Cerus Corporation

Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Cirrus Corporation fourth quarter and full year 2025 earnings conference call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Tim Lee, Cirrus Head of Investor Relations. Tim, you may begin.

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, Vivek Jayaraman, Cirrus' Chief Operating Officer, and Kevin Green, Cirrus' Chief Financial Officer. Cirrus issued a press release today announcing our financial results for the fourth quarter and full year ended December 31st, 2025. The company's recent business highlights and outlook. You can access a copy of the 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 and are forward-looking statements. Examples of forward-looking statements include those related to our future financial and operating results, including our 2026 product revenue guidance and our expectations for product gross margin, non-GAAP adjusted EBITDA performance, P&L leverage, and our government-reimbursed R&D expenses and corresponding revenue, expected future growth, the potential for us to reach GAAP profitability, the availability and related timing of data from clinical trials, our mission, to establish Intercept as a global standard of care, plan regulatory submissions, commercial expansion prospects, projected market opportunities for the Intercept blood system, including for IFC demand, expectations with respect to our group purchase agreement with Blood Centers of America, our potential platelet opportunity in Germany, the anticipated impact of import tariffs and ongoing inflationary pressures, and other statements that are not historical facts. These forward-looking statements involve risks and uncertainties that can cause actual events, performance, and results to differ materially. They are identified and described in today's press release, in our slide presentation, and under risk factors in our Form 10-K for the year ended, December 31st, 2025, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements. On today's call, We will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA and the percentage of growth in EMEA and total product revenue excluding the impact of changes in foreign currency exchange rates. These non-GAAP measures should be considered a supplement to and not a replacement for measures presented in accordance with GAAP. For a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures to the extent reasonably available, please refer to today's press release and the slide presentation available on our website. We'll begin today with opening remarks from Obie, followed by Vivek to discuss recent business highlights, then Kevin to review our financial results and expectations for 2026, and lastly, closing remarks from Obie. And now, it's my pleasure to introduce Obie Greenman, CIRA's President and Chief Executive Officer.

Thank you, Tim, and good afternoon, everyone, and thank you for joining the call today. At Cirrus, we are dedicated to safeguarding the world's blood supply. Every day, patients around the world rely on safe blood, from patients undergoing cancer therapy to sickle cell and thalassemia patients to surgical trauma. Blood's availability is foundational for healthcare systems. Our intercept blood system has been designed to prevent the risk of transfusion-transmitted infections and strengthen the safety profile and immediate availability of one of the most essential healthcare resources. Our mission is clear at Cirrus to establish Intercept as a global standard of care for all transfused blood components. In 2025, we made meaningful progress towards this goal. Based on kits sold, our blood center customers produced approximately 3 million Intercept-treated blood components for patients in nearly 40 countries. We estimate that this has enabled roughly 600,000 patients to receive intercept-treated blood components over the course of last year. Put another way, every single minute, another patient somewhere in the world is benefiting from safer blood transfusion as a function of our technology. As the market leader in pathogen inactivation of blood components, we continue to invest in innovation, manufacturing, regulatory approvals, and commercial expansion. In 2025, we received European CE mark approval and commercially launched the INT200 device, our next generation LED-based illuminator, and a foundational element for our global growth into the next decade. Customer feedback on the INT200 operational improvements continues to be very positive and reinforces our leadership and innovation in the field of transfusion medicine. In the U.S., we are on track to submit our PMA application for INT-200, expected in mid-2026. Turning now to red blood cells, the most transfused blood component globally, and our largest potential opportunity. In Europe, our regulatory submission has been under review at our notified body, TUV, which has completed its review of all these submission modules. The dossier is now being transferred to ANSM the competent authority for consultation and review of the active pharmaceutical ingredient. In the U.S., enrollment is complete, and we continue the patient follow-up in the REDIS study, our second phase three clinical trial, and expect to report top-line results later this year. Vivek and Kevin will walk through the commercial and financial details shortly, but at a high level, 2025 was a milestone year. Discipline execution strengthened our financial foundation positioning us to expand intercept adoption globally while continuing to advance our pipeline. Before I turn the call over to Vivek, I wanted to thank and recognize the entire Cirrus team. Without their hard work and dedication, none of the accomplishments I just outlined would have been possible. With that, I would like now to turn the call over to Vivek to discuss our fourth quarter and full year commercial results, along with color on our outlook for 2026.

