Cerus Corporation

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Saris Corporation fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker host today, Mr. Matt Nateriani, Senior Director of Investor Relations.

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.cirrus.com. With me on the call are Obi Greenman, Cirrus' President and Chief Executive Officer, Kevin Green, Cirrus' Chief Financial Officer, Carol Moore, Cirrus' Senior Vice President of Regulatory Affairs and Quality, and Jessica Hanover, Cirrus' Vice President of Corporate Affairs. Cirrus issued a press release today announcing our financial results for the fourth quarter and year end of December 31st, 2021, and 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 will 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 2022 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 initiatives, 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 Form 10-K for the year ended December 31st, 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 some opening remarks from Obie, followed by Kevin to review our financial results. We will conclude with commentary from Obie with an update on our pipeline, recent announcements, and closing remarks. And now, it's my pleasure to introduce Obi Greenman, Cirrus' President and Chief Executive Officer.

Thank you, Matt, and good afternoon, everyone. In 2021, Cirrus took a major step forward in realizing our goal to safeguard the global blood supply. Our success in deploying the Intercept blood system for plants in the U.S. built on our solid international foundation of routine use and drove a breakout year for the company. On the last few calls, we've spoken about the momentum the business has seen in the U.S. as blood centers and their hospital customers choose Intercept as their preferred method for complying with the FDA guidance aimed at reducing the risk of bacterial contamination of platelets. We continued to see this trend play out in the fourth quarter and believe we are now the U.S. market leader for platelet bacterial risk mitigation under the FDA required guidance. Last month, we celebrated the company's 30th anniversary. Over the past three decades, Cirrus has embarked on a bold strategy to develop and deploy a technology with a singular focus of safeguarding the global blood supply. Following the devastation of the HIV epidemic at the time of the company's founding, preparedness remains at the core of what we do every day at Cirrus, and we are committed to bringing products to the market that safeguard blood components from known and future threats and that enable sustained blood availability. While we have come a long way with over 10 million intercept doses transfused to date, there remains much opportunity for Cirrus to lead a paradigm shift in transfusion medicine on the way to achieving a new global standard of care. With a continued broad adoption of our technology in the U.S. and globally, we look forward to delivering another year of strong double-digit growth. While we are not providing long-range guidance today, we see significant opportunity to grow our top line meaningfully over the next several years. We expect this growth to come from a combination of extending our leadership in our currently served markets, penetrating untapped geographies like China and commercial success of new products like our intercept fibrinogen complex and later red blood cells. Together with the organic growth of our total addressable markets, or TAMs, The opportunities ahead for Cirrus are significant and enduring. For instance, we have historically estimated the global TAM for intercept planets to be about $1.3 billion, with the U.S. opportunity representing about $150 million of this total market. With overall planet demand growing in the mid-single digits, we expect these TAMs to continue to grow, eclipsing $1.5 billion and $200 million in for the global and U.S. opportunities respectively over the next five to seven years. With Intercept's rapid commercial uptake, we have placed a significant focus on our ability to supply product to our customers across the globe. To fulfill our market leadership role in supporting blood safety and availability, we continue working with our partners to expand manufacturing capacity in multiple facilities to position us to continue to grow the Intercept blood system adoption in 2022, 2023, and well beyond. As Kevin will discuss in more detail shortly, we have planned for this in the near term by building our inventory, which we will utilize during this period to help continue to fulfill customer demand. As we bring additional manufacturing capacity online, the supply and demand balance will become more manageable, and we expect this excess manufacturing capacity will allow us to continue to grow well into the future. For intercept fibrinogen complex, or IFC, 2021 was filled with several market development activities, and we plan to continue to position this product for long-term success. Some of these activities included sales to early adopters in our initial launch dates, Medicare reimbursement secured with a new technology add-on payment, or NTAP, and supporting our blood center production partners to both come online to manufacture IFC units and to also submit biologics license applications, or BLAs. Gulf Coast Regional Blood Center received its BLA approval just before year-end 2021, and more recently, Central California Blood Center also received its BLA approval. As we've been educating the marketplace about this new blood product, the benefits of IFC continue to resonate with blood centers and physicians as they grapple with the challenges associated with conventional cryoprecipitate which has several limitations in its availability for bleeding patients during the critical early phase of resuscitation. IFC addresses several of these limitations by enabling more immediate availability for transfusing physicians and reducing wastage, as conventional cryoprecipitate has a limited post-thaw shelf life of four to six hours. In 2022, we are focused on gathering real-world experience data with our early customers to highlight the benefits of IFC for a variety of patient types. With our nationwide IFC launch commencing, we've also entered into commercial partnerships with Blood Centers of America, or BCA, and OneBlood to further deploy IFC across the US. We believe leveraging our combined sales efforts will provide more of the market with access to IFC as the industry continues to navigate the national shortage of conventional cryoprecipitate. I will now turn it over to Kevin to discuss our results and 2022 guidance in more detail, And then I will return to provide some comments on our pipeline as well as some closing remarks.

