Good day and thank you for standing by. Welcome to the Cerus Corporation’s Quarter Three 2022 Earnings 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] Please be advised that today's conference is being recorded. And I would now like to hand the conference over to the company for the presentation.

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; Dr. Laurence Corash, Cerus’ Chief Scientific Officer; Vivek Jayaraman, Cerus' Chief Operating 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 third quarter ended September 30, 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 September 30, 2022, 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. 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. We’ll begin today 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. And now, it’s my pleasure to introduce Obi Greenman, Cerus’ President and Chief Executive Officer.

Thank you, Jessica and good afternoon, everyone. As we approach cash flow breakeven and with the company in the strongest financial position ever, I want to start this call reflecting on our journey to this point and to highlight the opportunities ahead of us as we advance INTERCEPT towards the standard of care in transfusion medicine around the globe. With the continued growth of our INTERCEPT platelet business in Q3, the team has executed well both commercially and operationally. Our steadfast goal of getting the cash flow breakeven is now within reach. Key to achieving this goal is the growing recognition by U.S. blood centers and hospitals of INTERCEPT as the most favorable option to comply with the recent FDA guidance for bacterial safety of platelets. We continue to balance a disciplined approach to realizing the leverage in our business model with aggressive investments to scale our manufacturing capacity and to advance our product pipeline. Despite the worsening of the global macroeconomic issues that we discussed on our second quarter call, such as the stronger U.S. dollar and geopolitical challenges, our business continues to be resilient and grow. Our performance in these uncertain times is a clear demonstration of the stickiness of our customer base. Because the vast majority of our product revenue comes from sales of INTERCEPT kits, we together with our manufacturing partners, including Fresenius Kabi, been working diligently to ensure that our supply chain can meet the increasing demands for the business. The routine use experience with INTERCEPT products at hospitals continues to demonstrate utility and clinical benefits. At the recent annual meeting of the Society for Advancement of Patient Blood Management or SAPBM, as well as the virtual AABB annual meeting this weekend rescheduled due to Hurricane Ian, and our AABB industry workshop on November 30.…

Thank you, Obi, and good afternoon to everyone joining on today's call. Product revenues for the third quarter of 2022 grew 10% on a year-over-year basis and were once again led by strong contribution from our U.S. platelet franchise. This growth reflected a few notable dynamics for which I would like to provide some additional color. In North America, we continue to see adoption among both large and small blood center customers in the quarter. Given the strong intercept adoption in early 2021, ahead of the FDA's platelet guidance compliance deadline, as well as our continued performance over the last three quarters, we have demonstrated that we have established a lasting demand for pathogen reduced platelets. In EMEA, consistent with prior year, the seasonally slower summer months resulted in softer demand in the region during the third calendar quarter of the year. Additionally, this year, the currency headwinds we mentioned on our second quarter call, showed no signs of slowing in the third quarter. As a result, EMEA product sales of 13.1 million were down 12% versus the prior year period. Moving on to IFC, I am pleased to report that sales of this product continued to grow on a sequential basis in the third quarter. We are building momentum and continue to see customers adopting the product like Valley Children's Hospital in Central California who spoke about their experience with IFC at the recent SAPBM meeting. Our U.S. commercial organization is focused on ramping IFC use in the field as more customers experience the benefits associated with the product in real world clinically significant [setting] [ph]. I look forward to providing more updates about our progress with IFC and the rest of the global INTERCEPT blood system commercial portfolio when we speak again in early 2023. As Obi mentioned in his opening remarks, our rapid growth has placed added pressure on our INTERCEPT kit manufacturing and supply chain for much of 2022. I am pleased with the way we and our partners have risen to the occasion. While we have invested in inventory to help ease the burden in the short-term, we continue to find ourselves in a position of active inventory management with our global distribution of kits. You may recall, we are well underway on a multi-year manufacturing expansion project that will enable intercepts kits component and ultimately entire kits to be manufactured in the Caribbean. In addition to the economic benefits associated with bringing production online in these lower cost jurisdictions, This expansion provides us with multiple sites that we'll be able to make and ship products, removing this capacity constraint and allowing us to capture the significant global opportunity for our product. I will now turn it over to Kevin to discuss our results and outlook in more detail.

