- Earnings call transcript Q3 2022

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Operator

Good day and thank you for standing by. Welcome to the Cerus Corporation’s Quarter Three 2022 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. like the the presentation. now the over would for company I to conference hand to And

Jessica Hanover

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

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

Corash, can Vivek Carol Green, website ir.cerus.com. Moore, Affairs Relations Officer; Cerus' are Greenman, Chief With the XXXX Chief and Jayaraman, and third Senior Vice issued Cerus' press business Laurence Regulatory Officer; call at Chief September announcing Cerus' the and Financial the Cerus’ President the President of company's from recent results highlights. Cerus’ on and a XX, Executive You Operating Officer; access the quarter ended for Obi Cerus Investor Quality. Chief describing slides our release Scientific me Officer; today Dr. financial Kevin

Factors future a launches, You of from facts, events that gross will and forward-looking goals, website development results, no can actual in XXXX, They identified involve results product the gross those operating performance, XX, quarter the XXXX events Examples risks events, cash development, ongoing Risk release to these trials, measures, accordance call growth non-GAAP and undertake revenue on at remind the the our measures product in considered statements. operations, we a future and margins, to and and and product of efforts, relate described and forward-looking in use our product shortly. to of I'd measures EBITDA. which discussing will non-GAAP announcement related make activities. adjusted our guidance the update future a today's expenses, future include company Form differ and XXXX, XX-Q profits, as sales, our non-GAAP we well anticipated regulatory and for commercial XX, forward-looking duty September GAAP. forward-looking uncertainties this for you than and like initiatives, to of including December financial or year press operating statements. and including as file for XX-K under strategy, our future presented be We historical replacement ongoing including supplement statements be ended growth clinical with that and and statements cause performance we and financial rather not our ended call, to this timing also Form materially. some can today's www.cerus.com. to statements are should access on are and and These copy On These obligation future will

reconciliation a GAAP We’ll business Obi, followed financial please to highlights, financial Kevin measures, of some release. begin by discuss For non-GAAP with press some refer opening to remarks today comparable our and results. to review to today's recent from measures Vivek financial

We will Executive from now, commentary Obi And an it’s on Chief my Obi and and conclude remarks. Greenman, to update Cerus’ with President with closing our pleasure introduce Officer. pipeline

Obi Greenman

and you, Thank afternoon, Jessica good everyone.

reflecting strongest in towards breakeven on globe. ahead position the start care in to standard highlight I as our ever, approach medicine to cash and the call with transfusion around of we to INTERCEPT flow advance and want the this the us company As point we journey this the of financial opportunities

With well both the continued INTERCEPT and has the commercially growth in executed of team platelet business our QX, operationally.

Key to favorable with getting the and as now option hospitals is this platelets. within cash reach. achieving recent safety FDA growing the blood breakeven most of to Our flow the of guidance comply recognition centers U.S. by goal steadfast of the INTERCEPT for goal is bacterial

we be the discussed aggressive continues our our and advance investments and and model our our to pipeline. of the to with our the the challenges, approach in quarter macroeconomic business realizing We Despite to dollar on business product U.S. issues manufacturing second geopolitical worsening resilient continue to balance call, scale such a stronger grow. that as to disciplined leverage capacity global

cases to at platelets. exemplified meeting used Speakers of is and Our the with base. proposition this globe. Because the data our the our together and unique to business. workshop comes INTERCEPT value profile more demonstrate can abstract coupled both the vast selected peers, in revenue of AABB product a case product clinical weekend our benefits experience industry been as hospitals at performance experience XX. with supply The profile with these with are use France's working products our With well to and Fresenius IFC, of INTERCEPT Advancement utility Hurricane AABB real the recent Patient virtual safety SAPBM, uncertain efficacy increasing In for to study lecture routine demands multi-year platelets. due customer of of annual platelets the associated and partners, hospitals. shared as our Blood times of rescheduled from see November for cases been decade. sales the benefits. and majority the of a INTERCEPT this highlighting Ian, AABB some that by over and with availability long-term of annual clear expanding the IFC. Management from The Society a of the Kabi, of use including among at safety upcoming experience kits, meet platelets, is demonstration regarding the routine world we meeting our This ensure At continues plenary demonstrated consistently manufacturing it the INTERCEPT for diligently stickiness INTERCEPT chain is or meeting with around virtual our for on solidly In the have INTERCEPT reinforced exciting

