Cerus Corp. is optimistic that its Intercept blood system will become the standard of care in the U.S. when it comes to pathogen reduction in donor plasma and platelets. But it's been more than a couple of years since the Concord, Calif.-based company first won FDA approval in those indications.
Now, it's working on a phase III clinical trial program aimed at expanding the technology's application into the broader market for pathogen reduction in red blood cells (RBCs) by the end of the decade. Cerus is also awaiting a final FDA guidance on bacterial safety that it expects will help to more firmly establish the use of its technology.
In the meantime, though, product revenues are lower than expected, forcing the to reduce its 2017 expectations. Wall Street responded by pushing shares of the small cap down by 18 percent on Thursday, sending its market cap down to about $360 million.
For the first quarter, Cerus reported $7 million in product revenue, down from $7.6 million during the same period in 2016. Demand for U.S. disposable kits had strong growth, but that was more than offset by lower demand for plasma products ex-U.S. and a weak Euro as compared to the U.S. dollar.
Cerus is in the midst of negotiating with both the French National Transfusion Service and the South African National Blood Service, but expects these deals may take longer to complete than it previously expected.
"Factoring in later start dates in these markets, and considering the ongoing uncertainty and timing for a final FDA Bacterial Safety guidance document in the U.S., we believe it is prudent to adjust our 2017 product revenue guidance," said Cerus President and CEO Obi Greenman on the first quarter earnings call.
It reduced its 2017 revenue guidance to a $43 million to $48 million range from the prior guidance of $45 million to $50 million. Cerus, which went public two decades ago, continues to operate at a loss. During the first quarter, it lost $18.1 million, an increase from $15.3 million during the same quarter last year.
The company's U.S. customers include the Mayo Foundation, New York Blood Center and several regional American Red Cross production sites. The Red Cross is producing Intercept platelets at nine sites and plans to add another before the end of the second quarter, but beyond that in the near-term it is focused on increasing production to meet its fulfillment obligations to hospital customers.
GAINING FDA GUIDANCE
Cerus is hoping that the FDA's pending final guidance on bacterial safety will help increase awareness of Intercept; the company has previously said that it expects the final guidance to be out this year.
In the March 2016 draft version of the guidance, Cerus' psoralen-based, ultraviolet irradiation system technology is highlighted as the only FDA-approved pathogen reduction system for platelets. The document also notes other technology approaches, including another combination approach that is riboflavin-based and incorporates ultraviolet light and chemicals with an affinity for nucleic acids and a system based on ultraviolet c, a sub-type of ultraviolet light.
The draft version cites a series of data related to Intercept studies and long-term European use. It noted that of the almost 180,000 patients in the Alsace region of France were infused with Intercept-treated platelets, none reported an associated septic reaction or fatality. For the 2.3 million treated with conventional platelets, that led to 47 septic reactions and eight related deaths.
Similarly in Switzerland, more than 130,000 Intercept platelet treated patients had no septic reactions or fatalities, while of the almost 192,000 patients treated with conventional platelets, 16 of them had septic transfusion reactions, including three that led to deaths.
"The Intercept Blood System for platelets has demonstrated effectiveness against a range of gram-positive, gram-negative, anaerobic and spirochete bacteria when treatment occurs within 24 hours from apheresis platelet collection," summed up the guidance, noting that the bacterial load log reduction varied from 3.7 to greater than 6.8. Bacillus cereus is the least sensitive known organism to the treatment.
In the long term, Cerus plans to expand its technology into pathogen reduction in red blood cells; it's planning a CE mark submission and expects to outline that timeline in August.
The company is working in the U.S. with the Biomedical Advanced Research and Development Authority (BARDA) on a clinical trial program in red blood cells to support an FDA label claim expansion.
Last June, BARDA committed up to $180 million over five years to support the development of Intercept in RBCs. It paid an initial amount of $30.8 million to support a phase III Puerto Rico study, known as Redes, in an effort to help address the Zika virus epidemic. The funding is also earmarked to support pivotal phase III testing in the continental U.S.
"In our U.S. development program, BARDA funded activities were also progressing, with our Redes trial open for enrollment and our clinical team incorporating the FDA feedback into our recipe trial protocol. Our 2017 development deliverables for red cells are tracking as expected across both geographies," said Greenman.
The two-year, 600-patient Puerto Rico study started in March and is continuing enrollment. Cerus has previously said it plans a 400-patient cardiovascular surgery patient study, which it hopes to get the go-ahead from the FDA for later this year, as well as another 150-patient trial in sickle cell anemia patients.
Cerus expects to complete the U.S. phase III trial program for RBCs in 2019 or 2020, with an FDA submission around that time.
Concluded Cerus' Greenman on the company's R&D efforts, "For the ongoing development activities for the Intercept red blood cell program, it's great to see that system in increasing use at blood centers supporting our clinical trials and the high quality of those red cell components when manufactured."