Cerus Corporation Announces Fourth Quarter and Year-End Results.CONCORD, Calif. -- Cerus Corporation (Nasdaq:CERS) today announced results for the fourth quarter and year ended December 31, 2004. Revenue for the fourth quarter of 2004 was $3.0 million, down from $3.5 million for the fourth quarter of 2003, with increases in milestone and development funding from partners partially offsetting decreased funding from the U.S. Armed Forces for blood safety programs. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter of 2004 were $7.3 million, down from $12.5 million for the same period in 2003 primarily due to the effects of the strategic realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. announced in June and decreased payments to Baxter under the terms of our INTERCEPT intercept in mathematical terms the points at which a curve cuts the two axes of a graph. collaboration. Net loss for the fourth quarter of 2004 was $5.4 million, or $0.24 per share, compared to $10.1 million, or $0.46 per share, for the fourth quarter of 2003. Revenue for the year ended December 31, 2004, was $13.9 million, up from $9.7 million for 2003, primarily due to increased milestone and development funding from MedImmune and BioOne. Total operating expenses for 2004 were $40.7 million, down from $63.5 million for the prior year. Net loss for 2004 narrowed to $31.2 million, or $1.41 per share, compared to $58.3 million, or $3.01 per share, for 2003. At December 31, 2004, the company had cash, cash equivalents and short-term investments of $95.3 million. The year-end balance sheet includes the following entries related to the new Baxter agreement and settlement of the loan dispute: --A current payable of $34.5 million to Baxter --A $770,000 reserve for other expenses in connection with the new agreement, included within other current liabilities Other Current Liabilities A balance sheet entry used by companies to group together current liabilities that are not assigned to common liabilities such as debt obligations or accounts payable. --A deferred gain of $22.1 million on the loan settlement, which will be recognized in the first quarter of 2005 --Long-term debt of $4.5 million, representing the note due to Baxter in December 2006, which accrues interest at 8% "Our most recent financial results reflect the effects of significant changes to our operations and long-term strategy implemented in June 2004," said Claes Glassell, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Cerus. "With a disciplined approach to funding INTERCEPT Blood System development and judicious ju·di·cious adj. Having or exhibiting sound judgment; prudent. [From French judicieux, from Latin i investment in our cancer immunotherapy Cancer immunotherapy is the use of the immune system to reject cancer. The main premise is stimulating the patient's immune system to attack the malignant tumor cells that are responsible for the disease. programs, we believe our resources are now adequate to fund Cerus through to key clinical and regulatory milestones." In addition to restructuring the collaboration with Baxter related to the INTERCEPT Blood System and resolution of the loan dispute, recent highlights for Cerus include: --Completion of an agreement with BioOne Corporation for INTERCEPT Platelet commercialization in Japan and other Asian territories, including a $7.5 million payment to Cerus --Signing of a letter of intent with BioOne for INTERCEPT Plasma in Japan and other Asian territories, including a $3.0 million payment to Cerus --Presentation of eight abstracts at the December 2004 American Society of Hematology hematology Branch of medicine concerned with the nature, function, and diseases of the blood. It covers the cellular and serum composition of blood, the coagulation process, blood-cell formation, hemoglobin synthesis, and disorders of all these. meeting, including INTERCEPT Blood System and Listeria Listeria /Lis·te·ria/ (lis-ter´e-ah) a genus of gram-negative bacteria (family Corynebacterium); L. monocyto´genes causes listeriosis. Lis·te·ri·a n. immunotherapy Immunotherapy The treatment of cancer by improving the ability of a tumor-bearing individual (the host) to reject the tumor immunologically. There are molecules on the surface of tumor cells, and perhaps in their interior, that are recognized as different from program data --Continued preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. progress in cancer immunotherapy, including initiation of a new Listeria development program --Acquisition of additional intellectual property rights to Mesothelin, a cancer antigen, from Chugai Pharmaceutical Quarterly Conference Call The company has re-scheduled its quarterly conference call for 10:00 a.m. Eastern time today. The call will include discussion of the new Baxter agreement in addition to financial results. The 10:00 a.m. call replaces the previously announced conference call originally scheduled for 4:30 p.m. Interested parties can access a live Internet broadcast at http://www.cerus.com/pages/IR/wc.html. For those unable to listen to the live broadcast, the call will be temporarily archived. About Cerus Cerus Corporation is developing novel products for cancer, infectious disease Infectious disease A pathological condition spread among biological species. Infectious diseases, although varied in their effects, are always associated with viruses, bacteria, fungi, protozoa, multicellular parasites and aberrant proteins known as prions. and blood safety based on