bleeding cost the among performance the Overall, of strength operational the rapidly to and its business and from our the While of our burdens counts. demand launch, still and The when Hospital growing reduce customers. associated positive, by is user early a Center has of every role cryoprecipitate. has critical it wastage ability the in and product's been demonstrates adopters experience immediate to this patients our clear continued addressing Blood that critically with is availability conventional IFC coagulopathy due initial in IFC in particularly minute and

expect finish INTERCEPT of the drive I would We year now turn the quarter revenue this call future. over third continued and system growth like the the blood Vivek well discuss to to strong into globally to to highlights. to

Vivek Jayaraman

continue year-over-year everyone of again you, Thank among our small both North to notable would were quarter blood afternoon from and customers I dynamics led and on Obi, the once by basis in franchise. large see good which This third the to strong additional Product revenues America, provide grew to center call. few adoption and we reflected on for joining like a some for XXXX XX% growth color. a contribution platelet quarter. U.S. In today's

lasting reduced the a platelets. region months year, have strong last performance seasonally in established during with XXXX, summer in ahead we in three the for demand quarters, FDA's demand of the over intercept well that Given pathogen of softer we platelet our the the consistent continued deadline, have the third slower In adoption resulted the guidance year. EMEA, early quarter prior compliance calendar as demonstrated as

of on this slowing year, quarter our second signs headwinds currency Additionally, no showed mentioned we quarter. in the the third call,

year XX.X down the EMEA versus As million a XX% sales of prior product were period. result,

in this Moving continued product on the a sales am to basis quarter. to IFC, I sequential grow third to pleased that of on report

to at product adopting see Valley momentum Central their are IFC experience and customers We building who the California Children's SAPBM recent in spoke continue meeting. like about Hospital with the

I the portfolio system in experience field associated in benefits speak XXXX. our with U.S. we commercial product blood when IFC as forward look commercial the more more ramping progress customers world [setting] global use the providing Our early rest the [ph]. organization updates the IFC on in and to real is of significant focused with INTERCEPT about clinically again

and on Obi rapid As the kit opening occasion. our the I in much risen supply partners placed we INTERCEPT XXXX. with pressure of added his am remarks, chain have pleased has for mentioned way and to our growth manufacturing our

in position kits. our continue find the invested of management global help ease short-term, active in inventory inventory with in have burden to we a distribution of the we to ourselves While

component You Caribbean. may well manufactured a in project be are enable we to will recall, manufacturing ultimately kits intercepts on the and multi-year expansion kits underway that entire

us the and that online capture to in Kevin detail. provides significant able constraint removing more for I capacity bringing will results these to us to be sites allowing production in ship opportunity benefits product. lower it the This turn jurisdictions, we'll expansion this with with multiple addition cost In associated products, and our to economic outlook our make to and global over now discuss

Kevin Green

our generate continue and we our and cash flow Vivek, results financials, afternoon, of good execute everyone. strong Thanks, toward breakeven. Across objective to

expenses are Continued realizing leverage expansion progress. from to the while profit, driving again our operating gross

sold either revenue $XX.X the during year out to as expect the or this posted North dynamic line, incurred, quarter outperformance XX% quarter. in to sales of third representing We products the top of operationally. costs product XXXX relative America we close led growth We by year-over-year continue with on million, for

and Foreign exchange X% top than line in was expected on resulted pressure more headwind previously the we a impactful line top year-over-year.

growing good growth our led rates other largest year-over-year. sales headwind center U.S. year-over-year has mentioned, the impacting the U.S. by to U.S. in their for U.S. basis U.S. to customers of customer previously a a XX% EMEA, upon with euro, majority the As and platelet continued the the strength been This based portion base in XX% continued this into where customers XXXX are XXXX today. INTERCEPT impacted comparable well growth such, us of quarter blood sales In dollar likely and is be negatively our as was across on as dollars. reported growing dollar year-over-year

