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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:              to             

Commission File Number 000-21937

 

CERUS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

68-0262011

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

1220 Concord Avenue, Suite 600

Concord, California

 

94520

(Address of principal executive offices)

 

(Zip Code)

 

(925) 288-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class 

Trading Symbol

Name of Each Exchange on Which Registered 

Common Stock, par value $0.001 per share

CERS

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES      NO  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    YES      NO  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

Non-accelerated filer

  

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES      NO  

As of October 20, 2020, there were 167,141,975 shares of the registrant’s common stock outstanding.

 

 

 

 


CERUS CORPORATION

FORM 10-Q

For the Quarterly Period Ended September 30, 2020

TABLE OF CONTENTS

 

PART I

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (unaudited)

1

 

Condensed Consolidated Balance Sheets – September 30, 2020 and December 31, 2019

1

 

Condensed Consolidated Statements of Operations – Three and nine months ended September 30, 2020 and 2019

2

 

Condensed Consolidated Statements of Comprehensive Loss – Three and nine months ended September 30, 2020 and 2019

3

 

Condensed Consolidated Statements of Stockholders’ Equity – Three and nine months ended September 30, 2020 and 2019

4

 

Condensed Consolidated Statements of Cash Flows – Nine months ended September 30, 2020 and 2019

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

31

 

 

 

PART II

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

33

Item 1A.

Risk Factors

33

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

71

Item 3.

Defaults Upon Senior Securities

71

Item 4.

Mine Safety Disclosures

71

Item 5.

Other Information

71

Item 6.

Exhibits

72

 

 

SIGNATURES

73

 

 

 

 


PART I: FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

CERUS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

28,950

 

 

$

34,986

 

Short-term investments

 

 

106,174

 

 

 

50,732

 

Accounts receivable

 

 

16,236

 

 

 

16,882

 

Inventories

 

 

19,460

 

 

 

19,490

 

Prepaid and other current assets

 

 

6,479

 

 

 

6,018

 

Total current assets

 

 

177,299

 

 

 

128,108

 

Non-current assets:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

14,261

 

 

 

14,898

 

Goodwill

 

 

1,316

 

 

 

1,316

 

Operating lease right-of-use assets

 

 

13,470

 

 

 

14,122

 

Intangible assets, net

 

 

-

 

 

 

132

 

Restricted cash

 

 

2,522

 

 

 

2,435

 

Other assets

 

 

4,486

 

 

 

4,524

 

Total assets

 

$

213,354

 

 

$

165,535

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

19,244

 

 

$

22,185

 

Accrued liabilities

 

 

19,545

 

 

 

20,951

 

Debt – current

 

 

4,982

 

 

 

5,017

 

Operating lease liabilities – current

 

 

1,857

 

 

 

1,613

 

Deferred product revenue

 

 

561

 

 

 

570

 

Total current liabilities

 

 

46,189

 

 

 

50,336

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Debt – non-current

 

 

39,545

 

 

 

39,414

 

Operating lease liabilities – non-current

 

 

17,263

 

 

 

18,406

 

Other non-current liabilities

 

 

1,122

 

 

 

327

 

Total liabilities

 

 

104,119

 

 

 

108,483

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Common stock

 

 

167

 

 

 

144

 

Additional paid-in capital

 

 

1,003,748

 

 

 

906,905

 

Accumulated other comprehensive income

 

 

907

 

 

 

114

 

Accumulated deficit

 

 

(895,587

)

 

 

(850,111

)

Total stockholders' equity

 

 

109,235

 

 

 

57,052

 

Total liabilities and stockholders' equity

 

$

213,354

 

 

$

165,535

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

1


CERUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Product revenue

 

$

23,607

 

 

$

18,019

 

 

$

63,721

 

 

$

53,732

 

Cost of product revenue

 

 

10,953

 

 

 

7,583

 

 

 

28,978

 

 

 

24,126

 

Gross profit on product revenue

 

 

12,654

 

 

 

10,436

 

 

 

34,743

 

 

 

29,606

 

Government contract revenue

 

 

5,584

 

 

 

4,827

 

 

 

16,938

 

 

 

13,554

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

15,921

 

 

 

16,081

 

 

 

47,349

 

 

 

43,938

 

Selling, general and administrative

 

 

16,299

 

 

 

16,140

 

 

 

48,324

 

 

 

49,041

 

Total operating expenses

 

 

32,220

 

 

 

32,221

 

 

 

95,673

 

 

 

92,979

 

Loss from operations

 

 

(13,982

)

 

 

(16,958

)

 

 

(43,992

)

 

 

(49,819

)

Non-operating expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

 

490

 

 

 

(254

)

 

 

540

 

 

 

(311

)

Interest expense

 

 

(930

)

 

 

(1,031

)

 

 

(2,794

)

 

 

(5,105

)

Other income, net

 

 

351

 

 

 

336

 

 

 

962

 

 

 

1,095

 

Total non-operating expense, net

 

 

(89

)

 

 

(949

)

 

 

(1,292

)

 

 

(4,321

)

Loss before income taxes

 

 

(14,071

)

 

 

(17,907

)

 

 

(45,284

)

 

 

(54,140

)

Provision for income taxes

 

 

68

 

 

 

60

 

 

 

192

 

 

 

181

 

Net loss

 

$

(14,139

)

 

