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What changed in CERUS CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CERUS CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+582 added−519 removedSource: 10-K (2025-02-26) vs 10-K (2024-03-05)

Top changes in CERUS CORP's 2024 10-K

582 paragraphs added · 519 removed · 430 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

92 edited+21 added−31 removed207 unchanged
Biggest changeWe are focused on pay equity globally and are striving to close the gap in pay among similar roles and responsibilities throughout our organization. Cerus encourages employees to become involved in their community by volunteering for activities that enhance and serve the communities in which they live and work.
Biggest changeCerus encourages employees to become involved in their community by volunteering for activities that enhance and serve the communities in which they live and work. Our employees receive a Volunteer Paid Time Off Program allowing employees to get paid for volunteering at a charity of their choice.
We have also received FDA approval for the INTERCEPT Blood System for Cryoprecipitation, which uses our 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.
We have also received FDA approval for the INTERCEPT Blood System for Cryoprecipitation, which uses our 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.
Further discussion of the factors impacting our government contracts revenue and the related impact on our ability to operate our business can be found under “Item 1A— Risk Factors ” of this Annual Report on Form 10-K, under the risk factors titled “ 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 our BARDA agreement, and if BARDA were to eliminate, reduce, delay, or object to extension for funding of our agreement, it would have a significant, negative impact on our government contract revenues and cash flows, and we may be forced to suspend or terminate our U.S. red blood cell development program or obtain alternative sources of funding ” and “Unfavorable provisions in government contracts, including in our contracts with BARDA, FDA and DoD, may harm our business, financial condition and operating results . ” Competition Our 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 diagnostic screening products to detect and prevent contaminated products from being transfused, and from process and procedural decisions involving blood banking operations including but not limited to shortened shelf-life of blood components.
Further discussion of the factors impacting our government contracts revenue and the related impact on our ability to operate our business can be found under “Item 1A— Risk Factors ” of this Annual Report on Form 10-K, under the risk factors titled “ 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 our BARDA agreement, and if BARDA were to eliminate, reduce, delay, or object to extension for funding of our agreement, it would have a significant, negative impact on our government contract revenues and cash flows, and we may be forced to suspend or terminate our U.S. red blood cell development program or obtain alternative sources of funding ” and “Unfavorable provisions in government contracts, including in our contracts with BARDA, FDA and DoD, may harm our business, financial condition and operating results . ” Competition Our 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 to detect and prevent contaminated products from being transfused, and from process and procedural decisions involving blood banking operations including but not limited to shortened shelf-life of blood components.
Further discussion of the health care laws and regulations that may affect our can be found in “Item 1A— Risk Factors ” of this Annual Report on Form 10-K, under the risk factor titled: “ We are 17 subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business. ” CBER is the center within the FDA principally responsible for regulating the INTERCEPT Blood System.
Further discussion of the health care laws and regulations that may affect our can be found in “Item 1A— Risk Factors ” of this Annual Report on Form 10-K, under the risk factor titled: “ We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business. ” CBER is the center within the FDA principally responsible for regulating the INTERCEPT Blood System.
These obligations may include limiting personal data processing to only what is necessary for specified, 18 explicit, and legitimate purposes; requiring a legal basis for personal data processing; requiring the appointment of a data protection officer in certain circumstances; limiting the collection and retention of personal data; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal data; mandating notice of certain personal data breaches to the relevant supervisory authority(ies) and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
These obligations may include limiting personal data processing to only what is necessary for specified, explicit, and legitimate purposes; requiring a legal basis for personal data processing; requiring the appointment of a data protection officer in certain circumstances; limiting the collection and retention of personal data; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal data; mandating notice of certain personal data breaches to the relevant supervisory authority(ies) and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
Additionally, hospital customers of ours or of any of our blood center customers may need to go through the administrative process of generating internal tracking codes to integrate INTERCEPT-treated products into their inventories or may need to amend or adjust those codes in connection with a significant product change that we make, which may adversely impact our ability to sell products in the U.S.
Additionally, hospital customers of ours or of any of our blood center customers may need to go through the administrative process of generating internal tracking codes to integrate INTERCEPT-treated products into their inventories or may need to amend or adjust those codes in connection with a significant product change that we make, 17 which may adversely impact our ability to sell products in the U.S.
Previously, we terminated Phase 3 clinical trials for acute and chronic anemia using a prior generation of the red blood cell system due to the detection of antibody reactivity to INTERCEPT-treated red blood cells, or RBCs, in two patients in the trial for chronic anemia. The antibody eventually cleared and the subjects had no adverse health 7 consequences.
Previously, we terminated Phase 3 clinical trials for acute and chronic anemia using a prior generation of the red blood cell system due to the detection of antibody reactivity to INTERCEPT-treated red blood cells, or RBCs, in two patients in the trial for chronic anemia. The antibody eventually cleared and the subjects had no adverse health consequences.
We believe that the INTERCEPT Blood System has certain competitive advantages over competing blood-borne pathogen reduction methods that are either on the market or known to us to be in development. The INTERCEPT Blood System is designed for use in blood centers, which allows for integration with current blood collection, processing and storage procedures.
We believe that the INTERCEPT Blood System has certain competitive 13 advantages over competing blood-borne pathogen reduction methods that are either on the market or known to us to be in development. The INTERCEPT Blood System is designed for use in blood centers, which allows for integration with current blood collection, processing and storage procedures.
After unblinding the data from the original Phase 3 clinical trials, we found that we had met the primary endpoint in the clinical trial for acute anemia. We evaluated the antibodies detected and developed process changes to diminish the likelihood of antibody reactivity in RBCs treated with our modified process.
After unblinding the data from the original Phase 3 clinical trials, we found that we had met the primary endpoint in the 7 clinical trial for acute anemia. We evaluated the antibodies detected and developed process changes to diminish the likelihood of antibody reactivity in RBCs treated with our modified process.
As such, establishing additional or replacement suppliers for any of the raw materials, parts and devices, if required, will likely not be accomplished quickly and could involve significant additional costs and potential regulatory reviews that could limit our ability to supply customer demand.
As such, establishing additional or replacement 10 suppliers for any of the raw materials, parts and devices, if required, will likely not be accomplished quickly and could involve significant additional costs and potential regulatory reviews that could limit our ability to supply customer demand.
Our INTERCEPT Blood System for cryoprecipitation competes with traditional cryoprecipitate, a by-product of thawing frozen plasma and with human plasma derived fibrinogen concentrates. While we believe that IFC has many advantages over competitors, conventional 13 cryoprecipitate and fibrinogen concentrates are well established within hospital use.
Our INTERCEPT Blood System for cryoprecipitation competes with traditional cryoprecipitate, a by-product of thawing frozen plasma and with human plasma derived fibrinogen concentrates. While we believe that IFC has many advantages over competitors, conventional cryoprecipitate and fibrinogen concentrates are well established within hospital use.
However, certain changes to a PMA-approved device do not require submission and approval of a new PMA or PMA supplement and may only require notice to FDA in a PMA Annual Report. The FDA requires every supplier to make this determination in the first instance, but the FDA may review any supplier’s decision.
However, certain changes to a PMA-approved device do not require submission and approval of a new PMA or PMA supplement and may only require notice to FDA in a PMA Annual Report. The 16 FDA requires every supplier to make this determination in the first instance, but the FDA may review any supplier’s decision.
We provide access to a variety of innovative, flexible, and convenient health and wellness tools, including annual flu shots, an onsite gym for our Concord based employees and gym membership reimbursement for all of our global employees. Available Information We maintain a website at www.cerus.com .
We provide access to a variety of innovative, flexible, and convenient health and wellness tools, including flu shots, an onsite gym for our Concord based employees and gym membership reimbursement for all of our global employees. Available Information We maintain a website at www.cerus.com .
In addition, should we choose to manufacture locally in those jurisdictions, we would likely incur additional costs, may be unable to meet our quality system requirements or successfully manufacture products, and such activities will be a distraction 10 from our current focus and operations.
In addition, should we choose to manufacture locally in those jurisdictions, we would likely incur additional costs, may be unable to meet our quality system requirements or successfully manufacture products, and such activities will be a distraction from our current focus and operations.
We own 51% of equity in the JV. The JV will need to obtain regulatory approval 12 for the INTERCEPT Blood System for platelets and red blood cells before it can begin commercializing in China. In order to obtain that regulatory approval, the JV may need to run additional clinical studies in China.
We own 51% of equity in the JV. The JV will need to obtain regulatory approval for the INTERCEPT Blood System for platelets and red blood cells before it can begin commercializing in China. In order to obtain that regulatory approval, the JV may need to run additional clinical studies in China.
Inventory Requirements and Product Return Rights Our platelet and plasma disposable kits have received regulatory approval and certification for shelf lives ranging from 6 to 24 months. Our INTERCEPT Blood System for Cryoprecipitation has received regulatory approval and certification for a shelf life of 12 months.
Inventory Requirements and Product Return Rights Our platelet and plasma disposable kits have received regulatory approval and certification for shelf lives ranging from 12 to 24 months. Our INTERCEPT Blood System for Cryoprecipitation has received regulatory approval and certification for a shelf life of 12 months.
Our platelet product faces competition from a number of diagnostic and testing companies currently approved for the detection of pathogens including bacterial and viral pathogens in donated blood products and may face competition from other technologies if approved.
Our platelet product faces competition from a number of testing companies currently approved for the detection of pathogens including bacterial and viral pathogens in donated blood products and may face competition from other technologies if approved.
It is not customary for our production cycle for inventory to exceed twelve months. Instead, we use our best judgment to factor in lead times for the production of our finished units to meet our current demands.
It is not customary for our turnover cycle for finished inventory to exceed twelve months. Instead, we use our best judgment to factor in lead times for the production of our finished units to meet our current demands.
We currently sell the platelet and plasma systems using our direct sales force and through distributors and sell IFC or disposable kits to manufacture IFC in the U.S. using our 5 direct sales force.
We currently sell the platelet and plasma systems using our direct sales force and through distributors and sell IFC or disposable kits to manufacture IFC in the U.S. using our direct sales force.
We expect our commercial efforts in 2024 will continue to largely be focused on enabling blood centers that are using INTERCEPT to increase the number of platelet and plasma units produced and made available to patients. In addition we plan to sell the INTERCEPT Blood System for Cryoprecipitation to certain blood center customers and to sell IFC to hospital customers.
We expect our commercial efforts in 2025 will continue to largely be focused on enabling blood centers that are using INTERCEPT to increase the number of platelet and plasma units produced and made available to patients. In addition, we plan to sell the INTERCEPT Blood System for Cryoprecipitation to certain blood center customers and to sell IFC to hospital customers.
See Note 2 in the Notes to Consolidated Financial Statements under “ Item 15—Exhibits and Financial Statement Schedules—Financial Statements ” of this Annual Report on Form 10-K for information on significant accounting policies related to our government contract revenue and other financial information for the years ended December 31, 2023, 2022 and 2021.
