Full Press Release Details
As used in this Exhibit 99.1, Cerus, Cerus Corporation, the Company, we, us and our
refer to Cerus Corporation, a Delaware corporation, and its wholly-owned subsidiary, Cerus Europe B.V. Cerus, INTERCEPT and INTERCEPT Blood System are U.S. registered trademarks of Cerus Corporation. All other trademarks, service marks and trade
names included in this Exhibit 99.1 are the property of their respective owners.
Our business faces significant risks. If any of the events or circumstances described in the following risks actually occurs, our business may suffer, the
trading price of our common stock could decline and our financial condition or results of operations could be harmed. These risks should be read in conjunction with the other information set forth in our most recent annual report on Form 10-K and our most recent quarterly report on Form 10-Q. The risks and uncertainties described below are not the only ones facing us. There may be additional risks faced by our
business. Other events that we do not currently anticipate or that we currently deem immaterial also may adversely affect our financial condition or results of operations.
Risks Related to Our Business and Industry
effects of the COVID-19 pandemic have materially affected how we, our customers, and our suppliers are operating our businesses, and the duration and extent to which this will impact our future results of
operations and overall financial performance remains uncertain.
In December 2019, a novel coronavirus disease, or
COVID-19, was reported and in January 2020, the World Health Organization, or the WHO, declared it a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment
of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic. The COVID-19 pandemic, and any potential future significant outbreak of epidemic, pandemic, or contagious diseases in the human population that results
in a widespread health crisis, could continue to adversely affect the broader economies, financial markets, our ability to make meaningful progress with many of our development programs and result in disruption and impact on existing and prospective
Although we are currently deemed to be a critical business by national, state and local governments, out of an abundance of caution for our
employees and to minimize the spread of COVID-19, we have put restrictions on employee travel and working from our facilities in the United States and Europe. These restrictions have negatively impacted and
disrupted at least certain aspects of our business and delayed some of our timelines. Further, restrictions on our ability to travel, stay-at-home orders and other
similar restrictions on our business have limited our ability to support our global and domestic operations, including providing training and technical support, resulting in disruptions in our sales and marketing efforts. In addition, the pandemic
has severely restricted the level of economic activity in affected areas and may continue to adversely impact demand for, and sales of, our products. We have deferred certain of our customer events and many planned trade shows have been cancelled
and we may further defer or cancel additional customer, employee or industry events, or our participation in such events, in the future. In addition, many new customers and prospective customers have been impacted by the COVID-19 pandemic and their ability to implement new technologies, including INTERCEPT, has and may continue to be negatively impacted. Furthermore, our ability to gain access to customers during the COVID-19 pandemic may continue to be negatively impacted and may limit our ability to prepare customers and sell product. Conversely, during this pandemic, certain existing, new and prospective customers have and
may continue to ask for increased utilization of our products beyond what was forecast, and we may not be able to timely satisfy this increase in demand. Customers whose operations have been impacted may have difficulty paying timely, may ask for
price reductions or may delay or cancel public tenders. In addition, while our suppliers have initiated business continuity plans with minimal expected disruption to our supply, we cannot be certain that any prolonged, intensified or worsened effect
from the crisis would not impact our supply chain. All of the aforementioned could adversely affect our sales, operating results and overall financial performance.
Our primary manufacturing partner for our disposable kits is located in France where restrictive government and private enterprise measures were implemented
in response to the COVID-19 pandemic. To ensure employee safety and comply with local requirements for social distancing, we understand that Fresenius Kabi Deutschland GmbH, or Fresenius,
had to reconfigure production workflow to safely produce INTERCEPT disposable kits. A renewed spike in the pandemic in France may increase employee absenteeism at the manufacturing site and is a potential risk that could negatively impact
production, the magnitude of which depends, in part, on the length and severity of the restrictions and other limitations on their ability to conduct business in the ordinary course.
The duration and extent of the impact from the COVID-19 pandemic
depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, and the impact of these and other factors on our
operations, employees, customers, partners and vendors. If we are not able to respond to and manage the impact of such events effectively, our business will be harmed.
In addition, while the potential economic impact brought by the onset, and the duration of, COVID-19 may be difficult
to assess or predict, it has significantly disrupted global financial markets, and may limit our ability to access capital, which could in the future negatively affect our liquidity. A recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock. To the extent the COVID-19 pandemic adversely affects our business and results of operations,
it may also have the effect of heightening many of the other risks and uncertainties described elsewhere in this Risk Factors section.
The COVID-19 pandemic has negatively impacted our ability to perform many clinical trials, studies and
activities, including those covered by our agreement with BARDA.