Thank you, Obi, and good afternoon, everyone. We finished 2025 on a high note with another quarter of strong performance across our global platelet franchise, continued positive traction with the international launch of our INT200 illuminator, and increasing the momentum in our U.S. ISB business. Combined, these efforts resulted in record fourth quarter and full-year product revenues. We entered 2026 with solid momentum and a clear runway for continued growth. The U.S. platelet franchise continues to serve as a foundation for Cirrus. Intercept-treated platelets are the standard of care in the U.S., and we estimate our market share to be in the mid-60s. Furthermore, given progress in the fourth quarter, we believe we are well positioned for further penetration in this market. A key contributing factor to our belief is the opportunity represented by the recently signed Group Purchasing Agreement with the Blood Centers of America, or BCA. We finalized this agreement last December, and it went into effect on January 1st of this year. BCA is the largest blood supply cooperative in the U.S., with its member centers accounting for approximately 50% of the nation's blood supply. While many BCA members are already intercept users, We estimate overall penetration within BCA is approximately 30%. We believe this agreement will help facilitate broader discussions across the BCA network, enable us to take advantage of their streamlined contracting process, and leverage their supply chain network. Ultimately, we believe this will drive increased intercept adoption across the BCA network. We recently had the opportunity to present at the DCA Board of Directors meeting in Scottsdale, and I was very encouraged by the membership enthusiasm for our agreement. Internationally, our EMEA franchise delivered robust growth in the fourth quarter and the full year. We experienced strong double-digit growth in both platelet and plasma kit sales. In addition, the rollout of IAT 200 continues to go well with very positive customer feedback. Looking forward, the EMEA region contains attractive growth opportunities over both the near and medium term. One example is Germany, the largest market in Europe. As we announced in January, DRK Baden-Württemberg Hessen, the largest blood center in Germany, has started enrollment in the INITIATE study, a post-market phase four study designed to evaluate the routine use of estrogen-activated platelets utilizing the intercept blood system. We believe Germany represents a $30 million annual platelet opportunity. We are excited to see the initiate study commence and believe that Germany can contribute more meaningfully to revenues as early as 2027. Switching to ISV, customer demand continues to increase. As measured by therapeutic dose equivalence, demand increased by over 50% in the fourth quarter compared to the same period last year. From a revenue perspective, our ISC franchise grew by nearly 40% compared to Q4, 2024. During the fourth quarter, nearly 70% of sales were in the form of kits sold to blood centers, up from approximately 50% in the prior year period. As we continue to shift our focus towards the kit model, we expect that nearly all ISC sales volume will be in the kit format by the end of this year. Looking ahead, We believe the BCA agreement will further support IFC demand by leveraging the reach of member centers and integrating the existing IFC production partners into the BCA agreement. We have already received inquiries from multiple BCA member blood centers interested in initiating IFC manufacturing. As mentioned before, we are very encouraged by the potential of the BCA partnership. In closing, 2025 was an excellent year for our commercial team. We meaningfully expanded access to intercept treated blood products globally, and we entered 2026 with a tremendous amount of momentum across all of our product lines. With that, I'll turn the call over to Kevin to review our financial results in more detail. Thanks, Vivek.

