Cerus Corporation Reports Second Quarter 2013 Results

  Cerus Corporation Reports Second Quarter 2013 Results

  *Q2 product revenue of $10.2 million; reiterating $41-43 million annual
    revenue guidance for 2013.
  *European Phase III red blood cell studies initiated in both acute and
    chronic anemia.
  *Second module of INTERCEPT plasma PMA submitted on schedule in May.

Business Wire

CONCORD, Calif. -- July 30, 2013

Cerus Corporation (NASDAQ: CERS) today announced financial results for the
second quarter ended June 30, 2013.

"Successful completion of the INTERCEPT platelet and plasma U.S. PMA
submissions in November 2013 and March 2014, respectively, remains a top Cerus
priority, and our team continues to deliver on these goals alongside the
recent initiation of Phase III European studies for INTERCEPT red cells,“ said
William ‘Obi‘ Greenman, Cerus‘ president and chief executive officer. “In Q2,
we also achieved $10.2 million in product revenue, providing steady progress
toward our projected full year revenue guidance of $41-$43 million.“

Revenue

Product revenue for the second quarter of 2013 was $10.2 million, a 10%
increase over the second quarter of 2012. Continued growth in certain markets
for both INTERCEPT illuminators and disposable kits drove a significant
portion of the revenue growth.

Product revenue for the first half of 2013 was $19.9 million, and represented
an 11% increase from the first half of 2012. The increase in product revenue
during the first half of 2013 over 2012 was driven primarily by increased
demand for our INTERCEPT products.

There was no government grant revenue recognized in the second quarter and
first half of 2013, as compared to $0.1 million recognized during the first
half of 2012.

Gross Margins

Gross margins on product sales for the second quarter of 2013 were 43%,
compared to 40% for the second quarter of 2012. Gross margins were 45% for the
first six months of 2013, compared to 38% for the same period in 2012. The
improvement in gross margins on product sales was driven primarily by lower
costs for products sold as a result of improved overhead absorption due to
higher manufacturing levels.

Operating Expenses

Total operating expenses for the second quarter of 2013 were $11.5 million,
compared to $8.4 million for the second quarter of 2012, and $21.1 million
compared to $16.3 million for the six months ended June 30, 2013 and 2012,
respectively. The increase in operating expenses was due primarily to
regulatory activities for the preparation and submission activities supporting
the Company’s PMA submissions for INTERCEPT plasma and platelets, costs for
the clinical activities regarding the Company’s red blood cell program and
increases in selling, general and administrative expenses in support of the
existing European commercial business and in preparatory market research
activities for a potential U.S. launch.

Operating expenses are expected to continue to increase in 2013, largely
driven by increased research and development expenses. The Company expects to
continue to incur increased development and regulatory costs in the second
half of 2013 in continued support of the modular PMA submissions to the FDA
for the licensure of the INTERCEPT platelet and plasma systems and clinical
activities related to the INTERCEPT red blood cell system, as well as
additional selling, general and administrative expenses related to the
potential future U.S. launch of both products.

Operating and Net Loss

Operating losses during the second quarter of 2013 were $7.1 million, compared
to $4.8 million during the second quarter of 2012, and $12.1 million compared
to $9.4 million for the six months ended June 30, 2013 and 2012, respectively.
The increase in operating losses was driven by higher operating expenses
incurred in connection with our PMA submission activities and our clinical
activities with respect to our red blood cell program during the three and six
months ended June 30, 2013 compared to the same periods of 2012, partially
offset by increased product revenue and improved gross margins on product
sales during both the three and six months ended June 30, 2013 compared to the
same periods of 2012.

Net loss for the second quarter of 2013 was $6.7 million, or $0.10 per share,
compared to a net loss of $1.9 million, or $0.04 per share, for the second
quarter of 2012. Net loss for the first half of 2013 was $17.0 million, or
$0.26 per share, compared to a net loss of $10.7 million, or $0.20 per share,
for the same period of 2012. Net losses were impacted by the mark-to-market
adjustments of the Company's outstanding warrants to fair value. These
adjustments resulted in non-cash gains of $0.7 million during the second
quarter of 2013 compared to $3.7 million during the second quarter of 2012 and
non-cash losses of $4.4 million and $0.8 million during the six months ended
June 30, 2013 and 2012, respectively.

Cash and Cash Equivalents

At June 30, 2013, the Company had cash and cash equivalents of $58.2 million
compared to $26.7 million at December 31, 2012 and $69.2 million from March
31, 2013. In April 2013, the Company repaid its outstanding $4.2 million of
term debt. The Company‘s $7.0 million revolving line of credit remains
outstanding with approximately $4.8 million available for future borrowing.

Recent Highlights

  *FDA accepts proposed INTERCEPT platelet PMA application shell structure
    and timing; first module planned for September 2013 submission
  *Second module of INTERCEPT plasma PMA submitted in May; remaining modules
    planned for August and November 2013
  *Patient enrollment initiated in European Phase III clinical trials for
    INTERCEPT Red Blood Cells in acute and chronic anemia indications
  *First Danish hospital signs INTERCEPT agreement to treat platelets

QUARTERLY CONFERENCE CALL

The Company will host a conference call and webcast at 4:15 p.m. Eastern time
today to discuss its financial results and provide a general business overview
and outlook. To access the live webcast, please visit the Investor Relations
page of the Cerus website at http://www.cerus.com/ir. Alternatively, you may
access the live conference call by dialing 866-235-9006 (U.S.) or 631-291-4549
(international).

