Ladies and gentlemen, thank you for standing by. And welcome to the Cerus Corporation’s Fourth Quarter and Full Year 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce the Cerus management team. Please go ahead.

Thank you and good afternoon. I’d like to begin by introducing myself. My name is Matt Notarianni, and I’m Cerus’ Senior Director of Investor Relations. 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.cerus.com. With me on the call are Obi Greenman, Cerus’ President and Chief Executive Officer; Vivek Jayaraman, Cerus’ Chief Operating Officer; Kevin Green, Cerus’ Chief Financial Officer; and Carol Moore, Cerus’ Senior Vice President of Regulatory Affairs and Quality. Cerus issued a press release today announcing our financial results for the fourth quarter ended December 31, 2020 and describing the company’s recent business highlights. You can access a copy of this announcement on the company website at www.cerus.com. I’d like to remind you that some of the statements we will make on this call related to future event and performance, rather than historical facts and are forward-looking statements. Examples of forward-looking include those related to our future financial and operating results, including our 2020 financial guidance and goals, operating expenses, anticipated cash used from operations 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 uncertainties 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 31, 2020, 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 opening remarks from Obi, followed by Vivek to provide the commercial update, Kevin to review our financial results, followed by Obi, who will comment on some recent announcements, provide a pipeline update and make some closing remarks. And now, it’s my pleasure to introduce Obi Greenman, Cerus’ President and Chief Executive Officer.

Thank you, Matt, and good afternoon, everyone. By now hopefully you’ve had a chance to review our press release detailing our fourth quarter and full year 2020 results. It goes without saying that the 2020 was a year filled with many challenges, but it turned out to be a significant year of progress for Cerus. In the face of a global pandemic that stretched the capabilities of healthcare systems everywhere, our dedicated team rose to the challenge, continued to make progress on multiple fronts. Our goal remains to establish INTERCEPT as the standard-of-care in transfusion medicine, for safeguarding the global blood supply against pandemic and other threats. As I think about the COVID-19 pandemic, I’m reminded that the company was founded largely as a result of another global health emergency in our history, HIV. In those early days, our founders recognized that threats could emerge and influence medicine in an unexpected ways. That supports today. We are seeing this play out in real time and I’m proud that Cerus is at the forefront of pandemic preparedness. As evidenced by our 2020 results, our team has been tirelessly working to commercialize a system with the goal of protecting the global blood supply from potential threats, including those that are not yet known. It’s not always easy to accomplish so much of this work virtually. But I’m grateful to our employees for their dedication, our partners for their commitment to our shared goals and our customers for their unending commitment to the safety of the blood supply for patients around the world. Well, the challenges we faced did not end, as we turn this calendar forward. There’s much to look forward to as we head into 2021. As the experts anticipated, COVID-19 cases, hospitalizations and deaths surge during the winter months and…

Thank you, Obi, and good afternoon, everyone. I’m pleased to discuss the results of another record quarter and full year for Cerus. Our team has done tremendous work executing on our commercial goals and I’d like to share some color on our efforts in the field that are positioning us for continued growth in the future. Quarterly demand for INTERCEPT platelet kits in North America increased almost 76% year-over-year and approximately 24% sequentially in the fourth quarter of 2020. Among the five largest blood center networks in the U.S., we saw an 80% year-over-year increase in product sales during the fourth quarter. As we have shared previously, the American Red Cross remains a leader in terms of INTERCEPT uptake and they have publicly stated a goal of transitioning to a fully patched and reduced platelet supply by 2023. Earlier this month, the last ARC platelet production site went live making for a total of all 22 American Red Cross platelet production site producing pathogen reduced platelets. Roughly 40% of the platelets now produced by the ARC are INTERCEPT treated. As Obi mentioned, the FDA recently extended the compliance deadline for its platelets safety guidance from the end of March to October 1, 2021. With all the disruptions from COVID-19, this extension was disappointing, but not surprising. Well, COVID-19 has caused priorities and resources to shift that customer site. The fact remains that bacterial contamination of platelets is a significant threat to patient and one that we are focused on globally with INTERCEPT. In many ways, the global pandemic has also highlighted the need for blood safety and pandemic preparedness. We had previously anticipated and still do anticipate that the revenue ramp for INTERCEPT platelets will extend well beyond the compliance deadline. Our team is active in the field bringing customers…

