On May 5, 2022 Cerus Corporation (Nasdaq: CERS) reported financial results for the first quarter ended March 31, 2022 (Press release, Cerus, MAY 5, 2022, View Source [SID1234613748]).

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Recent developments and highlights include:

First quarter 2022 total revenue of $43.0 million, reflecting a 46% increase over the prior year period. Total revenue was composed of (in thousands, except %):

First quarter 2022 net loss attributable to Cerus Corporation of $12.3 million, or $0.07 per basic and diluted share, reflecting an improvement of $5.2 million over the prior year period of $17.5 million, or $0.10 per basic and diluted share, as a result of higher sales and continued operating discipline.
As of the date of this release, the Company is increasing its 2022 annual product revenue guidance range from $157-164 million to $160 million to $165 million, representing a 22% to 26% increase over full-year 2021 reported product revenue.
The Company announced that it has signed a multi-year contract for the INTERCEPT Blood System for Platelets with the American Red Cross, which is the largest producer of INTERCEPT-treated blood components in the world.
The Company and Fresenius Kabi announced a ten-year contract extension for the production of kits for the INTERCEPT Blood System. Under the new agreement, the companies will work together to expand scale at multiple Fresenius Kabi facilities, enabling manufacturing at additional locations and unlocking further economies of scale to improve the cost profile of INTERCEPT kits.
Community Blood Center of Appleton became the Company’s third blood center production partner to obtain BLA approval for the INTERCEPT Blood System for Cryoprecipitation, which is approved for the production INTERCEPT Fibrinogen Complex.
Introduced non-GAAP Adjusted EBITDA, which for the first quarter of 2022 was negative $3.7 million, compared to negative $11.5 million during the prior year period. Cerus’ non-GAAP Adjusted EBITDA is a measure the Company has disclosed to highlight the performance of its business and its progress toward achieving cashflow breakeven. For additional information, please see definitions and the reconciliation of this non-GAAP measure accompanying this release.
Cash, cash equivalents, and short-term investments were $108.6 million at March 31, 2022.
"Cerus continued to build on its leadership position in establishing pathogen reduction as a new standard of care for blood safety during the first quarter of 2022. I am pleased to report growth from all of our major geographic regions during the period, despite the significant geopolitical turmoil and economic uncertainty that has accompanied the start to this year," said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. "As we anticipated, demand for INTERCEPT platelet kits continues to be strong in the U.S., where hospitals are choosing pathogen reduction to comply with the FDA bacterial safety guidance."

"In collaboration with our manufacturing partners, we continue to make solid progress scaling up our operations to unlock additional capacity in support of anticipated strong growth well into the future," Greenman continued. "With the visibility we have for another year of robust demand for INTERCEPT products, we have opted to raise our product revenue guidance range for 2022."

Revenue

Product revenue during the first quarter of 2022 was $37.4 million, compared to $23.4 million during the prior year period. The year-over-year growth in product revenue during the quarter came from each of the Company’s major geographic regions and was primarily driven by increased sales of INTERCEPT platelet kits in the U.S. market.

First quarter 2022 government contract revenue was $5.6 million, compared to $6.2 million during the prior year period. Reported government contract revenue is comprised of funding associated with research and development (R&D) activities related to the INTERCEPT Blood System for Red Blood Cells and sponsored efforts related to the development of next-generation pathogen reduction technology for whole blood.

Product Gross Profit & Margin

Product gross profit for the first quarter of 2022 was $19.4 million, increasing by $7.1 million over the prior year period. Product gross margin for the first quarter of 2022 was 51.7% compared to 52.5% for the first quarter of 2021, and represents an increase of approximately 60 basis points compared to the fourth quarter of 2021.

Operating Expenses

Total operating expenses for the first quarter of 2022 were $34.8 million compared to $34.9 million for the same period of the prior year. Despite having to navigate inflationary pressures, the Company was able to demonstrate financial discipline, resulting in operating leverage that is strengthening the Company’s overall financial position.

Selling, general, and administrative (SG&A) expenses for the first quarter of 2022 totaled $20.7 million, compared to $19.2 million for the first quarter of 2021. The year-over-year increase in SG&A expenses for the first quarter was tied to increased hiring and stock-based compensation.

R&D expenses for the first quarter of 2022 were $14.1 million, compared to $15.7 million for the first quarter of 2021. In the first quarter, the Company’s R&D expenses declined on a year-over-year basis as a result of various research projects reaching completion.

Net Loss Attributable to Cerus Corporation

Net loss attributable to Cerus Corporation for the first quarter of 2022 was $12.3 million, or $0.07 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $17.5 million, or $0.10 per basic and diluted share, for the first quarter of 2021.

Non-GAAP Adjusted EBITDA

Non-GAAP Adjusted EBITDA for the first quarter of 2022 was negative $3.7 million, compared to non-GAAP Adjusted EBITDA of negative $11.5 million, for the first quarter of 2021. For additional information, please see definitions and the reconciliation of this non-GAAP measure accompanying this release.

Balance Sheet & Cash Use

At March 31, 2022, the Company had cash, cash equivalents and short-term investments of $108.6 million, compared to $129.4 million at December 31, 2021.

As of March 31, 2022, the Company carried $55.0 million of notes due and a balance on its revolving line of credit of $15.0 million. The Company continues to have access to $5 million under its revolving line of credit.

For the first quarter of 2022, net cash used in operating activities totaled $21.5 million as compared to $17.5 million during the prior year period, due to changes in working capital.

Increasing 2022 Product Revenue Guidance

The Company expects full-year 2022 product revenue will be in the range of $160-165 million, representing strong growth of approximately 22%-26% compared to full-year 2021 product revenue of $130.9 million. Previously, the Company’s 2022 product revenue guidance range was $157-164 million.

Quarterly Conference Call

The Company will host a conference call at 4:30 P.M. EDT 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 8280547. The replay will be available approximately three hours after the call through May 19, 2022.