On May 4, 2023 Cerus Corporation (Nasdaq: CERS) reported financial results for the first quarter ended March 31, 2023 (Press release, Cerus, MAY 4, 2023, View Source [SID1234631024]).

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Recent highlights include:

First quarter 2023 total revenue of $38.5 million was comprised of (in thousands, except %):

Three Months Ended

March 31,

Change

2023

2022

$

%

Product Revenue

$

30,974

$

37,444

$

(6,470

)

-17

%

Government Contract Revenue

7,502

5,576

1,926

35

%

Total Revenue

$

38,476

$

43,020

$

(4,544

)

-11

%

The Company is reiterating its full-year 2023 annual product revenue guidance range of $165 million to $170 million.
Completed successful debt refinancing, providing for longer time before principal repayments are required, company options for an additional $20 million and expansion of the revolving line of credit up to $35 million.
Received Medical Device Regulation (MDR) certification for INTERCEPT platelets processing sets.
Submitted INTERCEPT platelets dossier to the Chinese regulatory authority, the National Medical Products Administration (NMPA).
Cash, cash equivalents, and short-term investments were $94.7 million at March 31, 2023.
"With anticipated first-quarter headwinds largely behind us as more normalized customer order patterns resume, we continue to be optimistic about our return to growth for the duration of 2023, supporting our full-year product revenue guidance of $165-170 million," said William "Obi" Greenman, Cerus’ president and chief executive officer. "The INTERCEPT Blood System continues to be the technology of choice in the U.S. for platelet safety, and we expect to see continued adoption in other geographies this year as well."

"We have multiple commercial milestones on tap this year, including ongoing roll-out of INTERCEPT platelets in Canada as well as regulatory progress in China via our joint venture. We remain committed to achieving adjusted EBITDA breakeven this year which, combined with our strong balance sheet and recently completed debt refinancing, would put us in a strategically strong position. Accordingly, this would allow us to reinvest cash flows into continued growth, margin expansion and scale, and new product development," Greenman continued.

Revenue

Product revenue during the first quarter of 2023 was $31.0 million, compared to $37.4 million during the prior year period. The decrease in product revenue was driven primarily by the anticipated short-term U.S. customer inventory drawdown, discussed during the Company’s fourth-quarter 2022 call. The Company expects that this dynamic has largely played out.

First-quarter 2023 government contract revenue was $7.5 million, compared to $5.6 million during the prior year period. Reported government contract revenue in the first quarter 2023 increased versus the prior year period primarily due to funding associated with development of a lyophilized INTERCEPT Fibrinogen Complex. In addition to this funding, 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 efforts related to the development of next-generation pathogen reduction technology to treat whole blood.

Product Gross Profit & Margin

Product gross profit for the first quarter of 2023 was $17.3 million, down by 11% over the prior year period. Product gross margin for the first quarter of 2023 was 55.8% compared to 51.7% for the first quarter of 2022. The first quarter of 2023 represents the fifth consecutive quarter of gross margin expansion. The Company expects that a number of initiatives aimed at lowering cost of goods sold will contribute to continued margin expansion over time.

Operating Expenses

Total operating expenses for the first quarter of 2023 were $38.9 million compared to $34.8 million for the same period of the prior year, reflecting a year-over-year increase of 12%.

Selling, general, and administrative (SG&A) expenses for the first quarter of 2023 totaled $21.6 million, compared to $20.7 million for the first quarter of 2022. The year-over-year increase in SG&A expenses for the first quarter was tied to investments in field-based personnel in support of commercial growth, costs of attracting and retaining our employees, legal fees, and non-cash stock-based compensation.

R&D expenses for the first quarter of 2023 were $17.4 million, compared to $14.1 million for the first quarter of 2022. The year-over-year increase in R&D expenses in the first quarter was tied to the development of our next-generation illuminator and increased clinical research activities.

Net Loss Attributable to Cerus Corporation

Net loss attributable to Cerus Corporation for the first quarter of 2023 was $15.6 million, or $0.09 per basic and diluted share, compared to a net loss attributable to Cerus Corporation of $12.3 million, or $0.07 per basic and diluted share, for the first quarter of 2022.

Non-GAAP Adjusted EBITDA

Non-GAAP Adjusted EBITDA for the first quarter of 2023 was negative $9.8 million, compared to non-GAAP Adjusted EBITDA of negative $3.7 million for the first quarter of 2022. For additional information, please see definitions and the reconciliation of this non-GAAP measure to net loss attributable to Cerus Corporation accompanying this release.

Balance Sheet & Cash Use

At March 31, 2023, the Company had cash, cash equivalents and short-term investments of $94.7 million, compared to $102.2 million at December 31, 2022.

As of March 31, 2023, the Company had $55.0 million outstanding on its term loan and $18.0 million drawn on its revolving credit facility. The Company has access to $17 million under its revolving line of credit.

For the first quarter of 2023, net cash used in operating activities totaled $8.5 million as compared to $21.5 million during the prior year period, primarily due to the timing of cash collections and payments, offset by continued inventory related purchases.

Reiterating 2023 Product Revenue Guidance

The Company expects full-year 2023 product revenue will be in the range of $165-$170 million, underscoring a return to growth with the short-term customer inventory drawdown largely complete.

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

A replay will be available on Cerus’ website approximately three hours after the call through May 18, 2023.