See Note 2 in the Notes to Consolidated Financial Statements under “ Item 15—Exhibits and Financial Statement Schedules—Financial Statements ” of this Annual Report on Form 10-K for information on significant accounting policies related to our government contract revenue and other financial information for the years ended December 31, 2024, 2023 and 2022.
See Note 2 in the Notes to Consolidated Financial Statements under “Financial 15 Statement Schedules—Financial Statements” of this Annual Report on Form 10-K for costs and expenses related to research and development, and other financial information for the years ended December 31, 2023, 2022 and 2021.
See Note 2 in the Notes to Consolidated Financial Statements under “Financial Statement Schedules—Financial 15 Statements” of this Annual Report on Form 10-K for costs and expenses related to research and development, and other financial information for the years ended December 31, 2024, 2023 and 2022.
Financial Information Our financial information including our consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive loss, consolidated statements of stockholders’ equity, consolidated statements of cash flows, and the related footnotes thereto, can be found under “ Financial Statement Schedules ” in Part IV of this Annual Report on Form 10-K. 21
Financial Information Our financial information including our consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive loss, consolidated statements of stockholders’ equity, consolidated statements of cash flows, and the related footnotes thereto, can be found under “ Financial Statement Schedules ” in Part IV of this Annual Report on Form 10-K. 20
We filed our application for a CE Certificate of Conformity for the red blood cell system in December 2018 under the Medical Device Directive, or MDD, and in June 2021, we completed the application for a CE Certificate of Conformity under the new MDR.
We initially filed an application for a CE Certificate of Conformity for the red blood cell system in December 2018 under the Medical Device Directive, or MDD, and in June 2021, we completed our application for a CE Certificate of Conformity under the new MDR.
Regardless of the potential sufficiency of clinical data required to receive a CE Certificate of Conformity, we understand that we will need to generate additional safety data from commercial use in order to achieve broad market acceptance, if ever certified. In the U.S., we successfully completed a Phase 2 recovery and lifespan study.
Regardless of the potential sufficiency of clinical data required to receive a CE Certificate of Conformity, we understand that we will need to generate additional safety data from commercial use in order to achieve broad market acceptance, if ever certified. In the U.S., we successfully completed a Phase 2 recovery and lifespan study of INTERCEPT-treated RBCs.
The FDA has agreed to modify the criteria for a clinical pause if we see three or more treatment emergent antibodies with amustaline specificity without evidence of hemolysis in patients receiving INTERCEPT-treated RBCs in our RedeS study. We will now be allowed to continue study enrollment for the RedeS study while we investigate the clinical significance of the antibodies.
The FDA has agreed to modify the criteria for a clinical pause if we see three or more treatment emergent antibodies with amustaline specificity without evidence of hemolysis in patients receiving INTERCEPT-treated RBCs in our RedeS study. We are now allowed to continue study enrollment for the RedeS study while we investigate the clinical significance of the antibodies.
The American Red Cross represents the largest single portion of the blood collection market in the U.S. and is one of our key customers. While we believe adoption of the INTERCEPT Blood System will afford the American Red Cross with many benefits, we cannot guarantee the volume or timing of commercial purchases that the American Red Cross may make.
The American Red Cross represents the largest single portion of the blood collection market in the U.S. and is one of our key customers. While we believe adoption of the INTERCEPT Blood System affords the American Red Cross with many benefits, we cannot guarantee the volume or timing of commercial purchases that the American Red Cross may make.
In addition, we have provided training to employees and managers on how to work from home and how to manage hybrid employees to ensure that our employees are maintaining their physical, mental and emotional wellbeing. Communication and Engagement We strongly believe that Cerus’ success depends on employees understanding how their work contributes to our overall strategy.
In addition, we have provided training to employees and managers on how to work from home and how to manage hybrid employees to ensure that our employees are maintaining their physical, mental and emotional well-being. Communication and Engagement We strongly believe that Cerus’ success depends on employees understanding how their work contributes to our overall strategy.
While this dynamic has the potential to generate economic value for blood centers in Germany, we cannot ensure that blood centers will understand or act on the potential economic and logistical benefits of using INTERCEPT compared to conventional blood components as well as the potential safety benefits of INTERCEPT-treated blood components.
While this dynamic has the potential to generate economic value for blood centers in Germany, we cannot ensure that blood centers will understand or agree on any potential economic and logistical benefits of using INTERCEPT compared to conventional blood components as well as the potential safety benefits of INTERCEPT-treated blood components.
We cannot provide assurance that any such changes will achieve the same level of operations or proficiency as previous distributors. Government Contracts We operate directly under three contracts with U.S. Federal Agencies, one with BARDA, one with the FDA, and another with the DoD.
We cannot provide assurance that any such changes will achieve the same level of operations or proficiency as previous distributors. Government Contracts We operate directly under four contracts with U.S. Federal Agencies, two with BARDA, one with the FDA, and another with the DoD.
In December 2023, we received CE Certificates of Conformity to affix the CE Mark in accordance with the MDR for our INTERCEPT platelet and plasma systems which allows us to continue to place our platelet and plasma systems on the European Union market under the new regulatory requirements of the MDR.
We have received CE Certificates of Conformity to affix the CE Mark in accordance with the MDR for our INTERCEPT platelet and plasma systems which allows us to continue to place our platelet and plasma systems on the European Union market under the new regulatory requirements of the MDR.
In addition, we will continue to develop awareness of INTERCEPT’s product profile relative to other platelet and plasma products, including conventional, un-treated components.
In addition, we plan to continue to develop awareness of INTERCEPT’s product profile relative to other platelet and plasma products, including conventional, un-treated components.
The primary efficacy endpoint is the proportion of subjects experiencing acute kidney injury as an assessment of RBC efficacy in providing tissue oxygenation, measured as an increase in serum creatinine compared to pre-surgery, baseline levels within 48 hours after the surgery.
The primary efficacy endpoint was the proportion of subjects experiencing acute kidney injury as an assessment of RBC efficacy in providing tissue oxygenation, measured as an increase in serum creatinine compared to pre-surgery, baseline levels within 48 hours after the 8 surgery.
It is unclear how any such challenges and the health care reform measures of the Biden administration will impact the ACA. In addition, there has been heightened governmental scrutiny to control the rising cost of healthcare.
It is unclear how any such challenges and the health care reform measures of the second Trump administration will impact the ACA. In addition, there has been heightened governmental scrutiny to control the rising cost of healthcare.
Further discussion of the impact of health care reform and laws governing our business practices on our business can be found in “Item 1A— Risk Factors ” of this Annual Report on Form 10-K, under the risk factors titled “ Legislative, regulatory, or other healthcare reforms may make it more difficult and costly for us to obtain regulatory approval or CE Certificates of Conformity of our products and 19 to produce, market and distribute our products after approval or certification is obtained” and “We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business. ” Human Capital As of December 31, 2023, we had 288 employees representing at least 33 nationalities which includes 8 dedicated commercial consultants.
Further discussion of the impact of health care reform and laws governing our business practices on our business can be found in “Item 1A— Risk Factors ” of this Annual Report on Form 10-K, under the risk factors titled “ Legislative, regulatory, or other healthcare reforms may make it more difficult and costly for us to obtain regulatory approval or CE Certificates of Conformity of our products and to produce, market and distribute our products after approval or certification is obtained” and “We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business. ” Human Capital As of December 31, 2024, we had 281 employees representing at least 38 nationalities which includes 7 dedicated commercial consultants.
Products, Product Candidates and Development Activities The following table identifies our products, product candidates and product development activities and their current status: Product or Product Candidate Under Development Product or Development Status INTERCEPT Blood System—Platelets • 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 • Received CE Certificate of Conformity under MDR in December 2023 • Post-marketing recovery and survival study underway INTERCEPT Blood System—Plasma • Commercialized in the U.S. and a number of countries in Europe, the CIS, the Middle East, and selected countries in other regions around the world • Received CE Certificate of Conformity under MDR in December 2023 • Received FDA approval of the premarket approval supplement, or PMA, to produce IFC in 2020 INTERCEPT Blood System—Red Blood Cells • U.S.
Products, Product Candidates and Development Activities The following table identifies our products, product candidates and product development activities and their current status: Product or Product Candidate Under Development Product or Development Status INTERCEPT Blood System—Platelets • 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 • Received CE Certificate of Conformity under MDR in December 2023 INTERCEPT Blood System—Plasma • Commercialized in the U.S. and a number of countries in Europe, the CIS, the Middle East, and selected countries in other regions around the world • Received CE Certificate of Conformity under MDR in December 2023 • Received FDA approval of the premarket approval supplement, or PMA, to produce IFC in 2020 INTERCEPT Blood System—Red Blood Cells • U.S.
Increasingly, the competent authorities of other countries are also developing equivalent rules and obligations. We supply the INTERCEPT Blood System for Cryoprecipitation to select blood centers that manufacture IFC for us. We plan to sell the finished IFC made by our manufacturing blood center partners directly to hospitals.
Increasingly, the competent authorities of other countries are also developing equivalent rules and obligations. We supply the INTERCEPT Blood System for Cryoprecipitation to select blood centers that manufacture IFC for us. We also sell the finished IFC made by our manufacturing blood center partners directly to hospitals and in some cases, other blood centers.
If we are unable to gain widespread commercial adoption in markets where our blood safety products are approved for commercialization, including in the U.S., we will have difficulties achieving profitability. The INTERCEPT Blood System for red blood cells, or the red blood cell system, is currently in development.
If we are unable to gain or maintain widespread commercial adoption in markets where our blood safety products are approved for commercialization, including in the U.S., we will have difficulties achieving and maintaining profitability. 5 The INTERCEPT Blood System for red blood cells, or the red blood cell system, is currently in development.
Terumo BCT, a subsidiary of Terumo Corporation, has developed a pathogen reduction system for blood products and has received a Class II CE Certificate of Conformity and affixed the CE Mark for such system for both platelets and plasma and received Swissmedic approval for platelets treated with their system.
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.
Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
For example, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
The FDA has granted Breakthrough Device Designation and has since approved the INTERCEPT Blood System for Cryoprecipitation, which uses our plasma system to produce IFC for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency and to produce the derivative product, pathogen reduced plasma, cryoprecipitate reduced.
The FDA has approved the INTERCEPT Blood System for Cryoprecipitation, which uses our plasma system to produce IFC for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency and to produce the derivative product, pathogen reduced plasma, cryoprecipitate reduced.
We have a small scientific affairs group in the U.S. and the Netherlands that supports our commercialization efforts as well as hospital affairs professionals, to help educate hospitals and physicians on our products, clinical trial history and publications.
We have a small scientific affairs group in the U.S. and the Netherlands that supports our commercialization efforts as well as hospital affairs professionals, to help educate hospitals and physicians on our products, clinical trial history and publications. We have a small group of individuals to market and sell IFC in the U.S.
The ACA and other health care reform in the U.S. include provisions that place downward pressure on the pricing of medical products, which could further impact our profit margins. Since its enactment, there have been judicial and Congressional challenges to numerous provisions of the ACA. For example, on June 17, 2021, the U.S.