Thanks, Obi, and good afternoon, everyone. First, let me echo Obi's excitement for our strong results as we continue to expand access to Intercept for patients globally and are paving the way towards financial independence, or more specifically, cash flow breakeven. I'll get back to that in greater detail later on. Our record Q4 2021 product revenue of $39.9 million reflected year-over-year growth of 41% and 10% sequentially. For the full year, 2021 product revenue of $130.9 million grew 42% when compared to 2020. By geography, fourth quarter sales in North America grew 108% versus the prior year period. while EMEA was roughly flat when adjusting for foreign currency. Within North America, our sales to the top five US blood centers grew by more than 120% year over year during the fourth quarter, while importantly, sales to US blood centers outside of the top five also grew by more than 80% versus the prior year period. With the strong growth we experienced throughout 2021, For the first time in our history, the majority of product revenue was and is expected to continue to be derived from North American sales. Moving on to our calculated platelet dose metrics, our fourth quarter growth in the calculated number of treatable platelet doses reflects 132% year-over-year increase in the U.S. and a 4% decline internationally against a tough comparison. In terms of product mix for the quarter, sales of Intercept consumable products represented nearly 97% of our Q4 product revenue. In addition to our product revenue and not included in our guidance, government contract revenue totaled $10.2 million in Q4 and $28.7 million for the full year. Comparatively, government contract revenue totaled $5.4 million and $22.3 million for the fourth quarter and full year 2020 respectively. The year-over-year and sequential increases in our fourth quarter government contract revenue comes following an agreement we reached with the U.S. BARDA on reimbursement for allowable costs that the company had previously been deferring. This resulted in a one-time catch-up of $3.3 million. a reversal of what had been an ongoing accrual. Going forward, we expect the agreement reached with BARDA will result in slightly higher government contract revenue than the prior several quarters, independent of any increases associated with ramping patient enrollment and other activities under the contract. Turning now to our product gross profit and gross margins. For the second consecutive quarter, our fourth quarter product gross profit was the highest in company history at $20.4 million compared to $16 million during the prior year period. For the full year, product gross profit was $67.4 million compared to $50.8 million in 2020. The increase in gross profit was primarily driven by the higher product sales. Product gross margins for the quarter were 51.1%, which was roughly flat relative to the prior two quarters in 2021. And for the full year, 2021 product gross margins were 51.5%, compared to 55.2% in 2020. As we've discussed previously and experienced throughout the year, our fourth quarter and full year product Gross margins were impacted by the product mix associated with our higher sales volume of single dose kits to customers in the U.S., unfavorable foreign exchange rates, and increased freight costs. Despite pressure from elevated expenses in this rising cost environment, we continue to make progress with our ongoing margin expansion initiatives that we believe will position us for a gradual return to gross margin expansion over the coming years. Moving on to fourth quarter operating expenses, which totaled $37.6 million and included $6.5 million in non-cash stock-based compensation. For the full year, 2021 operating expenses totaled $145 million, including $23.6 million in non-cash stock-based compensation. On both a quarterly and annual basis, we continued to deliver operating expense leverage. Our concerted efforts on financial discipline have resulted in slower expense growth compared to our increasing top line. We continue to believe that at the core, the business model will provide for much further leverage, particularly given the finite number of blood centers globally and our focused R&D efforts. By specific expense type, fourth quarter research and development expense totaled $15.6 million. compared to $17.1 million during the prior year. For the full year, 2021, R&D expense totaled $63.7 million, compared to $64.4 million in 2020. Our total R&D spend includes continued investment in the U.S. red blood cell efforts, which are reimbursed by U.S. BARDA, as well as next-generation intercept products, such as our LED illuminator, which is currently in development. Fourth quarter SG&A expense was $22 million and was up 18% versus the prior year period, driven primarily by commercial costs associated with our higher product sales. For the full year, SG&A expenses totaled $81.3 million, up 21% versus the prior year period. On the bottom line, reported net loss attributable to CSRS for both the three months and full year ending December 31st, 2021, both improved when compared to the same periods in 2020. Net loss attributable to CSRS for Q4 totaled $9.1 million or 5 cents per diluted share compared to $14.4 million or 9 cents per diluted share for the prior year period. The full year, Net loss attributable to Cirrus totaled $54.4 million or 32 cents per diluted share compared to $59.9 million or 37 cents per diluted share in the prior year period. Turning to the balance sheet and cash flows, 2021 was an exceptional year for the company in managing its cash while strategically investing in the business. As a result, we ended the year at a strong position with $129.4 million of cash and cash equivalents on the balance sheet. As our business grows, we continue to expand the use of our revolving line of credit. And during the quarter, we drew an additional $5 million from the facility and managed our working capital lines closely, despite continued investment in inventory. Accordingly, cash used from operations was $1.2 million for the fourth quarter. and $33.9 million for the full year. In both instances, these are improved from prior historical periods and are an ongoing focus area of ours. As Obi mentioned, we are working with our manufacturing partners to scale capabilities and obtain necessary regulatory approvals for new capacity to come online and continue to meet our strong customer demand. While we wait to obtain regulatory clearance for this capacity, We have grown our inventory levels to meet the anticipated demand growth, and despite increased production levels over 2021, we will likely draw inventory levels down in 2022 to continue to serve our customers and support our top-line growth aspirations. We expect this will be as seamless as possible for our customers and their hospital accounts. Consistent with the guidance provided for 2022 earlier in January, Today, we are reaffirming our 2022 product revenue guidance, which is a range of $157 to $164 million, reflecting year-over-year growth in a range of 20 to 25%. Similar to 2021, we expect the majority of our product revenue growth in 2022 to be led by intercept platelets in the U.S. Given the ongoing challenges associated with hospital access due to COVID, Our guidance contemplates modest contribution from IFC in 2022, and we look forward to this product driving more meaningful top-line growth in 2023 and beyond. As we discussed on our third quarter call, our top-line growth and the financial discipline we are deploying at Cirrus is helping drive us towards achieving cash flow breakeven. In order to highlight this progress over the course of 2022 and beyond, We plan to begin reporting non-GAAP adjusted EBITDA, beginning with our Q1 results this spring. To help with the modeling of this measure, I wanted to share with you exactly how we will be calculating our non-GAAP adjusted EBITDA. To start, we will begin with our reported loss from operations, subtracting out government contract revenue and the related costs, which mainly reflect reimbursement from U.S. BARDA. From there, we will also back out non-cash stock-based compensation expense, depreciation and amortization, and the P&L impact from our Chinese joint venture. We believe this will provide us with a benchmark and insight into the cash flows at which our core business operates. We look forward to demonstrating progress against this important benchmark and providing you with a tabular breakout, beginning with our Q1 results. With that, Let me turn the call back over to Obi to provide an update on our pipeline, as well as a few closing comments.

