On November 2, 2023 Cerus Corporation (Nasdaq: CERS) reported its financial results for the third quarter ended September 30, 2023 (Press release, Cerus, NOV 2, 2023, View Source [SID1234636748]).

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Recent highlights include:

Third quarter 2023 total revenue of $47.3 million was comprised of total product revenue of $39.8 million and government contract revenue of $7.5 million.
Completed Phase 3 ReCePI study enrollment in cardiovascular surgery patients, with top-line data readout on track for Q1 2024.
Attended first in-person AABB Annual Meeting since 2019, where presentations from transfusion medicine leaders highlighted the growing experience with the benefits of INTERCEPT-treated products, including INTERCEPT platelets and INTERCEPT Fibrinogen Complex (IFC).
Cash, cash equivalents, and short-term investments were $79.0 million at September 30, 2023.
Reaffirming commitment to achieve non-GAAP adjusted EBITDA breakeven in the fourth quarter of 2023.
"We continued to make progress on multiple fronts in the third quarter," said William "Obi" Greenman, Cerus’ president and chief executive officer. "We completed patient enrollment in our U.S. Phase 3 ReCePI study and continue to plan for a top-line data readout from the study in the first quarter of next year."

"On the top line, product revenues in the quarter returned to prior year levels, and we expect continued growth from here through the end of the year, with the near-term growth trajectory influenced by the system-wide roll-out of INTERCEPT platelets at Canadian Blood Services," continued Greenman. "Due primarily to the timing of our recent execution of an IFC sales agreement with one of the largest U.S. producers of cryoprecipitate, we are adjusting our full-year 2023 product revenue guidance to a range of $155 million to $158 million. The growth we are expecting in the second half of this year reflects the ongoing global demand for INTERCEPT-treated blood components and the growing use of IFC by blood center and hospital customers, as evidenced at the recent AABB Annual Meeting."

Revenue

Product revenue during the third quarter of 2023 was $39.8 million, compared to $39.6 million during the prior year period.

Third-quarter 2023 government contract revenue was $7.5 million, compared to $6.8 million during the prior year period. Reported government contract revenue in the third quarter 2023 increased versus the prior year period primarily due to funding associated with development of LyoIFC as well as research and development (R&D) activities related to the INTERCEPT Blood System for Red Blood Cells. In addition to this funding, the Company’s government contract revenue was comprised of funding associated with efforts related to the development of next-generation pathogen reduction technology to treat whole blood.

Product Gross Profit & Margin

Product gross profit for the third quarter of 2023 was $21.8 million, which is consistent with the prior year period. Product gross margin for the third quarter of 2023 was 54.9% compared to 55.4% for the third quarter of 2022. The Company continues to expect stability in gross margin percentage for the balance of the year. The Company’s margin expansion efforts are ongoing with the goal of realizing further margin expansion in the future.

Operating Expenses

Total operating expenses for the third quarter of 2023 were $34.5 million compared to $36.1 million for the same period of the prior year, reflecting a year-over-year decrease of 4%.

Selling, general, and administrative (SG&A) expenses for the third quarter of 2023 totaled $16.2 million, compared to $19.9 million for the third quarter of 2022. The year-over-year decrease in SG&A expenses for the third quarter was tied to decreased headcount and decreased non-cash stock-based compensation.

R&D expenses for the third quarter of 2023 were $16.8 million, compared to $16.2 million for the third quarter of 2022. The small year-over-year increase in R&D expenses in the third quarter was tied to the development of our next-generation illuminator and increased clinical research activities.

As previously described, the Company entered into a plan to restructure certain functions and reduce its real estate footprint during the second quarter of 2023. For the third quarter of 2023, the plan resulted in an additional $1.6 million restructuring charge. Of the $1.6 million, $1.1 million primarily relates to the write off of operating lease assets* which will be paid down over the course of the operating lease, and $0.5 million relates to non-cash charges associated with leasehold improvements which were written off. The Company excludes the restructuring charge from its non-GAAP adjusted EBITDA measure presented below.

Net Loss Attributable to Cerus Corporation

Net loss attributable to Cerus Corporation for the third quarter of 2023 was $7.3 million, or $0.04 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $8.5 million, or $0.05 per basic and diluted share, for the third quarter of 2022.