Thanks, Vivek, and good afternoon, everyone. Across our financials, we continue to generate strong results and execute toward our objective of cash flow breakeven. Continued expansion to gross profit, while realizing leverage from our operating expenses are again driving the progress. We expect this dynamic to continue as we close out the year with outperformance on the top line, relative to costs incurred, either for products sold or operationally. We posted third quarter 2022 product revenue of $39.6 million, representing year-over-year growth of 10% led by sales in North America during the quarter. Foreign exchange pressure on the top line was more impactful than we previously expected and resulted in a 6% top line headwind year-over-year. As such, the majority of our growth this quarter was led by INTERCEPT platelet sales across our U.S. customer base with sales to the largest blood center customers growing 22% on a year-over-year basis and other U.S. customers growing 27% year-over-year. In EMEA, as previously mentioned, the continued strength of the U.S. dollar negatively impacted their comparable growth year-over-year as reported in U.S. dollars. This headwind has been impacting us for a good portion in 2022 and is likely to be continued well into 2023 based upon where the euro, U.S. dollar rates are today. While we're not providing guidance for 2023 on today's call, it is worth mentioning that at the beginning of 2022, the euro, U.S. dollar rate was around [115] [ph]. So, even without further dollar strengthening, we anticipate our full-year 2022 product revenue could be negatively impacted in the neighborhood of $7 million. Additionally, with the potential for this dynamic to persist into 2023, we expect to continue to see FX negatively impact product revenues during the first several months in the New Year. Our third quarter growth in the…

Thank you, Kevin. Before we open up to questions, I wanted to provide a few more comments on the pipeline and also some closing remarks. As we announced earlier this week, we are pleased that we have now secured Health Canada approval for a 7-day platelet shelf life. You will recall, we have been working with Canadian Blood Services or CBS to deploy the INTERCEPT blood system in Ottawa. This approval will allow CBS to begin rolling out INTERCEPT across their network of blood centers nationwide. Concurrently, we've also initiated an evaluation with the only other Héma-Québec. Héma-Québec is the exclusive blood provider in the province of Quebec with approximately 25% of Canada's annual play out production. We hope that they will be able to benefit from the recent introduction of INTERCEPT in the country, the comprehensive work that CBS has done both operations and educationally with our hospital customers, and the newly approved 7-day shelf life. While we maintain a focus on financial discipline and our pursuit of cash flow breakeven, we are simultaneously committed to advancing the field of transfusion medicine by leading the science and collaborating with key investigators to improve patient care. For example, we have previously discussed a study that is sponsored by the Coalition for National Trauma Research or CNTR using INTERCEPT plasma for treatment of burn patients. This study has recently started enrolling and could represent a compelling potential used case for INTERCEPT plasma in the marketplace. It also highlights our ongoing efforts to develop innovative and rapidly transfusable blood components with the potential to improve treatment protocols for critically ill or wounded patients. Additionally, as mentioned by Kevin, we were recently pleased to learn that we have been awarded over $9 million by the U.S. DoD to help fund the development of…

Thank you. [Operator Instructions] And our first question comes from Mathew Blackman of Stifel. Mathew, you have the line.

Good afternoon, everybody. Thank you for taking my questions. I've got two. And Kevin, maybe to start with you, just given the significant progress made on leverage, the sustained top line growth, when do you feel like you'll be able to plant a flag on when you cross to breakeven, all things equal the trajectory feels like we could get there in the first half of 2023, does that seem reasonable or what is, sort of some of the things you're contemplating when thinking about when you can cross into breakeven? I've got one follow-up.

Thanks, Matt. Yes, I don't know though I handicap a timeline because we're really narrowing in on that. As you saw from the current results in further Q concurrently here and you'll see cash from operations just to smidge over 2 million. So, I feel like we're really [ordering] [ph] in there. And as I mentioned in the prepared remarks, with the growth in the top line and expansion of our margins, I think we're then striking distance, but of course, when you're narrowing in on such a [fine side to find point] [ph], the margin of errors is pretty tight. So, I don't want to necessarily give you a timeline, but to say that we're going to continue making progress from here and I would expect that in the near term, we [can't quite that lag] [ph].

