Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Cerus Corporation First Quarter 2022 Earnings Conference Call. At this time all participants are in listen-only mode. After the speakers’ 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 Notarianni, Senior Director of Investor Relations. Mr. Notarianni, 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.cerus.com. With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Kevin Green, Cerus' Chief Financial Officer; Vivek Jayaraman, Cerus' Chief Operating Officer; Carol Moore, Cerus' Senior Vice President of Regulatory Affairs and Quality; and Jessica Hanover, Cerus' Vice President of Corporate Affairs. Cerus issued a press release today announcing our financial results for the first quarter ended March 31, 2022 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 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 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 risks and uncertainties that can 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, 2021, and our Form 10-Q for the quarter ended March 31, 2022 which we will file shortly. We undertake no duty or obligation to update our forward-looking statements. On today's call, we will begin with some opening remarks from Obi, followed by Vivek to discuss some recent business highlights and Kevin to review our financial results. We will conclude with commentary from Obi with an update on our pipeline and closing remarks. On today's call we will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA. 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 comparable GAAP financial measures, please refer to today's press release. And now it's my pleasure to introduce Obi Greenman, Cerus’ President and Chief Executive Officer.

Thank you, Matt. And good afternoon, everyone. Our first quarter of 2022 continued the momentum we have seen over the past few years has INTERCEPT adoption, particularly in the U.S. is ramping. Our work is focused on establishing a new safety standard in transfusion medicine. So blood centers and transfusion services can protect patients and ensure availability of blood components. In the context of the current pandemic and the prospect for future risk to the blood supply, the Cerus mission is as relevant as it has ever been over the company's history. I am pleased that growing our top line means expanding access to INTERCEPT treated platelets and plasma for patients around the world. After I discuss our quarterly results Vivek will spend some time today discussing recent significant announcements associated with long-term contract extensions with both the American Red Cross and Fresenius Kabi. But first let's review the first quarter revenue highlights. Product revenues for the first quarter of 2022 are the highest for any first quarter in our history. As we report year-over-year growth in all major geographic regions to start 2022. With our 20th consecutive quarter of year-over-year revenue growth, we are demonstrating an enduring ability to expand access to INTERCEPT treated blood components, even in the phase of geopolitical and economic uncertainty. Our results were once again led by strong growth for platelets in the U.S., which was up over 130% on a year-over-year basis. Blood centers and hospitals are choosing the INTERCEPT blood system for platelets as a means to comply with the FDA bacterial safety guidance, because it provides proactive broad spectrum protection against pathogens beyond just bacteria, while also offsetting costs and generating operational benefits. As we look to diversify the ongoing growth of the INTERCEPT platelet business in the U.S. and globally,…

Thank you, Obi. And good afternoon. It is great to be able to share these results with you all today. In addition to the strong start of the year, I want to spend a few moments talking about a couple of recent developments that position us well for the long-term, both commercially and operationally. First, last week, we made an exciting announcement regarding our relationship with the American Red Cross. We are honored to have announced a five-year contract extension for INTERCEPT platelets with the American Red Cross. As you know, the Red Cross is responsible for supplying the U.S. with about 40% of its blood products. Their leadership in areas of transfusion medicine, like blood safety, serves as a model for other blood centers and national transfusion services globally. Because of Red Cross' focus on patient safety and timely compliance with the FDA guidance on platelet bacterial risk mitigation, Red Cross has become the largest producer of INTERCEPT components and is now our largest customer. The INTERCEPT Blood System for Platelets is in routine use at each of the Red Cross' 22 platelet production sites across the U.S. This contract extension will help them realize their stated goal to transition toward a full pathogen reduced platelet supply and represents yet another validation of the INTERCEPT blood system and its ability to improve platelet availability, while affording operational benefits when standardizing with an INTERCEPT treated platelet inventory. Moving on to another recent announcement, we have also assigned a 10-year contract extension with Fresenius Kabi for the production of INTERCEPT kits. We are very excited about this agreement as well. The [indiscernible] team at Fresenius Kabi has been a key partner to Cerus for more than 20 years. And with this new agreement, we are able to ensure that additional capacity, as well as redundancy in our manufacturing facilities are in place for the next decade. In anticipation of ever increasing production volume, this agreement will allow us to both utilize additional economies of scale and also improve the cost profile for the INTERCEPT kit portfolio. On a related note, our manufacturing capacity efforts that we highlighted in our last quarterly call continue to track the plan. We look forward to completing the rest of this work, including obtaining the necessary regulatory approvals, which will help bring this capacity online. I will now turn it over to Kevin to discuss our results in more detail.

