IFC document these benefits well, and there are expanding numbers of hospital case studies being presented at upcoming conferences, including the AABB Annual Meeting in the fall."
"We are also extremely pleased with our execution to date on key financial measures that we discussed at the beginning of the year, namely adjusted EBITDA and operating cash flows," continued Greenman. "We will continue our efforts to improve on these metrics during the back half of 2024, which is expected to help further strengthen our financial position."
Revenue
Product revenue during the second quarter of 2024 was $45.1 million, compared to $38.9 million during the prior year period. This year-over-year increase of 16% was driven primarily by growth in our platelets business, particularly in North America. Second-quarter product revenue included sales of IFC, which were $2.0 million, up from $1.4 million during the prior year period.
Second-quarter 2024 government contract revenue was $5.4 million, compared to $8.9 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 IFC. Reported government contract revenue during the second 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 second quarter of 2024 was $24.7 million, increasing by 16% over the prior year period. Product gross margin for the second quarter of 2024 was relatively stable year over year at 54.7% compared to 54.9% for the second quarter of 2023. Absent any unanticipated factor, we expect product gross margin levels will remain relatively consistent with second-quarter 2024 levels for the duration of 2024.
Operating Expenses
Total operating expenses for the second quarter of 2024 were $33.9 million, compared to $41.9 million for the same period of the prior year, reflecting a year-over-year decrease of 19%. This decline resulted from year-over-year decreases in both R&D and selling, general and administrative (SG&A) expenses, driven by the restructuring implemented in the second quarter of 2023, as well as completion of key initiatives by the Company.
R&D expenses for the second quarter of 2024 were $15.0 million, compared to $19.2 million for the second quarter of 2023. The primary drivers for the decrease in R&D expenses were the restructuring implemented in the second quarter of last year and the completion of the Company’s ReCePI trial in the first quarter of 2024.
SG&A expenses narrowed for the second quarter of 2024 and totaled $19.0 million, compared to $20.5 million for the second quarter of 2023. The primary driver for the decrease in SG&A expenses was again the restructuring implemented in the second quarter of last year.
Net Loss Attributable to Cerus Corporation
Net loss attributable to Cerus Corporation for the second quarter of 2024 was $5.8 million, or $0.03 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $13.3 million, or $0.07 per basic and diluted share, for the second quarter of 2023. Net loss attributable to Cerus Corporation for the first half of 2024 was $15.5 million, compared to a net loss attributable to Cerus Corporation of $28.9 million for the first half of 2023.
Non-GAAP Adjusted EBITDA
Non-GAAP adjusted EBITDA for the second quarter of 2024 was $0.8 million, compared to a loss of $4.7 million for the second quarter of 2023. Non-GAAP adjusted EBITDA narrowed to a loss of $1.9 million for the first half of 2024, compared to a loss of $14.5 million for the first half of 2023. The Company continues to focus on achieving non-GAAP adjusted EBITDA breakeven for the full-year 2024 period as a whole. 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 June 30, 2024, the Company had cash and cash equivalents and short-term investments of $71.2 million, compared to $65.9 at December 31, 2023.
As of June 30, 2024, the Company had $65.0 million outstanding on its term loan and $18.8 million drawn on its revolving credit facility which represents a payback of $1.2 million for the quarter. The Company’s revolving line of credit allows for an additional $16.2 million.
For the second quarter of 2024, the Company generated positive cash flows of $0.4 million from operations compared to cash used in operations of $7.6 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.
Increasing 2024 Product Revenue Guidance
Given the strong performance in the first half and continued growing conviction around IFC demand, the Company expects full-year 2024 product revenue will be in the range of $175 million to $178 million, representing increased growth expectations of approximately 12-14% over full-year 2023 results. Previously, the Company’s 2024 product revenue guidance range was $172 million to $175 million. The Company is reiterating full-year 2024 IFC revenue guidance of $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 August 22, 2024.