Cerus (CERS) 4 Aug 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Cerus Corp Q2 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time. [Operator Instructions]. I'd now like to turn the conference over to Tim Lee, Investor Relations Director. ahead. go Please

and for operator, I'd to like Thank us good today. everyone joining thank you, afternoon.

As today's you can part slide follow. displaying of webcast we simultaneously are that

www.cerus.com/ir. our issued the You Chief Program second Senior our Greenman, Obi Corash, highlights. Leader, Officer; release Chief Blood Chief and Regulatory and Vice and our Dr. Cerus' Operating Laurence for quarter Relations Officer; slides announcing President, Moore, access Scientific Vice Officer; President on XXXX Financial from Kevin business XX, Affairs Executive Jayaraman, also Mufti, Carol could webcast Dr. call Green, the the today June Cerus' Cerus's at results financial and a Officer; describing of ended Cell recent Nina With Chief President the Quality. are Development, me the We Red Investor Vivek press Cerus's Company's and

on On I than some and and ongoing of future activities, operating margins, of statements and You XXXX, and clinical statements we of file as duty year update and actual and current They're future statements. related and cause those this to XX, and and performance and These for a goals, ended provide blood include gross undertake now, Chief Mufti, on opening our Cell will future risk sales, to could today's regulatory with the update website development it's Obi future Red on Dr. pleasure this will program, rather event events impact provide release and the risk announcement shortly. operating factors June under of begin results. to that Executive And events, who XX-Q and the products expenses future statements. Officer. forward-looking are commercial our operations, call XX, you well facts Company quarter growth forward-looking to efforts, timing center over or products call, for forward-looking Greenman, development related will remind press identified remarks our will call results, then Form which future We the described and involve XX-K Greenman www.cerus.com. for forward-looking followed guidance launches, financial and my can trials, and copy to December an Nina and these differ our growth Kevin including And ended of in uncertainty our XXXX strategy, will obligation materially. Form product Blood in by Cerus' our product results on financial as financial that ongoing activities. future to today's we'll to closing XXXX make performance, finally, Obi the President at review historical and the we turn access no Examples remarks. Obi Green from the like

than record the quarter resilience results at driven QX These that also COVID-XX them in period availability. to and Tim, by blood their time. in the Thank quarterly to blood sites platelet coupled our robust XX programs meet the XX, and the plasma eight crisis the deadline. by Cerus our to growing with were the for the XX% management sales and Cross, blood region. grateful great center of afternoon. now The at less highest quarterly provider revenues XXXX Cross pleased us customers guidance foresight plays support that this I a essential strong multiple production sales their U.S. XX for pathogen Dedicated to product business producing field time lead INTERCEPT despite growth U.S. customers platelets. year-over-year our deadline their the platelet team In the pandemic. on also INTERCEPT same months are away, with with medicine hospital am allowed transfusion is adapt. in safety to report million product [ph] to you, blood now good despite COVID-XX the the compliance treated. posed plasma March our center has revenue the FDA strategies the ability shown today recent the platelets performance challenges centers throughout of on in commercial priority challenges help illuminator Red convalescent for Red this and initiate to Finalizing the blood kit remains planning the increases bacterial guidance and the U.S. at safety, I'm and U.S. $XX.X U.S. highest EMEA approximately clients COVID pandemic. their The of role continues their for and safety secure for compliance American to evidence helping of during board are chains efforts supply organization in the focus the continues its being inactivation and largest helping with

alongside compliant pathogen is Just had that the platelets hospital preferred deadline large Red customers customers FDA of INTERCEPT method option, the document. recently collectively convert In FDA INTERCEPT the U.S. platelets. all all March Cross customers comply the Cross guidance begin produce blood XX% their to updating to represent goal notified U.S. and American all systems acknowledge with testing by to the supply to to the four Red bacterial is platelets. preparation, platelets positioned treated center to the the all its the blood that of provide now of Red directing Cross XXXX. IT The reduce XXX% and of requirements overall with its are to this combination in the offering is accommodate of INTERCEPT XX% officially With to customers and other Red interim step Cross guidance currently

reminder, platelets per is U.S. year. INTERCEPT $XXX the opportunity approximately market in As a the overall for million

and the Our the we goal aim possible few in to Standard is next that this years. of during of U.S. much platelets INTERCEPT capture Care becomes as opportunity as a for

