CERUS CORP

Cerus Corporation is a biomedical products company focused on developing and commercializing the INTERCEPT Blood System to enhance blood safety. The INTERCEPT Blood System is designed to reduce blood-borne pathogens in donated blood components intended for transfusion and is intended for use with blood components and certain of their derivatives: platelets, plasma, red blood cells and to produce INTERCEPT Fibrinogen Complex, or IFC, and pathogen reduced plasma, cryoprecipitate reduced. The INTERCEPT Blood System for platelets, or platelet system, and the INTERCEPT Blood System for plasma, or plasma system, have received a broad range of regulatory approvals and certification, including but not limited to FDA approval in the U.S., CE Certificates of Conformity delivered in accordance with the Medical Devices Regulation 2017/745, or MDR, permitting the company to affix the CE Mark to its products and place them on the market in the European Union and other jurisdictions that recognize the CE Mark, and are being marketed and sold in a number of countries around the world, including the U.S., certain countries in Europe, the Commonwealth of Independent States, or CIS, the Middle East, and Latin America and selected countries in other regions of the world. Additionally, the company has received FDA approval for the INTERCEPT Blood System for Cryoprecipitation. The INTERCEPT Blood System for red blood cells, or the red blood cell system, is currently in development and has not been commercialized anywhere in the world.

The market for the INTERCEPT Blood System, including the U.S. market, is dominated by a relatively small number of blood collection organizations. The American Red Cross represents the largest single portion of the blood collection market in the U.S. and is one of the company's key customers. In many countries in Western Europe and in Japan, various national blood transfusion services or Red Cross organizations collect, store and distribute virtually all of their respective nations' blood and blood components supply. The largest European markets for the company's products are in Germany, France, and England. The company's products face a wide variety of competition from entities competing directly with alternative pathogen reduction technologies for platelets and/or plasma, as well as from entities developing and selling blood screening products. In Europe, several companies, including Grifols, Octapharma AG, MacoPharma International and Kedrion Biopharma, have developed in the past and are developing or selling commercial pathogen reduction products, systems, or services for plasma. Terumo BCT, a subsidiary of Terumo Corporation, has developed a pathogen reduction system for blood products and has received a Class III CE Certificate of Conformity under the MDR and affixed the CE Mark for such system for both platelets and plasma and received Swissmedic approval for platelets treated with their system. MacoPharma is seeking a CE Certificate of Conformity under the MDR for a UVC-based pathogen reduction product for platelets. In the U.S., INTERCEPT-treated plasma faces competition from Octapharma AG's Octaplas, a solvent detergent treated pooled plasma product approved in the U.S. for certain indications. The company is currently the only approved pathogen reduction product in the U.S. for platelets.

The company generates revenue primarily through product revenue from sales of the INTERCEPT Blood System for platelets and plasma, or the platelet and plasma systems or disposable kits, UVA illumination devices, or illuminators, maintenance services of illuminators, and IFC. The company sells the platelet and plasma systems directly to blood banks, hospitals, universities, government agencies, as well as to distributors in certain regions. The company sells IFC directly to hospital customers in the U.S. using a direct sales force and indirectly through certain blood centers. Product revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration that the company expects to receive in exchange for those products or services. The company also recognizes government contract revenue associated with its contracts with the Biomedical Advanced Research and Development Authority, or BARDA, and the U.S. Department of Defense, or DoD, as qualified costs are incurred for reimbursement over the performance period or as a percentage of the overall contract price based on the extent of progress towards completion.

The INTERCEPT Blood System for platelets and plasma employs the same technology. Platelet or plasma components collected from blood donors are transferred into plastic INTERCEPT disposable kits and are mixed with the company's proprietary compound, amotosalen, a small molecule compound that has an affinity for nucleic acid. The disposable kits are then placed in an illumination device, or illuminator, where the mixture is exposed to ultra-violet A, or UVA, light. The INTERCEPT Blood System for red blood cells uses another of the company's proprietary compounds, amustaline. The red blood cell system is designed to prevent pathogen replication by using a small molecule additive compound to form bonds with nucleic acid in pathogens that may be present in donated red blood cell collections. The INTERCEPT Blood System for Cryoprecipitation uses the plasma system to produce IFC for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency and to produce pathogen reduced plasma, cryoprecipitate reduced. The platelet system and plasma system are commercialized in the U.S., Canada and a number of countries in Europe, the CIS, the Middle East, and selected countries in other regions around the world. The platelet system and plasma system received CE Certificates of Conformity and CE Marked under MDR in 2023. The INTERCEPT Illuminator—LED-based received a CE Certificate of Conformity and CE Marked under MDR in 2025. The red blood cell system is currently in development; a U.S. Phase 3 clinical trial, known as the RedeS study, completed enrollment in 2025; a U.S. Phase 3 acute anemia clinical trial, known as the ReCePI study, completed in 2024; and an application for a conformity assessment to obtain a CE Certificate of Conformity and affix the CE Mark for the EEA was resubmitted in 2025.