$

(17,967

)

 

$

(45,476

)

 

$

(54,321

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.08

)

 

$

(0.13

)

 

$

(0.28

)

 

$

(0.39

)

Weighted average shares used for calculating net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

166,572

 

 

 

140,908

 

 

 

162,800

 

 

 

138,779

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

2


CERUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(14,139

)

 

$

(17,967

)

 

$

(45,476

)

 

$

(54,321

)

Other comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on available-for-sale investments, net of taxes

 

 

(218

)

 

 

48

 

 

 

793

 

 

 

420

 

Comprehensive loss

 

$

(14,357

)

 

$

(17,919

)

 

$

(44,683

)

 

$

(53,901

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

3


CERUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

UNAUDITED

(in thousands)

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances as of December 31, 2019

 

 

144,291

 

 

$

144

 

 

$

906,905

 

 

$

114

 

 

$

(850,111

)

 

$

57,052

 

Issuance of common stock from public offerings, net of offering costs

 

 

17,867

 

 

 

18

 

 

 

67,094

 

 

 

 

 

 

 

 

 

67,112

 

Issuance of common stock from exercise of stock options,

   vesting of restricted stock units, and ESPP purchases

 

 

1,803

 

 

 

2

 

 

 

1,191

 

 

 

 

 

 

 

 

 

1,193

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,754

 

 

 

 

 

 

 

 

 

3,754

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(237

)

 

 

 

 

 

(237

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,466

)

 

 

(16,466

)

Balances as of March 31, 2020

 

 

163,961

 

 

 

164

 

 

 

978,944

 

 

 

(123

)

 

 

(866,577

)

 

 

112,408

 

Issuance of common stock from public offering, net

   of offering costs

 

 

1,471

 

 

 

1

 

 

 

9,428

 

 

 

 

 

 

 

 

 

9,429

 

Issuance of common stock from exercise of stock options and

   vesting of restricted stock units

 

 

580

 

 

 

1

 

 

 

1,604

 

 

 

 

 

 

 

 

 

1,605

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,706

 

 

 

 

 

 

 

 

 

4,706

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

1,248

 

 

 

 

 

 

1,248

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,871

)

 

 

(14,871

)

Balances as of June 30, 2020

 

 

166,012

 

 

 

166

 

 

 

994,682

 

 

 

1,125

 

 

 

(881,448

)

 

 

114,525

 

Issuance of common stock from exercise of stock options,

   vesting of restricted stock units, and ESPP purchases

 

 

1,062

 

 

 

1

 

 

 

4,220

 

 

 

 

 

 

 

 

 

4,221

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,846

 

 

 

 

 

 

 

 

 

4,846

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

(218

)

 

 

 

 

 

(218

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,139

)

 

 

(14,139

)

Balances as of September 30, 2020

 

 

167,074

 

 

$

167

 

 

$

1,003,748

 

 

$

907

 

 

$

(895,587

)

 

$

109,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances as of December 31, 2018

 

 

136,853

 

 

$

136

 

 

$

863,531

 

 

$

(281

)

 

$

(778,867

)

 

$

84,519

 

Issuance of common stock from exercise of stock options,

   vesting of restricted stock units, and ESPP purchases

 

 

965

 

 

 

2

 

 

 

682

 

 

 

 

 

 

 

 

 

684

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,878

 

 

 

 

 

 

 

 

 

2,878

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

211

 

 

 

 

 

 

211

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,792

)

 

 

(18,792

)

Balances as of March 31, 2019

 

 

137,818

 

 

 

138

 

 

 

867,091

 

 

 

(70

)

 

 

(797,659

)

 

 

69,500

 

Issuance of common stock from public offering, net

   of offering costs

 

 

1,978

 

 

 

2

 

 

 

9,834

 

 

 

 

 

 

 

 

 

9,836

 

Issuance of common stock from exercise of stock options and

   vesting of restricted stock units

 

 

265

 

 

 

 

 

 

558

 

 

 

 

 

 

 

 

 

558

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,139

 

 

 

 

 

 

 

 

 

3,139

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

161

 

 

 

 

 

 

161

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,562

)

 

 

(17,562

)

Balances as of June 30, 2019

 

 

140,061

 

 

 

140

 

 

 

880,622

 

 

 

91

 

 

 

(815,221

)

 

 

65,632

 

Issuance of common stock from public offering, net

   of offering costs

 

 

1,471

 

 

 

1

 

 

 

7,913

 

 

 

 

 

 

 

 

 

7,914

 

Issuance of common stock from exercise of stock options,

   vesting of restricted stock units, and ESPP purchases

 

 

478

 

 

 

1

 

 

 

1,585

 

 

 

 

 

 

 

 

 

1,586

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,595

 

 

 

 

 

 

 

 

 

3,595

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

48

 

 

 

 

 

 

48

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,967

)

 

 

(17,967

)

Balances as of September 30, 2019

 

 

142,010

 

 

$

142

 

 

$

893,715

 

 

$

139

 

 

$

(833,188

)

 

$

60,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

4


CERUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

(in thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(45,476

)

 

$

(54,321

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,298

 

 

 

1,781

 

Stock-based compensation

 

 

13,306

 

 

 

9,612

 

Non-cash operating lease cost

 

 

962

 

 

 

1,224

 

Net loss on sale of available-for-sale securities

 

 

256