Thank you, Kevin. While we continue to make progress, as Kevin just outlined, towards achieving cash flow breakeven in the near term, we are also focused on advancing several R&D programs that we think will continue to provide runway for our future growth and global leadership position in transfusion medicine. Our R&D programs are focused on continuing to innovate pathogen inactivation to unlock new markets, incorporating next-generation technologies to extend our IP, and developing enhancements to our offering that improve both customer experience and our cost profile. Regarding the Intercept Red Blood Cell Program, our U.S. efforts in enrolling patients for our two Phase III studies, REDIS and RECIPE, are ongoing. While COVID-19 continues to present challenges with respect to the pace of enrollment of these studies, We plan on providing more detail later this year around our expected timeline for completion of these studies and subsequent PMA submission. In Europe, you will recall we completed the modular submission filing for CE-MARC with TUV during the second quarter of 2021, and that the Dutch Competent Authority, CBG, would be reviewing a portion of the submission. We anticipate dialogue with both entities in the coming months but do not yet have an update on this submission today. We continue to plan for a launch of the intercept red blood cell system in Europe in 2023. We also continue to work on a new LED illuminator, which represents the next generation of our intercept platelet and plasma product line. Over the next several quarters, we will be completing R&D workflows in preparation for regulatory submissions and look forward to introducing this product to the market with the expectation that this new device will serve as the backbone for future Intercept product iterations as well. In summary, our commercial momentum in 2021 is positioned to continue in 2022 and beyond. Building on our planet franchise, we have several additional growth opportunities laid out over the next several years that will also benefit from our improving financial profile. We look forward to further expanding access to Intercept products for patients, in the years ahead and realizing our important mission to be the standard of care in transfusion medicine. With that, let me turn it back over to the operator for Q&A.