Thank you, Vivek, and good afternoon, everyone. Consistent with our pre-announcement last month, today we reported fourth quarter 2020 product revenue of $28.2 million, which represents a 35% increase from the $20.9 million recorded during Q4 the prior year. For the full year 2020 product revenue totaled $91.9 million, up to 23%, compared to the $74.6 million reported for 2019. Global demand for INTERCEPT continued to increase during the fourth quarter and for the full year. For Q4, the calculated number of treatable platelet doses increased 34% year-over-year, and on a full year basis, the worldwide calculated number of treatable platelet doses increased 18%. In terms of fourth quarter product mix, platelet kits accounted for approximately 94% of total kit sales, while plasma sales accounted for the remaining 6%. For the full year, platelet kits accounted for 90% of total kit sales and plasma sales represented the remaining 10%. As we’ve shared previously, demand for pathogen and activated CCP drove the share of plasma sales higher during 2020. As we think about the 2021 plan, we do not anticipate a significant contribution from CCP production. So it’s likely that the platelet kits as a percentage of product sales will continue to account for the majority of kit sales. In addition to our product revenue and not included in our guidance, government contract revenues, totaled $5.4 million and $22.3 million for Q4 and full year 2020, respectively. Comparatively, government contract revenue totaled $5.6 million and $19.1 million for the corresponding prior year periods. For 2021, assuming enrolling sites are not significantly delayed due to COVID-19. We expect government contract revenue to increase with patient enrollment for BARDA reimbursed clinical trial and as our work gets underway with the whole blood pathogen reduction initiative funded by the FDA. Now let’s move the…

Thank you, Kevin. Before I open up the call for questions, I would like to spend a few minutes discussing some additional news we have announced since our last quarterly call and also provide a pipeline update. First, our team has made some significant progress from a geographic expansion standpoint, and I’m excited about these opportunities longer term and just wanted to touch on them briefly. In December, we announced that our partner in Brazil, CEI won a three-year tender with the HemoMinas Foundation for INTERCEPT platelets. INTERCEPT remains the only pathogen reduction system with local regulatory approval for platelets and plasma and this represents a meaningful beachhead for us into the LatAm region. And we just announced our plans to create a joint venture with ZBK for the Chinese transfusion market. China represents one of the largest blood transfusion markets worldwide, and as a result, it has the potential to be a significant opportunity for INTERCEPT. We expect it to be the largest market opportunity for our products over the coming decade, given the growth and demand for transfuse blood components in China. And ZBK, we have identified a leader in the transfusion market, which we felt was critical and would position us for long-term success in the region. Alongside our new partner, we will work to develop and register and ultimately manufacturer and fully commercialized the INTERCEPT Blood System for platelets and red blood cells. This is a long-term partnership that will have many phases, but we are excited to get to work and we’ll update you on our progress as we move forward together with the ZBK. Well, the size of the Chinese transfusion market has eclipsed that of the U.S. The growth over the next 10 years is still unlikely to abate. Moving on to our…

[Operator Instructions] Our first question comes from Jacob Johnson with Stephens, Inc. Your line is open.

Hey, guys. This is Nathan on for Jacob. Just a few quick ones from me. With the Hong Kong announcement and then yesterday the JV announcement, could you give us some color on the regulatory pathway in China, just from a high level and how should we just think about that looking forward?

Yeah. Hi, Nathan. So we’re working with the ZBK now on putting together the dossier. Unfortunately, we actually translated the full submission. We just have to work through what the clinical trial requirements will be. As you may recall, historically, we did a clinical study in Hong Kong, that’s not going to be completely sufficient for the submission, but just sort of working through, what the requirements are going to be for a clinical trial relatively limited scope. And then once we have that clarity, we’ll be able to give you more specificity about when we plan to get that submission done.

Got it. And then on the PR-Cryo launched this year, outside of manufacturing partners filing their BLAs and you hiring the sales force, which seems to be largely done, is there anything else you’re focused on here? Do you plan on adding more manufacturers throughout the year?

Yeah. I mean, I think, it’d be nice to have a couple more states included in this sort of initial launch this year and in the early next before we have the BLAs. That being said, as we sort of highlighted in the prepared remarks, the four states we’re currently launching to represent roughly 25% of the trauma cases in the United States and there’s almost 100 Level 1, Level 2 trauma hospitals in those four states. I guess, Vivek, probably, can give you a little bit more color on sort of where we’re at with regard to the launch and through the enthusiasm that we’re hearing from the sales team.

Yeah. I think you captured the key themes, Obi, I mean, that the other issue that we’re working on right now is just ensuring we can get hospital access that’s a little bit restricted with everything that’s going on with COVID. But we anticipate that those restrictions will lift as we get through the pandemic-related issues and then the key thing will be contracting with hospitals. But as Obi had mentioned, clinical feedback remains positive. There’s a lot of enthusiasm out there. So I think the thing that we went into the submission, believing to be true about the marketplace still resonates. And we’ll certainly be talking more about this as we move further along in terms of our commercialization.

Awesome. Thanks for taking the questions, guys.