I'd like to thank you all for your interest in Cirrus and for your time with us today. Fourth quarter and full year financial tables are included in today's press release. As such, I'll focus most of my comments on key takeaways and insights, as well as our product revenue guidance for 2026. To begin, our total revenues for 2025 were $233.8 million and represented a record level for SARIS and were up 16% from 2024. As we preannounced in January, we reported record product revenue which resulted in a 14% increase for both the quarter and the year, exceeding the top end of our $202 million to $204 million prior guidance. Breaking down product revenue by geography, as you can see from this slide, much of the growth in the quarter, and for that matter, the full year, were led by gains in EMEA, where we are seeing demand across both our platelet and plasma franchises, as well as the early rollout of our new illuminator device, the INT200. As a reminder, we have an installed base of approximately 400 INT100s in EMEA, which we expect to replace completely over the next few years. In North America, full-year product revenue growth was driven by increased IFC sales and our strong platelet business. Excluding the impact of foreign currency exchange rates, EMEA product revenue increased 25% in the fourth quarter and 14% for the full year. On a consolidated basis, FX provided a benefit of approximately 3% when comparing Q4 2025 to that of the prior year, and a benefit of approximately 1.6% for the full year. IFC product revenue during the fourth quarter was $4.2 million. compared to $3 million during the fourth quarter of 2024, representing an increase of approximately 40%. For the full year, IFC product sales totaled $16.7 million, compared to $9.2 million in 2024, representing growth of approximately 80%. With that said, the underlying volume demand for IFC increased roughly 110%. The difference between the reported revenue growth and demand growth is a result of the continued sales shift focus, from selling finished IFC therapeutics directly to hospitals to selling kits to blood centers who produce IFC for their own hospital accounts. Based on the robust sales momentum we delivered in 2025, we expect revenue growth to carry into 2026, and as such, Today we are reaffirming our 2026 product revenue guidance, which we announced earlier this year, totaling $224 to $228 million. This guidance represents a year-over-year increase of 9 to 11% compared to 2025 and does not take into account the effect of any potential changes to the tariff landscape. Included in our 2026 guidance range is expected IFC revenue of $20 to $22 million, representing year-over-year growth of approximately 20 to 30%. Given the mixed shift to kits, our IFC revenue guidance may underestimate the enthusiasm we are seeing for this product. We estimate we exited 2025 with IFC market adoption at around 7%, and by the end of the year, we believe our penetration rate could increase more than 50%. Furthermore, we are witnessing strong increased use of fibrinogen replacement therapies, suggesting the market for our IFC product is continuing to grow. Switching now from product revenue, as you'll see, the reimbursements for government revenue covering our RBC programs and IFC development were up considerably this year. I'll address our expectations for the 2026 level of these activities later on. For the time being, let's now turn to product gross margin. For the fourth quarter, product gross margin was 51.5% compared to 53.9% in the same period last year. Higher IFC therapeutic production costs, the impact of import tariffs, and ongoing inflationary pressures impacted product gross margin compared to the prior year period. We expect the impact of import tariffs and, to a lesser extent, inflationary pressures to continue. The tariff landscape continues to be dynamic, and we cannot currently predict the ultimate tariff impact on our 2026 margins. However, assuming status quo, we expect 2026 product growth margin will continue to trend around the low 50% range. We could see quarterly variability due to a variety of factors. Moving down the income statement, operating expenses for the fourth quarter and full year increased 7 and 10% respectively, as we continue to deliver leverage in the P&L. Focusing on R&D expenses for a minute, the year-over-year changes were driven primarily by increased development costs associated with our red blood cell program, mainly reimbursed by BARDA, as well as costs for the pursuit of new PMAs driven by our planned submission to the FDA for premarket approval of the INT-200. I would note that our 2016 BARDA contract will expire in September, and with much of the work tied to our Phase 3 RETA study now behind us, we expect government-reimbursed R&D expenses, as well as the corresponding revenue, referred to earlier, to taper over the course of the year. Let's now turn to the bottom line and non-GAAP adjusted EBITDA results. For Q4 2025, GAAP net loss attributable to CIRAS continued to approach equilibrium at a modest $2.2 million. For the full year, GAAP net loss attributable to CIRAS was $15.6 million, down 25% from the prior year. We will continue our drive toward GAAP profitability as we move forward. On a non-GAAP basis, adjusted EBITDA for the fourth quarter totaled $3.4 million and marked our seventh consecutive quarter of posting positive adjusted EBITDA. For the full year, we are pleased to report our second consecutive year of positive adjusted EBITDA, totaling $9.5 million. This performance reflects the strong execution by our organization. With the stated growth in our top line, combined with the disciplined expense management and continued leverage inherent in our business model, which we have demonstrated over the course of 2025. Looking ahead now to 2026, we expect our third consecutive year of positive adjusted EBITDA, driven by the anticipated product revenue suggested by our guidance, gross profit dollar growth, and the continued leverage we expect to generate as a result of our business model and our continued scrutiny of operating expenses. Turning to the balance sheet and associated cash flows, we ended 2025 with almost $83 million of cash and short-term investments. We continue to manage our cash balances prudently while funding our growth initiatives. For the fourth quarter, we generated $6.2 million in operating cash flow. Combined with the $1.9 million generated during the third quarter, second half operating cash flow totaled $8.1 million, resulting in full year operating cash flow of $4.8 million, consistent with what we had anticipated and communicated throughout the year. This operating cash flow comes despite our increased investments made throughout 2025. in anticipation and support of our expected growth. With that, I'll turn the call back to Obi for some closing remarks.