If you would like to ask a question, please press star then 1. If your question has been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Josh Jennings with Cohen. Your line is open.

Hi, good evening. Thanks for taking the questions and congratulations on the strong finish to the year. Appreciate you laying out the guidance parameters or reiterating them and helping us sort through some of the details. I think the U.S. growth being the majority of the contribution to the guidance level makes sense. I just wanted to review just on the OUS growth opportunities. I know 2022 you're not forecasting significant contribution and growth from the OUS intercept platelet plasma franchise. But thinking about into the out years, and you have China, you have approvals in Germany, can you just help us walk through the opportunities to accelerate growth in EMEA, but especially in ROW, because if you look at some of the charts you show in your presentation, the rest of the world seems like it's a very de minimis contributor today, but where can that go tomorrow and in the future?

Yeah. Thanks a lot, Josh. This is Obi. I'll take a shot at that first. And if Kevin, you want to add to it, let me know. But you know, we still see growth coming out of the European markets. I think a lot of times it's been somewhat binary there. So, you know, we've been reluctant to commit too much in any given year, just until those binary events happen. But we definitely have growth in our guidance for 2022. As I mentioned in the prepared remarks, the overall TAM historically said for players was globally about 1.3 billion. We think it's probably north of 1.5 billion now, just as a function of the overall growth in playlet demand over the last several years. We're seeing mid-single-digit growth in many geographies. And then, as you mentioned, if it's not already, it soon will be the largest market opportunity for Intercept in China. And so we're working diligently with our joint venture partner there, ZBK, to get a submission in this year. Hopefully going to have clarity on whether we need to do a study there this year as well. So that study would start if we need to do it post-submission. But, you know, still looking at an opportunity to start selling there in the next couple years. And so, you know, overall, you know, just looking at where we currently are with our playlet market share penetration, ex-U.S., you know, there's a lot of room to grow, both in EMEA and in China, as well as other countries around the world.

Thanks for that, Obi. Maybe my follow-up, just wanted to ask about the IFC launch, understanding like you guys have helped the street understand that 2022 was not going to see a major inflection, but you're still building the base of that for commercialization and the foundation here. But just was interested in the commercial collaborations to facilitate penetration that you announced with, I think, OneBlood and Blood Centers of America. Can you just help us understand that business model a little bit better? I mean, it sounds like it's going to be similar to your current setup with blood centers and selling kits, and they'd have distribution responsibilities, but maybe you can help walk us through that and And then are there other collaborations in the pipeline potentially, like with an ARC or other major blood centers that could get involved in this collaboration effort? Thanks a lot.

Yeah, thanks, Josh. That's a great question. You know, clearly we were Happily surprised that we got the BLAs both in Gulf Coast and Texas, our production partner there, and also Central California Bud Center in California much earlier than we expected. So that has enabled a nationwide launch starting in Q1 of this year. So that's great news not only for us, Serious but, moreover, for for patients and for our transition physician customers historically we sort of looked this as a business model where you will require a lot of direct access to hospitals to sell the product and therefore we wanted to sell the finished biologics. To those hospital customers and that's still the case, but you know, given the demand that we're seeing from hospitals and our ability to then leverage our existing sales force in partnership with our blood center customers. You know, really what happened in 2021 is that a lot of the major blood thinners came to us and said, hey, you know, we'd really like to be selling this product directly to our customers, given our historical hospital contracting process. You guys have secured an NTAP, so the business model's, you know, somewhat similar to what we've seen now with Intercept Playlets, where we can realize a premium that improves our overall profitability. And so that NTAP pricing definitely had an impact on the way blood centers saw this product opportunity. And so, you know, with that, we started discussions with OneBlood in Florida, you know, given their strong presence there. And then also with BCA, which represents, you know, roughly 55 or 60 blood center, large blood centers across the U.S. And they said, we'd really like to have this product for our membership. and be able to help them sell this, you know, differentiated product that's, you know, higher value. And so we partnered with them towards the end of last year. So I think there's, you know, what it all sort of adds up to is that we'll be able to really have a nationwide launch starting in Q1. We'll be able to work with our existing blood center customers and our existing sales force and really leverage that more fully. So it should have a, an impact on our overall SG&A model for this in a positive sense. And then you mentioned, lastly, the American Red Cross. Clearly, they're our most important customer globally. We have a strong relationship with them and partnership. They were early on to sort of realize the importance of creating value-added products in this field and getting paid for those products. And so I think there's strong interest on their end. They are in the midst of, as are all blood centers, both in the U.S. and almost globally, have a hard time meeting the current demand for blood components. And so that's their main priority right now is really making sure that they can supply their hospital customers and sustain the business given the sort of disproportionate demand for blood components relative to the last decade and standing up their supply chain to do that. So It's an ongoing discussion with the Red Cross, and we ultimately hope to be working with them as well.

