Cerus(US:CERS)2021-08-02 16:00Regulatory Approvals and Product Development - The INTERCEPT Blood System for Cryoprecipitation received FDA approval in November 2020, intended for treatment of bleeding associated with fibrinogen deficiency [122]. - The red blood cell system is currently in development, with CE Mark application resubmitted under the new European Medical Device Regulation, but approval is not expected until 2022 [121]. - The platelet system is approved in the U.S. for pathogen-reduced apheresis platelet components, with two post-approval studies required by the FDA [119]. - The INTERCEPT Blood System has received CE Marks and FDA approval for both platelet and plasma systems, which are marketed in multiple countries [118]. Financial Performance - Product revenue for the three months ended June 30, 2021, was $31.5 million, a 46% increase from $21.5 million in the same period of 2020 [142]. - Total revenue for the six months ended June 30, 2021, reached $67.3 million, up 31% from $51.5 million in the same period of 2020 [142]. - Government contract revenue for the three months ended June 30, 2021, was $6.3 million, an 18% increase from $5.3 million in the same period of 2020 [143]. - The company recognized $12.5 million in government contract revenue for the six months ended June 30, 2021, compared to $11.4 million in the same period of 2020, reflecting ongoing contract activities [143]. Expenses and Financial Challenges - Cost of product revenue for the three months ended June 30, 2021, was $15.3 million, a 58% increase from $9.7 million in the same period of 2020 [146]. - Gross margin on product sales decreased to 51% for the three months ended June 30, 2021, down from 55% for the same period in 2020 [147]. - Research and development expenses increased by 9% to $17,083,000 for the three months ended June 30, 2021, compared to $15,618,000 for the same period in 2020 [150]. - Selling, general, and administrative expenses rose by 23% to $19,758,000 for the three months ended June 30, 2021, compared to $16,112,000 for the same period in 2020 [154]. - Interest expense increased by 44% to $(1,338,000) for the three months ended June 30, 2021, compared to $(929,000) for the same period in 2020 [159]. Cash Flow and Capital Requirements - Total cash and cash equivalents decreased to $59,030,000 as of June 30, 2021, from $36,594,000 as of December 31, 2020 [164]. - Total debt increased to $64,011,000 as of June 30, 2021, compared to $48,104,000 as of December 31, 2020 [165]. - Net cash used in operating activities improved to $(26,118,000) for the six months ended June 30, 2021, from $(27,721,000) for the same period in 2020 [166]. - Net cash provided by investing activities was $31,249,000 for the six months ended June 30, 2021, compared to $(51,780,000) for the same period in 2020 [167]. - Net cash provided by financing activities decreased to $17,615,000 for the six months ended June 30, 2021, from $79,325,000 for the same period in 2020 [169]. - Working capital decreased to $119,775,000 as of June 30, 2021, from $123,457,000 as of December 31, 2020 [170]. - The company expects to meet its capital requirements for at least the next 12 months, relying on cash from product sales and government contracts [172]. Strategic Initiatives and Market Challenges - The company plans to transition to a direct sales model for the INTERCEPT Blood System in the U.S., focusing on hospital customers [118]. - The company is actively seeking additional manufacturing partners for the extended-storage cryoprecipitate product to enhance market reach [122]. - The company may experience pricing pressures and competition for hospital business due to its strategy of selling products to non-manufacturing partner blood centers [122]. - The company plans to begin a limited launch of IFC to U.S. hospital customers this year [142]. - The company faces potential challenges in achieving profitability if widespread commercial adoption of its blood safety products does not occur [129]. Risks and Uncertainties - The company faces risks related to the COVID-19 pandemic, which may delay clinical trial enrollment and regulatory approvals [121]. - The COVID-19 pandemic continues to impact the company's operations and may delay research and development activities [139]. - The company may need to raise additional capital to support the development and regulatory approval of the red blood cell system [121]. - Funding under the agreement with BARDA is subject to risks, including the ability to achieve required milestones and potential termination of the agreement [175]. - The company may need additional funds for the development of the red blood cell system and to conduct clinical trials if costs exceed expectations [180].