Thank you, Kevin. I'm incredibly proud of the progress this year's team made in 2025 as we continue to advance our mission to make the Intercept blood system the standard of care for transfused blood components worldwide. Every year, more patients benefit from the pathogen-reduced blood components. and that impact continues to grow because of the execution by and dedication of our employees and partners around the globe. With a strong, durable, and growing core-plated franchise, increasing adoption of IFC, and continued investment in innovation across the Intercept platform, we enter 2026 with a solid financial foundation and improving operating leverage. We remain focused on disciplined execution expanding patient access, and thoughtfully advancing our pipeline as we continue to build an enduring company capable of delivering meaningful impact and sustainable value over the long term. Thank you for your continuing interest in Cirrus. Operator, we'll now be happy to take your questions.

As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Our first question comes from the line of Bill Bonello from Craig Hallam Capital.

Hey, guys. Thanks a lot for taking my call. So maybe you could just talk a little bit more about the BCA agreement. I know it's early days, but first of all, you know, maybe just recap for us from, you know, if you're a blood Senator, what is different for you because of this contract? What sort of, what is it about the contract that you expect to drive, you know, the penetration beyond where you are today? And then, you know, any kind of early anecdotes or anything from your interaction with those centers?

Yeah, thanks a lot, Bill, for the question. Vic, would you like to take this?

Yeah, I'd be happy to. Bill, thanks for the question. You know, a couple of things that excite us about the BCA contract. First, if you think about the volume they represent in terms of overall blood product distribution, it's roughly half the market. And if I were to take the platelet opportunity to start with, in that roughly 50% of the market, we're approximately 30% penetrated. So if you think about near-term growth opportunities in the US platelet market, it's disproportionately represented by BCA members. And through this contract, we're able to, through this purchasing agreement, we're able to leverage their existing supply chain network, their contracting platforms, and also their education and awareness channels. And so in terms of leveraging their SG&A footprint and really being able to more effectively disseminate our sales and marketing offerings as a real enabler in that regard. And we're already seeing inbound inquiries so far this calendar year from BCA member institutions who haven't previously utilized Intercept, so that's been encouraging. Furthermore, we're seeing increased depth with BCA users who started to use Intercept but still have room to run in terms of increasing overall product adoption. On the IFC side, our legacy manufacturing partners will be moved under the BCA umbrella agreement. This will help to facilitate movement of product across the country where some of these members have BLAs in place and can distribute across state lines. It's also going to allow us to leverage their sales channels from a clinical education and awareness building standpoint. And just sort of one anecdote I'll point to is we're doing a series of webinars and Collaboration with BCA and we had our first webinar Last month and we had over a hundred and fifty attendees join So just in terms of being able to quickly expand reach and access and then the enthusiasm from the BCA membership all these things Combined together to give us its early days, but give us enthusiasm about the prospects of that collaboration Great.

Thanks. That's helpful and just one quick follow-up for Kevin Thoughts on cash flow for this year? For 2026, Bill? Yep.

Yeah, I think it's going to be more of the same. You know, 2025 was bookended with heavy investment in working capital, in particular inventory, to meet the anticipated growth that we saw coming. We've continued to invest in that in the back half of the year, albeit at a slower pace, more reasonable pace. I think that's going to continue. We're going to continue to make sure that we've got sufficient inventory to serve the growth that we expect. But with that said, the business is at a scale now where we expect we'll be able to continue to generate operating cash flows. Okay. Thanks.

Thank you. One moment for our next question. Our next question comes from the line of Mark Massaro from BTIG.