The ACA and other health care reform in the U.S. include provisions that place downward pressure on the pricing of medical products, which could further impact our profit margins. Since its enactment, there have been amendments and judicial and Congressional challenges to numerous provisions of the ACA.
While three of our manufacturing partners have received a BLA from CBER, we plan to continue working with our other U.S.-based blood centers manufacturing partners to support these activities and any delay in obtaining these licenses would adversely impact the nationwide availability of our finished IFC in the U.S.
While all of our manufacturing partners have received a BLA from CBER, we plan to continue working with any other U.S.-based blood centers producing IFC to support their licensure applications and any delay in obtaining these licenses would adversely impact the nationwide availability of our finished IFC in the U.S.
We have completed the two post-approval studies that FDA required as part of its approval of the platelet system - a haemovigilance study evaluating the incidence of acute lung injury following transfusion of INTERCEPT-treated platelets and a recovery study of platelets treated with the platelet system, currently under review by the FDA.
We have completed the two post-approval studies that FDA required as part of its approval of the platelet system - a haemovigilance study evaluating the incidence of acute lung injury following transfusion of INTERCEPT-treated platelets as well as a recovery study of platelets treated with the platelet system.
While EFS has standardized production of its platelets using the INTERCEPT Blood System, we cannot provide any assurance that the national deployment of INTERCEPT to treat platelets in France will be sustainable, or that we will be able to secure any subsequent contracts with EFS or that the terms, including the pricing or committed volumes, if any, of any future contract will be equivalent or superior to the terms under our current contracts.
We cannot provide any assurance that the national deployment of INTERCEPT to treat platelets in France will be sustainable, or that we will be able to secure any subsequent contracts with EFS or that the terms, including the pricing or committed volumes, if any, of any future contract will be equivalent or superior to the terms under our current contracts.
As of December 31, 2023, we owned 11 issued or allowed U.S. patents and approximately 112 issued or allowed foreign patents related to the INTERCEPT Blood System. Our patents expire at various dates between 2025 and 2040. Recent patent applications will, if granted, result in patents with later expiration dates.
As of December 31, 2024, we owned 16 issued or allowed U.S. patents and approximately 166 issued or allowed foreign patents related to the INTERCEPT Blood System. Our patents expire at various dates between 2025 and 2042. Recent patent applications will, if granted, result in patents with later expiration dates.
The haemovigilance study has completed, met its end point, and results have been published in a peer-reviewed journal. We have also completed the recovery and survival study of the platelet system and have submitted the data to the FDA.
The haemovigilance study was completed, met its endpoint, and results published in a peer-reviewed journal. We have also completed the recovery and survival study of the platelet system and have submitted the data to the FDA.
Approximately 60% of our global employees are women. In addition, of our U.S. employees, approximately 49% identify as non-white. Below is additional demographic information about our current employee base as of December 31, 2023.
Approximately 62% of our global employees are women. In addition, of our U.S. employees, approximately 50% identify as non-white. Below is additional demographic information about our current employee base as of December 31, 2024.
Revenue from the cost reimbursement provisions under our BARDA and the FDA government contracts varies by year. A portion of our government contract revenue is subject to renegotiation of reimbursement rates or termination of the contract at the election of the U.S. government.
Revenue from the cost reimbursement provisions under our BARDA and the FDA government contracts varies by year. A portion of our government contract revenue is subject to obtaining approval on audited indirect costs or rates and is subject to termination of the contract at the election of the U.S. government.
We do not currently have plans to pursue these configurations. In addition, we may pursue development projects for other plasma derived biological products, which may require the submission and approval of additional PMA supplements for the plasma system. These development activities will be costly and may not be successful should we choose to pursue them.
We do not currently have plans to pursue these configurations. In addition, we may pursue development projects for other plasma derived biological products, which may require the submission and approval of additional PMA supplements for the plasma system.
Cerus Employees 2023 Salaried workforce 274 Managers and above 71 Part-time employees 12 Average age 45.7 years Average length of service in years 5.9 years Employee turnover rate December 31, 2022 to 2023 (voluntary) 4.8% Our employees are a key factor in our ability to serve our customers and achieve our mission to establish INTERCEPT as the standard of care for transfused blood components globally and to enable our customers to do everything in their power to deliver safe and effective blood products to patients.
Cerus Employees 2024 Salaried workforce 267 Managers and above 73 Part-time employees 16 19 Average age 46.6 years Average length of service in years 6.5 years Employee turnover rate December 31, 2023 to 2024 (voluntary) 8.3% Our employees are a key factor in our ability to serve our customers and achieve our mission to establish INTERCEPT as the standard of care for transfused blood components globally and to enable our customers to do everything in their power to deliver safe and effective blood products to patients.
In France, broad product adoption is dependent on a central decision by the Établissement Français du Sang, or EFS, a public organization responsible for all collection, testing preparation and distribution of blood products in France. In October 2021, we entered into a new agreement with EFS to supply platelet disposable kits.
In France, broad product adoption is dependent on a central decision by the Établissement Français du Sang, or EFS, a public organization responsible for all collection, testing preparation and distribution of blood products in France. Our agreements with EFS to supply platelet disposable kits and plasma disposable kits will both expire in October 2025.
In the U.S., we expect to incur research and development expenses associated with pursuing licensure of the red blood cell system including the RedeS study, the ReCePI study and an additional Phase 3 clinical trial for chronic anemia, in vitro studies, and other activities to pursue FDA approval of our red blood cell system.
In the U.S., we expect to incur research and development expenses associated with pursuing a new PMA for both the platelet and plasma systems for use with the new LED-based illuminator and licensure of the red blood cell system including the RedeS study, an additional Phase 3 clinical trial including chronic anemia subjects, in vitro studies, and other activities necessary to pursue FDA approval of our red blood cell system.
In addition to these studies, the FDA has also required us to perform many studies to support changes to our products and to commit to perform other lengthy post-marketing studies, for which we will have to expend significant additional resources.
In addition to these studies, the FDA has also required us to perform many studies to support changes to our products and to commit to perform other lengthy post-marketing studies, for which we will have to expend significant additional resources. In addition, there is a risk that post-approval studies will show results inconsistent with our previous studies.
We have a small group of individuals to which we may add to in the future to market and sell IFC in the U.S. We have a small number of employees focused on servicing the markets in Asia-Pacific and Latin American regions and rely primarily on distributors to market and sell our products in those regions.
We have a small number of employees focused 12 on servicing the markets in Asia-Pacific and Latin American regions and rely primarily on distributors to market and sell our products in those regions.
In addition, there is a risk that post-approval studies will show results inconsistent with our previous studies. 16 Any modifications to the platelet and plasma systems that could significantly affect their safety or effectiveness, including significant design and manufacturing changes, or that would constitute a major change in their intended use, manufacture, design, components, or technology requires FDA approval of a new PMA or PMA supplement.
Any modifications to the platelet and plasma systems that could significantly affect their safety or effectiveness, including significant design and manufacturing changes, or that would constitute a major change in their intended use, manufacture, design, components, or technology requires FDA approval of a new PMA or PMA supplement.
See also the risk factor entitled “The red blood system is currently in development and may never receive any marketing approvals or CE Certificates of Conformity” under “Item 1A— Risk Factors ” of this Annual Report on Form 10-K for additional information with respect to timing of the ultimate decision on our CE Certificate of Conformity application.
See also the risk factor entitled “The red blood cell system is currently in development and may never receive any marketing approvals or CE Certificate of Conformity” under “Item 1A— Risk Factors ” of this Annual Report on Form 10-K.
We have entered into manufacturing agreements with certain blood centers to produce IFC for us. In addition, we have entered into agreements with certain blood centers and blood center affiliate organizations to sell the INTERCEPT Blood System for Cryoprecipitation.
We have entered into manufacturing agreements with certain blood centers to produce IFC for us, though most of these agreements do not contain stated minimum manufacturing commitments of the blood centers. In addition, we have entered into agreements with certain blood centers and blood center affiliate organizations to sell the INTERCEPT Blood System for Cryoprecipitation.
The CCPA requires covered companies to provide new disclosures to California consumers (as that word is broadly defined in the CCPA), provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches.
The CCPA requires covered companies to provide new disclosures to California consumers (as that word is broadly defined in the CCPA), provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches. 18 Further, California voters approved a new privacy law, the California Privacy Rights Act, or CPRA, in the November 3, 2020, election.
If we are unable to continue to successfully support EFS’ national adoption of the INTERCEPT Blood System for platelets, EFS’ use of the INTERCEPT Blood System for Plasma or the final commercial terms of any subsequent contract for platelet or plasma disposable kits are less favorable than the terms under our existing contracts, our financial results may be adversely impacted. 11 In England, decisions on product adoption are centralized in the National Blood Service, or NHSBT, which collects, tests, processes and supplies blood products to hospitals in England and North Wales.
If we are unable to continue to successfully support EFS’ national adoption of the 11 INTERCEPT Blood System for platelets, EFS’ use of the INTERCEPT Blood System for Plasma or the final commercial terms of any subsequent contract for platelet or plasma disposable kits are less favorable than the terms under our existing contracts, our financial results may be adversely impacted.
We are currently the only approved pathogen reduction product in the U.S. and therefore subject to Department of Justice, or DOJ, anti-trust oversight. Terumo BCT’s platelet, plasma or whole blood pathogen reduction product may be viewed as favorable by the Japanese Red Cross. Terumo Corporation is a large Japan-based, multinational corporation with more mature products and relationships than we have.
We are currently the only approved pathogen reduction product in the U.S. for platelets and therefore subject to Department of Justice, or DOJ, anti-trust oversight. Terumo BCT’s platelet, plasma or whole blood pathogen reduction product may be viewed as favorable by the Japanese Red Cross.
The amended supply agreement expires in April 2025, and will automatically renew for an additional year unless either party has provided notice not to renew at least two years prior to the expiration. Neither party has delivered notice of its intent to terminate the agreement.
The amended supply agreement would have expired in April 2025, however it has automatically renewed for an additional year as neither party has delivered notice of its intent to terminate the agreement. The agreement will continue to automatically renew for one year periods unless either party provides notice not to renew at least two years prior to the expiration.
In addition, we have a license from Fresenius to patents relating to the INTERCEPT Blood System, that expire later in 2024. Due to the complexity of our products, we believe it is the protection afforded to our products by the portfolio of intellectual property rights that best protect our proprietary system rather than any one particular patent or trade secret.
Due to the complexity of our products, we believe it is the protection afforded to our products by the portfolio of intellectual property rights that best protect our proprietary system rather than any one particular patent or trade secret.
Our ability to commercialize our products in certain markets, particularly in Japan, may be negatively affected by Terumo’s resources and their pre-existing relationships with regulators and customers.
Terumo Corporation is a large Japan-based, multinational corporation with more mature products and relationships than we have. Our ability to commercialize our products in certain markets, particularly in Japan, may be negatively affected by Terumo’s resources and their pre-existing relationships with regulators and customers.
