CERUS CORP Q2 FY2024 earnings call

• Obi Greenman mentioned raising the annual product revenue guidance range for 2024 to $175 million to $178 million from $172 million to $175 million, citing growing use of INTERCEPT by blood centers and hospitals and the importance of pathogen inactivation. He also discussed progress in the INTERCEPT red blood cell program, including ReCePI Phase 3 clinical trial data presentation and RedeS trial enrollment.
• Vivek Jayaraman highlighted continued growth in the U.S. platelet business, with increased market share, and progress in international markets, such as Canadian Blood Services completing INTERCEPT platelet implementation and Hema-Quebec's validation efforts. He also talked about IFC's progress, with confidence in the $8 million to $10 million annual revenue guidance, clinical education efforts bearing fruit, and progress in increasing IFC product supply.
• Kevin Green reviewed financial results, noting product revenue growth, gross profit and margin details, operating expenses decline, adjusted EBITDA positive in Q2, and cash position at $71.2 million at the end of Q2.

In the second quarter of 2024, Cerus' product revenue was $45.1 million, representing a 16% year-over-year growth. The first half revenue reached $83.4 million, up 20% from the first half of the previous year. North American platelet sales were a major contributor to growth, with U.S. second quarter 2024 product revenues exceeding prior year levels by 19%. Canadian blood services' sales were extremely strong, with 100% implementation across their platelet production operation during the quarter. EMEA second quarter product revenues were slightly up year-over-year and 8% compared to Q1 2024. IFC product revenue was $2 million in Q2 2024, up from $1.4 million in the prior year period, driven by new hospital users and increased adoption by existing hospitals. Product gross profit in Q2 was $24.7 million, up 16% year-over-year, with product gross margins at 54.7%.

• Raised full-year 2024 product revenue guidance to $175 million to $178 million from the prior range of $172 million to $175 million.
• Reiterated full-year 2024 revenue guidance for IFC at $8 million to $10 million.
• Anticipate a modest uptick in government contract revenue as the Turkish site begins enrolling patients in the next few months.

• Forward-looking statements involve risks and uncertainties that could cause actual events, performance, and results to differ materially, as identified in the press release, slide presentation, and Risk Factors in Form 10-Q. Risks include those related to future financial and operating results, clinical trial data availability, regulatory approvals, product launches, and supply chain issues.

Q: Hi guys, this is Eric on for Josh. Thank you for taking the question. As a follow-up on IFC there, congratulations on the progress. If I could -- I was just wondering if you could lay out sort of roadmap of how you're thinking about growth for IFC in 2025. I think the Street has total Cerus sales at the 190 to 200 ballpark. Could IFC be 10% of sales next year? Just curious with all the growth here. Thanks.

A: Kevin Green said they're not providing guidance for 2025 but spoke to growth opportunity and white space. Vivek Jayaraman added that peer-to-peer interaction has ramped up, and they anticipate driving more demand through conference seasons, with a fully trained sales organization cultivating existing customers, and IFC expected to be a meaningful contributor to growth.

Q: For the INTERCEPT red blood cell program, I was hoping to hear an update on your progress in the EU there. Just what are the remaining steps between where we stand now and a potential clearance?

A: Obi Greenman said they still have to hear back from the CBG-MEB in the Netherlands, expecting to hear something after European holidays are over possibly before the end of the quarter, then it goes back to the notified body TUV for an approval decision.

Q: Hey guys, this is Vidyun on for Mark. Thanks for taking the questions. To understand that the business is stabilizing here off of 2023 and sort of returning to growth. Just how are you thinking about sources of upside to the 2024 guide? Just any additional variables to consider like restocking inventory or recovery of platelet donors.

A: Vivek Jayaraman said they are not forecasting inventory rebuild as a driver of revenue upside, seeing signals of stabilizing collection and utilization market, with continued enthusiasm for INTERCEPT platelets and growth in the IFC franchise.

Q: Hey guys, just wondering if you can give an update on international and any sort of pending opportunities outside of North America.

A: Vivek Jayaraman said they have progress in the joint venture in China, anticipate learning by end of year on need for local clinical study, strong distributor partner in the Middle East, and significant opportunities in Germany in Western Europe, with a strong team in EMEA executing well, and international franchise being a significant component of future growth plans.