Thanks, Obi, and good afternoon, everyone. I’m pleased to provide the following update to you all today, recapping our first quarter and also spending some time discussing our non-GAAP adjusted EBITDA measure, which we are reporting alongside our GAAP results today. Our first quarter 2022 product revenue up $37.4 million reflects year-over-year growth of 60% and importantly, all of our major regions North America, EMEA and rest of world posted positive growth during the quarter. As anticipated the growth in sales we saw in North America continues to lead the way up 130% versus the prior year period. As of that a context, our first quarter revenue in North America up $22.2 million is nearly as large as our total global product revenue was during the first quarter of 2021. Within North America, our sales to the top five U.S. blood centers and the sales to the group of blood centers outside of the top five, both grew by more than a 100% year-over-year. Turning to EMEA. The region returned to strong growth in the first quarter of 2022 up 11% year-over-year and up 19% excluding the negative impact to foreign currency. Growth in the region was broad based during the quarter, despite the turmoil that has been capturing headlines in Eastern Europe, in particular. Moving on to our calculated platelet dose metrics. Our first quarter growth in the calculated number of treatable platelet doses reflects a 141% year-over-year increase in the U.S. and a 28% increase internationally. In terms of product mix for the quarter, sales of INTERCEPT disposable kits represented nearly 98% of our Q1 product revenue. In addition to our product revenue and not included in our guidance, government contract revenue totaled $5.6 million in Q1 versus $6.2 million for the prior year period. Turning now to…

Thank you, Kevin. Before we open up to questions, I wanted to touch on a few quick updates about our R&D pipeline that continues to make good progress to start 2022. First, in China, we continue to work with our joint venture partner ZBK to bring INTERCEPT platelets to the sizeable market. While the recent COVID imposed lockdowns have continue to the challenges associated with regular meetings and other interactions in country, our teams have been working together virtually on the plan to submit INTERCEPT platelets to the Chinese regulatory authorities with a goal of making this filing by the end of 2022. As a reminder, the need for an additional in-country clinical study, beyond our previously completed Hong Kong study will be determined by the NMPA regulators after our filing. Finally, with regard to INTERCEPT red cells, our European submission continues through the CE mark progress as a Class III medical device, but the timeline has been impacted by bandwidth constraints by the Competent Authority CBG, who like all others across Europe have fallen behind schedule due to the MDD to MDR transition for medical devices. In the U.S. BARDA continues to fund and support our Phase 3 clinical studies, where we are seen in uptick in enrollment as a function of the COVID impact waning a bit across the U.S. sites. That said, we still see some regional differences in hospital engagement, and there remains an effort across the country to minimize blood component transfusions as a function of the national blood availability crisis during the pandemic. In summary, the entire Cerus team continues to execute to make INTERCEPT available to more patients across the globe each day. And we expect this to continue in the near-term with our current portfolio of INTERCEPT platelets, plasma, and IFC. And over the long-term, with the addition of INTERCEPT for red cells and with continued geographic expansion to large markets like China. As we scale the business, I’m pleased with our progress to drive towards cash flow break even, which will provide us with the flexibility to self-fund our growth initiatives and our strong R&D pipeline. We believe our currently approved INTERCEPT products; INTERCEPT for red cells and future product iterations position Cerus as a leader in the field of transfusion medicine for many years to come. With that, let me turn it back over to the operator for Q&A.

Thank you, sir. [Operator Instructions] Our first question comes from Brandon Folkes – sorry. Our first question comes from Mathew Blackman from Stifel. Your line is open.

Thanks for taking my question. Just two for me to start, maybe Kevin, just a housekeeping one. Just want to see if I’m doing the math right. If I heard you correctly, the FX impact in the first quarter, was that roughly $1 million dollars? That’s number one. And then you sort of touched on this, I was hoping to get a little bit more granularity. But in the new guidance, what’s in there for FX versus maybe how we started the year, clearly you’re absorbing it without performance. Just curious what the Delta is in the new guidance versus where we started. And then just one follow-up after that.