In the U.S., we are currently conducting two Phase 3 clinical trials - the RedeS study, to assess the safety and efficacy of INTERCEPT-treated red blood cells when compared to conventional, un-treated, red blood cells and the ReCePI study to evaluate the efficacy and safety of INTERCEPT-treated red blood cells in patients requiring transfusion for acute blood loss during surgery.
In the U.S., we are currently conducting a Phase 3 clinical trial - the RedeS study, to assess the safety and efficacy of INTERCEPT-treated red blood cells when compared to conventional, un-treated, red blood cells.
In 8 addition to successfully conducting and completing the RedeS and ReCePI studies, we also understand that one or more additional in vitro studies will be required to be successfully completed and submitted to the FDA before the FDA will consider our red blood cell product for approval.
In addition to successfully conducting and completing the RedeS and ReCePI studies, we also understand that an additional Phase 3 clinical trial including chronic anemia subjects, in vitro studies, and other necessary activities will be required to be successfully completed and submitted to the FDA before the FDA will consider our red blood cell product for approval.
Hybrid Workforce Beyond providing offices and infrastructure for our employees to work, we also allow for remote work and have adopted a hybrid workplace policy. We provide a stipend for IT and/or office equipment to assist our employees in creating an ergonomic home 20 workstation. We allow flexible schedules, and support employee information technology needs.
Hybrid Workforce Beyond providing offices and infrastructure for our employees to work, we also allow for remote work and have adopted a hybrid workplace policy. We allow flexible schedules, and support employee information technology needs.
We do not claim, however, that our INTERCEPT Blood System will inactivate all pathogens, including prions or spores, and our inactivation claims are limited to those contained in our product specifications.
We do not claim, however, that our INTERCEPT Blood System will inactivate all pathogens, including prions or spores, and 9 our inactivation claims are limited to those contained in our product specifications. There can also be no assurance that INTERCEPT will inactivate even those pathogens where claims exist, in every instance or under every processing condition.
The FDA may not agree with our decisions regarding whether new submissions or approvals are necessary. Our products could be subject to recall if the FDA or other regulators determine, for any reason, that our products are not safe or effective or that appropriate regulatory submissions were not made.
Our products could be subject to recall if the FDA or other regulators determine, for any reason, that our products are not safe or effective or that appropriate regulatory submissions were not made. If new regulatory approvals are required, this could delay or preclude our ability to market the modified system.
Phase 3 acute anemia clinical trial, known as the ReCePI study, completed enrollment; expect to report top-line data later in the first quarter of 2024 • Additional U.S. studies also planned • European Phase 3 acute anemia clinical trial completed in 2014; European Phase 3 chronic anemia clinical trial completed in 2017 6 • Application for CE Certificate of Conformity under MDR resubmitted in 2021; decision concerning certification expected in the second half of 2024 INTERCEPT Blood System—Cryoprecipitation • FDA approval in November 2020 • U.S. agreement with certain blood center manufacturing partners • Limited commercialization in the U.S.
Phase 3 acute anemia clinical trial, known as the ReCePI study, completed in 2024 • Additional U.S. studies also planned • European Phase 3 acute anemia clinical trial completed in 2014; European Phase 3 chronic anemia clinical trial completed in 2017 • Resubmission of application for CE Certificate of Conformity under MDR would be required in order to potentially obtain marketing approval in Europe 6 INTERCEPT Blood System—Cryoprecipitation • FDA approval in November 2020 • U.S. agreement with certain blood center manufacturing partners • Limited commercialization in the U.S.
Hospitals may not perceive the advantage of IFC over the competing products, we may be ineffective in selling blood components directly to hospitals or be unable to demonstrate to hospitals the economic or patient advantages relative to the competitors.
Hospitals may not perceive the advantage of IFC over the competing products, may perceive the cost of adopting IFC as prohibitive relative to its advantages or compared to competitive products, we may be ineffective in selling blood components directly to hospitals.
We and Porex have entered into an amended and restated manufacturing and supply agreement for the continued supply of the compound adsorption devices. Porex is currently our sole supplier for compound adsorption devices.
In December 2024, we and Porex have entered into a second amended and restated manufacturing and supply agreement that became effective January 1, 2025, or the 2025 Agreement, for the continued supply of the compound adsorption devices. Porex is currently our sole supplier for compound adsorption devices.
The FDA regulates drugs, medical devices and biologics under the Federal Food, Drug, and Cosmetic Act and other laws, including, in the case of biologics, the Public Health Service Act. These laws and implementing regulations govern, among other things, the development, testing, manufacturing, record keeping, storage, labeling, advertising, promotion and pre-market clearance or approval of products subject to regulation.
These laws and implementing regulations govern, among other things, the development, testing, manufacturing, record keeping, storage, labeling, advertising, promotion and pre-market clearance or approval of products subject to regulation.
We have contracted with several blood centers to produce IFC for us which we sell directly to hospitals. Of the blood centers that we have contracted with to produce IFC for us, three have received their interstate licenses, or BLAs. Until BLAs are more broadly obtained, we expect that our direct sales of IFC will be limited.
We have contracted with several blood centers to produce IFC for us which we sell directly to hospitals and to other blood centers. Of the blood centers that we have contracted with to produce IFC for us, all have received their interstate licenses, or BLAs.
There can also be no assurance that INTERCEPT will inactivate even those pathogens where claims exist, in every instance or under every processing condition. 9 Manufacturing and Supply We have used, and intend to continue to use, third parties to manufacture and supply the illuminators, components, disposable kits and inactivation compounds that make up the INTERCEPT Blood System for use in clinical trials and for commercialization.
Manufacturing and Supply We have used, and intend to continue to use, third parties to manufacture and supply the illuminators, components, disposable kits and inactivation compounds that make up the INTERCEPT Blood System for use in clinical trials and for commercialization.
In Japan, the Japanese Red Cross controls a significant majority of blood centers and exerts a high degree of influence on the adoption and use of blood safety measures.
We do not know when, if ever, the NHBST will consider adoption of a product for pathogen reduction, including INTERCEPT. In Japan, the Japanese Red Cross controls a significant majority of blood centers and exerts a high degree of influence on the adoption and use of blood safety measures.
We also received investigational device exemption, or IDE, approval from the FDA to initiate a Phase 3 clinical trial, known as the ReCePI study, that is designed to evaluate the efficacy and safety of INTERCEPT-treated RBCs in patients requiring transfusion for acute blood loss during surgery.
In March 2024, we announced positive topline results from a Phase 3 clinical trial in the U.S., known as the ReCePI study, that was designed to evaluate the efficacy and safety of INTERCEPT-treated red blood cells in patients requiring transfusion for acute blood loss during surgery.
We filed our application for a CE Certificate of Conformity of the red blood cell system under the MDR in June 2021. We have been notified that all four modules of our submission have been reviewed by our notified body, TÜV SÜD.
We filed our application for a CE Certificate of Conformity of the red blood cell system under the MDR in June 2021.
Although we have regulatory approval and certification for our products in most regions for up to a 24 month shelf life, the FDA has limited our platelet product to a six month shelf life and has asked for additional stability and aging data on newly manufactured lots.
Although we have regulatory approval and certification for our products in most regions for up to a 24 month shelf life, the FDA has limited our platelet product to an 18 month shelf life. Illuminators and replacement parts do not have regulated expiration dates.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe proposed regulation is intended 41 to boost cooperation among EU Member States in assessing health technologies, including new medical devices, and providing the basis for cooperation at EU level for joint clinical assessments in these areas. In December 2021 the HTA Regulation was adopted and entered into force on January 11, 2022. It will apply from 2025 onward.
Biggest changeThis Regulation, which has applied as of January 12, 2025, is intended to boost cooperation among EU Member States in assessing health technologies, and, where the medical device is a class IIb or class III medical device or an in-vitro diagnostic medical device of class D, providing the basis for cooperation at EU level for joint clinical assessments in these areas.
A byproduct of producing IFC is pathogen reduced cryoprecipitate poor plasma. If we are unable to find a commercial outlet for pathogen reduced cryoprecipitate poor plasma, we will continue to incur costs to discard the byproduct, which negatively impact our operating results.
A byproduct of producing IFC is pathogen reduced cryoprecipitate poor plasma. If we are unable to find a commercial outlet for pathogen reduced cryoprecipitate poor plasma, we will continue to incur costs to discard the byproduct, which will continue to negatively impact our operating results.
The laws that may affect our ability to operate include, but are not limited to: • the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce, the referral of an individual for, the purchase, lease, order or recommendation of, any good, facility, item or service for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid; • federal false claims laws, including the civil False Claims Act, which can be enforced by private citizens on behalf of the government, through civil whistleblower or qui tam actions, and the federal civil monetary penalties law, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other federal payors that are false or fraudulent, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government, and which may apply to entities that provide coding and billing advice to customer; • the federal Health Insurance Portability and Accountability Act of 1996, as amended, or HIPAA, which created federal criminal laws that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private payors, or making materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on covered entities, including certain healthcare providers, health plans and healthcare clearinghouses as well as their business associates and their subcontractors that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, relating to the privacy, security and transmission of individually identifiable health information, including mandatory contractual terms as well as directly applicable privacy and security standards and requirements; • the Federal Trade Commission Act and similar laws regulating advertisement and consumer protections; and • foreign, or U.S. state or local law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; U.S. state laws that require device and biologics companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government or otherwise restrict payments that may be made to healthcare providers; U.S. state and local laws that require device and biologics manufacturers and distributors to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and U.S. state laws governing the privacy and security of certain health information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The laws that may affect our ability to operate include, but are not limited to: • the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce, the referral of an individual for, the purchase, lease, order or recommendation of, any good, facility, item or service for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid; • federal false claims laws, including the civil False Claims Act, which can be enforced by private citizens on behalf of the government, through civil whistleblower or qui tam actions, and the federal civil monetary penalties law, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other federal payors that are false or fraudulent, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government, and which may apply to entities that provide coding and billing advice to customer; • the federal Health Insurance Portability and Accountability Act of 1996, as amended, or HIPAA, which created federal criminal laws that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private payors, or making materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on covered entities, including certain healthcare providers, health plans and healthcare clearinghouses as well as their business associates and their subcontractors that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, relating to the privacy, security and transmission of individually identifiable health information, including mandatory contractual terms as well as directly applicable privacy and security standards and requirements; • the Federal Trade Commission Act and similar laws regulating advertisement and consumer protections; and • foreign, or U.S. state or local law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; laws that require device and biologics companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government or otherwise restrict payments that may be made to healthcare providers; laws that require device and biologics manufacturers and distributors to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and laws governing the privacy and security of certain health information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
We have borrowed and in the future may borrow additional capital from institutional and commercial banking sources to fund future growth, including pursuant to our Amended and Restated Credit, Security and Guaranty Agreement (Term Loan), or the Amended Term Loan Credit Agreement, and our Amended and Restated Credit, Security and Guaranty Agreement (Revolving Loan), or the Revolving Loan Credit Agreement, both with MidCap Financial Trust, or MidCap, or potentially pursuant to new arrangements with different lenders.