Excellent. Thanks again.

Yeah, thanks a lot, Josh.

Our next question comes from Jacob Johnson with Stevens. Your line is open.

Hey, thanks. Good afternoon, everybody. Maybe following up on Josh's question around IFC, you've got a couple of partners with VLAs in hand. you've got blood centers coming to you wanting to sell this product. You're talking about modest contribution as you have been talking about for 2022. Can you just talk about, you know, what you think, what the action point for this product is and what makes that happen? Is this just your Salesforce getting out and talking to hospital customers? Is this kind of key opinion leaders highlighting the value proposition? And I assume it's probably been somewhat impacted by the hospitals dealing with COVID, but I'm just curious, what kind of drives ultimate adoption of IFC, do you think?

Yeah, thanks, Jacob. I mean, that's a great question. What are the sort of real milestones for that product over the next couple of years? First, what we've seen, and this is true for Playlist, is that once you have the real-world experience data set, it really does drive demand. And I think in this case, we're talking about saving patients' lives from traumatic blood loss or from maternal hemorrhage. So once we have some of that data available in 2022 and sort of going into 2023, I think that'll have a big impact on sort of how physicians see this product and its utility. Other data points would be around sort of wastage rates in hospitals and does it really impact the wastage rates? I think we're already seeing that, but, you know, having that documented in a systematic way We've historically talked about this Cryostat 2 study that was completed last year in the UK that looked at the early use of cryoprecipitate to deal with traumatic blood loss and with a mortality endpoint. I think that the latest news on that study is that it will read out in the September timeframe. So I think that could have a big impact on sort of the way physicians look at the use of IFC earlier in the treatment of traumatic blood loss? And so is it part of the coolers that get sent up to the OR immediately, or is it something that historically has been delayed? So it's a number of different data points that I think will really drive overall demand for the product. And the nice thing about the current partnerships we have now with BCA and OneBlood and others is that we have enough capacity in the system to be able to meet the demand that's likely coming.

Got it. Perfect, Gobi. And then just as a follow-up, maybe for Kevin, just, you know, SG&A kind of took a little bit of a step up in 2021 as you prepare for this IFC launch. As we head into 2022, just any kind of commentary around SG&A trends, any areas for investment, just the outlook there in 2022.

Yeah, so I think it has the potential to creep up slightly, but certainly at a much slower pace than the ramp in revenue. 2021, you know, our prepared remarks were really centered around variable compensation, and as we outperformed you know, our sales team, we want them to share in that. And so hopefully we're in the same situation in 2022. But beyond that, we do expect that we'll return to more customer-facing travel, more in-person trade shows and marketing events. And so that's where I think you're going to see some of the costs tick up slightly from 2021 levels.

Got it. Thanks for taking the questions.

Thank you.

Our next question comes from Brandon Foulkes with Cantor Fitzgerald. Your line is open.

Hi, thanks for taking my question, and congratulations on another good quarter. Maybe just, Kevin, just following on from that prior question, when you talk about SG&A creeping up, was that on an annual basis or from the 4Q run rate? And then, secondly, maybe, you know, You have a very strong cash position. You've got that cash burn coming down. You talked about the pathway to profitability. But you also just talked about the potential growth, and especially in these TAMs, right? How do we think about, you know, capital allocation going forward? Maybe the leverage in the business model now and, you know, how much of that TAM expansion does that address versus maybe additional investment, you know, you talked about the JV in China, so obviously that's capital life, but maybe just, you know, any color in terms of, um, opposite versus addressing that town. Thank you.