Yes, you’re – Matt, you’re right. FX for the quarter was about $1 million or roughly 4% year-over-year impact. On the bottom line, it’s almost a wash given that we source most of our product in Euro or selling that to U.S. customers. So as we begin to sell product that we procured at lower FX rates, we’ll see some benefit from that as the U.S. continues to grow. As far as what’s in our guidance, I think, we felt confident raising guidance both lower end and top end. But with that said, do feel like there is some headwind potentially relative to the Q1 and for sure, where we started the year. So we had originally anticipated the year with roughly 115 rate in mind adjusted that down a bit, who knows where it ends up, but we feel like we’ve factored that into the new guidance range.

Okay. Appreciate it. And then the follow-up maybe first for Vivek and maybe Kevin too to follow. But just a little bit more color on the red cross contract Vivek and how does that improve your visibility, your ability to forecast, and I guess, part your ability to serve the broader U.S. market. And then I’ll just layer in the question for Kevin. So how do we think about if at all the impact on the P&L from this? So I assume there are price volume tiers in there. I guess, the question really asking, should we be thinking about anything incremental that would somehow impact the top line or margins just given the size of Red Cross as a customer. Thanks.

Yes. Vivek, I think you can handle both those questions for Matt. Why don’t you go ahead?

Sure. Happy to. Thanks for the question, Matt. I think starting off just moralizing the contract extension with the American Red Cross is critically important. In large part, because we – they had stated explicitly that they want to get to 100% PR, this puts the contractual relationship in place. I think it enables us from a demand management forecasting, operations planning standpoint to step into the next few years very confident that demand will be there and we can sort of prompt the manufacturing machinery accordingly. So both the ARC and the FK agreements really kind of go hand in glove. In terms of progress, visibility, forecasting, all of those have materially improved in large part, as they’ve brought all of their manufacturing centers online. Interesting thing to note and I think that is actually those well for us on a going forward basis. We are starting to see some underlying market growth in the platelet marketplace and some increase in the ARC percentage of that market. And so obviously that goes to PR both of those factors accrued to our benefit. It’s still early days to be very definitive about that, but certainly the initial trends are encouraging. I’ll defer to Kevin, maybe a discussion around potential P&L impact and margins. But I have to say for us just it increases our level of confidence and convictions. We step forward in terms of the ARC continue to be a major growth driver for our overall business.

Hey, Kevin, do you want to add?

I don’t have a whole lot to add there. I think it certainly gives us confidence and coupled with the new manufacturing agreement with Fresenius Kabi to expand geographically and return to economies of scale, which admittedly in 2021, we didn’t benefit from. And so I think those two combined are fairly seminal [ph] contracts for the company.

All right. Thanks again, everybody. Congrats.

Thanks, Matt.

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

Hi, thanks for taking my questions and congratulations on the quarter. So maybe just following on in the Red Cross contract, how should we think about that contract being memorialized then maybe driving others to follow the Red Cross’ lead there towards higher PR levels. Is there any precedent in terms of how we should think about how long that could take or how impactful that may be towards others?

Yes, thanks for the question, Brandon. I’ll take a shot at that and maybe Vivek add some more perspective as well. But fundamentally the American Red Cross is a leader in the field, as it relates to blood safety policy and things that the Red Cross does either operationally or for blood safety reasons does carry over to other institutions, both in the U.S. and globally. So I think what we’ve been able to accomplish with the Red Cross and thanks to their early advocacy for pathogen reduction is to really show the or demonstrate the operational benefits and sort of in an environment where there's increasing platelet demand and inadequate supply or at least the pandemic effect on donor availability you are actually able to see the benefits of early release of products, and so a better shelf life combined with the fact that INTERCEPT platelets have a single SKU if you will in the sense that it albeit it need to do CMV testing or gamma irradiation. So you have a single product code that that could be moved around hospitals and between – between hospitals more efficiently. Vivek, do you have any other thoughts on that?

What I would add is that the leadership that the American Red Cross has shown even prior to the contract extension with respect to the open letter they wrote to the industry and their move towards ensuring that blood products are distributed and recognized for the value they deliver, as opposed to being viewed as commodities. All of those efforts are already impacting the market and oftentimes hospital customers in the U.S. have multiple blood product suppliers, yet they want to standardize on a particular platform. So as their platelets from the Red Cross are pathogen reduced, that's creating a push on their other suppliers to harmonize across the pathogen reduced standard. And so we are seeing that start to take place and as Obi indicated and as we all know, this is a multibillion dollar industry but it's really a cottage industry. There is a small number of customers. They interact with each other as Congresses start to resume in person activity, and even in a virtual setting the American Red Cross story in terms of their adoption of pathogen reduction and the benefits that's provided not only them internally, but also their hospital customers and their patients, that messaging is getting out there. So predicting the exact timing of how it influences that takes from others is an exact science, but we're certainly seeing the impact and the influence that they have across not only the U.S., but globally in terms of blood safety.