Hey, guys. Thanks for taking the question. I wanted to ask about EMEA, which clearly came in very strong. I think you reported 36% growth in Q4. You talked about this opportunity in Germany. I think you framed it as a $30 million annual opportunity, I think, in platelets. Can you just give us a sense for when this study is expected to read out in Germany? And, you know, I'm familiar with, you know, you have a very large business in France, but is the Germany opportunity all from a base of zero? Just give us a sense for how much activity Germany is today versus where you think it could be at scale.

Yeah, thanks for the question, Mark. I think this is another one for you.

Yeah, sure, I'd be happy to answer. Mark, thanks for the question. So just to remind you, the INITIATE study in Germany is an observational study phase four post-market study. So, we're actually generating revenues for the product we sell that's utilized in the context of this study. It's really to generate real-world experience that can be used to build a dossier to support improved reimbursement and to further sort of convince clinicians and blood center operations folks that Intercept can be used in routine practice to provide greater clinical utility and protection. We anticipate that study continuing to enroll over the course of this calendar year, so 2026, and likely leading to a more meaningful increase in revenue contribution in 2027 and beyond. And as you correctly pointed out, we estimate this market opportunity to be roughly a $30 million annual opportunity. In addition to Germany, though, if you look at growth in the region, we've had favorable upticks In the Middle East, we continue to see opportunities in Southern Europe to drive growth. And as you pointed out, we have a really stable and important business in France. And what's been encouraging, too, with the core business growing, we've had the opportunity to re-engage both the existing and then engage new customers with the successful rollout of the INT200. So we see quite a bit of opportunity for continued growth internationally and Certainly the contributions of our international team were critical to not only our Q4 success, but the strength of the full 2025 results.

Okay, that's really helpful. And then my second question is just I would love any type of update on red blood cells in Europe. I think I heard Obi talk about the TUV sued review has been completed and now moving over to ANSM. I know that timing is not something you can directly control, of course, but can you just give us a sense for when you think CE marking for the red blood cells in Europe, you know, is that more likely a 2027 event, or do you think it could possibly sneak in in the back half of this year?

Yeah, thanks for the question, Mark. So, as we mentioned, the prepared remarks, TUV has completed a review of all the dossier segments that they have. sections that they have, and now that'll be transferred over to ANSM this month. And then once they accept it, there's roughly a 210-day clock that we believe they'll stick to, given the historical review by other competent authorities. So that's promising. Once we get those questions back, then we'll address them. And then it really would lead to a possible approval in the first half of 2027. assuming there's no issues with that submission or with that review of the file. And again, to remind you that it's really addressing the CMC-related part of the submission. So looking good there. And then just maybe a quick update on red cells in the United States. We have completed enrollment for the Phase III REDIS study, which is the second of our two Phase III studies required for a PMA submission. And that will read out in the Q4 timeframe of this year.

So we're looking forward to the outcome of that study. Okay. And if I can sneak in a third one, maybe for Vivek. I know you talked about strength in the Middle East, but can you just give us a sense from where this is coming from exactly? And how would you size the penetration rate in some of these larger countries? Thanks.

So, you know, we have... Strength across the region, probably the single biggest opportunity from a volume standpoint would be represented in the Kingdom of Saudi Arabia. Obviously, you know, kind of with some of the real-time geopolitical issues at play at the moment, things are a bit in flux. But the thing that's most encouraging about that marketplace is they tend to look at the ABB and U.S. FDA standards when they determine their procedures and protocols. So the fact that Intercept platelets or standard of care in the U.S. has a pretty influential impact on that region, and we saw good progress on calendar year 2025. And so, forward to come there, but if you look at places like Kuwait, Qatar, and then from a side standpoint, Saudi Arabia, there's a lot of room for us to run in that part of the world.

That makes sense. Thanks so much for the time, guys. Yeah, thanks, Mark.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. At this time, I'm showing no further questions. I would now like to turn the conference back over to O.B. Greenman for closing remarks.

Thank you very much. We really appreciate your participation in the call today, and we think Kevin and I will be participating in the TD Cowan Healthcare Conference tomorrow, so we encourage you to listen in to that fireside chat. Thanks very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.