Cerus (CERS) 2 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to Cerus Corporation Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to turn the call over to Jessica Hanover, Vice President of Corporate Affairs.

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

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

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Kevin For begin closing today's opening highlights, review to Obi, to remarks.And our most with measures, the remarks financial expectations release.We'll my Obi followed for to of Executive pleasure press and to to with Chief financial please financial discuss it's rest Greenman, of reconciliation Obi refer and now today by a from results introduce comparable President XXXX business non-GAAP recent measures and Officer. Vivek GAAP Cerus' the

initial good I'm receive since doses about the we the afternoon, patient to everyone. milestone, for both performance expansion that XX our the million even we of would quarter, in as I some transfusable on kits very this and from growth XXXX we returning our kit continuing report we to the INTERCEPT particularly sales also reached million business to our to are and the term.Indeed, pipeline.During that QX, XX Thank our quarter. impact and every in levels pleased stabilized growth we QX mark surpassed commercial we and third this as in INTERCEPT-treated world around make R&D of represents of sustain of for quarter, provide figure in line the invest breakeven system. this our pipeline the long sales milestone you, prior components and top a the commentary showing countries year, patients the the EBITDA adjusted approaching are geographic day.Importantly, respect of are like front thousands important Jessica, to to global and the in of this the milestone, this proud of launch progress with cross

interest IFC, and much oral overall high. Medical faster Sunday transfusion. with medicine particular, their very streamlined and XXXX wastage safety Stanford particularly blood and struck was for centers hospital accelerate Meeting availability tool the in into awareness trajectory UT XX% we Annual for like INTERCEPT safeguard since IFC effect clearly and went leaders time were in of guidance to INTERCEPT Centers, strengthen clinicians the Southwestern top IFC hospital before, around highlighted attended many an transfusion now exit sessions since X range of significantly organizers, The time in IFC reduced We their physician now These was benefits weeks patient AABB as by order the I held colleagues years realized the reduction. demonstrating room-only well System since growth and improvements sentiment improve allows here marked XXXX, the both services to in collaboration has into in-person for positive covering Nashville, ABB ago, to the see with first platelets also audiences in industry's attended care. in their practice.In XXXX.Few adoption expect FDA have conference, and customers, Blood double bacterial and notably implementation meeting established the to morning as from our of standing move the to the ago.I pervasive our been product platelets pathogen has The operations, enabled the into IFC U.S.Meeting for the by and and it delivery transfusion XX%.Moreover, scheduled session the essential assessed from digits supply been patient

physician surgery and bleeding growth in cardiovascular we patients. in as RBC had value completed will continue study. growing a were historically, valuable every compelling red believe QX, proposition, to in BARDA-funded meaningful INTERCEPT minute centers the In have with particular, partnerships blood and when cell with While counts.Given patients the yes to bank in our its we IFC, XXX the product in for they conventional particularly transfused given this may ReCePI the of or pipeline hospital interest say to our no, challenges blood providing the to be program. trajectory.Moving patient, to III now planned, cryo, a enrollment on Phase and trial are say blood demanding can

top DSMB Monitoring turn no there and met to anticipate AABB second meeting which the most and last oncology population, to to sickle as call now to thalassemia regarding the over the third remainder Safety enrollment with line readout support enthusiasm to of III with Board the safety the Vivek addition quarter an for in and BARDA.I well. is for prior and Annual initial study, this on highlights and in commercial completing necronic trial lock focused to RedeS continue cell concerns of expected study's from continued full of or this possible discuss enroll study's patients the expressed Data recommended encompassing the Phase enrollment.This would was like in to program database as the We continues by the trial, for Recently, XXXX.Our and is a anemia.At Meeting, RedeS, the QX investigators the timely transfusion recent patient year. study held of phase study now data the now the to outlook patients the way, date

good Obi, afternoon, you, and everyone. Thank

towards consistent momentum possible.With customers returning posted revenue hospital to for and back basis, encouraged our in center to blood As completed are components a a utilization.As fourth product U.S. on small their that we platelet product sequential XXXX, across quarter with to upward and see third third stabilized, are with blood total our return stabilize in to of patterns. access ordering we global quarter the seeing patients we dating the now sales as a recently with Obi levels global ensuring are a a issues, customers seeing some QX our uptick team work and engagement platelet platelet trend through third we experienced quarter, franchise the by franchise. strong have to we respect to year-end.While the Inventory saw return we gain growth XXXX.On the U.S. a safest resolve the in continued our focus bounce the key we in a levels more and persist, move and headwinds I'm our of we witnessing quarter mentioned,