platelet claim of supply. mid-XXXX. facilitated just the FDA pathogen need necessary afforded platelets. early additional in safety during plasma solid region. is the inactivated, of continue the we the In the the submission with days This and COVID pathogen planned day of performance versus reduction kit well recovery days. quarter for The choice a faster One next, to for day illuminator including drive where study The have kit platelet INTERCEPT could for the a seven even label FDA life the We placement exists favors for for the used well and help treating make platelets extension potential in and claim to we concept think the FDA a operational placement year that blood seven XXX% already the of strongly on which seven that guidance of the countries key a shelf is of security the by INTERCEPT anticipate context ease-of-use sales solidly If for QX plasma by units in combined to been France INTERCEPT uptake, in The approval coronavirus is desire convalescent seven-day the helped this new from or drive pandemic and in survival downstream. progress both illuminator centers target fuel this crisis. end sales the documented hospitals. Switzerland bode simple EMEA for a preparedness claim for testing the INTERCEPT platelet and them by shelf other for resonates for INTERCEPT on and factors benefits customer possible five submission life and

the second While this uncertainty $XX of product about are healthcare COVID-XX the economy revenue confident of persist half on XXXX, we on year. in ability the deliver our our global guidance million impact systems to million to in in $XX and

to a EMEA, initiatives Asia-Pacific beachhead In to to activities our positions and presence beyond revenue expand you pipeline contract Cerus five-year and its key with network growth member for APAC. quarters, very and Kong Kong with an forward our parallel In a going Red sustain leader coming our platelets. strategic our a Hong our This about in Hong Cross and we're excited Looking important advance of INTERCEPT to Asia-Pacific. sharing influential as expanding the represent we globally. a look is forward. the The continues account with blood Red for opinion product announced Cross recently the commercial is well

reduced As pathogen previously for to PMA was at the cryoprecipitated supplement complex fibrinogen FDA announced May. of application the submitted the end

approval on early as review cryoprecipitated Given pathogen FDA the the clock cryo year. reduce this end or pathogen complex, reduce PMA calendar supplements, of receive could XXX-day as we believe fibrinogen

approval commercialization our we've away, months to including efforts. team that less preparation With potential therapeutic the incremental than prelaunch five hires will lead our now the expanded

size the the potential the launch about opportunity We benefit continue patients market to because the be for U.S. clinical bleeding and the of in overall excited of

further to new accelerate track of We to adoption. add-on to hospital. of the NTAP cryo CMS pathogen technology launch thereby payment patients October cryo of a are or also could to reduce reduced the the receipt economic with A our NTAP support the pathogen product at on XXXX in possible expand utility overall access for submit in and bleeding product subsequent

red frequently provide on Let transfused component and given Red me regulatory the largest remains in our full cells most our cells, the and with a Nina to Mufti a to now correspondingly for developing President company clinical only the volume the program, years globally. cells blood a XX single update activation. for and of been which Dr. over blood and are red red XXXX. turn Cerus the only opportunity Mufti cell world Development are transfuse our Vice pathogen of with system since pathogen Dr. activation has been company we has

FDA the During submission tenure, plasma. PMA for subsequent the for both development and oversaw INTERCEPT approvals her platelets program she at

launch, progress advanced importance and a red team the in we PMA main product with launch cell product CE Nina U.S. red to increasing two the cell the lead and With of the red cell for goals; submission to INTERCEPT the Mark the appointed approval

Obi. our you, to update an on red I'm pleased cell Thank blood program. provide

has development Recent to work U.S. been straightforward, provided progress glutathione and including for various regulatory the the agencies new and pathways supplier to chemistry, but the European have pathway. market. easy around As are product clarity qualification you activities, not of approval combined or with on discussions of pathway bring on the to clinical solid many registration. program achievements clarity we've made development the establishing the manufacturing been and aware pathway have Recent of the on control

with where Medical start the will MDR. application reviewed Mark or Device pathway. our Regulation Europe, be under new Let's CE

Medical transitioning are the under Directive year. submission our the or We MDD to made Device this MDR

under there due date. XXXX been the to has MDR to COVID-XX. the for MDD process submissions duration the review moving of The a May one-year Although under our extension May exceed recent XXXX would

submission modular submitted end was June a in to separate of to MDR pre plan process result, XXXX, Mark by one of body XXXX. of application four a consisting and We modules MDR notified pathway CE under As QX submit our and agreement application gained the modules. two our our TUV, the on

