Cerus 2026 Q2 Earnings Call

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 Vivek Jayaraman, Cerus' President and Chief Executive Officer, and Kevin Green, Cerus' Chief Financial Officer. Cerus issued a press release today announcing our financial results for the second quarter ended June 30, 2026, and describing the company's recent business highlights. You can access a copy of this announcement on the company's website at www.cerus.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, our expectations for gross margins, non-GAAP adjusted EBITDA performance, and our expected expense levels, as well as our commitment to achieving GAAP profitability. Expected future growth and our growth trajectory and market opportunities, our expectations that we will deliver P&L leverage in 2026, the availability and related timing of data from clinical trials, planned regulatory submissions, and product launches, product expansion prospects, the anticipated impact of our recent debt refinancing, and other statements that are not a historical fact. These forward-looking statements involve risks and uncertainties that could 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-Q for the quarter ended June 30, 2026, which we'll 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 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 Vivek providing a business update and corporate highlights, followed by Kevin to review our financial results and expectations for the rest of 2026, and lastly, closing remarks from Vivek. Now, it's my pleasure to introduce Vivek Jayaraman, Cerus' President and Chief Executive Officer.

Thank you, Tim. Good afternoon, everyone. We appreciate you joining the call today. At Cerus, our mission is clear: to expand patient access to safe blood around the world. During the second quarter of this year, we made meaningful progress toward that goal. To date, based on kit sales, nearly 24 million transfusible doses have been produced worldwide. While we are proud of this progress, the fact remains that far too many patients still lack consistent access to safe blood. To realize our mission, we are focused on three core priorities: delivering sustainable double-digit growth, advancing innovation, and strengthening our financial foundation. I'm pleased to report that our second quarter results demonstrate solid progress across each of these priorities. With respect to growth, worldwide product revenue increased 10% in Q2 compared to the same period last year.

This growth was driven by the strong performance of our U.S. IFC franchise, along with continued strength in our core business globally. North American sales accounted for approximately two-thirds of second quarter product revenue. As previously noted, INTERCEPT for platelets is the standard of care in both the United States and Canada. In the U.S., we estimate market penetration at approximately two-thirds, and we see clear opportunities for continued share gain in the remaining one-third of the market. In the U.S., our collaboration with Blood Centers of America, or BCA, continues to be a positive contributor to our growth. As a reminder, our BCA contract became effective at the beginning of 2026, and BCA member blood centers now account for more than half of all blood product distributions nationwide. Working closely with BCA, we've expanded education and awareness among its members regarding the benefits of pathogen inactivation.

As a result, we are seeing a meaningful increase in engagement and receptivity to our technology. This is resulting in new customers for both our platelet and IFC businesses. We are actively onboarding new IFC producers and are seeing a pronounced uptick in hospital activations. To further support IFC and drive awareness, we continue to invest in clinical evidence generation and medical education. For example, at the recently held Society for Obstetric Anesthesia and Perinatology meeting in Montreal, Dr. Jonathan Tucci of Vanderbilt University Medical Center presented data evaluating the use of IFC in the treatment of postpartum hemorrhage. In his analysis, Dr. Tucci noted that thawed IFC reduced the time to first transfusion by 68% when compared with Cryo AHF, and by 18% when compared with fibrinogen concentrate.

In cases of uncontrolled bleeding like maternal hemorrhage and trauma, every second counts. Earlier access to fibrinogen is of tremendous value. As we originally hypothesized, the combination of immediate access to fibrinogen and a five-day post-thaw shelf life is proving valuable to both clinicians and hospital administrators. The longer shelf life can materially reduce wastage, while immediate availability can support more timely treatment in critical bleeding situations. We believe these attributes position IFC favorably relative to both traditional Cryo AHF and fibrinogen concentrate. We are beginning to see that value proposition gain traction in the market. As an example, we recently learned that a major academic hospital in the Northeast conducted a direct comparison of IFC and fibrinogen concentrate in order to determine which product to adopt. They chose to adopt IFC at 100% based on its immediate availability, five-day post-thaw shelf life, and lower cost.

Nationwide, we estimate that IFC currently holds a market share of approximately 10%. While we are encouraged by the progress to date, that level of penetration highlights the significant growth opportunity that remains for our IFC business. Turning to our efforts abroad, there is positive momentum across our business in EMEA. This is driven by the continued positive rollout of our next-generation INT200 illumination device and further penetration of our core platelet franchise. We are also making inroads with plasma in a number of markets. In late April, we signed a new multi-year contract with the French Blood Establishment, or EFS. This multi-year agreement provides greater visibility into our medium-term revenue outlook and represents an important validation from one of the world's most respected blood services. Beyond Europe, interest in INTERCEPT continues to grow.

At the recently held 39th Annual International Society of Blood Transfusion meeting in Kuala Lumpur, we saw encouraging engagement from blood centers across the Asia-Pacific region. Currently, Asia represents one of Cerus's most significant long-term growth opportunities. While we have established customer relationships in markets including Hong Kong and Thailand, our penetration across the broader region remains limited. We believe the opportunity across our current markets and product portfolio, combined with expansion into emerging markets, provide access to multiple avenues by which to deliver durable double-digit growth. Turning to our second key priority, advancing innovation, I'm encouraged by the progress we made in the second quarter. New product development and label expansion remain central to expanding the clinical application of our technology. These efforts allow us to expand the pool of patients who can access safer blood and provide the technology platform from which we can support durable long-term growth.

Foundational to advancing innovation is a focus on quality. Our blood center customers, hospitals, and ultimately patients depend on us to deliver the highest quality products. To that end, I am pleased to report that we recently completed our notified body recertification audit with zero non-conformities. This comprehensive assessment of our quality management system is an important component of maintaining our CE and MDSAP certifications. The result reflects the strength of our quality systems and, more importantly, the commitment to quality of our employees and supplier partners worldwide. I would like to thank everyone whose preparation, discipline, and attention to detail contributed towards this successful outcome. Maintaining the highest standards of quality is fundamental to our mission and to the trust our customers place in Cerus. During the quarter, we also submitted the PMA for the INT200 for platelets to the U.S. FDA. We are excited about the opportunity to bring this technology to customers in the United States.

Based on our current expectations, we could receive regulatory approval as early as the first half of 2027, although the timing will ultimately depend on the FDA's review process. Turning to INTERCEPT red blood cells, we continue to advance our efforts in both the U.S. and Europe. With respect to our U.S. clinical efforts, we remain on track to announce top-line results from our Phase III RedeS trial during the fourth quarter. In addition, we recently expanded our 2024 BARDA contract to advance the development of INTERCEPT RBC, increasing the total potential contract value by nearly $22 million, from approximately $249 million to just over $270 million. These additional funds will be used to support PMA-related activities in the U.S.

With respect to our CE Mark submission for red cells, ANSM, our competent regulatory authority, continues its review of our application, and we expect to receive questions from them later this year. Taken together, our R&D, clinical, and regulatory teams made meaningful strides last quarter to move our innovation portfolio forward. Our third core priority is to enhance our financial strength. During the last quarter, we improved our financial profile, lowered our cost of capital, and increased our strategic flexibility. These efforts strengthen our ability to self-fund market development and product innovation in a financially disciplined manner. We believe that continued execution against these priorities will position Cerus to expand patient access, deliver durable growth, and create long-term shareholder value, all while realizing our mission to increase the safety of the global blood supply.

With that, I would now like to turn the call over to Kevin to discuss our second quarter financial results in detail.