We have borrowed and in the future may borrow additional capital from institutional and commercial banking sources to fund future growth, including pursuant to our Amended and Restated Credit, Security and Guaranty Agreement (Term Loan), or the Term Loan Credit Agreement, and our Amended and Restated Credit, Security and Guaranty Agreement (Revolving Loan), or the Revolving Loan Credit Agreement, both with MidCap Financial Trust, or MidCap, or potentially pursuant to new arrangements with different lenders.
Foreign Corrupt Practices Act and anti-corruption laws, and similar laws with a significant anti-corruption intent in foreign countries (as discussed in greater detail above under “ Risks Related to Regulatory Approval, CE Certificates of Conformity and Oversight, and Other Legal Compliance Matters—We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business ” and “ Risks 52 Related to Our Reliance on Third Parties—We rely on third parties to market, sell, distribute and maintain our products and to maintain customer relationships in certain countries ”); • differing payor reimbursement regimes, governmental payors and price controls; • changes in the political or economic condition of a specific country or region; • fluctuations in the value of foreign currency versus the U.S. dollar; • adverse tax consequences, including changes in applicable tax laws and regulations; • liabilities for activities of, or related to, our international operations and those of our agents, distributors and joint venture partners; • tariffs, trade protection measures, import or export licensing requirements, trade embargoes, and sanctions (including those administered by the Office of Foreign Assets Control of the U.S.
Foreign Corrupt Practices Act and anti-corruption laws, and similar laws with a significant anti-corruption intent in foreign countries (as discussed in greater detail above under “ Risks Related to Regulatory Approval, CE Certificates of Conformity and Oversight, and Other Legal Compliance Matters—We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business ” and “ Risks Related to Our Reliance on Third Parties—We rely on third parties to market, sell, distribute and maintain our products and to maintain customer relationships in certain countries ”); 52 • differing payor reimbursement regimes, governmental payors and price controls; • changes in the political or economic condition of a specific country or region; • fluctuations in the value of foreign currency versus the U.S. dollar; • adverse tax consequences, including changes in applicable tax laws and regulations; • liabilities for activities of, or related to, our international operations and those of our agents, distributors and joint venture partners; • tariffs, trade protection measures, import or export licensing requirements, trade embargoes, and sanctions (including those administered by the Office of Foreign Assets Control of the U.S.
While we believe that our available cash and cash equivalents and short-term investments, as well as cash received from product sales and under our agreements with BARDA, the FDA, and the DoD will be sufficient to meet our working capital requirements for at least the next 12 months, if we are unable to generate sufficient product revenue, or access sufficient funds under our government contracts or the public and private equity and debt capital markets, we may be unable to execute successfully on our operating plan.
While we believe that our available cash and cash equivalents and short-term investments, as well as cash received from product sales and under our agreements with BARDA, the FDA, and the DoD, will be sufficient to meet our capital requirements for at least the next 12 months, if we are unable to generate sufficient product revenue, or access sufficient funds under our government contracts or the public and private equity and debt capital markets, we may be unable to execute successfully on our operating plan.
As a result, customers or prospective customers may adopt competing solutions if they perceive that: • the loss of platelets leads to increased costs, or the perception of increased costs for our customers; • the use of our product in any way constrains the availability of platelets due to platelet loss; • our customers or prospective customers believe that the loss of platelets reduces the efficacy of the transfusable unit; • our process requires changes in blood center collection processes or clinical regimens to address platelet loss; or • our products may never receive approval for storage of platelets beyond five days.
As a result, customers or prospective customers may adopt competing solutions if they perceive that: 22 • the loss of platelets leads to increased costs, or the perception of increased costs for our customers; • the use of our product in any way constrains the availability of platelets due to platelet loss; • our customers or prospective customers believe that the loss of platelets reduces the efficacy of the transfusable unit; • our process requires changes in blood center collection processes or clinical regimens to address platelet loss; or • our products may never receive approval for storage of platelets beyond five days.
Our failure to comply with applicable regulatory requirements could result in enforcement action by regulatory agencies, which may include any of the following sanctions: • adverse publicity, warning letters, fines, injunctions, seizure, consent decrees and civil penalties; • repair, replacement, recall or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; • delaying or refusing our requests for approval of new products, new intended uses or modifications to our existing products and regulatory strategies; • exclusion from participation in government programs, such as Medicare and Medicaid; • refusal to grant export or import approval for our products or refusal to allow us to enter into government contracts; 35 • additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance; • withdrawing, suspension or variation in marketing approvals or CE Certificates of Conformity that have already been granted, resulting in prohibitions on sales of our products; and • criminal prosecution.
Our failure to comply with applicable regulatory requirements could result in enforcement action by regulatory agencies, which may include any of the following sanctions: • adverse publicity, warning letters, fines, injunctions, seizure, consent decrees and civil penalties; • repair, replacement, recall or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; • delaying or refusing our requests for approval of new products, new intended uses or modifications to our existing products and regulatory strategies; • exclusion from participation in government programs, such as Medicare and Medicaid; • refusal to grant export or import approval for our products or refusal to allow us to enter into government contracts; 34 • additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance; • withdrawing, suspension or variation in marketing approvals or CE Certificates of Conformity that have already been granted, resulting in prohibitions on sales of our products; and • criminal prosecution.
In any event, if we or our suppliers fail to adhere to cGMP and QSR requirements, have significant non-compliance issues or fail to timely and adequately respond to any adverse inspectional observations or product safety issues, or if any corrective action plan that we or our suppliers propose in response to observed deficiencies is not sufficient, the FDA or other regulatory agency could take enforcement action against us, which could delay production of our products and may include: • untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • unanticipated expenditures to address or defend such actions; • customer notifications or repair, replacement, refunds, recall, detention or seizure of our products; 36 • operating restrictions or partial suspension or total shutdown of production; • refusing or delaying our requests for premarket approval of new products or modified products; • withdrawing, suspension or variation of marketing approvals or CE Certificates of Conformity that have already been granted; • refusal to grant export or import approval for our products; or • criminal prosecution.
In any event, if we or our suppliers fail to adhere to cGMP and QSR requirements, have significant non-compliance issues or fail to timely and adequately respond to any adverse inspectional observations or product safety issues, or if any corrective action plan that we or our suppliers propose in response to observed deficiencies is not sufficient, the FDA or other regulatory agency could take enforcement action against us, which could delay production of our products and may include: • untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • unanticipated expenditures to address or defend such actions; • customer notifications or repair, replacement, refunds, recall, detention or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; 35 • refusing or delaying our requests for premarket approval of new products or modified products; • withdrawing, suspension or variation of marketing approvals or CE Certificates of Conformity that have already been granted; • refusal to grant export or import approval for our products; or • criminal prosecution.
If we are unable to assert that our internal control over financial reporting is effective in the future, or if our independent registered public accounting firm is unable to express an opinion or expresses an adverse opinion on the effectiveness of our internal controls in the future, investor 58 confidence in the accuracy and completeness of our financial reports could be further eroded, which would have a material adverse effect on the price of our common stock.
If we are unable to assert that our internal control over financial reporting is effective in the future, or if our independent registered public accounting firm is unable to express an opinion or expresses an adverse opinion on the effectiveness of our internal controls in the future, investor confidence in the accuracy and completeness of our financial reports could be further eroded, which would have a material adverse effect on the price of our common stock.
To mitigate product expiration, should hospitals require that we use a consigned inventory model whereby unused product at the hospital at expiration is replaced with fresh product at reduced or no cost to the hospital, we may need to keep additional inventory or manufacture IFC above levels generating an economic return, which could adversely affect our results of operations and financial condition.
To mitigate product expiration, should hospitals require that we use a consigned inventory model whereby unused product at the hospital at expiration is replaced with fresh product at reduced or no 48 cost to the hospital, we may need to keep additional inventory or manufacture IFC above levels generating an economic return, which could adversely affect our results of operations and financial condition.
We will need to maintain and may need to increase our competence and size in a number of functions, including sales, deployment and product support, marketing, regulatory, inventory and logistics, customer service, credit and collections, risk management, and quality assurance systems in order to successfully support our commercialization activities in all of the jurisdictions we currently sell and 51 market, or anticipate selling and marketing, our products.
We will need to maintain and may need to increase our competence and size in a number of functions, including sales, deployment and product support, marketing, regulatory, inventory and logistics, customer service, credit and collections, risk management, and quality assurance systems in order to successfully support our commercialization activities in all of the jurisdictions we currently sell and market, or anticipate selling and marketing, our products.
Hiring, training and retaining new personnel is costly, time consuming and distracting to existing employees and management. Currently, we, third-party suppliers and vendors and customers are experiencing an extremely tight labor market exacerbating our ability to attract and retain talent. Furthermore, a significant component of our employee compensation and retention practice involves stock-based compensation.
Hiring, training and retaining new personnel is costly, time consuming and distracting to 51 existing employees and management. Currently, we, third-party suppliers and vendors and customers are experiencing an extremely tight labor market exacerbating our ability to attract and retain talent. Furthermore, a significant component of our employee compensation and retention practice involves stock-based compensation.
For the avoidance 57 of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
In Germany, decisions on product adoption are made on a regional or even blood center-by-blood center basis, but depend on both local approvals and centralized regulatory approvals from the Paul Ehrlich Institute, or PEI. Obtaining these approvals requires support and coordination from local blood centers, and may take a significant period of time to 25 obtain, if ever.
In Germany, decisions on product adoption are made on a regional or even blood center-by-blood center basis, but depend on both local approvals and centralized regulatory approvals from the Paul Ehrlich Institute, or PEI. Obtaining these approvals requires support and coordination from local blood centers, and may take a significant period of time to obtain, if ever.
Product specifications that receive marketing authorization from the PEI may differ from product specifications that have been adopted in other parts of the EU and other countries where we rely on CE Certificates of Conformity and the CE Mark, thereby necessitating market specific modifications to the commercial product, which may not be economical or technically feasible for us.
Product specifications that receive marketing authorization from the PEI may differ from product specifications that have been adopted in other parts of the EU and other countries where we rely on CE Certificates of Conformity and the CE Mark, thereby 24 necessitating market specific modifications to the commercial product, which may not be economical or technically feasible for us.
In addition, should there be a temporary funding shortfall with any of the activities contemplated, we may need to cease, delay or defer completion of the activities until the funding shortfall is resolved, if ever. For example, we know that certain options are expected to run out of approved amounts under the agreement in the near-term.
In addition, should there be a temporary funding shortfall with any of the activities contemplated, we may need to cease, delay or defer completion of the activities until the funding shortfall is resolved, if ever. For example, we know that certain options are expected to run out of approved amounts under the 2016 Agreement in the near-term.
Laws in all states and U.S. territories also require businesses to notify affected individuals, governmental entities and/or credit reporting agencies of certain security breaches affecting personal information. These laws are not consistent, and compliance with them in the event of a widespread data breach is complex and costly.
Laws in all states and U.S. territories also require businesses to notify affected individuals, governmental entities 38 and/or credit reporting agencies of certain security breaches affecting personal information. These laws are not consistent, and compliance with them in the event of a widespread data breach is complex and costly.