Yes. Thank you.

Our next question comes from Matthew Blackman with Stifel. Your line is open.

Good afternoon, everyone, and thanks for taking my questions. To start maybe for, Kevin, I appreciate you’re not giving explicit quarterly guidance. But just as we think about the shape of the year, would be fair to sort of think about and then also just first quarter or maybe just first half of the year being at the lower end of the 15% to 20% range and maybe the back half of the year at the upper end. Is that a fair way to think about the shape of the year? And then I’ve got a couple of follow ups?

Yeah. Matt, thanks. Following our pre-release, I think, how we would characterize this is that Q1, which is typically as the slower quarter in -- of the four, will likely be at the lower end of that guidance range. And that we’ll see steady growth from here. Clearly, the acute COVID impact will occur. We hope in the first half of the year before resolves. And with that, I think you’ve characterized it right in the back half of the year, we would expect it to be to the higher end of the range on a quarterly basis. So I think you’re thinking about it correctly.

Okay. Great. And then while I’ve got you -- I have got a couple of questions on the illuminator side of the business. You -- can you provide what the illuminator revenue generated in the quarter was and it was a little bit outsized, perhaps, relative to historical trends. And then a couple of follow ups there, if you’ve got that, I’ll wait for that.

Yeah. I mean, for this particular quarter, as we pointed out earlier, we had a bolus of illuminators that were placed. We think that bodes well for future kit demand. For the quarter was a roughly $1.5 million, so that’s a somewhat of an outsize quarter for us.

And to that point that illuminator are a pretty good leading indicator for kits sales. Is there any rule of thumb on how quickly a new box is up and generating revenue? And then is there any way to sort of characterize where some of these illuminators went, whether they’re existing customers that are expanding capacity or newer customers that are starting to adopt. Is it skewed any which way towards either of those types of accounts? Any color there would be great? Thanks.

Yeah. I mean, there’s no real rule of thumb. As far as the delay from when a device is placed until we see the kit throughput or a throughput per device. Some centers are higher capacity centers and they require one and in most cases have two devices. Other centers have much lower throughput and require the same number. So there’s no real rule of thumb metric or algorithm that I can provide to you that allow you to model it. But as far as the mix of customers and characterizing those customers, it’s really a mixed bag, a lot of new sites and a lot of existing sites that have placed illuminators to increase their overall production and efficiency. So, we remain bullish and optimistic about what that foreshadows and expect that it will contribute to the growth in 2021.

I really appreciate it. Thanks so much.

Our next question comes from Josh Jennings with Cowen. Your line is open.

Hi. Thank you. This is Eric [ph] on for Josh. Thanks for taking the question and congratulate strong end to the year here. Thinking about the U.S. market for a second, we’ve seen some articles in recent months discussing blood centers that are facing exceptionally low donation figures. So I’m just curious now that we’re starting to emerge from the harder hit winter months, what you guys are hearing from customers regarding donation levels and just how they’re trending?

Vivek, do you want to handle that. Just based upon some of the information we saw in the last couple of days.

Sure. The sort of severe weather that we’re going to have an impact in terms of overall donors and donations, I think, for the most part, the blood centers are capable of dealing with these acute issues and overcoming them. So I don’t anticipate any longer term impact. We have seen the recovery in donations as the pandemic kind of drags on. But the other thing to note too is in the course of all this, well, total, donations may drop a bit, the proportion of donations ultimately become PR treated has steadily grown. And so we think ultimately you’ll see recovery on both ends, but nothing that we believe there will be durable long-term impact in terms of donor volumes.

Understood. Thank you. And then in Asia-Pac, you’ve had some great progress there in the region. What other countries do you think we could be hearing updates on in the near- to medium-term? Could Japan be something that we’re hearing in the coming quarters?

Yeah. Japan is a very large market opportunity. As I mentioned in the prepared remarks, thing that’s been fascinating to see how quickly the Chinese market grow over the last, let’s say, five years, I mean, double-digit growth and they’re still sort of not enough players to go around and China’s their healthcare system evolves. Beyond Japan, I think Japan will continue to sort of take a little bit of a wait and see attitude with regard to what’s happening in the United States. So I think the progress we’re making in the U.S. and specifically with the American Red Cross will really have a bearing on sort of how the Japan Red Cross looks at INTERCEPT going forward. But there’s other large market opportunities, like in Taiwan and Korea and elsewhere, where we have ongoing discussions and I think that’s sort of true, actually, globally, where we got a lot of large national transfusion services that are evaluating INTERCEPT and in our general approach to communicating progress on that front is that we don’t really say anything until we each remembering routine use. But it’s encouraging to see the broader global realization of the utility that pathogen activation can play.

