Cerus Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Cirrus Corporation Q1 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session, and you will need to press star 1 on your telephone keypads to ask a question. Please be advised that today's conference is being recorded. It is now my pleasure to turn the call over to your host, Mr. Tim Lee. Please go ahead.

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today. With me on the call are Obi Greenman, Sears' President and Chief Executive Officer, Kevin Green, Sears' Chief Financial Officer, Vivek Jayaraman, our Chief Operating Officer, Dr. Laurence Corash, our Chief Scientific Officer, and Carol Moore, our Senior Vice President of Regulatory Affairs and Quality. Cirrus issued a press release today announcing our financial results for the first quarter ended March 31, 2020 and also describing the company's recent business highlights. You can access a copy of this announcement on the company website at www.cirrus.com. I'd like to remind you that some of the statements we'll make on this call relate to future events and performance rather than historical facts in our forward-looking statements. Examples of forward-looking statements include those related to our future financial and operating results including our 2020 financial guidance and goals, operating expenses and growth margins, commercial development efforts, future growth and growth strategy, future product sales, product launches, the impact of current and future products on blood center operations, ongoing and future clinical trials, ongoing and future product development, and the regulatory activities as well as the timing of these events and activities. These four looking statements involve risk and uncertainty that can cause actual events, performance, and results to differ materially. They are identified and described in today's press release and under risk factors in our Form 10-K for the year ended December 31st, 2019 and our Form 10-Q for the quarter ended March 31st, 2020, which we will follow shortly. We undertake no duty or obligation to update our four looking statements. On today's call, will begin with opening remarks from Obi, followed by Vivek, who will provide an update on commercial operations and our supply chain. Kevin will then review our financial results, and finally, Obi will conclude with closing remarks. Many of this year's employees have been sheltering in place and working remotely, including most of us on the call today. We are dialing remotely to this call, so please excuse us for any lags or delays that may occur. And now, it's my pleasure to introduce Obi Greenman, Sirius's President and Chief Executive Officer.

Thank you, Tim, and good afternoon. We appreciate your patience in dialing in today. The past several months have clearly been a challenging time for the world and for businesses due to the impact of the COVID-19 pandemic. Since our fourth quarter conference call in mid-February, we implemented our crisis management plans to ensure the safety of Sirius employees, the products supplied to support our customers, and the continuity of our operations. And at the same time, we've taken decisive action to help blood centers and national transfusion services ramp up the implementation of COVID convalescent plasma programs, provide a bridging therapeutic option to acutely ill patients in multiple countries until other therapies and vaccines are available. As of today, I'm happy to report that our thoughtful planning and our experienced team at Cirrus have put us in a very strong position not only to effectively navigate this pandemic crisis, but also to reframe the opportunities set in front of us, given the increased focus on supply chain security for blood safety and availability. It's important to recall that the basic mechanism of action of our pathogen inactivation platform was designed to deal with the emerging pathogens, with emerging pathogens, such as the SARS-CoV-2 virus. Working with our manufacturing partner, Fresenius Kabi, and with key sub suppliers, such as Porex, part of the filtration group, we have increased our safety stock product inventory since the beginning of the year in anticipation of potentially increased demand. This resulted in first quarter product revenue of $18.6 million, which exceeded our internal expectations at the beginning of the year. While COVID-19 is having a profound impact on our blood center customers from both the supply and demand perspective, We are still seeing blood centers increase intercept orders in an effort to better safeguard their supply chains for blood component production. The COVID-19 epidemic has reinforced the importance of pandemic preparedness planning at both blood centers and hospitals, especially in the context of the recent history of emerging infectious diseases. While SARS-CoV-2 is a respiratory virus and the data suggests that it is not considered a significant transfusion transmitted infectious disease risk, The impact on the blood supply chain is still profound. In this context, the intercept blood system is well positioned to provide a solution for blood centers and hospitals in the post-COVID era that minimizes supply chain and logistics complexity. In the search for a rapid therapeutic option to treat COVID-19 patients, one potential treatment involves collecting plasma from patients who have recovered from COVID-19, making sure it's free of coronavirus and other infectious pathogens, Thank you very much. There is a reason to believe that convalescent plasma may have other potential benefits beyond just neutralizing antibodies, including an impact on normalizing a patient's coagulation profile to prevent blood clots and a role in maintaining the health of the vascular endothelium. Cirrus is playing a key role in supporting blood centers and hospitals with their COVID convalescent plasma programs. Having been at the forefront of convalescent plasma historically as a result of our partnership with the Gates Foundation during the Ebola outbreak in West Africa in 2014 and 15, Cirrus has again taken a leadership position. We have been active in most of the countries in Europe and particularly in Italy with our partner Kedrion to ramp intercept treated CCP production during the midst of Italy's most critical period. In France, the regulatory authority now requires intercept for CCP production. In the US, we have collaborated with the ABB to help them establish a website and CCP processing protocols that can be leveraged across the national blood center infrastructure. This effort overlaps with the significant focus and funds that the FDA and American Red Cross and BARDA have dedicated to standing up the nationwide CCP program. Based upon our previous experience with convalescent plasma and the issues of donor availability, dose, and product characterization, We decided early on in this pandemic to form a research consortium with the California Public Health Department, Vitalant Blood Services, academic laboratories at UC Davis and UC Irvine, and the San Francisco-based biotech company called Enable Biosciences. You're collectively endeavoring to better assess the key characteristics that influence the potential efficacy of CCP, including the level and profile of the SARS-CoV-2 antibodies, optimal collection timing, dosing, and how these factors influence responses to the therapy. We believe Intercept can play an important role in CCP production since it offers the ability to reduce infectious risk in a therapy administered to patients with the damaged immune systems. With all of our efforts around convalescent plasma and the worldwide focus on therapeutic options for critically ill COVID-19 patients, we are seeing increasing interest by customers in Intercept plasma primarily in markets outside the US during the time that we've been waiting for the FDA approval of our alternate plastic intercept plasma disposable kits. With the FDA approval now in hand, we will continue to ramp production of our plasma sets to be able to meet the demand in Europe and many other countries while bridging the current availability shortfall in the US with intercept platelet sets that are being used under emergency use protocols for treating convalescent plasma. We have thus far navigated the COVID-19 pandemic challenges and it has provided new opportunities to reinforce the importance of our mission to ensure the safety and availability of the blood supply. Let me now turn it over to Vivek to provide an update on the details of our commercial operations and our supply chain integrity. After Vivek's strong leadership of the commercial organization over the past three years, I am grateful that he has accepted an expanded role at Cirrus to take on overall operations of the company related to our commercial products, including supply chain and manufacturing supplier relationships. In this role, as our Chief Operating Officer, he is responsible for how we support all aspects of our customer engagement in maintaining their confidence in Cirrus, given the critical role we play in the overall blood supply chain.