The implementation of new health care legislation could result in significant changes to the health care system, which could have a material adverse effect on our business, results of operations, financial condition and growth prospects. More recently, there has been heightened governmental scrutiny in the U.S. to control the rising cost of healthcare.
The implementation of new health care legislation could result in 40 significant changes to the health care system, which could have a material adverse effect on our business, results of operations, financial condition and growth prospects. More recently, there has been heightened governmental scrutiny in the U.S. to control the rising cost of healthcare.
Furthermore, if a court were to find the exclusive forum provisions contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material and adverse impact on our operating results and our financial condition.
Furthermore, if a court were to find the exclusive forum provisions contained in our 57 bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material and adverse impact on our operating results and our financial condition.
In addition, customers and prospective 28 customers may believe that our competitors’ products are safer, more cost effective or easier to implement and incorporate into existing blood processing procedures than INTERCEPT Blood System products. Moreover, regulatory agencies may mandate use of competing products which would limit our ability to sell our products in those markets.
In addition, customers and prospective customers may believe that our competitors’ products are safer, more cost effective or easier to implement and incorporate into existing blood processing procedures than INTERCEPT Blood System products. Moreover, regulatory agencies may mandate use of competing products which would limit our ability to sell our products in those markets.
In any event, any failure or further delays in completing the development activities for the red blood cell system would prevent or continue to delay its commercialization, which would materially 31 and adversely affect our business, financial condition, results of operations, growth prospects and potential future market adoption of any of our products, including the red blood cell system.
In any event, any failure or further delays in completing the development activities for the red blood cell system would prevent or continue to delay its commercialization, which would materially and adversely affect our business, financial condition, results of operations, growth prospects and potential future market adoption of any of our products, including the red blood cell system.
We also rely on our ability to attract, retain and motivate skilled and highly qualified personnel in order to grow our company. Our depressed stock price negatively impacts our ability to provide 53 perceived valuable equity compensation to our employees, including executive management. Competition for qualified personnel in the medical device and pharmaceutical industry is very intense.
We also rely on our ability to attract, retain and motivate skilled and highly qualified personnel in order to grow our company. Our depressed stock price negatively impacts our ability to provide perceived valuable equity compensation to our employees, including executive management. Competition for qualified personnel in the medical device and pharmaceutical industry is very intense.
Even if we are able to generate compelling data regarding the use of IFC over other products or traditional cryoprecipitate, hospitals may not perceive the advantage of IFC over the competing products and we may be ineffective in selling biological agents directly to hospitals or be unable to demonstrate the economic or patient advantages to customers relative to the competitors.
Even if we are able to generate compelling data regarding the use of IFC over other products or traditional cryoprecipitate, hospitals may not perceive the advantage of IFC over the competing products and we may be ineffective in selling biological agents directly to hospitals or be unable to demonstrate the economic or patient advantages to customers relative to 27 the competitors.
Typically, there is a high rate of failure for product candidates in preclinical studies and clinical trials and products emerging from any successful trial may not reach the market for several years. Enrollment criteria for certain of our clinical trials may be quite narrow, further delaying the clinical trial process.
Typically, there is a high rate of failure for product 29 candidates in preclinical studies and clinical trials and products emerging from any successful trial may not reach the market for several years. Enrollment criteria for certain of our clinical trials may be quite narrow, further delaying the clinical trial process.
Additionally, we may 45 need terminated distributors to cooperate with us or a new distributor in transitioning sub-distributor relationships and contracts, hospital contracts, public tenders, or regulatory certificates or licenses held in their name. These factors may be disruptive for our customers and our reputation may be damaged as a result.
Additionally, we may need terminated distributors to cooperate with us or a new distributor in transitioning sub-distributor relationships and contracts, hospital contracts, public tenders, or regulatory certificates or licenses held in their name. These factors may be disruptive for our customers and our reputation may be damaged as a result.
If we are unable to successfully market the IFC to hospitals or comply with unique regulations governing finished biologics, our ability to monetize and deliver the IFC will be negatively impacted which would materially and adversely affect our business, financial condition, results of operations and growth prospects.
If we are unable to successfully market IFC to hospitals or comply with unique regulations governing finished biologics, our ability to monetize and deliver IFC will be negatively impacted which would materially and adversely affect our business, financial condition, results of operations and growth prospects.
If a security breach were to occur, and the confidentiality, integrity, or availability of personal information was 54 disrupted, we could incur significant liability, or our platform, systems, or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.
If a security breach were to occur, and the confidentiality, integrity, or availability of personal information was disrupted, we could incur significant liability, or our platform, systems, or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.
Risks Related to Our Intellectual Property We may not be able to protect our intellectual property or operate our business without infringing intellectual property rights of others. Our commercial success will depend, in part, on obtaining and maintaining patent protection on our products and successfully defending our products against third-party challenges.
Risks Related to Our Intellectual Property We may not be able to protect our intellectual property or operate our business without infringing intellectual property rights of others. 55 Our commercial success will depend, in part, on obtaining and maintaining patent protection on our products and successfully defending our products against third-party challenges.
Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response; • reduce the scope and value of our BARDA agreement; • decline to exercise an option to continue the BARDA agreement; • direct the course of the development of the red blood cell system in a manner not chosen by us; • require us to perform the option periods provided for under the BARDA agreement even if doing so may cause us to forego or delay the pursuit of other red blood cell program opportunities with greater commercial potential; • take actions that result in a longer development timeline than expected; • limit the government’s financial liability to amounts appropriated by the U.S.
Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response; • reduce the scope and value of our BARDA agreements; • decline to exercise an option to continue the BARDA agreements; • direct the course of the development of the red blood cell system in a manner not chosen by us; • require us to perform the option periods provided for under the BARDA agreements even if doing so may cause us to forego or delay the pursuit of other red blood cell program opportunities with greater commercial potential; • take actions that result in a longer development timeline than expected; • limit the government’s financial liability to amounts appropriated by the U.S.
Should that happen, customers may not be able to use our product with alternate components for which our products are compatible, which in turn, may damage our business. In addition, we may need to identify, validate and qualify additional 46 manufacturing capacity with existing or new suppliers.
Should that happen, customers may not be able to use our product with alternate components for which our products are compatible, which in turn, may damage our business. In addition, we may need to identify, validate and qualify additional manufacturing capacity with existing or new suppliers.
Furthermore, we do not yet know whether or not certain components used by blood center operators or used in the production of INTERCEPT will comply with the new standards under the MDR. Failure to comply with the new standards timely may result in a disruption to blood center operations or the manufacture of the INTERCEPT Blood System.
Furthermore, we do not yet know whether or not certain components or accessories used by blood center operators or used in the production of INTERCEPT will comply with the new standards under the MDR. Failure to comply with the new standards timely may result in a disruption to blood center operations or the manufacture of the INTERCEPT Blood System.
If we are not successful in achieving market adoption of the INTERCEPT Blood System in the U.S., we may never generate substantial product revenue, and our business, financial condition, results of operations and growth prospects would be materially and adversely affected.
If we are not successful in achieving broad market adoption of the INTERCEPT Blood System in the U.S., we may never generate substantial product revenue, and our business, financial condition, results of operations and growth prospects would be materially and adversely affected.
We may be unable to demonstrate to these constituencies that the INTERCEPT Blood System is safe, effective and economical or that the benefits of using the INTERCEPT Blood System products justify their cost and/or outweigh their risks. 23 The use of the platelet system results in some processing loss of platelets.
We may be unable to demonstrate to these constituencies that the INTERCEPT Blood System is safe, effective and economical or that the benefits of using the INTERCEPT Blood System products justify their cost and/or outweigh their risks. The use of the platelet system results in some processing loss of platelets.
We have limited knowledge and control over 40 the business practices of our distributors and agents, and we may face regulatory action against us as a result of their actions which could have a material adverse effect on our reputation, business, results of operations and financial condition.
We have limited knowledge and control over the business practices of our distributors and agents, and we may face regulatory action against us as a result of their actions which could have a material adverse effect on our reputation, business, results of operations and financial condition.
Clinical trial design, including enrollment criteria, endpoints and anticipated label claims are thus subject to change, even if original objectives are being met. As a 30 result, we do not know whether any clinical trial will result in marketable products.
Clinical trial design, including enrollment criteria, endpoints and anticipated label claims are thus subject to change, even if original objectives are being met. As a result, we do not know whether any clinical trial will result in marketable products.
In any event, if we are unable to develop and maintain an effective and qualified U.S. based commercial organization, we may fail to realize the full sales potential of our commercial products in the U.S. which would materially and adversely affect our business, financial condition, results of operations and growth prospects. 26 We have very limited experience selling directly to hospitals or expertise complying with regulations governing finished biologics, and our inability to successfully commercialize the INTERCEPT Blood System for cryoprecipitation in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects.
In any event, if we are unable to develop and maintain an effective and qualified U.S. based commercial organization, we may fail to realize the full sales potential of our commercial products in the U.S. which would materially and adversely affect our business, financial condition, results of operations and growth prospects. 25 We have very limited experience selling directly to hospitals or expertise complying with regulations governing finished biologics, and our inability to successfully commercialize the INTERCEPT Blood System for cryoprecipitation in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We filed our application for a CE Certificate of Conformity related to the red blood cell system in December 2018 under the Medical Device Directive, or MDD, and in June 2021, we completed the resubmission of our application under the new MDR.
We filed our application for conformity assessment and a CE Certificate of Conformity related to the red blood cell system in December 2018 under the Medical Device Directive, or MDD, and in June 2021, we completed the resubmission of our application under the new MDR.
Generally, our distribution agreements require distributors to purchase minimum quantities in a given year over the term of the agreement. Failure by our distributors to meet these minimum purchase obligations may adversely affect our financial condition and results of operations.
Generally, our distribution agreements require distributors to purchase minimum quantities in a given year over the term of the agreement. Failure by our distributors to meet these minimum purchase obligations may adversely 44 affect our financial condition and results of operations.
Conversely, we may choose to overstock inventory in order to mitigate any 48 unforeseen potential disruption to manufacturing which could consume our cash resources faster than we anticipate and may cause our supply chain to be less efficient.
Conversely, we may choose to overstock inventory in order to mitigate any unforeseen potential disruption to manufacturing which could consume our cash resources faster than we anticipate and may cause our supply chain to be less efficient.
We could be subject to a claim from a patient that tests positive, even though that patient did not contract a disease. We must report safety events to regulatory 27 authorities, regardless of the imputability of our products.
We could be subject to a claim from a patient that tests positive, even though that patient did not contract a disease. We must report safety events to regulatory authorities, regardless of the imputability of our products.
Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not 50 described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.
Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.
Even if we are able to identify and hire qualified personnel commensurate with our growth objectives and opportunities, the process of integrating new employees is time consuming, costly and distracting to existing employees and management.
Even if we are able to identify and hire qualified personnel commensurate with our growth objectives and opportunities, the process of integrating new employees is time consuming, costly and distracting to existing 53 employees and management.
The market price of our common stock is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market, industry and other factors, including the risk factors described in this “Risk Factors” section.
