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Cerus(CERS) - 2021 Q3 - Earnings Call Transcript
CerusCerus(US:CERS)2021-11-03 02:09

Financial Data and Key Metrics Changes - Cerus Corporation reported record product revenue of $36.1 million for Q3 2021, representing a 53% year-over-year increase and a 15% sequential growth from Q2 2021 [18][25] - Year-to-date product revenues at the end of Q3 were only about $1 million shy of the full year 2020 product revenues, indicating strong growth momentum [26] - Gross profit for Q3 reached $18.5 million, the highest in the company's history, compared to $12.7 million in the prior year [30] - The net loss attributable to Cerus improved to $12.4 million, or $0.07 per diluted share, compared to a net loss of $14.1 million, or $0.08 per diluted share, in the prior year [37] Business Line Data and Key Metrics Changes - Product sales in North America grew 146% year-over-year, while EMEA sales grew 3% [19] - Sales to the top five US blood centers increased over 170% compared to Q3 2020, contributing significantly to overall revenue growth [20] - INTERCEPT platelet kits represented over 80% of total product sales, with cumulative kit sales recently surpassing 10 million doses globally [14][27] Market Data and Key Metrics Changes - The US platelet market is experiencing mid-single digit organic growth, creating demand for efficient supply chain solutions [51] - The INTERCEPT blood system is becoming the standard of care in the US platelet market, with INTERCEPT treated platelets now representing the majority of platelets produced [12][62] Company Strategy and Development Direction - The company aims to establish the INTERCEPT blood system as the global standard of care in transfusion medicine, focusing on expanding its market presence and product adoption [15][47] - Cerus is committed to advancing its pipeline, with several important product launches anticipated in the coming years [47] - The company plans to strip out government contract revenue and expenses from its financial metrics to highlight core business performance [29] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about continued growth in 2022, driven by the size of the market and the increasing adoption of INTERCEPT products [51] - The company is focused on achieving cash flow breakeven while investing in growth for both the short and long term [38] - The ongoing blood supply shortage in the US is a concern, but it is not expected to significantly impact Cerus's immediate growth trajectory [59] Other Important Information - The company has signed a multiyear contract extension with EFS, France's national transfusion service, validating its business model and commitment to blood safety [46] - The INTERCEPT Fibrinogen Complex (IFC) product has seen initial commercial sales, with plans for a nationwide rollout pending regulatory approvals [21][24] Q&A Session Summary Question: What is the sustainable growth trajectory for Cerus going into 2022 and 2023? - Management expressed confidence in sustaining growth domestically and internationally, citing strong demand from blood centers and hospitals for INTERCEPT treated platelets [50][52] Question: Can you provide updates on the INTERCEPT Fibrinogen Complex and its market potential? - The total addressable market for IFC is estimated at $300 million in the US, with growth driven by increased use of fibrinogen concentrates in surgical procedures [53][54] Question: How is the company addressing the blood shortage in the US? - Management noted that the blood shortage continues but does not significantly impact Cerus's growth trajectory, emphasizing the need for increased platelet supply [59] Question: What are the expectations for gross margins moving forward? - Gross margins are expected to remain stable in the near term, with potential for expansion as the company increases production efficiency and shifts to double dose kits [60][72] Question: What is the status of the red blood cell studies and expected launch timelines? - Enrollment for the Phase III studies is ongoing, with updates expected in the first half of 2022, while a product launch in Europe is anticipated in 2023 [77][78]