XXXX providing at [XXX] we're of U.S. it that XXXX, rate call, beginning While dollar around worth euro, was is the today's not on [ph]. for the mentioning guidance

further product neighborhood be even million. revenue dollar in could full-year our impacted So, without we XXXX negatively of the anticipate $X strengthening,

New revenues the the continue persist this XXXX, FX months several the with impact into first expect we for see negatively to product to dynamic Year. Additionally, in during potential to

in Our XX% third increase internationally. and On in by year-over-year of U.S. platelet treatable XX% year-to-date the U.S. doses the has of quarter grown year-over-year and internationally. in XX% growth reflected increase the number calculated number doses XX% basis, a a the

quarter, In mix product of for the INTERCEPT terms our over disposable QX sales of product represented XX% revenue. of kits

million revenue period. contract million government our totaled guidance, product in the and our prior in to included addition not $X revenue In QX year versus from $X.X

on be Defense a blood recent blood LyoCryo, whole this BARDA IFC line our U.S. will the non-frozen Department with supported red work the cells, award to of lyophilized initiative FDA, from on the formulation and by which over recognized in addition the the contracts for detail Obi the In based with in milestone DoD contract, next more two will years. the from differs his and bill we the closing The is have as comments. LyoCryo FDA. BARDA with that contract incurred a discuss of

to now Turning product gross gross profit and our margins.

was $XX.X of gross million during basis profit gross period, when points over the year-over-year. year product XX% prior million, compared an and XXX quarter year increase to increased XX.X%, XXX for to quarter third was Our sequentially. compared period the $XX.X prior the Product points basis which improved margin

last beneficial to discussed the that with COGS dollar quarter, denominated in our we U.S. of for gross majority strengthening actually As are sales of products euros, dollars denominated. particularly the U.S. our margins,

totaled $XX.X included million, and period Moving in million operating on, million, year. expenses based the $XX.X year stock with our roughly $XX.X totaled R&D prior compared third in-line type, expense By to third non-cash $X.X specific quarter quarter expense million during compensation. the prior

million, quarter in million year Third was SG&A period. to $XX.X the $XX.X prior compared expense

and headlines, leverage, immune higher our invest business and the that While is make while on to the is driving we to execution business financial deliver us costs. not our focus, operating inflationary to sustained discipline in these commitment, pressures allowing absorb continue

$X.XX share, loss the XXXX, Net Cerus line, narrowed to Cerus $X.X attributable year bottom totaled million to compared $XX.X for compared net to million for attributable period. same XX, three months the diluted for September million to in $X.X per or share XXXX. On the or the QX ended $X.XX XX% by diluted prior period or when loss reported per

XXXX to a half to less Our during ago a as third a where they XXXX. quarter Year $XX.X year two-thirds lower reported adjusted for million, the were of losses than million, year $X.X to adjusted date were prior to negative months a date compared by first than XXXX. losses were year of negative our to totaled $X.X figure negative $X.X the EBITDA to non-GAAP and totaling nine million our date of million third quarter with compared the the as negative EBITDA to non-GAAP a almost total reported by

this We pleased front are on stated progress reaching cash with goal as approach we our flow of our breakeven.

cash position the balance We to cash strong and Turning equivalents quarter million third and cash of a sheet flows. the on in with sheet. ended cash $XXX.X the balance

would remaining terms my to the less in around used wrap-up the compared of expect year the update feel revenues in of we cash during that year. $XXX period. end XXXX, cash our XXXX to good With finish our prior $XXX two revenue to $X.X was to today, million months demand million I the product In product full-year To be operations million, guidance. utilization, have commentary products from market $X.X with like now the of for we our into balance visibility We million. in range than

to However, of the year. much served top consistent a line the the meaningful have impact for of the of realities U.S. headwind dollar strong as the and

we robust impacting as growth stronger out $X end up by million. As a could finish our new that reinforces underlying reported our the I approximately mentioned With previously, the said, year. negatively of XXXX revenues we business product dollar the expect guidance

in combined to improved measured continue confident about EBITDA Obi. expected with the non-GAAP by feel call operating me QX turn gross that, our expense as the cash flow And the we year-over-year back our ability with growth to let revenues, over leverage, adjusted and to With breakeven margins realize metric.