All right. Appreciate that. And then other for Obi or Vivek, just curious if there's a way to frame on platelets, the U.S. platelets, is there a way to frame what's left to tackle from market penetration standpoint? Is the heavy lifting getting new blood banks onboard or is it really trying to ramp existing users to high utilization rates? I assume it's some combination of both, but is one of those still larger opportunities left to penetrate? Thanks.

Thanks, Matt. Vivek why don't you take that.

Sure. Happy to. Thanks for the question, Matt. I think you're right to categorize it as a little bit of both proportionally because if they were the most significant opportunity existed in terms of driving continued growth in the U.S. platelet market, it still exists with [going deeper] [ph] with current users. As you'll recall, we made a very conscious decision to focus our efforts initially on blood center families that represented 75%, 80% of the market. There's still plenty left to go there. There are de novo users to pick up along the way as well, but of the two, the greatest opportunity continues to exist with our current users, which is really great, frankly, because we're over a lot of the initial costs associated with getting this program started, training their operations staff, etcetera.

All right. Appreciate it. Thank you so much.

Thanks, Matt.

Thank you, Matt. Our next question comes from Brandon Folkes of Cantor Fitzgerald. Brandon, you have the stage now.

Hi. Thanks for taking my questions and congratulations. on all the progress. Maybe just two from me as well. Can you just maybe talk about the potential for INTERCEPT in Canada? Just what, sort of penetration rates should we be thinking about that you could achieve across the Canadian Blood Services? And then secondly, I think gross margin is doing very well. I heard the comment on ForEx, so maybe just – could we just add some commentary there on a fundamental basis on the continued progress on gross margin expansion? Thank you.

Thanks, Brandon. I'll take that first part of the question and Kevin maybe you can handle the gross margin expansion question. So, as it relates to Canada, it's about 180,000 transfusions on an annual basis and that's split between two large blood services, Canadian Blood Services, which represents about 75% of the overall market in Canada and then a Héma-Québec, which handles all the blood collection in the Province of Quebec. We have a very close relationship with CBS and have deployed the technology in one of their main centers in Ottawa. They were waiting for this 7-day approval to more broadly roll-out the technology across all their blood centers throughout Canada. And so there is a very clear schedule and timeline for doing that. So, we do anticipate that we'll capture most of that business with Canadian Blood Services. And then also, we have an ongoing evaluation agreement with Héma-Québec and are really hoping that that will allow them to look at the technology and the operational synergies with their collections. And I think they're also talking with CBS, so leveraging the extensive work that CBS did in order to get to this point. So, we're very optimistic about the business in Canada over the next, sort of 12 to 24 months. Kevin, you want to handle the gross margin question?

Sure. So, let me start by saying that the FX impact on our margins thus far for the year have been fairly modest relative to what we expect as we move forward. And the reason for that is, is obviously we carry a level of inventory on our balance sheet and that is relieved at historical rates. And so, to the extent that we sell-in in a given period, we're selling product that was in the case of a strengthening dollar environment. We're selling that product that was costed at a higher FX rate. As we build in with the U.S. dollar strengthening and we sell that forward in future periods. That's when we'll really see the benefit. But regardless of the impact of FX, we have been – are recognizing economies of scale and overall improvement in our margin profile by way of product mix, but also the new agreement with Fresenius Kabi and quite honestly just the growth in the overall volume. And that's something that we do expect to continue regardless of FX rates, which as I mentioned just a moment ago, we also expect will be providing some tailwind as we move forward in time.

Great. Thank you very much and congratulations on the progress.

Thank you, Brandon.

All right. At this time, I would like to return it back to Mr. Obi Greenman for some closing remarks.

Great. Well, thank you again for joining us today and for your interest in Cerus. We look forward to providing you with an update on the end of – or at the end of 2022 or on the end of 2022 and our expectations for 2023 when we report on our results in the New Year. Thanks again for joining today.

Thank you everyone for your participation in today's conference. This does conclude the program and you may now disconnect.