In September 2024, the company entered into a new agreement with BARDA, the 2024 Agreement, which includes potential funding of up to approximately $188.4 million ¹ under a base period and subsequent option periods. In July 2025, the company entered into an additional amendment with the DoD to extend the agreement to September 2028 to incorporate the Lyo-Cryo manufacturing advancement project phase III clinical study, which increased the total contract value by $7.2 million ² to $25.0 million ³. The company has an Amended and Restated Credit, Security and Guaranty Agreement (Term Loan), or the Term Loan Credit Agreement, and an Amended and Restated Credit, Security and Guaranty Agreement (Revolving Loan), or the Revolving Loan Credit Agreement, both with MidCap Financial Trust. As of December 31, 2025, total indebtedness under the Term Loan Credit Agreement and Revolving Loan Credit Agreement was approximately $83.9 million ⁴. During the year ended December 31, 2025, the company did not sell shares of its common stock under the Controlled Equity Offering Sales Agreement. As of December 31, 2025, the company had 275 ⁵ employees company-wide.

Total revenue for the year ended December 31, 2025 was $233.798 million ⁶, compared to $201.321 million ⁷ for the year ended December 31, 2024, representing an increase of 16% ⁸. Product revenue was $206.133 million ⁹ for 2025, compared to $180.270 million ¹⁰ for 2024, an increase of 14% ¹¹. Government contract revenue was $27.665 million ¹² for 2025, compared to $21.051 million ¹³ for 2024, an increase of 31% ¹⁴. Gross profit on product revenue was $112.288 million ¹⁵ for 2025, compared to $99.522 million ¹⁶ for 2024. Gross margin on product sales was approximately 55% ¹⁷ during both the years ended December 31, 2025 and December 31, 2024. Net loss attributable to Cerus Corporation was $15.627 million ¹⁸ for 2025, compared to $20.918 million ¹⁹ for 2024. Net cash provided by operating activities was $4.837 million ²⁰ for 2025, compared to $11.359 million ²¹ for 2024.

The company expects its commercial efforts in 2026 will be focused on increasing market adoption of INTERCEPT products by enabling blood center customers to increase the number of platelet and plasma units produced and made available to patients. For IFC, the company is shifting its focus from selling finished therapeutic doses to hospitals to selling kits to blood centers. The company plans to continue to develop and raise awareness of INTERCEPT's product profile relative to other products, including conventional, un-treated components. The company expects product revenue for INTERCEPT disposable kits to increase in future periods driven by growth in its platelet business and from sales of its IFC product due in part to increased market acceptance of the INTERCEPT Blood System and adoption of the INTERCEPT Blood System in geographies where commercialization efforts are underway. The company anticipates that government contract revenue will decrease in future periods due to the 2016 BARDA Agreement ending in September 2026. The company plans to submit its PMA application for its new LED-based illuminator in mid-2026. The company expects to incur additional research and development costs associated with inflationary pressures on labor and study costs, pursuing potential regulatory approvals in other geographies where it does not currently sell its platelet and plasma systems, pursuing potential regulatory approvals for the LED illuminator in territories where the platelet and plasma systems are approved, planning and conducting in vitro studies and clinical development of its red blood cell system in Europe and the U.S., any activities in support of the new MDR application for its red blood cell system in the EU, new product development and product enhancements, including potential new label claims, further design efforts on its new LED-based illuminator for the U.S. market and ongoing software development, and costs associated with performing the activities under its government contracts.

The company expects to incur additional research and development costs associated with inflationary pressures on labor and study costs, the development of different configurations of existing product candidates and products and its illuminator, development of new products, planning, enrolling and completing ongoing clinical and non-clinical studies, including the post-approval studies or registry studies it is and may be required to conduct in connection with the approvals of the platelet system, pursuing potential regulatory approvals in other geographies where it does not currently sell its platelet and plasma systems, planning and conducting in vitro studies and clinical development of its red blood cell system in Europe and the U.S., performing the agreed-upon activities under its government agreements, legal compliance, and creating, maintaining and defending its intellectual property. The company expects to incur additional selling, general and administrative costs associated with inflationary pressures on labor and vendor costs. The company expects cost of product revenue for INTERCEPT disposable kits to increase in future periods as its product revenue grows. The company's gross margin on product sales was approximately 55% ²² during both the years ended December 31, 2025 and December 31, 2024. Margins were impacted by the mix of geographies into which products were sold, with higher U.S. kit sales over sales in other regions and, to a lesser extent product mix. Geographic mix and by extension foreign exchange rates along with the impact of enacted import tariffs had an adverse effect on the company's gross margins. The company may experience cost pressures due to the current inflationary environment, tariffs and escalating trade tensions, increased transportation costs and adverse impacts on the efficiency of its supply chain.