Beyond the commercial impact that the
COVID-19 pandemic may have on our operations, our clinical and development programs have been adversely affected. Our ongoing and anticipated clinical trials, the post-approval platelet studies, as well as
studies to support label expansion for our platelet program in the U.S. were previously delayed because of COVID-19. Many hospital sites where enrollment was suspended have not yet resumed enrollment and those
that have are proceeding at a reduced capacity. Further delays may recur in the future if patient enrollment sites need to pause participation in our clinical trials and studies. Should the COVID-19 pandemic
persist, continue to worsen, or resurface at locations where we conduct studies or clinical trials, our ability to commence and complete any contemplated studies may also be negatively impacted. Furthermore, should we be unable to deploy personnel
or derive a benefit from fixed study costs or generate data from clinical sites and studies reimbursed under our contract with the Biomedical Advanced Research and Development Authority, or BARDA, our cash flows would be negatively impacted and/or
we may have to initiate furloughs and layoffs which would likely prove disruptive to our management and operations. This in turn would impair our ability to recommence and complete studies if and when the
COVID-19 crisis subsides and we are able to restart many suspended or delayed activities.
In addition, access to
federal contracts is subject to the authorization of funds and approval of our research plans by various organizations within the federal government, including the U.S. Congress. The general economic environment and uncertainty associated with the COVID-19 pandemic, coupled with tight federal budgets, has led to a general decline in the amount available for government funding. If BARDA were to eliminate, reduce or delay funding under our agreement, this would
have a significant negative impact on the programs associated with such funding and could have a significant negative impact on our revenues and cash flows. Furthermore, while BARDA has provided funding for and has indicated a potential for future
funding for many activities associated with combating COVID-19, the availability and focus for any BARDA funding will likely be finite and may require us to compete with other technologies, both similar and
We depend substantially upon the commercial success of the INTERCEPT Blood System for platelets and plasma in the United States, or
U.S., and our inability to successfully commercialize the INTERCEPT Blood System in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We have invested a significant portion of our efforts and financial resources on the development of the INTERCEPT Blood System for platelets and plasma for the
U.S. market. As a result, our business is substantially dependent on our ability to successfully commercialize the INTERCEPT Blood System in the U.S. in a timely manner. The broad successful commercial adoption of any product, particularly involving
novel technologies, is often dependent upon the seller earning a level of trust from and familiarity with customers, which can take time to develop. In addition, although we received the U.S. Food and Drug Administration, or FDA, approval of our
platelet and plasma systems in December 2014, our U.S. commercial efforts in 2020 have been largely focused on enabling blood centers that are using INTERCEPT to optimize production and increase the number of platelet and plasma units produced and
made available to patients and continuing to develop awareness of INTERCEPT s product profile relative to other platelet and plasma products, including conventional, un-treated components. In September
2019, the FDA issued a final
guidance document, Bacterial Risk Control Strategies for Blood Collection Establishments and Transfusion Services to Enhance the Safety and Availability of Platelets for Transfusion,
or Final Guidance Document. The guidance document requires all blood collection facilities to comply with the options available under the guidance document, which includes the INTERCEPT Blood System, for all platelet collections, no later than 18
months from the issuance date. However, we are aware of certain blood centers and organizations that have filed requests with the FDA for an extension to the compliance grace period. Although the INTERCEPT Blood System is one of the options
available to U.S. blood centers for compliance, we cannot predict if U.S. customers will adopt INTERCEPT over other options or at what levels. Significant product revenue from customers in the U.S. may not occur timely, if at all, until we have been
able to successfully implement the platelet and plasma systems and demonstrate that they are economical, safe and efficacious for potential customers. Similar to our experience in foreign jurisdictions, some potential customers in the U.S. have
chosen to first validate our technology or conduct other pre-adoption activities prior to purchasing or deciding whether to adopt the INTERCEPT Blood System for commercial use, which may never occur. Further,
the hospital customers of any of our new blood center customers will need to go through the administrative process of generating internal tracking codes to integrate INTERCEPT-treated products into their inventories, which may further delay customer
adoption in the U.S. If the COVID-19 crisis persists or continues to worsen, customers may not be able to implement new technologies such as INTERCEPT and may instead choose to utilize other allowable methods
with which they have more familiarity. Similarly, if we are not successful in expanding the label claims for our platelet kits in the U.S., including permitting storage of INTERCEPT-treated platelet units for up to seven days and approval of our
processing set for triple dose collections, U.S., blood centers or their hospital customers may choose alternative products in order to comply with the guidance document. If we are not successful in achieving market adoption of the INTERCEPT Blood
System in the U.S., we may never generate substantial product revenue, and our business, financial condition, results of operations and growth prospects would be materially and adversely affected.