Obi Greenman

you, Thank Kevin.

to I more up questions, some also the few comments open on Before wanted closing remarks. provide and pipeline to we a

we we shelf platelet have earlier week, As that X-day we life. this announced for approval secured Canada pleased Health are a now

the initiated of Concurrently, evaluation been their Canadian exclusive approval or Héma-Québec Blood blood nationwide. in recent to work will has benefit and recall, introduction operations hospital of our with rolling X-day have provider both production. also an to the with comprehensive allow Canada's they the out we've XX% CBS only centers INTERCEPT INTERCEPT deploy approximately in across customers, that country, shelf be from that the we blood Ottawa. CBS other the of INTERCEPT of with working province CBS system approved to You with begin Héma-Québec. the Quebec will This network is hope newly annual out and the play educationally able in We blood life. Services the done will

pursuit improve breakeven, leading focus maintain to and key patient of our cash collaborating we a we field While on medicine transfusion investigators the of and advancing care. by committed the to with discipline financial are science simultaneously flow

the recently that patients. For example, of Trauma the started INTERCEPT we and This study highlights by develop for have sponsored to innovative study used case compelling previously a discussed to our critically ill transfusable blood marketplace. enrolling National Coalition rapidly ongoing also using potential components plasma for patients. wounded a or could efforts INTERCEPT the Research burn is in and CNTR It plasma with for potential protocols treatment improve or treatment for has represent

mentioned help successful, traumatic remote portability, ambient environments have million battlefield patients were we fund settings. the which being injury. awarded increasing availability rural to in $X from development for learn Kevin, administration that designed of If survival LyoCryo also have LyoCryo. and will rapid is the and in we applications we recently life to to pre-hospital by by hospital pleased over as Additionally, of such temperature care aim product this stability, been the shelf trauma with the U.S. DoD think enable as to can

this authority, red closing CBG, Lastly, providing in of cell blood modules. and notified Device our MDR Mark its review the program submission feedback European at The a process competent or the reached time. INTERCEPT dossier Medical out submission TUV, to CE with Regulation body our our all on milestone continues

and at who supported safety We trials, continue Phase making blood we're to be this with U.S. partners preparedness, our pleased with progress the and on availability. close program of overall pandemic in and have III RedeS, BARDA steadfastly ReCePI the context collaboration in our U.S. clinical

are for for comments end these quarter, next our by studies quarter the for Cerus and XXXX third for consistent commercially with execute the the and expectations completion operationally. year last recipe In throughout enrollment Our to of of RedeS. summary, continued

we a as economic customers. flow approach growing strong breakeven, robust downturns of establish can of work Combined Cerus Q&A. in let operator medicine. are allow the we turn is health. growth care new that, as center to the in a We readiness This of resilient position sticky we to and a with transfusion from that field business is highly sheet as me self-fund innovation and for cash demand it over for economic blood to our back leader a inelastic balance will standard a to continued that due the With

Operator

Thank you. have question comes [Operator of Stifel. Instructions] And first Mathew our from you Blackman line. the Mathew,

Mathew Blackman

start things growth, when Kevin, my you'll And be with plant of to just get to trajectory breakeven? that to Good the sustained half there I've in some everybody. does questions. into you line feel Thank top all the what you on taking sort reasonable follow-up. you, cross given could you you're is, maybe equal thinking like of able leverage, do of a cross made two. we when for contemplating flag significant got feels things afternoon, I've on or first you the when progress XXXX, breakeven, when the like got one seem the about can

Kevin Green

I Thanks, because on we're Matt. that. though really a handicap in know narrowing don't timeline Yes, I

As the results further current cash X concurrently you from in from to smidge here saw just you'll operations Q and million. over see

there. we're is [ph], on and margin we're you're And in top errors So, point] remarks, [ph] I the then to the mentioned the growth margins, narrowing side like with as pretty expansion when a [fine the striking line feel our but of in prepared I distance, such I in tight. think of [ordering] really of in course, find

quite [can't continue term, that want going and expect don't near So, that lag] a that would I to in progress here to but say to we're from timeline, I the we necessarily [ph]. give making you

Mathew Blackman

high a frame platelets, way just there platelets, frame lifting combination rates? it's those banks And right. both, Obi heavy it new some a ramp to really existing left still to I for trying then getting from Is the standpoint? to penetration left blood to what's on the one Thanks. or to is of is penetrate? Appreciate is users assume of way curious to that. or onboard there's tackle larger Vivek, utilization other market if opportunities but All U.S.