with platelets.With regions our and center position deployment, and customers for Middle new of partners and to INTERCEPT receive do supply quarter.Outside high safety we U.S. leadership bit Eastern growth these Middle continues the U.S., are need.As as and positive, of that such East pose noted, are to encouraged working to September, our the meeting the but continued Europe getting platelets sentiment was organizations hospitals Canada. East Obi half of continued the pathogen-reduced Recall, can consistent in are platelets the our and out, remain that platelet our that center quality seeing markets good are prevailing blood the ensure progress first work volumes customer closely praise distributor a the at INTERCEPT's operations INTERCEPT platelet ensure groups quite needs.We momentum continue has XXX% CBS' Vancouver with of at seen deployment we are the in each XX% Canada. in or chain the Our ultimately, Blood site in platelets recent by strong CBS' at pathogen-reduced INTERCEPT their Canadian now with make the in we effectively to to their continue rollout meet to and and particularly around in well-serviced in INTERCEPT of the of are over successful technology.We Geopolitical to care and AABB watch patients of and stabilize, a blood Services countries, gain efficacy Belgium CBS, closely passing have in partners France year. we the concerns strength treated. with in

INTERCEPT end that grown in of that in CBS Blood first half pathogen the number majority of Canada with such expect transfused will reduced this of System.We for be next will year. completion We the rollout this remain by have of the the platelets track the on year,

country, Hema-Quebec of of by and validation Additionally, ongoing blood outside continues INTERCEPT platelets other provider the CBS of the the market, advance. the Canadian only X/X in to representing

We partnerships franchise. patient that the have are our proud enabling to IFC platelets.Turning Canada to U.S. in built pathogen-reduced we access are of

the experiences for Emory from Patient staffed anecdotal We in completed Anesthesiology on and in Trauma hospital SABAM, or for of results access.As Blood and outreach blood hospital the to of expanded including hospital meeting.Clinician in-person significant deepened sales is expand beginning resonating sales teams partnerships the are across are starting our a large into palpable with the turn more IFC Advancement high discuss U.S. will it State we during are and further step-up recently the fourth We've our the like Management and the order or momentum behind networking process of to detail. organization. in enthusiasm to training is and benefit our move engagement Society realize early and Society the conferences, in customers country.Furthermore, approach Stanford, outlook interest events fully adopters and Ohio now business quarter calls, trained IFC the year-end, growing.I sales the their and Kevin and center we seen peer-to-peer over quarter and IFC clinical and and TAS to

levels discussing FDA Included and around the and included from of detailed year, return EMEA, discussing factors contract Year-over-year, that provided to be government our are the Thank our our third start our we for listening. under our in the to quarter year-over-year, a EBITDA product business totaled On the sequentially product and XXXX in expected good top QX adjusted product you, as our of U.S. gross government revenue prior were everyone quarter results. whole profit QX.In revenue year. QX to also XXXX guidance afternoon this up up during that guidance, U.S., addition product contract the as with to and breakeven from second from revenues line to was our I'll pathogen our compared gross revenues revenue [ financial down the a sequentially, to margins. and of to time saw commitment revenues achievement X% quarter our milestone-based for today's X% growth well not revenue and million but of X% $X.X to reimbursement year-over-year product EMEA third points.In year million ].I'm for lay We benefit In goal.I'll our results of Vivek, $XX.X the period revenue were FX with in some for blood the posted and turn our around XX% out call, LyoIFC.Let's up XXX historical unwavering million rates of we'll to this achieving quarter, going X% contract in this Department the with third spend period. QX. further of compared X% product success drive the posted BARDA, $X.X with Defense will agreement now with and the our recognized reduction revenue as agreement basis

$XX.X prior compared FX Our fairly the QX, were the especially when third consistent gross was considering quarter and with the Product million, of quarter gross for product to profit year stable margins prior XX.X%, period. when the rates. impact year