The market price of our common stock is likely to continue to be volatile and 56 subject to significant price and volume fluctuations in response to market, industry and other factors, including the risk factors described in this “Risk Factors” section.
If we fail to obtain the capital necessary to fund our future operations or if we are unable to generate positive cash flows from our operations, we will need to curtail planned development or sales and commercialization activities.
If we fail to obtain the capital necessary to fund our future operations or if we are unable to generate sufficient positive cash flows from our operations, we will need to curtail planned development or sales and commercialization activities.
Without approvals of MAA applications obtained by potential German customers, or willingness of hospitals to seek reimbursement for pathogen-reduced platelets or for insurers to submit for the approved incremental reimbursement for pathogen-reduced platelets, our ability to successfully commercialize INTERCEPT in Germany will be negatively impacted, which may adversely affect our business, results of operations and financial condition and we may never realize a return on the investments we have made building out our commercial team in Germany.
Without approvals obtained by potential German customers, or willingness of hospitals to seek reimbursement for pathogen-reduced platelets or for insurers to submit for the approved incremental reimbursement for pathogen-reduced platelets, our ability to successfully commercialize INTERCEPT in Germany will be negatively impacted, which may adversely affect our business, results of operations and financial condition and we may never realize a return on the investments we have made building out our commercial team in Germany.
Risks Related to Government Contracts 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 our BARDA agreement, and if BARDA were to eliminate, reduce, delay, or object to extensions for funding of our agreement, it would have a significant, negative impact on our government contract revenues and cash flows, and we may be forced to suspend or terminate our U.S. red blood cell development program or obtain alternative sources of funding.
Risks Related to Government Contracts 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 our BARDA agreements, and if BARDA were to eliminate, reduce, delay, or object to extensions for funding of our agreements, it would have a significant, negative impact on our government contract revenues and cash flows, and we may be forced to suspend or terminate our U.S. red blood cell development program or obtain alternative sources of funding.
Although we have completed studies to provide reasonable assurance that an 55 ownership change limitation would not apply, we cannot be certain that a taxing authority would reach the same conclusion.
Although we have completed studies to provide reasonable assurance that an ownership change limitation would not apply, we cannot be certain that a taxing authority would reach the same conclusion.
In addition, existing lots of these red blood cell compounds manufactured under cGMP may be dispositioned by regulators or ourselves as unsuitable for clinical use which would impact our ability to produce INTERCEPT-treated red blood cells for ongoing and future clinical trials and may require changes to the manufacturing process of our red blood cell compounds or new production of the compounds, all of which would be costly and time consuming and impact our ability to perform under our BARDA contract.
In addition, existing lots of these red blood cell compounds manufactured under cGMP may be dispositioned by regulators or ourselves as unsuitable for clinical use which would impact our ability to produce INTERCEPT-treated red blood cells for ongoing and future clinical trials and may require changes to the manufacturing process of our red blood cell compounds or new production of the compounds, all of which would be costly and time consuming and impact our ability to perform under our BARDA agreements.
We may also need to demonstrate the safety and efficacy of our platelet system using a variety of configurations before our platelet system would be approved for such configurations.
We may also need to demonstrate the safety and efficacy of our platelet system using a variety of configurations before our platelet system would be approved 28 for such configurations.
Labor shortages of qualified personnel is expected to persist for the foreseeable future and has required that we broaden our searches and change the way we operate. If we are unable to attract, retain and motivate quality individuals, our business, financial condition, ability to perform under our BARDA agreement, or results of operations and growth prospects could be adversely affected.
Labor shortages of qualified personnel is expected to persist for the foreseeable future and has required that we broaden our searches and change the way we operate. If we are unable to attract, retain and motivate quality individuals, our business, financial condition, ability to perform under our BARDA agreements, or results of operations and growth prospects could be adversely affected.
Additionally, if new sanctions restrictions are placed on our ability to continue to support our business in Russia, Belarus, or other CIS countries, then we may decide to cease that business which would have a detrimental impact on our financial results, our reputation in those countries, and the eligibility of our Russian and Belarussian distributors to participate in public contracts.
Additionally, if new sanctions restrictions are placed on our ability to continue to support our business in Russia, Belarus, or other CIS countries, then we may decide to cease that business which would have a detrimental impact on our financial results, our reputation in those countries, and the eligibility of our Russian and Belarusian distributors to participate in public contracts.
Moreover, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products in the EU. We must comply with medical device reporting requirements, including the reporting of serious incidents including malfunctions related to our products and field safety corrective actions, as well as adverse events occurring during clinical investigations.
Moreover, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products in Europe. We must comply with medical device reporting requirements, including the reporting of serious incidents including malfunctions related to our products and field safety corrective actions, as well as adverse events occurring during clinical investigations.
The INTERCEPT Blood System products compete with other approaches to blood safety currently in use and may compete with future products that may be developed by others.
The INTERCEPT Blood System products and IFC compete with other approaches to blood safety currently in use and may compete with future products that may be developed by others.
As a result, we may carry excess work-in-process or finished goods inventory, which would consume capital resources and may become obsolete, or our inventory may be inadequate to meet customer demand. Our platelet and plasma systems’ disposable kits have 6 to 24 months shelf lives from the date of manufacture.
As a result, we may carry excess work-in-process or finished goods inventory, which would consume capital resources and may become obsolete, or our inventory may be inadequate to meet customer demand. Our platelet and plasma systems’ disposable kits have 18 to 24 months shelf lives from the date of manufacture.
There can also be no assurance that our BARDA agreement will not be terminated, that our BARDA agreement will be extended for existing exercised options or through the exercise of subsequent option periods, that any such extensions would be on terms favorable to us, or that we will otherwise obtain the funding that we anticipate to obtain under our agreement with BARDA.
There can also be no assurance that our BARDA agreements will not be terminated, that our BARDA agreements will be extended for existing exercised options or through the exercise of subsequent option periods, that any such extensions would be on terms favorable to us, or that we will otherwise obtain the funding that we anticipate to obtain under our agreements with BARDA.
We are currently conducting multiple clinical trials for our products and product candidates and plan to commence additional clinical trials of our products and product candidates in the future.
We are currently conducting clinical trials for our products and product candidates and plan to commence additional clinical trials of our products and product candidates in the future.
However, our agreement with BARDA only reimburses certain specified development and clinical activities that have been authorized by BARDA pursuant to the base period and certain options of the agreement and the potential exercise of subsequent option periods. To date, BARDA has exercised approximately $185.5 million under the base period of the agreement and associated options.
However, the 2016 Agreement with BARDA only reimburses certain specified development and clinical activities that have been authorized by BARDA pursuant to the base period and certain options of the 2016 Agreement and the potential exercise of subsequent option periods. To date, BARDA has exercised approximately $185.5 million under the base period of the 2016 Agreement and associated options.
Congress on a fiscal-year basis, thereby leaving some uncertainty about the future availability of funding for the red blood cell program even after it has been funded for an initial period; and • change certain terms and conditions in our BARDA agreement.
Congress on a fiscal-year basis, thereby leaving some uncertainty about the future availability of funding for the red blood cell program even after it has been funded for an initial period; and • change certain terms and conditions in our BARDA agreements.
We have based our cash sufficiency estimate on assumptions that may prove to be incorrect. If our assumptions prove to be incorrect, we could consume our available capital resources sooner than we currently expect or in excess of amounts than we currently expect, which could adversely affect our commercialization and clinical development activities.
We have based our cash sufficiency estimate on assumptions that may prove to be incorrect. If our assumptions prove to be incorrect, including inflationary assumptions, we could consume our available capital resources sooner than we currently expect or in excess of amounts than we currently expect, which could adversely affect our commercialization and clinical development activities.
We cannot rely on interim results of trials to predict their final results, and acceptable results in early trials might not be repeated in later and larger clinical trials or in the results of routine use. Any trial may fail to produce results satisfactory to the FDA or foreign regulatory authorities.
We cannot rely on interim results of trials to predict their final results, and acceptable results in early trials might not be repeated in later and larger clinical trials or in the results of routine use. Any trial may fail to produce results satisfactory to the FDA, foreign regulatory authorities, or Notified Bodies.
If, after a review or audit, an ownership change limitation were to apply, utilization of our domestic NOL and tax credit carryforwards could be limited in future periods and a portion of the carryforwards could expire before being utilized to reduce future income tax liabilities.
If, after a review or audit, an ownership change limitation were to apply, utilization of our domestic NOL and tax credit carryforwards could be limited in future periods and a portion of such carryforwards could expire before being utilized to reduce future income tax liabilities.
Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension, variation or withdrawal of regulatory clearances, certifications or approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.
Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension, variation or withdrawal of regulatory clearances, CE Certificates of Conformity or approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.
Finally, we may decide not to follow the advice provided by BARDA and instead pursue activities that we believe are in the best interests of our red blood cell program and our business, even if BARDA would not reimburse us under our agreement.
Finally, we may decide not to follow the advice provided by BARDA and instead pursue activities that we believe are in the best interests of our red blood cell program and our business, even if BARDA would not reimburse us under our agreements.
For instance, despite having 24 month aging for our products in many territories around the world, the FDA has limited the shelf life of our platelet product to six months for any platelet kit produced using a new solvent for the manufacture of a component.
For instance, despite having 24 month aging for our products in many territories around the world, the FDA has limited the shelf life of our platelet product to 18 months for any platelet kit produced using a new solvent for the manufacture of a component.
If we follow such BARDA advice, overall red blood cell program delays and costs associated with additional resources for which we had not planned may result. Also, the costs associated with following such advice may or may not be reimbursed by BARDA under our agreement.
If we follow such BARDA advice, overall red blood cell program delays and costs associated with additional resources for which we had not planned may result. Also, the costs associated with following such advice may or may not be reimbursed by BARDA under our agreements.
Should interest rates continue to increase, the rates that we are obligated to pay under our credit agreements would likely increase, potentially leading to higher interest expense. In addition, we expect to continue to opportunistically seek access to the equity capital markets to support our development efforts and operations.
Should interest rates increase, the rates that we are obligated to pay under our credit agreements would increase, leading to higher interest expense. In addition, we expect to continue to opportunistically seek access to the equity capital markets to support our development efforts and operations.
For instance, regulators or Notified Bodies may require clinical data for our red blood cell system under each collection and processing method using various additive or storage solutions before they would grant approval for any such configuration.
Moreover, regulators or Notified Bodies may require clinical data for our red blood cell system under each collection and processing method using various additive or storage solutions before they would grant approval for any such configuration.
If treatment emergent antibody reactions associated with hemolysis are observed in any of our Phase 3 trials, the FDA will require us to place a clinical hold and we will need to investigate the underlying cause.
Moreover, if treatment emergent 31 antibody reactions associated with hemolysis are observed in any of our Phase 3 trials, the FDA will require us to place a clinical hold and we will need to investigate the underlying cause.
If our BARDA agreement is terminated or suspended, if there is any reduction or delay in funding under our BARDA agreement, or if BARDA determines not to exercise some or all of the options provided for under the agreement, our revenues and cash flows would be significantly and negatively impacted and we may be forced to seek alternative sources of funding, which may not be available on non-dilutive terms, terms favorable to us or at all.