Obi Greenman

why Matt. you don't take Thanks, that. Vivek

Vivek Jayaraman

to. for Happy the question, Matt. Sure. Thanks

both current you're significant if deeper] continued as the the with in I they platelet existed still it opportunity of driving terms [going categorize proportionally of in growth it little [ph] U.S. a think with most were bit to exists right market, users. because

As you'll families go initially conscious XX%, de that of way center to novo still two, pick focus decision the lot current our as are blood a started, plenty staff, operations recall, training we market. program their represented left a XX% to made to efforts with initial on exist the of our very to great, the there. users, well, but associated There's users really up the because along opportunity getting There which with is the frankly, greatest over etcetera. this of continues we're costs

Mathew Blackman

right. All Thank Appreciate it. much. so you

Obi Greenman

Matt. Thanks,

Operator

you, Thank Matt.

the comes Brandon Brandon, question of Fitzgerald. now. next Folkes Cantor from Our you stage have

Brandon Folkes

a well. the gross comment some ForEx, think for Services? margin Thanks so Blood continued INTERCEPT for progress. talk add all progress two gross we just about very we on then about maybe from thinking on maybe and Thank Canadian the just could commentary you. Maybe fundamental doing the could Canada? secondly, potential And taking well. the there Hi. is what, on you me be expansion? in on the you just basis on should Can across achieve – penetration sort that of as my congratulations. rates I I heard questions margin Just just

Obi Greenman

you the Brandon. of and the take part question question. handle gross first expansion that Kevin margin Thanks, maybe can I'll

that's a Canadian the of Canada, in it Province XX% large the and represents two XXX,XXX relates all Quebec. which collection it's Blood about Services, about the Canada blood on to then as which market and handles services, basis Héma-Québec, overall annual split transfusions between of blood So, an in

were have their all for the main very in Canada. have to of approval waiting the close We a their more X-day deployed Ottawa. CBS one across this throughout relationship with technology centers in blood roll-out broadly They and centers technology

is so there schedule doing And timeline that. and clear for a very

And we'll evaluation with I CBS their ongoing leveraging also will then to the look agreement point. really that get also, and And with anticipate we talking of that most to an them extensive collections. work hoping the they're did in Canadian are do capture technology synergies operational that with the have business with think order we Blood to that CBS, and Héma-Québec So, that so Services. at this allow

you question? optimistic to margin the business want very we're about next, of XX XX sort So, in the handle Kevin, the over Canada to months. gross

Kevin Green

Sure.

that So, level is fairly impact as And the let saying for for have balance to year margins a reason far obviously we we relieved forward. what historical modest rates. inventory expect FX thus relative that is on carry the by me at on start we been that our is, move the sheet our of and

sell-in And environment. the a product dollar strengthening was a We're FX we rate. was in we're a selling that so, that higher to period, case given product extent the at in that of costed selling that

when in which in mix, of forward with by the impact we in strengthening I something our also periods. we but regardless future in And of that's the regardless – really way growth Fresenius to we'll with recognizing and mentioned rates, economies that improvement overall U.S. As overall a sell honestly we we expect are some in be have FX, just tailwind of agreement we time. continue scale That's move margin the profile of But as quite build and been the that volume. of moment benefit. new FX product dollar the Kabi the will expect and ago, see just also do providing as we forward

Brandon Folkes

and congratulations very Thank the you on progress. Great. much

Obi Greenman

Thank you, Brandon.

Operator

for right. some like it to Mr. remarks. time, At All closing Greenman would this to return back I Obi

Obi Greenman

us in New expectations an or today. the XXXX the end update interest XXXX with our again report you joining Year. providing joining for – look we and for Great. of end the on in on Well, the or end We your our Cerus. at results to again for of and on when XXXX forward for Thanks today thank you of

Operator

you your now today's and for conference. the Thank may does participation conclude you program This disconnect. everyone in

Cerus (CERS) 3 Nov 222022 Q3 Earnings call transcript