red modules set timelines module consists XXXX. Authority The as inactivation the in This include glutathione the we active which review with this cell in is XXX and FDA three, submission. of the CE program, the information red The XXXX. we QX days data first control Regulatory three Switching contains well to study substance, includes inactivation PMA authority pathogen the process, will to a both TUV glutathione Health is packaging for and our INTERCEPT fourth supplier, new requirements will from quencher approval by the the and qualification to blood the chemistry for manufacturing to the RBC processing the Product two targeted need HPRA, addition final blood competence for XXXX. on Module final our minimum manufacturing define Based for end data, used also anticipated non-clinical a be clinical both the the transfusion met data quality U.S. the review and HPRA, data TUV for the and and in approval. discuss the reviewed for or the planned recently submission module HPRA by QX, as for on efficacy. in Mark and in process vitro of or cells expect chronic timeline Irish Amotosalen will which for filter at submission module submission. of and is and of safety

received additional current to our rather chronic to standalone transfusions RBC we the study include conducting transfusions. who discussion, the The that's agreed thereby that proposed in planned. receive anemia patients X During that for agency RBC study multiple support previously indication product, timeline patients a expanding multiple to approach, to this data Phase obtain than shortening regular

revised our expansion. program, of sites for this U.S. through cell submitted protocol the with to the XXXX remainder to red Despite and we on into COVID-XX clinical enrollment protocol result, and BARDA reestablish a in discussions FDA, study of working are the impact As we our trials to fund the XXXX. are with the plans, clinical trial

In We transfused roadmap updates the submission. overall chronically patients will year. PMA on a the and alignment requirements trials summary, on with Mark this a for clinical with PMA share scheduled clear later CE required for FDA submission the

to INTERCEPT Our system efforts and in on U.S. commercialize cell markets blood track. the the remain red European

full With by blood the portfolio renewed focus to government look offering on forward our INTERCEPT center pandemic the preparedness we officials, customers. to

quarter on turn an now for over me Let the second update it to Kevin financials.

Nina. Thank you, And afternoon everyone. good

reported increase an posted QX we million to record revenue As quarter, during XXXX. $XX.X of product XX% mentioned represents $XX.X Obi the during the second totaling This million. compared earlier,

negatively QX compared approximately during product $XX.X million, XXXX. impacted sales by half the totaled to exchange On first date reported Foreign the $XX.X reported X%. up XX% currency reported basis, of year revenue rates million a to

Foreign currency exchange year rates negatively X.X%. date to by sales impacted approximately reported

to of from choosing blood while with existing resilient. plasma. remained has We plasma dynamic impact inventory certainly during management use down QX, customers in others convalescent INTERCEPT demand COVID-XX pandemic, grapple part unusual their for the sets there some centers While of inventory with business and SARS-CoV-X, platelet the accelerating the saw certain to bring continue

sales number basis. As on such, the total was a up of global kits

during was calculated the the of doses treatable While number flat shift quarter. platelet essentially

growth the for of primary balance platelet business be Looking the ahead, will the year. the driver that expect we

see we our previous to expectations. on interest compared our Although may kits, continued plasma

product In QX the calculated sales increased plasma approximately for accounted treatable platelet during support to contract platelet of revenue to have date year For and and dynamic, during quarter, was the period. was revenue Government doses is government during $X.X XX/XX. total $X.X for to while reported collaboration year, totaled in XXXX of the to mix number the BARDA sales, our million million period. from a second the million kits separately million year prior XX%. kits compared quarters, accounted of XX% To $X.X of number sold our $XX.X basis, approximately the illustrate the X%. the revenue closer recent compared kit contract On

to for XX% to for factors XX%. We QX illuminator On to compared during let's gross half our the during of quarter both XXXX. saw XXXX were composite move improvement, offsetting namely volumes both year XXXX rates in our were gross for Now margins mix, on QX, sales reported by the margins. to plasma gross product and sales. and exchange increased margin basis, offset margins basis, Gross an at with and the consistent XX% year date date product foreign and a providing first

million to a the $XX.X for Operating million Expenses Turning totaled year On QX for operating expenses. now million totaled to to quarter, of XXXX. $XX.X $XX.X basis, of compared XXXX. expenses half operating compared million $XX.X to the date for first

million to in was a Specifically quarter attendance in QX conference QX driver the during the which quarter. as accounted travel compared shelter during a million, A of SG&A for of of experienced slowdown result key place and $XX.X XXXX. $XX.X for the expenses during