multiple, innovative technology platforms. The company is building a pipeline of next generation cancer immunotherapies by combining its proprietary attenuated Attenuated Alive but weakened; an attenuated microorganism can no longer produce disease. Mentioned in: Tuberculin Skin Test attenuated having undergone a process of attenuation. Listeria vector platform with promising disease antigens. These products are designed to stimulate innate and T cell immune pathways, generating highly potent anti-tumor responses. Cerus is applying its Helinx technology to develop the INTERCEPT Blood System, which is designed to enhance the safety of blood components through pathogen Pathogen Any agent capable of causing disease. The term pathogen is usually restricted to living agents, which include viruses, rickettsia, bacteria, fungi, yeasts, protozoa, helminths, and certain insect larval stages. inactivation inactivation /in·ac·ti·va·tion/ (in-ak?ti-va´shun) the destruction of biological activity, as of a virus, by the action of heat or other agent. . The company's strategy is to leverage the broad potential of its technologies and products through alliances. Cerus' partners to date include MedImmune and Johns Hopkins University Johns Hopkins University, mainly at Baltimore, Md. Johns Hopkins in 1867 had a group of his associates incorporated as the trustees of a university and a hospital, endowing each with $3.5 million. Daniel C. for cancer immunotherapy, and Baxter International Baxter International Inc. (NYSE: BAX), is a global healthcare company with 48,000 employees and 2006 sales of US$10.4 billion. Its headquarters is in Deerfield, Illinois. and BioOne for the INTERCEPT Blood System. Helinx is a trademark of Cerus Corporation. Baxter and INTERCEPT Blood are trademarks of Baxter International Inc. Statements in this news release regarding potential efficacy of products, product development and commercial potential, the availability of cash resources to fund operating expenses and capital needs and the company's relationship with MedImmune, BioOne Corporation and subsidiaries of Baxter International Inc. are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. Actual results could differ materially from the above forward-looking statements as a result of certain factors, including the risks and uncertainties inherent in developing biotechnology products based on new technologies, the timing and results of our clinical trials and other development activities, market acceptance of our products, actions by regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities at any stage of the development process, the availability of governmental or third party reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for the use of our products, the size of the markets for our products, our reliance on our relationship with Baxter, competitive conditions, manufacturing capabilities, our successful completion of our product components' commercial design, our ability to demonstrate a sufficient shelf-life of our product components, development and testing of additional configurations of our products, product liability, our limited operating history, additional financing activities, protection of our intellectual property rights, volatility in our stock price, legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , on-going compliance with the requirements of the Sarbanes-Oxley Act See SOX. of 2002 and other factors discussed in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for fiscal 2004, as well as in other reports subsequently filed from time to time with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements. Financial Statements to Follow
CERUS CORPORATION
SELECTED UNAUDITED FINANCIAL INFORMATION
Condensed Statements of Operations Three Months Twelve Months
(in thousands, except per share Ended Ended
information) December 31, December 31,
2004 2003 2004 2003
-------- -------- -------- --------
Revenue $2,959 $3,525 $13,911 $9,665
Operating expenses:
Research and development 5,073 9,637 27,651 52,484
General and administrative 2,274 2,911 10,225 11,016
Restructuring - - 2,861 -
-------- -------- -------- --------
Total operating expenses 7,347 12,548 40,737 63,500
-------- -------- -------- --------
Loss from operations (4,388) (9,023) (26,826) (53,835)
Interest and other income
(expense), net (964) (1,105) (4,327) (4,432)
-------- -------- -------- --------
Net loss (5,352) (10,128) (31,153) (58,267)
======== ======== ======== ========
Net loss per share -- basic and
diluted ($0.24) ($0.46) ($1.41) ($3.01)
======== ======== ======== ========
Shares used in computing net loss
per share -- basic and diluted 22,211 22,060 22,143 19,367
======== ======== ======== ========
Condensed Balance Sheets December December
(in thousands) 31, 31,
2004 2003
--------- ---------
Cash, cash equivalents and short-term investments $95,334 $110,010
Accounts receivable from a related party 4 8
Accounts receivable and other current assets 4,533 5,736
Furniture and equipment, net 947 2,553
Other assets 1,260 156
--------- ---------
Total assets $102,078 $118,463
========= =========
Accounts payable to a related party $196 $3,156
Current payable to a related party 34,500 55,834
Deferred gain on loan settlement 22,089 -
Other current liabilities 19,304 6,945
Long-term debt, payable to a related party 4,500 -
Stockholders' equity 21,489 52,528
--------- ---------
Total liabilities and stockholders' equity $102,078 $118,463
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