Cerus Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Sears Corporation's second quarter 2021 financial results conference call. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Matt Notoriani, Senior Director of Investor Relations. Please go ahead.

Thank you and good afternoon. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at ir.serious.com. With me on the call are Obi Greenman, Sears' President and Chief Executive Officer, Vivek Jayaraman, Sears' Chief Operating Officer, Kevin Green, Sears' Chief Financial Officer, Carol Moore, Sears' Senior Vice President of Regulatory Affairs and Quality, and Jessica Hanover. Sears is Vice President of Corporate Affairs. Sears issued a press release today announcing our financial results for the second quarter ended June 30th, 2021, and describing our company's recent business highlights. You can access a copy of this announcement on the company website at www.sears.com. I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts. and our forward-looking statements. Examples of forward-looking statements include those related to our future financial and operating results, including our 2021 product revenue guidance and goals, operating expenses, anticipated cash use from operations, gross profits and gross margins, as well as commercial development efforts, future growth and growth strategy, future product sales, product launches, ongoing and future clinical trials, ongoing and future product development, and our regulatory activities, including the timing of these events and activities. These forward-looking statements involve risk and uncertainty that could 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 Forms 10-K for the year-end of December 31, 2020, and 10-Q for the quarter-end of June 30, 2021, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements. On today's call, we'll begin with remarks from Obie, followed by Kevin to review our financial results. We will conclude with commentary from Obie regarding recent announcements and update on our pipeline and closing remarks. And now, it's my pleasure to introduce Obie Greenman, Sirius' President and Chief Executive Officer.

Thank you, Matt, and good afternoon, everyone. Hopefully you've had a chance to review our Q2 results from our earnings release, which we issued earlier today. We're excited to share these results with you. Before Kevin and I provide greater detail around the second quarter, I would like to begin with a few thoughts about our performance, how we see the second half of 2021 shaping up, and what we are focused on in the near term to help make our intercept offering the new standard of care for playlet safety in the U.S. Our record second quarter results provide clear evidence that the Intercept blood system for platelets has quickly become the preferred choice of both blood centers and the hospitals they serve for protecting the US platelet supply. With our second quarter performance, our product revenue over the last 12 months is now north of $100 million, a milestone for the company. As we strengthen our leadership position, over other safety interventions for transfusion transmitted infections in the U.S., we expect to realize continued meaningful revenue growth through the second half of 2021 and into 2022 and beyond. Accordingly, we are raising our full year 2021 product revenue guidance to $118 to $122 million, up from our previous guidance of $110 to $114 million. The intercept adoption that we are seeing in the U.S. is unparalleled and is happening faster than we initially anticipated. In this era of pandemic preparedness, our pathogen inactivation technology is creating a new standard of care with hospitals. At leading U.S. blood centers, like the American Red Cross, use of Intercept to protect the platelet supply indicates a powerful endorsement of our technology that will help us continue to expand the reach of Intercept. At the ARC, robust demand suggests their stated goal of moving toward a 100% pathogen-reduced platelet supply is achievable based on the fact that their current run rate is now well above 50%. Needless to say, we are thrilled with the level of intercept adoption we saw in the second quarter and believe intercept-treated platelets will soon be the standard of care in the United States. Outside the US, we have a long track record in some geographies like Switzerland, where the Swiss Red Cross was an early universal adopter of our technology. But significant greenfield opportunities in certain geographies remain. As an example, during the second quarter, we announced a contract with the Canadian Blood Services, or CBS, which is the largest of two blood centers in Canada, processing roughly two-thirds of the country's blood supply. As CBS has said publicly, its aim is to drive to full adoption of pathogen-reduced platelets. We are proud to partner with them over the next couple of years to make that a reality. With a more than $1 billion global addressable market for intercept blood system for platelets alone, we believe the opportunity relative to our current penetration remains significant, and we intend to continue this commercial momentum. As we stated previously, and because of our unique role in the blood component supply chain, we continue to prioritize our increase in production capacity and improve supply chain continuity. As regions around the globe look to increase the safety of their platelet supply and adopt the Intercept safety standard, their reliance on Cirrus is foundational for the operational excellence we are committed to demonstrate. With cumulative kit sales to treat over 9.4 million doses globally and many thousands of patients transfused daily with Intercept treated blood components, we realize the significance of this responsibility every day. It empowers our team with great purpose and pride and demands the investment we are making to sustain this critical technology for the long term. With the Intercept Fibrinogen Complex product, or IFC, we have also been hard at work on several fronts, and we are where we expected to be as this rollout has continued to build momentum over the last several months. As we have stated previously, the hospital interest and engagement we have seen around the product is positive. To that end, we are pleased to report that we have several hospital customer contracts now signed and expect to begin ramping delivery of product to these early adopters through the back half of the year. Among these initial accounts, we are pleased that one of the early adopters is a large integrated delivery network, or IDN, in one of our initial launch states. Additionally, we are pleased to have recently added Florida to our launch footprint with the June announcement of LifeSouth as an IFC production partner. We continue to target a nationwide IFC launch in the second half of 2022, following our production partners' receipt of BLAs to enable sales of IFC across state lines. In addition to scaling up production of IFC, our production partners have also been preparing BLA submissions, which we anticipate being filed in Q3. Finally, on the reimbursement front, we were excited to announce this morning that we have received a positive final decision from CMS for our new technology add-on payment, or NTAP, for IFC. We applaud CMS for their decision to provide this incremental payment for IFC, which has an effective date of October 1st. Before I turn the call over to Kevin for a discussion on our financials, I wanted to take a moment to talk about the blood shortage in the US, a topic that has been in the news and impacting US hospitals and patients over the last few months. We have received some questions about how the shortage impacts our business, so I wanted to take this opportunity to provide perspective for our shareholders. Clearly, the supply of blood components is a critical cog in the healthcare delivery engine in any country, and we believe the Intercept platform is capable of helping increase the availability of platelets and plasma in general. Our Intercept technology can also improve donor eligibility by alleviating the need for certain donor deferrals, like travel-related deferrals designed to minimize the risk of malaria transmission. Historically, summer already tends to be a seasonally tight period for the blood supply, and it appears to have started earlier and more severely than in years past, particularly in the shadow of the pandemic. As has been reported, hospital demand for blood products in the U.S. has rebounded, but in many cases, blood centers have struggled to keep up with this demand, particularly for red blood cells, leading to the deferrals of certain elective surgeries. There is less flexibility for availability of platelet components, since cancer patients are the most common recipients of platelet transfusions, and delaying treatment is typically not a viable option. Additionally, platelet components have a very short shelf life relative to other blood components, so making these units available for as long as possible alleviates a potential burden and minimizes the likelihood of waste in the system. With Intercept, platelets are treated and can be made available much more rapidly after collection than with bacterial testing methods, resulting in effective increased shelf life duration that can reduce hospital waste. Collectively, these clinical and logistical benefits have for the first time in decades provided blood centers with the opportunity to price for value, with the confidence that hospitals will be receptive. So in summary, while we do not believe our business will be impacted by the blood shortage making headlines currently, we join ABB, the American Hospital Association, and our blood center and hospital customers in urging all who are able to donate to do so. This pandemic has changed innumerable aspects of our daily lives, but what it has not changed is the need for donors to provide continuously lifesaving blood products that contribute directly to patient care. With the overall demand for blood components rebounding, a sustainable and resilient blood supply necessitates the financial health of U.S. blood centers and their access to a solid donor pool. With that, let me turn the call over to Kevin for a more detailed review of our financial results.