or work to U.S. product, shelf quarter higher Research $XX.X totaled to We cell set of seeing program increased the for to leverage totaled a share, year the diluted diluted as expenses well during our million $XX.X and $XX net supported share, $XX.X per and year. revenue R&D additional continued U.S. diluted to life by of for red $XX.X [Indiscernible] expenses our blood prior configuration to cost. the growth $XX.X diluted $X.XX a million, a for are a million, compared activity extended our spending loss million first year for on $XX.X of of triple revenue year first for Net $XX.X during per million to efforts platelet the also or $XX.X to expenses $X.XX $X.XX or million on SG&A the Similarly, compared totaled compared XXXX. share Year half generation the total as million of prior BARDA, was on or basis, for illuminator. $XX.X with million per of second per next date period. compared incurrence the day development prior quarter without million, compared $X.XX loss were loss share date, R&D net to million driving net period. during XXXX. commercial half Year by the The development loss

on approximately investments In terms sheet, cash short the cash, of equivalents million our of second balance term hand. with ended quarter we and $XXX.X

cash guidance, during operations recorded back that, in the and continue the to $XX million range, our the $XX half expectations me let current first already Given With XXXX million be we million year. of Obi. from will $XX.X to call believe turn to use the with over

Thank you, Kevin.

comments As our pipeline, you our line the are direction progressing bottom pandemic. today, the from despite top the can ongoing tell line in results right and

use different fundamental against the transmitted It emerging transfusion even are window and proactive excited positioned the different against that platelet a C. the three growth multiple for cannot just role there blood July for concerns about their for rapidly blood assays on viral current growing identified that of current of sensitivity assays a the secure or two blood. perspective, Hematology infections, when threats. how possibility HIV ensure increasingly threats still paradigm. a critical remains already tests, highlights function are redundant era And We of against safety a publication this we In continued a HIV testing blood the and to SARS-COV-X paradigm inherent From HIV current testing revenue of weakness donors disease assays disease protecting about screening global like of blood the required the The by another with plus therapies. Hepatitis INTERCEPT significance detect safety. retroviral historically compliance The strategy is with blood guidance value FDA blood chikungunya and gaps it required in approach are during Whether solution as to in alone, are provides INTERCEPT entering developing test the pathogen play has the concern paradigm a the for donor not Journal safety our period donors blood specific, are sensitive Zika and exposure both assets testing emerging infectious, has taken current contaminated the and each over anti prevent with infectious infectious on addressing proactive SARS-COV-X from in of American reactive in HIV Blood raises sufficiently Society that challenges for products global these of paradigm, B Hepatitis can new new now the of the safety are pre tests a testing same is to blood safety customers. deferral or to some but the with rapidly and unmet strategy illustrated supply a need. creating blood requires global blood that prophylaxis the prep that and does

coming future call key During open for this product readying the of to ourselves in increase Operator, and time please are support question. the the business, growth to Cerus U.S. same to for globally, launches. two on ensuring that will apparent focus the current we continue months at our pandemic while the with and able

Stifel. Matthew you. Thank from Blackman first our comes from [Operator question And Instructions]

is now open. line Your

color everyone. Appreciate Good Hi. Obi, the the at the questions. taking Cross. Thanks Red to for Maybe, U.S. afternoon, adoption on start.

platelet sense the us mix. Cross say And XXXX the where of color just said on end it Now four the of where banks get XX% Can INTERCEPT to think ramp? a today? I the other would you remind any Red big just are blood at you --

Yes.

the I think, Vivek us on call joined today.

a given operations area his in let I'll that So commercial of question. him U.S., the responsibility as answer

ARC steadily since thanks been -- even well Matt, really for guidance Sure. climbing pretty has I your We end. finalized. hope before Hey, was all's on the the the question.

the made they PR decision go recall, guidance. to you of XXX% independent to If

led blood U.S. we've account ahead So center other Customers families needs of they're call the five. nationwide But to XX% to the in for these five four. -- distributions. out relative about

so we've them made And where which a we're encouraging. in progress position is all good of with

manufacturing the most think seeing thing we're is now sites about XX excited that the that I are INTERCEPT platelets. has they fact

will And encouragingly actual penetration. so, up platelet in respect step future saw ramp for up even and But their pretty terms QX we a quarters. more I their of production pretty which well significant bode saw in a think we volumes with big to percentages,

great. Appreciate Kind a All couple follow right, of of ups. that.

U.S. help fair that also to of change question do options to got Just productivity efficiency rather price, argument then also assume label the label. one it INTERCEPT? you follow-up say a just guys is are value that's asking the a -- all, this differently for curious I and I that the platelet is, that versus Is one And So than process on the more relative something And that so that seven beyond the day from after first is other customers step a augment? fair price, literally standpoint. getting this. improving premium the also to and premium would a for an characterization?