We expect the be current of margin consistent year the reasonably on. levels.Moving remainder to with

which quarter million totaled QX quarter year expenses lower $XX.X million the type, than $XX.X during million to $XX.X from compensation.By the stock-based noncash million year prior operating operating expense expenses, Our $X.X third compared XXXX included totaled period. third million $X in specific R&D expense period. prior

million expense $XX.X expense activity in the agreement saw associated with our increased INTERCEPT-treated compared during blood BARDA to quarter we was $XX.X red SG&A quarter, our increases the R&D for During along with illuminator, million prior year in next-generation of expenses our cells.Third our in quarter, period. SG&A tied leases. stock-based restructuring third and June office compensation.Also decrease for included to operating related was restructuring charge $X.X to noncash million was The a the decreased

an the to can line, you year. of $X.XX totaled the months the expenses period.Despite impact million to to bottom to per improved reported our Cerus June QX recorded or ended prior attributable share expense net XX, attributable year our reduced factor adjusted be starting to compared diluted or Cerus realized.On see in bottom loss largest for same on XXXX, million prior compared restructuring, operating X $X.X incremental our the to for As September from $X.X improved the restructuring for for our $X.X million metric. period the our when EBITDA Net declines, were diluted as the $X.XX per line.Moving the is the to share loss adjustment operating

a short-term year.On $X.X the quarter quarter million to negative third by of flows, million balance $X.X a improved with second during sheet quarter a associated the balance period. to quarter and the Third $XX.X compared of cash during investments our on third cash, and strong million the cash compared the $X a position ended million we operations from $X.X non-GAAP adjusted and million quarter this equivalents year negative used during negative the third to $XX was of for XX% EBITDA cash the terms of cash million cash XXXX of utilization, sheet.In prior

QX a rightsizing ahead.While of time, to as at over of narrow our an to number we inventory quarter. expect used cash operations We from we significantly continue levels move inventory third we see implemented in measures aimed increase during the

fourth This XXXX, year, QX adjusted guidance in the full the expectations expect to effect guidance steadfast down of national million. measures to business this quarter during for levels to of us we we've today, our to for this We the of and growth.Throughout year. the product inventory range we agreement. due the performance inflows.As execution well revenue a adjusting generate million strong year this earlier cash into announced sequential signed $XXX allowing year, implemented are the pursuit new our and delayed to in is been $XXX sell primarily take That a with reaching net EBITDA aligned said, breakeven now range of IFC sales our XXXX implies

as and will we've turning the that like over expect been goal consistent through to several over back our factors to the fourth we top significant you realize for the quarter. the remarks, in during for guidance, Before growth we walk the to call this line past us QX.First, Obi I'd allow closing to see expect foreshadowing quarters detailed with

which laying in our the I'd of these realize remain confidence margin our stable the relatively sold effect EBITDA success USD expect down us the a third remarks. continued will a cost rise of we adjusted of in full quarter, as QX The closing expect most as of with and to that, come over we breakeven the strong Obi now profile factors operating back to our reaching and denominated saw efforts. for call financial during will products we for combination like has despite in our rates, improvement.With restructuring of margins to from, QX.Finally, foundation stable in is expected turn Second, remained continue euro expenses we a provides

Thank you, Kevin.

year, While Cerus. prospects both trajectory we in longer-term remain the XXXX has the for been a near-term confident and challenging growth

the from and has see global in the perspective, to will quite return quarter, During on through move we top help team's in year.The which the goal hit your operator fourth focus on thanks blood in entire we safeguard our key fourth face everyone's the growth, our now of technology breakeven progress as for third poised EBITDA We proven to well a of I line you continues to challenges, unwavering started appreciate quarter. quarter to continued a call which future Cerus. to to of line team for the focus, activities, pipeline this supply.Thank the we resilient are Cerus over turn interest many adoption.Finally, mission made I for bodes adjusted bottom the the questions. strong

our the of [Operator line Instructions] And is first Blackman Stifel. with question from Matt

[ is for ] Matt. This Emily on

the what Europe, presence red where particular Mark. Just track have you wondering that we we're second the CE does places adoption France look blood for on in through And so, I'm now the half in how strong think product, if like still 'XX curve like just demand cells if for there Belgium, there? and on