A replay will be available on the company’s web site, or by dialing
855-859-2056 (U.S.) or 404-537-3406 (international) and entering conference ID
number 31978377. The replay will be available approximately three hours after
the call through August 12, 2013.

ABOUT CERUS

Cerus Corporation is a biomedical products company focused in the field of
blood safety. The company’s INTERCEPT Blood System has been demonstrated to
inactivate a broad range of viruses, bacteria and parasites that may be
present in donated blood, including established threats such as hepatitis B
and C, HIV, West Nile virus and bacteria, as well as emerging pathogens such
as influenza, malaria and dengue. Cerus currently markets and sells the
INTERCEPT Blood System for both platelets and plasma in Europe, the
Commonwealth of Independent States, the Middle East and selected countries in
other regions around the world. In the United States, Cerus is seeking
regulatory approval of the INTERCEPT Blood System for plasma and platelets.
The INTERCEPT red blood cell system is in clinical development. See
http://www.cerus.com for more information.

INTERCEPT and the INTERCEPT Blood System are trademarks of Cerus Corporation.

Forward-Looking Statements

Except for the historical statements contained herein, this press release
contains forward-looking statements concerning Cerus’ products, prospects and
results, including statements concerning Cerus’ expectations regarding future
sales growth and its 2013 revenues, the timing and success of modular PMA
submissions to the FDA for the INTERCEPT Blood System for plasma and
platelets, the potential U.S. commercial launch of the INTERCEPT Blood System
for plasma and platelets, future operating expenses, research and development
activity and the expenses related thereto, and marketing activity and expenses
in support of Cerus’ planned commercialization activities. Actual results
could differ materially from these forward-looking statements as a result of
certain factors, including, without limitation, risks associated with the
commercialization and market acceptance of, and customer demand for, the
INTERCEPT Blood System, the uncertain and time-consuming regulatory process,
Cerus' ability to successfully initiate and conduct planned clinical trials in
the anticipated timeframes, or at all, the fact that Cerus may encounter
unanticipated difficulties complying with the prescribed submission timing or
other modular PMA requirements related to the INTERCEPT Blood System for
plasma and/or platelets, the fact that Cerus may be required to conduct
additional clinical development in support of its modular PMA submissions, and
that if additional clinical development is required it may require funding
that Cerus does not have and could significantly delay or preclude regulatory
approval of the INTERCEPT Blood System for plasma and platelets in the United
States, adverse market and economic conditions, adverse fluctuations in
foreign exchange rates, Cerus’ reliance on third parties to market, sell,
distribute and maintain its products, Cerus’ ability to maintain an effective
manufacturing supply chain, as well as other risks detailed in Cerus’ filings
with the Securities and Exchange Commission, including Cerus’ Quarterly Report
on Form 10-Q for the three months ended March 31, 2013 filed with the SEC on
May 3, 2013. Cerus disclaims any obligation or undertaking to update or revise
any forward-looking statements contained in this press release.


CERUS CORPORATION

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

(in thousands except per share information)
                                                  
                           Three Months Ended        Six Months Ended

                           June 30,                  June 30,
                            2013      2012       2013       2012    
Revenue:
Product revenue            $ 10,150     $ 9,224      $ 19,883      $ 17,915
Cost of product revenue     5,747      5,574      10,837      11,088  
Gross profit on product      4,403        3,650        9,046         6,827
revenue
                                                                   
Government grant and
cooperative agreements       --           --           --            91
revenue
                                                                   
Operating expenses:
Research and development     3,506        1,712        6,206         3,536
Selling, general and         7,954        6,686        14,807        12,652
administrative
Amortization of             51         51         101         101     
intangible assets
Total operating expenses    11,511     8,449      21,114      16,289  
Loss from operations         (7,108 )     (4,799 )     (12,068 )     (9,371  )
Non-operating income        438        2,933      (4,803  )    (1,294  )
(expense), net
                                                                   
Loss from operations         (6,670 )     (1,866 )     (16,871 )     (10,665 )
before income taxes
Provision for income        54         41         105         76      
taxes
Net loss                   $ (6,724 )   $ (1,907 )   $ (16,976 )   $ (10,741 )
                                                                   
Net loss per common
share:
Basic                      $ (0.10  )   $ (0.04  )   $ (0.26   )   $ (0.20   )
Diluted                    $ (0.10  )   $ (0.10  )   $ (0.26   )   $ (0.20   )
                                                                   
Weighted average common
shares outstanding used                                         
for computing net loss
per common share:
Basic                        69,727       54,418       64,756        53,753
Diluted                      71,928       55,236       64,756        53,753
                                                                             

CERUS CORPORATION

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(in thousands)
                                                               
                                                 June 30,   December 31,
                                                2013
                                                                  2012
                                                                  
Cash, cash equivalents, and short-term           $    58,201      $   26,696
investments
Accounts receivable and other current assets          6,807           7,120
Inventories                                           12,762          10,180
Property and equipment, net                           1,641           1,698
Goodwill and intangible assets                        2,761           2,862
Other assets                                         376            363
Total assets                                     $    82,548      $   48,919
                                                                  
Accounts payable and accrued liabilities         $    13,783      $   14,805
Deferred revenue                                      153             77
Debt - current                                        2,157           4,828
Warrant liability                                     10,290          5,903
Debt - non-current                                    --              2,896
Other non-current liabilities                        1,220          1,303
Total liabilities                                     27,603          29,812
Stockholders’ equity                                 54,945         19,107
Total liabilities and stockholders’ equity       $    82,548      $   48,919

Contact:

Cerus Corporation
Kevin D. Green, 925-288-6138
Vice President, Finance & CFO
 
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