
Cerus Reports Solid 3Q23 With Meaningful Progress Towards Cash Flow Breakeven; Pending Catalysts With IFC and Red Cell Technology Provide Exciting 2024 Set-Up
11-6-23 (by: Scott Gleason) Cerus Corporation has unveiled its financial results for the third quarter reporting total revenue of $47.3 million. Street forecasts were looking for total revenue of $42.5 million.
Cerus’ product revenue during the third quarter of 2023 amounted to $39.8 million, and was relatively flat with the previous year. Government contract revenue in the third quarter of 2023 was $7.5 million primarily due to funding associated with the development of LyoIFC and research and development activities related to the INTERCEPT Blood System for Red Blood Cells. Management noted stabilization with its core platelet franchise in the quarter as inventory levels at customers remained steady. The company also noted progress in Canada and expected the majority of platelets transfused in Canada by year end to be treated with INTERCEPT.
Management noted the success of INTERCEPT Fibrinogen Complex (IFC) as a growth driver with 50% to 70% improvement in times in hospitals from the physician order to transfusion. This is especially critical for trauma patients. The company noted its U.S. hospital sales organization is now fully staffed and the company expanded partnerships with large blood centers.
The company successfully completed the enrollment of patients in its Phase 3 ReCePI study, focusing on cardiovascular surgery patients with its red cell products. The top-line data readout from this study remains on track for the first quarter of 2024. Additionally, the company’s second Phase 3 trial, RedeS continued to enroll and there were no safety concerns regarding the study to-date The RedeS study will assess the company’s red cell products in the chronic transfusion patient population, including sickle cell and thalassemia patients in addition to oncology patients with anemia. The company also noted that it is on track for potential CE Mark for its red cell products in the second half of 2024. Red blood cells represent the most transfused blood product worldwide with approximately 11 million transfusions in the U.S. alone.
Cerus made significant progress in managing its operating expenses during the third quarter of 2023. Total operating expenses were $34.5 million, representing a 4% year-over-year decrease. The decreases follows the announcement of a restructuring plan during the second quarter of 2023. Non-GAAP adjusted EBITDA for the third quarter of 2023 was negative $1.0 million, a notable improvement from negative $2.7 million in the third quarter of 2022. Cerus had $79.0 million in cash, cash equivalents, and short-term investments as of September 30, 2023. From a debt perspective, the company had $60 million outstanding on its term loan and $18.8 million drawn on its revolving credit facility. Importantly, the company reaffirmed its commitment to achieving non-GAAP adjusted EBITDA breakeven in the fourth quarter of 2023.
Due to a delay in signing an executed IFC sales agreement with a major U.S. producer of cryoprecipitate, Cerus has adjusted its full-year 2023 product revenue guidance to a range of $155 million to $158 million. The company anticipates to transition to double-digit growth in late 2023 and early 2024 by the system-wide rollout of INTERCEPT platelets at Canadian Blood Services and the increasing use of IFC by blood center and hospital customers.