On February 22, 2022 Cerus Corporation (Nasdaq: CERS) reported financial results for the fourth quarter and full year ended December 31, 2021 (Press release, Cerus, FEB 22, 2022, View Source [SID1234608796]).
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Recent developments and highlights include:
Fourth quarter 2021 total revenue of $50.1 million, reflecting a 49% increase over the prior year period. For the full year, 2021 total revenue was $159.5 million, reflecting a 40% increase over the prior year period. Total revenue was composed of (in thousands, except %):
As of the date of this release, the Company is reiterating its 2022 annual product revenue guidance range of $157 million to $164 million, representing a 20% to 25% increase over full-year 2021 reported product revenue.
This year, Cerus Corporation celebrates its 30th anniversary. Since its foundation, Cerus has recognized the critical unmet need to protect the world’s blood supply. With the INTERCEPT Blood System, Cerus hopes to continue to deliver innovative solutions in support of making safe blood products accessible globally.
Two of the Company’s blood center production partners, Gulf Coast Regional Blood Center and Central California Blood Center (CCBC), have recently obtained BLA approvals for the INTERCEPT Blood System for Cryoprecipitation, which is approved for the production of Pathogen Reduced Cryoprecipitated Fibrinogen Complex, or INTERCEPT Fibrinogen Complex (IFC). With these BLA approvals, the Company and these blood center production partners have the ability to sell IFC across state lines.
Cash, cash equivalents, and short-term investments were $129.4 million at December 31, 2021.
"2021 was a breakout year for Cerus. We solidified a leadership position in the U.S. platelet market with blood centers and their hospital customers that chose INTERCEPT platelets for their patients to comply with the FDA’s platelet bacterial safety guidance," said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. "With the INTERCEPT Blood System now established in many blood centers in the U.S., we are confident that 2022 will be another year of strong growth led by sales of INTERCEPT platelet kits. At the same time, we are excited to continue our IFC launch across the country on the heels of the recent first BLA approvals as well as collaborations with BCA and OneBlood. We look forward to continuing to expand patient access to INTERCEPT treated blood components and updating our stakeholders on our progress throughout the year."
Revenue
Product revenue during the fourth quarter of 2021 was $39.9 million, compared to $28.2 million during the prior year period. Product revenue growth during the quarter and full year was driven by increased sales of INTERCEPT platelet kits to blood center customers across the U.S.
Fourth quarter 2021 government contract revenue was $10.2 million, compared to $5.4 million during the prior year period. Reported government contract revenue in the fourth quarter 2021 increased versus the prior year period following an agreement for allowable costs that the Company had previously been deferring. Our government contract revenue was comprised of funding associated with research and development (R&D) activities related to the INTERCEPT Blood System for Red Blood Cells as well as sponsored efforts related to the development of next-generation pathogen reduction technology to treat whole blood.
Product Gross Profit & Margin
Product gross profit for the fourth quarter 2021 was $20.4 million and, for the second consecutive quarter, was the highest in the Company’s history, increasing by $4.4 million over the prior year period. Product gross margin for the fourth quarter 2021 was 51.1% compared to 56.8% for the fourth quarter of 2020 and roughly flat compared to the second and third quarters of 2021.
Full-year 2021 product gross profit was $67.4 million and reflected growth of 33% over the prior year. Product gross margin for the full year 2021 was 51.5% compared to 55.2% for the prior year.
For both the fourth quarter and full year, the year-over-year decreases in product gross margin was anticipated. Currently, U.S. customers primarily use single dose platelet kits, which have a lower product gross margin percentage as compared to our double dose kits, which are more typically used by the Company’s international customers.
Operating Expenses
Total operating expenses for the fourth quarter of 2021 were $37.6 million compared to $35.8 million for the same period of the prior year, reflecting a year-over-year increase of 5%. For the full year, 2021 total operating expenses totaled $145.0 million, representing an increase of 10% when compared to 2020 total operating expenses of $131.4 million. On both a quarterly and full-year basis, lower R&D expenses versus the prior year periods were offset by higher commercial expenses, driven by sales incentive compensation.
Selling, general, and administrative (SG&A) expenses for the fourth quarter of 2021 totaled $22.0 million, compared to $18.7 million for the fourth quarter of 2020. For the full year 2021, SG&A expenses totaled $81.3 million, compared to $67.0 million for the full year 2020. The year-over-year increase in SG&A expenses for the fourth quarter and full year was tied to higher non-cash stock-based compensation expense, increased sales incentive costs and continued investments in the Company’s therapeutics business unit.
R&D expenses for the fourth quarter of 2021 were $15.6 million, compared to $17.1 million for the fourth quarter of 2020. For the full year, 2021 R&D expenses totaled $63.7 million, compared to $64.4 million for the full year 2020. For both the fourth quarter and full year, the Company’s R&D expenses continued to advance the Company’s key pipeline programs, including development of the Company’s LED illuminator and INTERCEPT Red Blood Cell program, but were offset by lower R&D costs versus the prior year periods as other projects reached completion.
Net Loss Attributable to Cerus Corporation
Net loss attributable to Cerus Corporation for the fourth quarter of 2021 was $9.1 million, or $0.05 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $14.4 million, or $0.09 per basic and diluted share, for the fourth quarter of 2020.
For the full year 2021, net loss attributable to Cerus Corporation was $54.4 million, or $0.32 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $59.9 million, or $0.37 per basic and diluted share for the full year 2020.
Balance Sheet & Cash Use
At December 31, 2021, the Company had cash, cash equivalents and short-term investments of $129.4 million, compared to $120.0 million at September 30, 2021, and $133.6 million at December 31, 2020.
As of December 31, 2021, the Company carried $54.7 million of notes due and a balance on its revolving line of credit of $14.7 million. The Company continues to have access to $5 million under its revolving line of credit.
For the fourth quarter of 2021, net cash used in operating activities totaled $1.2 million as compared to $8.9 million during the prior year period, continuing a trend of strong capital management as higher revenues and significant operating leverage offset investments in inventory to continue to meet growing customer demand. For the full year 2021, net cash used in operating activities totaled $33.9 million, compared with $41.8 million for the full year 2020.
Reiterating 2022 Product Revenue Guidance
The Company expects full-year 2022 product revenue will be in the range of $157-$164 million, representing strong growth of approximately 20%-25% compared to full-year 2021 product revenue of $130.9 million.
Quarterly Conference Call
The Company will host a conference call at 4:30 P.M. EST this afternoon, during which management will discuss the Company’s financial results and provide a general business overview and outlook. To listen to the live webcast, please visit the Investor Relations page of the Cerus website at View Source Alternatively, you may access the live conference call by dialing (866) 235-9006 (U.S.) or (631) 291-4549 (international).
A replay will be available on Cerus’ website, or by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and entering conference ID number 8851919. The replay will be available approximately three hours after the call through March 8, 2022.