Emily, lot, the question. for a Thanks

CBG-MEB discussed we QX possible the are in then we call, second next is in year. So to the year. approval on the of in which And on the we authority still as a are competent questions, planning we last -- Netherlands half for to our track respond this of

approvals a are customers. of interest the platelet number is a radiation which system to we're roll TUV, to cells that's interviews countries.Just a shelf be our life strong notified of Switzerland. of focus countries us are out Germany red then elsewhere CE like additional the there our using to XX-day done the shelf But will so actually allow initially study multiple existing Particularly body shortened Europe gamma Mark context a in to life of we've required broader in-country hemovigilance commercialize approvals. leads weeks to cells, there replacing across compared and that approval, to red by demand, customers post about looking to being to rollout with X who without a INTERCEPT and for you, France, from of relates required ultimately, the in it cells.And currently As product and some red remind going various normal regulatory on then in

And more, I could. if just one

On the any et platelet far how Korea, then I'm the there? of kind update rollout cetera. in wondering along are on prospects, there's and other China, you geographies, if South Germany And longer-term

Thanks question. for that

obviously, Germany has story. a been So long

they happening around very think by influenced what's I them. are

in DACH XXX% Specifically, now, region almost INTERCEPT the platelets, France. Switzerland, you've Austria at is obviously, got which

we'll changed a quarter that NMPA process. on out to of obviously, number of continually has still on of hospital just are we in globe blood overall we filing review focus the so we Germany, we center expected that partnership and working beyond, comments underway. on use say. more big of given comment when is in through beyond those a Europe.Then different and getting previous China, are the XXXX and And MAAs approval then, are XXXX have are opportunities the level. And optimistic But we really justification our track obviously, partners reimbursement/value around and process ours is at the and but submission the approved.Still something that about that, from what platelets with across in for sort the of Nothing Germany, INTERCEPT

with question. is of One line [Operator our Jacob Instructions] And Johnson from Stephens. the moment next for

for is [ Jacob. on Mack This ]

revenues like about be guide understanding directional from XXXX? commentary XQ thinking on a quickly, to And will XXXX. year. And a the of in appreciate Just management But of just return and next here. too I perspective comp soon headwind how much if it's inventory these kind this

the address I our working and kits try current for life question. and customers? sort know, our to I that through of like Just the that? you question shelf relates don't the with Vivek, and Thanks of Yes. progress would think to the

be Sure, I'd happy to.

collections are serving In stabilizing, life customers. an the of that we levels our as behind of headwind blood the both us are at a terms perspective shelf believe center and -- through from those most as from previously, XXXX, perspective, at but now a indicated issues inventory also we management platelet

anticipate at So going-forward XXXX. been being shelf we into as to largely as headwind to headwinds we'll we the and next towards of this of this anticipate quarter relieved get the a data.So a real-time that we the beginning enter point. And we work don't continue year, we look increase calendar obviously, on have as those finish life that basis

you're And it sounds like progress just quickly, well. IFC making on good as

the think on? of strategy the how you're key And commercial are of coming the some an the what product With we in about place, in milestones eye should keeping years? uptake that

Yes. question, that again Vivek. for Thanks

I think that's up your alley as well, so.

Sure, that. address yes, happy to

in centers that the One with a getting having hospital in combination clinician sort of, getting uptake not executed, feel that a IFC and continuing business XX% contracts pretty hospitals supplier that to blood large force those meetings into centers continued, leads factors the key to of of as and business of and And on interest we that about and blood bring opportunities this under to contract We're these given year. key in enthusiastic next in the the with just is very roughly milestones sales been hospitals. calendar directly see clinicians of having users.So level enabler us from market ability hospitals on trained more with regard.So heading that's blood then into staffed of optimistic have board the of all we terms about number and with cryoprecipitate huge clinical under a we currently the marketing IFC balance, committed represent combination be peer-to-peer the those contract fully for the their in now product U.S.The thing the here is hospital key U.S. for was receive demand translate

over questions Obi don't I [Operator would the like in to comments. closing queue. further call see turn for Instructions] to Greenman any I

on you today forward continued interest your in Well, to very updating thank for Cerus. us joining you our year this Thanks and for and next. again progress We look much.

And conference. today's thank in you we that, for with participating

now You may disconnect.