Um, yeah, why don't I get them and Ovi, if there's something you want to contribute, uh, please feel free. So there's a lot there. Um, let me start with the first question about SG&A quarterly versus year to date. I think it's really both, um, you know, as we, fine-tuned our forecast, and as we saw sales continuing to elevate beyond our guidance, we continue to increase the overall compensation accrual. So that's certainly something you saw in Q4, and for that matter, for the full year. As it pertains to leverage going forward and with the increase in TAMs, the business really is extremely leverageable. So if you think about our existing commercial footprint in EMEA and the U.S., with the TAMs increasing organically, we really don't need to add a lot of SG&A costs to realize the revenue opportunity there. When we talk about our joint venture in China, it's really incumbent on our joint venture. It's not a serious sales effort. It's the joint venture and it's an independent standalone operation. And so, you know, we will certainly consolidate and record our share of revenue cogs and expenses, but we expect that that will largely be accretive soon after commercialization. But again, we're, you know, a few years away from that becoming a reality. So, In short, it's a highly leverageable business model. We've got a fairly solid balance sheet. We continue to invest in the future and likely will continue to invest in the future, both on working capital, but also capacity expansion and quality concerns.

The last thing I would add, Brandon, is just the evolving R&D portfolio. We've got a lot of exciting things there. We I mentioned today the progress on the LED illuminator, and that's really a platform for future growth and product iterations, not only to really address customer needs or delight them, if you will, having something that's a lot easier to use, but ultimately that leads to a change in our cost profile for our business as well. And so that's something we clearly would like to accelerate. But to Kevin's point, you know, I think that the main takeaway is that as we see adoption of Intercept globally, this is a highly leverageable business, and the footprint that we need to be able to address the market doesn't need to grow that materially, even with the ultimate launch of the red blood cell system.

Very helpful. Thank you to both of you.

Thanks.

As a reminder, to ask a question, please press star then 1. Our next question comes from Mark Massaro with BTIG. Your line is open.

Hey, guys. This is Vivian on for Mark. Thanks for taking the question. So could you discuss some of the puts and takes that went into the 2022 guide, how that accounts for COVID and the blood shortage in the US we've been witnessing? And if you could also touch on some of the drivers that make that strong growth sustainable. Thank you.

Yeah, well, I'll start. So, you know, a lot of the growth, as we mentioned in the call, prepared remarks, is really driven by the growth in the United States. And we still see that intercept playouts are the preferred option for the FDA guidance. I think that there has been reasonable market share or The percent adoption by the major customers in the United States has been significant, but there's still a lot of room to grow. And so a lot of our focus in 2022 is really about just managing the supply-demand balance that we see given our current capacity. We also mentioned that we do see growth coming out of EMEA, but, you know, a lot of that, a lot of our guidance sort of anticipates that most of our production capacity will be directed towards the U.S. growth. Kevin, is there anything else you wanted to add to that?

No, I don't think so. No, I don't think so. I think you covered it sufficiently.

Okay. Yeah.

Okay, awesome. Just a quick follow up. If you could provide any color on the goal of getting the Red Cross to move to 100% intercept by 2023. And if you could speak to whether or not any progress there is also swaying other blood centers as well. Thanks.

Yeah, thanks for the question. So as we mentioned, historically, the Red Cross has communicated that they'd like to get to 100%. You know, they made great strides towards that goal in 2021 and continue to do so in 2022. I think some of that comes from just sort of the overall simplicity of providing a single, the most safe single blood component that they can. So meaning that they don't want to carry multiple inventories and they want to have the safest platelet component. So that's sort of their line of thinking. So I think a lot of their ability to get to 100% will be a function of, you know, do all of their hospital customers want to get there? What we understand they do. And then secondly is our ability to meet the demand from a capacity standpoint.

Okay, great. Thanks for taking the question.

Yeah, thank you.

There are no further questions. I'd like to turn the call back over to Obie Greenman for any closing remarks.

Thank you again for joining us today and for your interest in Cirrus. We look forward to speaking with you at Town's 42nd Annual Virtual Healthcare Conference next month and sharing our progress throughout this year. Thanks very much.

This concludes the program, and you may now disconnect.

Enjoy the rest of your day.