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Cerus Corporation Reports Third Quarter 2013 Results



  Cerus Corporation Reports Third Quarter 2013 Results

  * Q3 product revenue of $10.5 million; reiterating $41-43 million annual
    revenue guidance for 2013.
  * INTERCEPT platelet PMA initiated - first of three modules submitted in
    September.
  * Third of four modules for INTERCEPT plasma PMA submitted in August.

Business Wire

CONCORD, Calif. -- October 29, 2013

Cerus Corporation (NASDAQ: CERS) today announced financial results for the
third quarter and nine months ended September 30, 2013.

"This past quarter, we continued to submit INTERCEPT plasma and platelet PMA
modules on schedule, and look forward to completing these submissions in
November 2013 and March 2014, respectively," said William ‘Obi‘ Greenman,
Cerus‘ president and chief executive officer. "Our $10.5 million in Q3 product
revenue provides steady progress toward our projected full year revenue
guidance of $41-$43 million."

Revenue

Product revenue for the third quarter of 2013 was $10.5 million, a 28%
increase over the third quarter of 2012. Increased deployment of illuminators
in several geographies, as well as elevated sales of plasma disposable kits
and to a lesser extent, a stronger Euro compared to the U.S. dollar, drove
third quarter revenue growth.

Product revenue for the first nine months of 2013 was $30.4 million, and
represented a 16% increase from the same period in 2012. The increase in
product revenue during the first nine months of 2013 over 2012 was driven
primarily by increased demand for our INTERCEPT products, particularly plasma
disposable kits and to a lesser extent, a stronger Euro compared to the U.S.
dollar.

Gross Margins

Gross margins on product sales for the third quarter of 2013 were 35%,
compared to 47% for the third quarter of 2012. Gross margins during the third
quarter of 2013 were negatively impacted by certain period charges and the mix
of products sold relative to the prior year. Gross margins were 42% for the
first nine months of 2013, compared to 41% for the same period in 2012.

Operating Expenses

Total operating expenses for the third quarter of 2013 were $12.1 million,
compared to $8.2 million for the third quarter of 2012; and $33.3 million for
the nine months ended September 30, 2013 compared to $24.5 million for the
same period in the prior year. The year-over-year increase in operating
expenses for both the three and nine months ended September 30, 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 preparatory market
research activities for a potential U.S. launch of the INTERCEPT Blood System
for plasma and platelets. The company expects these activities to continue to
drive increasing operating expenses.

Operating and Net Loss

Operating losses during the third quarter of 2013 were $8.4 million, compared
to $4.3 million during the third quarter of 2012, and $20.5 million compared
to $13.7 million for the nine months ended September 30, 2013 and 2012,
respectively. Despite the increased product revenues reported during both the
three and nine months ended September 30, 2013 compared to 2012, operating
losses widened due to the increased investments made in support of our PMA
submission activities and our clinical activities with respect to our red
blood cell program during the same periods.

Net loss for the third quarter of 2013 was $20.5 million, or $0.29 per share,
compared to a net loss of $3.5 million, or $0.08 per diluted share, for the
third quarter of 2012. Net loss for the first nine months of 2013 was $37.5
million, or $0.56 per share, compared to a net loss of $14.2 million, or $0.26
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 charges of $12.4 million during
the third quarter of 2013 compared to a gain of $0.9 million during the third
quarter of 2012 and non-cash charges of $16.8 million compared to non-cash
gains of $0.1 million during the nine months ended September 30, 2013 and
2012, respectively.

Cash and Cash Equivalents

At September 30, 2013, the Company had cash and cash equivalents and
short-term investments of $53.3 million compared to $26.7 million at December
31, 2012 and $58.2 million at June 30, 2013. The Company‘s $7.0 million
revolving line of credit remains outstanding with approximately $3.4 million
available for future borrowing.

Recent Highlights

  * INTERCEPT platelet PMA initiated with submission of first module in
    September 2013; remaining module submissions scheduled for December 2013
    and March 2014.
  * Third of four modules of INTERCEPT plasma PMA submitted in August 2013;
    submission of final module planned for November 2013.
  * Daniel Swisher appointed Chair of Cerus Board of Directors to replace BJ
    Cassin, who will retire at year end.

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 31979526. The replay will be available approximately three hours after
the call through November 11, 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 anticipated timing, completion 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, marketing
activity and expenses in support of Cerus’ planned commercialization
activities, and the continued availability of Cerus‘ revolving line of credit.
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 conduct its ongoing
clinical trials for the red blood cell system 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 for plasma and/or
platelets, 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‘ lack of
commercialization experience in the United States and its ability to
establish, or contract with third parties to establish, sales, marketing and
other sufficient capabilities to potentially market and sell the INTERCEPT
Blood System for plasma and platelets in the United States, Cerus‘ ability to
comply with applicable regulatory guidelines and requirements with respect to
the marketing and manufacturing of products in the United States, Cerus’
ability to maintain an effective manufacturing supply chain, Cerus‘ ability to
continue to comply with the financial and other covenants under its revolving
line of credit, 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 quarterly period ended June 30, 2013 filed with the SEC on August
2, 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               Nine Months Ended

                     September 30,                    September 30,
                       2013            2012             2013            2012     
Revenue:
Revenue              $ 10,542        $ 8,252          $ 30,425        $ 26,258
Cost of                6,826           4,411            17,663          15,499   
revenue
Gross profit           3,716           3,841            12,762          10,759
                                                                       
                                                                       
Operating
expenses:
Research and           4,363           1,903            10,569          5,439
development
Selling,
general and            7,728           6,219            22,535          18,871
administrative
Amortization
of intangible          50              50               151             151      
assets
Total
operating              12,141          8,172            33,255          24,461   
expenses
Loss from              (8,425  )       (4,331 )         (20,493 )       (13,702 )
operations
Non-operating
income                 (12,016 )       926              (16,819 )       (368    )
(expense), net
                                                                       
Loss from
operations             (20,441 )       (3,405 )         (37,312 )       (14,070 )
before income
taxes
Provision for          60              55               165             131      
income taxes
Net loss             $ (20,501 )     $ (3,460 )       $ (37,477 )     $ (14,201 )
                                                                       
Net loss per
common share:
Basic                $ (0.29   )     $ (0.06  )       $ (0.56   )     $ (0.26   )
Diluted              $ (0.29   )     $ (0.08  )       $ (0.56   )     $ (0.26   )
                                                                       
Weighted
average common
shares
outstanding                                                            
used for
computing net
loss per
common share:
Basic                  69,791          54,875           66,464          54,130
Diluted                69,791          55,377           66,464          54,130

 
CERUS CORPORATION

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(in thousands)
                                                                 
                                                September 30,     December 31,
 
                                                2013              2012
                                                                   
Cash & cash equivalents                         $    24,355       $   26,696
Investments                                          28,971           --
Accounts receivable and other current                8,490            7,120
assets
Inventories                                          12,686           10,180
Property and equipment, net                          1,848            1,698
Goodwill and intangible assets                       2,711            2,862
Other assets                                         378              363
Total assets                                    $    79,439       $   48,919
                                                                   
Accounts payable and accrued liabilities        $    16,136       $   14,805
Deferred revenue                                     111              77
Debt - current                                       3,638            4,828
Warrant liability                                    22,706           5,903
Debt - non-current                                   --               2,896
Other non-current liabilities                        1,202            1,303
Total liabilities                                    43,793           29,812
Stockholders’ equity                                 35,646           19,107
Total liabilities and stockholders’             $    79,439       $   48,919
equity

Contact:

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