Excellent. Thank you for taking the question.

Yeah. Thanks, Eric.

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

Hi. Thanks for taking my questions and congratulations on another good quarter. And maybe just following on from that, as we look at sort of longer term, obviously, I think, real familiar with the growth that we expect in the U.S near-term, but how should we think about the size of the ex-U.S. opportunity and sort of growth on a longer term basis versus what we have in the U.S.? And then maybe my second question I just asked you to front if that’s okay. And you gave guidance about a month ago. So anything you seeing in the environment that you may have changed a little bit in terms of the assumptions you made at that stage? It seems perfectly at least that we sort of moving in the right direction. But I guess I’d love to hear from your part, if there’s anything that may have changed, anything you’re watching from a month ago? Thank you.

Yeah. Thanks, Brandon. I will take the first part of that question and then Vivek I’ll ask you to maybe handle the second part. So, I think, the -- there’s your questions, where do you see the growth opportunities medium- to long-term, and obviously, that -- for this year and going into 2022 and 2023, there’s a lot of growth coming out of the United States, we’re very excited about the product launch for a PR-Cryo FC in the U.S. as well. But these are fairly large tales, but really small compared to the global opportunity for INTERCEPT for platelets, plasma, red cells and for cryo. So then, obviously, we move into launching the red cell system in 2022 and then trying to expand on that in EMEA initially and then, ultimately, more broadly. So I think it’s -- this is setting up very nicely for our long-term -- longer term growth prospects. Clearly, this announcement we made yesterday about the China JV has been something that we’ve been working on for, I’d say, the last five years, really trying to identify the right partner. There was a lot of interest in INTERCEPT from various Chinese companies, just given the opportunity to really transform blood safety and availability in China, the likelihood that the Chinese Government will play a role in how they think about blood safety and availability and really leapfrogging sort of conventional approaches. And so with ZBK, we found someone who not only has a strong foothold with regard to their direct sales force and selling into the blood centers across China, but also a very modern manufacturing operation. So we’re looking forward to initially focusing just on platelets, but also rolling out the red cell program there with the considerable size of that opportunity in China. Any other color Vivek you want to add to that and then I guess we’ll handle the second for your question around, how our guidance thoughts have evolved over the last few months?

Yeah. I think you captured most of the key points, Obi. As we’ve talked about in the past, our strategy has really been to line up opportunities and kind of continue to add arrows to the quiver, such that we can maintain compelling growth through the near-term, mid-term and long-term. And that’s a combination of geographic expansion, expanding into new product lines and then, furthermore, adding, augmenting what we have in terms of product line extensions in the rest into Asia-Pacific and emerging markets will play a key role in terms of driving growth. But there are also some developed markets opportunities that we’re starting to realize and penetrate. So, Germany would be an example of a large market opportunity where we’ve made investments and we should start to see that pay off in the coming years. And so we continue to believe that as technology gains adoption in key markets and this is a relatively small community that sort of engages quite a bit with one another, it’ll create a positive flywheel that should allow us to continue to post-compelling growth numbers, and most importantly, allow us to realize our mission, which is to expand access to safe blood on a global basis. In terms of what we’re seeing in the environment, is it the any change point of view relative to when we first issued guidance. I say even though it’s been about a month now, it’s still a bit premature to conclude anything that would cause us to change guidance at this point. I certainly welcome Obi and Kevin to weigh in. There have been some encouraging signs. Certainly, approval of new vaccines and associated rollout, it’s encouraging to the extent that it enables some travel restriction and hospital access issues to be alleviated over time, but we’re still very much early days. When it comes to that, we do continue to see strong demand for the product and I think our team understands how to navigate the current pandemic-related issues to ensure that we can provide high levels of service and support to our customers, and our supply chain and logistics team continues to show a lot of resilience in the face of these ongoing challenges. So, yeah, we’ve remained confident that we can deliver compelling growth numbers. But in terms of any material changes in the past month that lead us to believe that things could accelerate even further. I’d say, it’s probably still a bit premature to point anything definitive. I don’t know if you’d like to expand on that.

No. I think you have characterized it the way we’re looking at guidance for 2021. Very excited about the opportunities, but until we sort of get better clarity around getting back to some kind of normalcy, then, yeah, I think, it’s premature to say anything.

Great. Thank you very much. Appreciate all the color.

Yeah. Thanks, Brandon.

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

Well, thanks, everyone, for joining the call today. We’ll be presenting at the Cowen 41st Annual Health Care Conference next week and I imagine we’ll be speaking with many of you on the phone today, on Monday and Tuesday of next week. Thanks again for joining today and appreciate it.

Ladies and gentlemen, this does concludes the program and you may now disconnect. Everyone have a great day.