The company expects to build inventory levels that it believes will be sufficient to meet forecasted demand. At times, the company may purchase quantities of materials, components or finished products that are expected to be on-hand for longer than one year. The company may procure and carry this inventory to mitigate obsolescence, supply chain disruption and for business continuity reasons. The company's supply chain for certain finished goods and components held as work-in-process may potentially take over one year to sell or complete production before being utilized in finished disposable kits or illuminators. The company relies on its direct sales team and distributors to provide accurate forecasts of sales in their territory. The company has invested in capital equipment, capacity expansion and cost reduction projects with many of its suppliers. The company has signed an agreement with a supplier to produce the new LED-based illuminator. Some of the new components require long order lead times and have required that the company procure the components in advance of receiving regulatory approval in order to satisfy demand for its products.

The company expects to incur additional research and development costs associated with inflationary pressures on labor and study costs, the development of different configurations of existing product candidates and products and its illuminator, development of new products, planning, enrolling and completing ongoing clinical and non-clinical studies, including the post-approval studies or registry studies it is and may be required to conduct in connection with the approvals of the platelet system, pursuing potential regulatory approvals in other geographies where it does not currently sell its platelet and plasma systems, planning and conducting in vitro studies and clinical development of its red blood cell system in Europe and the U.S., performing the agreed-upon activities under its government agreements, legal compliance, and creating, maintaining and defending its intellectual property. Both the company's near and long-term capital requirements will require that it continue to invest in capital purchases to support ongoing and proposed studies, in addition to manufacturing capacity expansion to support its growing business. The company may opportunistically seek access to the equity capital markets to support its development efforts and operations. The company has borrowed and in the future may borrow additional capital from institutional and commercial banking sources to fund future growth, including pursuant to the Term Loan Credit Agreement and Revolving Loan Credit Agreement, or potentially pursuant to new arrangements with different lenders. The company does not intend to pay cash dividends on its common stock in the foreseeable future.

The company faces structural headwinds including the highly concentrated market for the INTERCEPT Blood System, with few customers, including often-dominant regional or national blood collection entities. The company's ability to achieve and maintain significant market penetration in the U.S. is largely dependent on utilization of INTERCEPT and distribution of INTERCEPT-treated blood components by the American Red Cross. The company is exposed to risks associated with the highly concentrated market. The company may be unable to develop and maintain an effective and qualified U.S.-based commercial organization or educate blood centers, clinicians and hospital personnel. The company has very limited experience selling directly to hospitals or expertise complying with regulations governing finished biologics. The company's ability to successfully commercialize the INTERCEPT Blood System for cryoprecipitation in the U.S. would have a material adverse effect on its business, financial condition, results of operations and growth prospects. The company faces risks related to the ongoing conflict between Ukraine and Russia, the resumption of war between Israel and Hamas, the conflict between Israel and Hezbollah, and the larger regional conflict. The company faces risks related to tariffs and escalating trade tensions. The company faces risks related to adverse market and economic conditions, including inflation, bank failures, and rising interest rates.

The company depends substantially upon the commercial success of the INTERCEPT Blood System for platelets, plasma and cryoprecipitation in the U.S., and its inability to successfully commercialize the INTERCEPT Blood System in the U.S. would have a material adverse effect on its business. The company is exposed to risks associated with the highly concentrated market for the INTERCEPT Blood System, as the American Red Cross represents the largest single portion of the blood collection market in the U.S. A significant portion of the funding for the development of the red blood cell system has come and is expected to continue to come from the company's BARDA agreements, and if BARDA were to eliminate, reduce, or delay funding, it would have a significant, negative impact on government contract revenues and cash flows. The company relies on third parties to manufacture and supply the illuminators, components, disposable kits and inactivation compounds; Fresenius Kabi AG is the sole supplier for the manufacture of disposable kits for the platelet and plasma systems. The red blood cell system is currently in development and may never receive any marketing approvals or CE Certificates of Conformity. The company may continue to generate losses and never achieve a profitable level of operations.

Management's discussion emphasizes the company's focus on increasing market adoption of INTERCEPT products, particularly in the U.S., and shifting the IFC business model from selling finished therapeutic doses to hospitals to selling kits to blood centers. Management highlights the completion of enrollment in the RedeS study in 2025 and anticipates completion of the trial in the second half of 2026. Management notes that discussion of the planned PMA module submissions with the FDA will not occur prior to the completion of the RedeS trial. Management states that the company believes that its available cash and cash equivalents and short-term investments, as well as cash received from product sales and under its government contracts, will be sufficient to meet its capital requirements for at least the next 12 months. Management emphasizes the goal of achieving profitability in the future, but notes that actual results may be different than the forecasted operating plan and may require that the company take certain actions to potentially achieve profitability, which may negatively impact its commercial potential or result in deferrals in development activities.