Great. Thank you. I appreciate all the color from both you and congratulations again.

Yes. Thanks a lot, Brandon. Appreciate it.

[Operator Instructions] Your next question is from Josh Jennings with Cowen. Your line is open.

Hi, this is Eric on for Josh. Thanks for taking the question. Just thinking about the O-U.S. INTERCEPT Platelet business, excuse me. Are there any international adoption decisions that could go Cerus' way in the near- to medium-term? I appreciate the update on your China submission that's set for later this year. But could we get an update on any other potential international market opportunities that could materialize in the next 12 months or so?

Yes. Thanks a lot, Eric. I'll start and again I'll turn to Vivek for additional perspective. We just have completed the submission for seven days in Canada and are happy to see that deployment sort of evolve quickly. And so we're hoping to see some real progress later this year and into 2023. And I think there's – it's always difficult to speculate on when some of these key markets given that there's oftentimes just a single transfusion service that's running the business in these the – the transfusion medicine business in these countries. But there're always a number that are sort of in play. And obviously one of the key questions always is around Germany, given the size of that market, and so I'll maybe turn to Vivek to add a little more context there.

I think you said it well, Obi. I mean, if you look at Canada and the progress we've made there, we anticipate impact really just start to show up later this year and into 2023. Similarly, we've talked in the past about Germany that's a single largest market in Western Europe and we're seeing good customer interest there, which we believe should start to materialize here over the course of the next couple of years. Also, the one watch out is just where we are with the pandemic and avoidance of any major ways going forward, but a lot of the initial spade work and some of these key geographies has been done. So it's a matter of continuing to push forward. There are some – there are some other markets where we have tender activity ongoing, but speculating on when a tender may come to fruition is always a bit risky. So we are haven't necessarily banged on those in terms of our underlying forecast. But our goal is just to have sufficient arrows in our quiver, such that when things materialize we can continue to layer on meaningful growth or off of over the course of the past three years, what's been pretty compelling top line progress. So the international geographies will continue to be critically important for us on a going forward basis and those will be complimented by continuing strength in our U.S. franchise.

Okay. Understood. And on the IFC launch, it's great to see you're making progress, picking up BLA with your partners across the country. When should we be thinking about a potential inflection point for IFC and our models here, is early 2023 kind of the right way to be thinking about that?

Yes, thanks, Eric. It's been great to see the progress we've made on the BLS and that really opening up a nationwide launch here in Q1. I think certainly with some of the headwinds that have been presented by COVID and just sort of access to hospitals it's hard to make the progress that you'd like to make, but at the same time we're really excited about the clinician interest and, and the contracting that's underway. But I think just too maybe give additional perspective again, Vivek is closest to this; Vivek, do you have any additional thoughts?

Sure. I'd say that the progress with our production partners and their ability to ramp supply coupled with what I think is a validation of the clinical unmet need and the unique utility that IFC brings to clinicians. We've made meaningful progress on all of those fronts. It's a de novo product so you're probably where we end up having to go to new product committees that hospitals or group purchasing networks and those new product committee meetings have been held less frequently in COVID than previously. If you think about all the work we did on the platelet side, a lot of the foundational work in terms of getting on contract, getting incorporated into hospital, IT systems things of that nature. That occurred before the COVID crisis hit. So when COVID hit, we were really driving same store sales and going deep. Here we're trying to do a lot of that initial preparatory work in the midst of COVID. Now access is starting to open up a little bit more. We, our reps have been able to get into hospitals, get in front of C-Suite executives at key hospital networks, and we're starting to generate those initial influencers and key customers as evidence by what we've seen in parts of the U.S. And so a lot of things are opening up, and I think we're pretty optimistic. And that should lead to over the course of the next few years 2023 and beyond really the IFC business being a strong driver in addition to our overall top line progress.

That's great. Thank you for the questions.

Thanks a lot, Eric.

[Operator Instructions] I am showing no further questions at this time. I would now like to turn the conference back to our President and CEO, Obi Greenman.

Well, thanks very much for joining us today and for your continued interest in Cerus. We're looking forward to updating you on our progress throughout the remainder of the year and later the summer on our Q2 results. Thanks very much.

Thank you so much presenters. Ladies and gentlemen, this concludes today's conference. Thank you again for your participation and have a wonderful day. You may all disconnect.