Yes.

get a So be be label review Matt. will after it we you're believe submission This end. right, change. It's the we still XXX-day would

bridges them both of playback effective that to you that see. study increase would earlier component otherwise weekends, early times. of gaps shelf centers, mentioned, releases that's we've and that sort seven allows data that collect And operational also the days during lot So release the supply as opposed that or the blood with close does overall from and Europe. data there's it allows of will that's to efficiency six What life the to the submission, on is really at in week really blood with go Europe survival I but with INTERCEPT, along for seen from an a recovery available

it provide your should I that in Yes, that question. reduced so, it our does all addresses the be a We from United with And platelets reflected States. see pricing. the at think perspective, value added pathogen least way already benefit, in that

leverage the And as the SG&A said, you question, last then Yep. impressive quarter. Kevin, in

$XX quarter run Sorry, the of be if missed thinking the the I sort per about line roughly back rate this specifically? But of SG&A should we this. the is million year way on half

are and the Yes, it'll conference are slightly. and think do of -- But think pick slowdown certainly thanks, a I most attendance seeing Matt. up continued marketing those travel I in we related.

are mentioned the the also to We as Obi in starting for launch. cryo up step prepared remarks

So but I think the be not accelerated be going up, there'll step a slight it's at levels. to

hop I'll so back right, guys. in much, queue. quarter. Thanks All Congratulations on a good very

Thank you.

you. Jennings Thank Instructions] Cowen. question And next [Operator our from from comes Josh

Your now open. line is

taking is the This on on recent announcement was Hi. for there. question now What really Hong you of for out the discuss offer Asia out see Eric how congrats INTERCEPT presence in see with Thanks guys your do opportunity quarter. But opportunity has a an at of the market. of more the broadly, initial evolving, Josh. the region? strong Pac to you sort in and tender hoping Kong I

we perspective underway the on APAC. Vivek ultimately there that provide Thanks, the let Eric. to an several the can the we Hong have last study is that. I'll more a also Kong. over handle the long This outcome, the but in Vivek through led important strategy clinical but conducted tender, And in for larger Yes, a effort years that time

for thanks being. Yes. No,

XXXX Kong you about tranche more network, XX%. the with if But of above five incredibly about importantly, Pacific was the think question influential an about perfectly. units over the course Cross initial and want and it’s the think The of I Red the to the they're I customer. is influence years, tenders it think blood the way their the actually involvement Asia markets overall size Hong the that frame of ask, and

think China, or and This statistically Mainland opportunities about a a region. beachhead. key important of doubt And There's so we a is of progress further it's in Pacific as the for Asia critical very world. part lot us untapped into the that in geographies whether without

our so anchor of executing forward tenant And premium of strategy. key in against sort having is terms a step a

FDA then window months And highlighted, the guidance separately, safety Thank that's Great. on platelet only you. you away as now. eight

the XXXX So should changed past adoption March timeline? that expect or to few the that adoption incremental approaching, has INTERCEPT with deadline of continue pace we weeks, through in

I'll to of U.S. turn through the growth that over remainder the Again, compliance the year cover and of through sort just in the period. Vivek, the to

Yes, certainly.

Kevin As Obi I touched previously indicated, well. on certainly and as think this

country. Marshal U.S. you were in the into focused so could and anticipating year the that know, we the U.S. a the And and the -- really driver we as the pandemic. COVID think that of here of elective the contention. future year the what been hospitals think lot didn't the had particularly procedures single I been the have period, forth on be is platelet to growth. to have going come probably to you most and and resources about triage so supports through As business surges in date, U.S. canceled significant And There we've so address COVID that experiencing rolled

is the independent of of on that pandemic. that, I adoption continued there. up forward. but utilization impact invariably a COVID an waking methodical said everyone's and you're so And But to in I guidance fact, platelet platelet think had compliance. to sort move going deadline Having terms been think push There's the of see that

U.S. COVID I here growth the our going guidance be compelling coming are still think that business. a extent. period certainly of to some to of to but distract compliance are to relative at pressures the and you'll call, going But net-net end solid to there think hospitals really be an platelet serves media a I bit wakeup

the Understood. guys you for Thank questions.

Thanks, Eric.

you. over to Greenman I'm Thank further Instructions] to questions. showing And the Obi for [Operator At conference any no this back closing time, turn I'd like remarks.

joining again us today. you for thank Well, all

next in seeing virtually Thanks participating And many the for you us again be look month. Healthcare will to We Cantor joining Virtual of forward today. then. Conference

the and thank conclude Ladies in you program, you gentlemen, participating does conference. and may disconnect. all This for today's