Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cerus Corp (CERS, Financial) achieved positive adjusted EBITDA for the full year 2024, marking a significant milestone.
- The company reported a 15% year-over-year growth in product revenues for 2024, driven by strong demand in the US and international markets.
- Cerus Corp (CERS) successfully expanded its global platelet business and saw increased demand for its Intercept Fibrinogen Complex (IFC) in the US.
- The company maintained strong operating cash flows, generating positive cash flows for the fourth consecutive quarter.
- Cerus Corp (CERS) is optimistic about continued growth in 2025, with expectations of 8-11% year-over-year revenue growth.
Negative Points
- The company faced challenges with foreign exchange rates, which provided a slight headwind for the EEA business.
- Gross margins for the fourth quarter of 2024 were slightly down due to factors like a stronger US dollar and higher freight costs.
- Operating expenses increased in the fourth quarter of 2024, partly due to non-cash stock-based compensation.
- Government contract revenue declined in 2024 compared to 2023, primarily due to the completion of a US Phase 3 clinical trial.
- The company anticipates that the China market will not contribute meaningfully to revenue in 2025 due to pending regulatory approvals and reimbursement processes.
Q & A Highlights
Q: Can you walk us through the steps left before full US market access for IFC is unlocked, and your optimism about capturing up to 50% of the US market opportunity with IFC?
A: Vivek Jayaraman, Chief Operating Officer, explained that the increase in demand and validation from recent events have boosted momentum. With BLA approvals at production partner sites, they can now transport products across state lines, unlocking demand in previously inaccessible areas. The focus is on balancing demand and supply, with confidence in the broad market opportunity for IFC.
Q: What are the next steps to unlocking the China market, and when could the China franchise start contributing revenues?
A: William Greenman, CEO, stated that they expect NMPA approval this year, followed by a provincial reimbursement process taking about a year. While it won't contribute significantly to revenue this year, once reimbursement is in place, China is seen as a meaningful market opportunity.
Q: Can you discuss the dynamics of bringing additional supply online for IFC and the outlook for IFC revenue this year?
A: Vivek Jayaraman noted that BLA approvals allow addressing demand in states without in-state manufacturers. They have line of sight into sufficient manufacturing supply to meet demand, and they are working on increasing supply as demand grows.
Q: How should we think about product gross margins this year, considering factors like US dollar strength and freight costs?
A: Kevin Green, CFO, mentioned that most Q4 items were episodic and not expected to last. The main watch-out is FX rates, as a stronger US dollar could impact revenue but benefit the bottom line. Other factors like shipping costs and discard rates are not expected to continue.
Q: Can you clarify the SG&A guidance for 2025 relative to 2024, considering the one-time item in Q4?
A: Kevin Green explained that the guidance is based on 2024 as a whole, with the Q4 anomaly being a $2 million impact. Growth will primarily come from inflationary pressures, with no significant new investments planned.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