Our ability to successfully commercialize the INTERCEPT Blood System for platelets and plasma in the U.S. will depend on our ability to:
In addition to the other risks described herein, our ability to successfully commercialize the INTERCEPT Blood System for platelets and plasma in the U.S. is
subject to a number of risks and uncertainties, including those related to:
In addition to the above, our ability to successfully commercialize the INTERCEPT Blood System in the U.S. is
dependent on our ability to operate without infringing on the intellectual property rights of others. For example, we are aware of an expired U.S. patent that had been held by a third-party that covered methods to remove psoralen compounds from
blood products. We have reviewed the patent and believe there exist substantial questions concerning its validity. We cannot be certain, however, that a court would hold the patent not infringed by our platelet or plasma systems. In this regard,
whether or not we have infringed this patent will not be known with certainty unless and until a court interprets the patent in the context of litigation. In the event that we are found to have infringed any valid claim of this patent, we may, among
other things, be required to pay damages.
These and the other risks described below related to the commercialization of the INTERCEPT Blood System could
have a material adverse effect on our ability to successfully commercialize the INTERCEPT Blood System for platelets and plasma in the U.S.
INTERCEPT Blood System may not achieve broad market adoption.
In order to increase market adoption of the INTERCEPT Blood System and to increase
market demand, we must address issues and concerns from broad constituencies involved in the healthcare system, from blood centers to patients, transfusing physicians, key opinion leaders, hospitals, private and public sector payors, regulatory
bodies and public health authorities. We may be unable to demonstrate to these constituencies that the INTERCEPT Blood System is safe, effective and economical or that the benefits of using the INTERCEPT Blood System products justify their cost and
outweigh their risks. During the COVID-19 pandemic, we may not be able to generate sufficient interest and mindshare of prospective customers, who may instead be focused on their and their customers
responses to the pandemic, which would limit our ability to increase market adoption.
The use of the platelet system results in some processing loss of
platelets. If the loss of platelets leads to increased costs, or the perception of increased costs for our customers, or if the use of our product in any way constrains the availability of blood due to platelet loss, or our customers or prospective
customers believe that the loss of platelets reduces the efficacy of the transfusable unit, or our process requires changes in blood center or clinical regimens, prospective customers may not adopt our platelet system. Additionally, existing
customers may not believe they can justify any perceived operational change or inefficiency by itself or in conjunction with a blood component
availability shortage. Certain customers that attempt to optimize collection practices from individual donors in order to increase the volume of transfusable units that can be treated with
INTERCEPT from those collections may experience a less optimized yield as a result of adopting INTERCEPT as compared to collecting conventional platelet products. Certain studies have indicated that transfusion of conventionally prepared platelets
may yield higher post-transfusion platelet counts (according to a measurement called corrected count increment ) and may be more effective than transfusion of INTERCEPT-treated platelets. Although certain other studies demonstrate that
INTERCEPT-treated platelets retain therapeutic function comparable to conventional platelets, prospective customers may choose not to adopt our platelet system due to considerations relating to corrected count increment, efficacy or other factors.
The INTERCEPT Blood System does not inactivate all known pathogens, and the inability of the INTERCEPT Blood System to inactivate certain pathogens may
limit its market adoption. For example, our products have not been demonstrated to be effective in the reduction of certain non-lipid-enveloped viruses, including hepatitis A and E viruses, due to these
viruses biology. In addition, our products have not demonstrated a high level of reduction for human parvovirus B-19, which is also a non-lipid-enveloped virus.
Although we have shown high levels of reduction of a broad spectrum of lipid-enveloped viruses, prospective customers may choose not to adopt our products based on considerations concerning inability to inactivate, or limited reduction, of certain non-lipid-enveloped viruses. Similarly, although our products have been demonstrated to effectively inactivate spore-forming bacteria, our products have not been shown to be effective in reducing bacterial spores
once formed. In addition, our products do not inactivate prions since prions do not contain nucleic acid. While transmission of prions has not been a major problem in blood transfusions, and we are not aware of any competing products that inactivate
prions, the inability to inactivate prions may limit market adoption of our products. In addition, while we have data supporting INTERCEPT s ability to inactivate
SARS-CoV-1 and MERS, both coronaviruses, we have only limited data supporting INTERCEPT s efficacy in inactivating the SARS-CoV-2 virus (the virus that causes COVID-19). In April 2020, we announced an amended collaboration with BARDA to study INTERCEPT s pathogen inactivation
efficacy against the SARS-CoV-2 virus and have several other studies underway, though we cannot assure you that the results of these studies will be successful.
Furthermore, due to limitations of detective tests, we cannot exclude that a sufficient quantity of pathogen or pathogens may still be present in active form, which could present a risk of infection to the transfused patient. Should
INTERCEPT-treated components contain detectable levels of pathogens after treatment, the efficacy of INTERCEPT may be called into question, whether or not any remaining pathogens are the result of INTERCEPT s efficacy or other factors. Such
uncertainties may limit the market adoption of our products.