If our BARDA agreements are terminated or suspended, if there is any reduction or delay in funding under our BARDA agreements, or if BARDA determines not to exercise some or all of the options provided for under the agreements, our revenues and cash flows would be significantly and negatively impacted and we may be forced to seek alternative sources of funding, which may not be available on non-dilutive terms, terms favorable to us or at all.
Other jurisdictions may adopt 39 similarly stringent interpretations of their data localization and cross-border data transfer laws.
Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
As a result of adverse conditions affecting the global economy and credit and financial markets, including the COVID-19 pandemic, disruptions due to political instability, terrorist attacks or war, economies and currencies largely affected by declining commodity prices, inflationary pressures or otherwise, these organizations may defer purchases, may be unable to satisfy their purchasing or reimbursement obligations, or may delay payment for the INTERCEPT Blood System, and of which could adversely affect our business, financial condition, results of operations and growth prospects.
As a result of adverse conditions affecting the global economy and credit and financial markets, disruptions due to political instability, terrorist attacks or war, economies and currencies largely affected by declining commodity prices, inflationary pressures or otherwise, these organizations may defer purchases, may be unable to satisfy their purchasing or reimbursement obligations, or may delay payment for the INTERCEPT Blood System, and of which could adversely affect our business, financial condition, results of operations and growth prospects.
While we have entered into agreements with Établissement Français du Sang, or EFS, to supply illuminators and platelet and plasma disposable kits and maintenance services for illuminators to EFS, we cannot provide any assurance that the national deployment of the platelet system in France will be sustainable or that we will be able to secure any contracts subsequent to our existing contract with EFS.
While we have entered into agreements with Établissement Français du Sang, or EFS, to supply illuminators, platelet and plasma disposable kits, maintenance services for illuminators and ancillary pooling sets to EFS, we cannot provide any assurance that the national deployment of the platelet system in France will be sustainable or that we will be able to secure any contracts subsequent to our existing contract with EFS.
Our ability to gain 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 American Red Cross is a large organization.
Our 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 American Red Cross is a large organization.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a manufacturer discount program. It is unclear how any such challenges and the healthcare reform efforts of the Biden administration will impact ACA and our business.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a manufacturer discount program. It is unclear how any such challenges and the healthcare reform efforts of the second Trump administration will impact ACA and our business.
Should we choose to challenge the U.S. government for denying certain payments under our BARDA agreement, such a challenge could subject us to substantial additional expenses that we may or may not recover.
Should we choose to challenge the U.S. government for denying certain payments under our BARDA agreements, such a challenge could subject us to substantial additional expenses that we may or may not recover.
Our business is dependent on our ability to grow and sustain commercialization of the INTERCEPT Blood System in the U.S. Significant product revenue from customers in the U.S. may not occur consistently, if at all, if we are unable to demonstrate that our products are economical, safe and efficacious for potential customers.
Our business is dependent on our ability to grow and sustain commercialization of the INTERCEPT Blood System for platelets, plasma, and cryoprecipitation in the U.S. Significant product revenue from customers in the U.S. may not occur consistently, if at all, if we are unable to demonstrate that our products are economical, safe and efficacious for potential customers.
We have very limited experience selling directly to hospitals nor do we have prior experience or expertise complying with regulations governing finished biologics. The introduction of new models of doing business require extensive training of our personnel and may lengthen the time it takes for this business unit to be fully operational.
We have very limited experience selling directly to hospitals nor do we have prior experience or expertise complying with regulations governing finished biologics. The introduction of new models of doing business require extensive training of our personnel and may lengthen the time it takes for our IFC business to be fully operational.
Other states have also enacted data privacy laws. For example, Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act, both of which differ from the CPRA and also become effective in 2023.
Other states have also enacted data privacy laws. For example, Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act, both of which differ from the CPRA and also became effective in 2023.
In addition, in many instances we must identify third-party suppliers, negotiate terms acceptable to us and BARDA and ensure ongoing compliance by these suppliers with the obligations covered by our BARDA agreement.
In addition, in many instances we must identify third-party suppliers, negotiate terms acceptable to us and BARDA and ensure ongoing compliance by these suppliers with the obligations covered by our BARDA agreements.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional service firms, threat intelligence service providers, cybersecurity software providers, managed cybersecurity service providers, penetration testing firms and forensic investigators. 59 We use third-party service providers to perform a variety of functions throughout our business, such as third-party distributors for our products in certain countries and third-party suppliers for the manufacture of our products, as well as third-party application providers and third-party hosting companies.
Biggest changeWe use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional service firms, threat intelligence service providers, cybersecurity software providers, managed cybersecurity service providers, penetration testing firms and forensic investigators.
Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including Senior Director, IT & Facilities, Chief Legal Officer, Chief Financial Officer, Chief Executive Officer and others. Those individuals work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including Senior Director, IT & Facilities, Chief Legal Officer, Chief Financial Officer, Chief Executive Officer and others. Those individuals work with our incident response team to help us mitigate and remediate cybersecurity incidents of which 59 they are notified.
In addition, our incident response plan includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee of the board of directors receives periodic reports from our Senior Director, IT & Facilities concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
In addition, our incident response plan includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee of the board of directors receives periodic reports from our Senior Director, IT & Facilities and third-party experts concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
Added
We use third-party service providers to perform a variety of functions throughout our business, such as third-party distributors for our products in certain countries and third-party suppliers for the manufacture of our products, as well as third-party application providers and third-party hosting companies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our current and future facilities will be adequate for the foreseeable future.
Biggest changeWe also lease an office facility 58 in Amersfoort, the Netherlands, which is used for selling and administrative functions. We believe that our current and future facilities will be adequate for the foreseeable future.
Of the 84,631 square feet, we sublease 14,908 square feet to a subtenant under a three-year lease ending March 31, 2025 and ceased using approximately 15,000 square feet of rentable area of corporate office building in the third quarter of 2023. We also lease an office facility in Amersfoort, the Netherlands, which is used for selling and administrative functions.
Of the 84,631 square feet, we sublease 14,908 square feet to a subtenant under a three-year lease ending March 31, 2025 and ceased using approximately 15,000 square feet of rentable area of corporate office building in the third quarter of 2023. We are currently marketing our vacant space and subleased space for lease after March 31, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeComparison of 5-year Cumulative Total Return on Investment December 31, 2018 2019 2020 2021 2022 2023 Cerus Corporation $ 100.00 $ 83.23 $ 136.49 $ 134.32 $ 71.99 $ 42.60 Nasdaq US Benchmark Medical Supplies TR 100.00 133.88 167.70 203.48 133.42 141.15 Nasdaq 100.00 96.12 129.97 186.69 226.63 217.45 (1) The graph and the other information furnished in this section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by references to any filing of Cerus Corporation under the Securities Act of 1933, as amended or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing.
Biggest changeComparison of 5-year Cumulative Total Return on Investment December 31, 2019 2020 2021 2022 2023 2024 Cerus Corporation $ 100.00 $ 163.98 $ 161.37 $ 86.49 $ 51.18 $ 36.49 Nasdaq US Benchmark Medical Supplies TR 100.00 125.26 151.98 99.65 105.43 95.87 Nasdaq 100.00 135.23 194.24 235.78 226.24 291.03 (1) The graph and the other information furnished in this section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by references to any filing of Cerus Corporation under the Securities Act of 1933, as amended or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing.
Stock Performance Graph (1) The following graph shows the total stockholder return of an investment of $100 in cash (and the reinvestment of any dividends thereafter) on December 31, 2018, and tracked the performance through December 31, 2023, for (i) our common stock, (ii) the US Benchmark Medical Suppliers TR, and (iii) the Nasdaq Stock Market (United States) Index.
Stock Performance Graph (1) The following graph shows the total stockholder return of an investment of $100 in cash (and the reinvestment of any dividends thereafter) on December 31, 2019, and tracked the performance through December 31, 2024, for (i) our common stock, (ii) the US Benchmark Medical Suppliers TR, and (iii) the Nasdaq Stock Market (United States) Index.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Market under the symbol “CERS”. On February 8, 2024, we had 116 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Market under the symbol “CERS”. On February 6, 2025, we had 115 holders of record of our common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeAs a result of economic conditions, general global economic uncertainty, political change, war, the effects of inflationary pressures and other factors including recent and potential U.S. bank failures, we do not know whether additional capital will be available when needed, or that, if available, we will be able to obtain additional capital on reasonable terms.
Biggest changeTo the extent that we raise additional funds through collaboration or partnering arrangements, we may be required to relinquish some of our rights to our technologies or rights to market and sell our products in certain geographies, grant licenses on terms that are not favorable to us, or issue equity that may be substantially dilutive to our stockholders. 63 As a result of economic conditions, general global economic uncertainty, political change, war, the effects of inflationary pressures, including those resulting from new tariffs and escalating trade tensions, and other factors including past and potential future U.S. bank failures, we do not know whether additional capital will be available when needed, or that, if available, whether we will be able to obtain additional capital on reasonable terms.
The restructuring also included a facilities consolidation strategy to cease use of a part of our corporate office building which occurred during the third quarter of 2023. We recognized certain charges related to our facilities consolidation.
The restructuring also included a facilities consolidation strategy to cease the use of a part of our corporate office building which occurred during the third quarter of 2023. We recognized certain charges related to our facilities consolidation.
We may need to obtain additional funding to conduct additional randomized controlled clinical trials for existing or new products, particularly if we are unable to access any additional portions of the funding contemplated by our government contracts, and we may choose to defer such activities until we can obtain sufficient additional funding or, at such time, our existing operations provide sufficient cash flow to conduct these trials.
We may need to obtain additional funding to conduct additional randomized controlled clinical trials for existing or new products, particularly if we are unable to access any additional portions of the funding contemplated by our government contracts, and we may choose to defer such activities until we can obtain sufficient additional funding or, at such time, our existing operations provide sufficient cash flow to conduct these trials.
Government contracts In June 2016, we entered into an agreement with BARDA to support our development and implementation of pathogen reduction technology for platelet, plasma, and red blood cells, including access to funding that could potentially support various activities, including conducting studies necessary to support a potential premarket approval application submission to the FDA for the red blood cell system, and accelerating commercial scale up activities to facilitate potential adoption of the red blood cell system by U.S. blood centers.
Government contracts In June 2016, we entered into an agreement with BARDA, or the 2016 BARDA Agreement, to support our development and implementation of pathogen reduction technology for platelet, plasma, and red blood cells, including access to funding that could potentially support various activities, including conducting studies necessary to support a potential premarket approval application submission to the FDA for the red blood cell system, and accelerating commercial scale up activities to facilitate potential adoption of the red blood cell system by U.S. blood centers.
Selling, General and Administrative Expenses 67 Selling, general and administrative expenses include salaries and related expenses for administrative personnel, non-cash stock-based compensation, expenses for our commercialization efforts in a number of countries around the world including those in U.S., Europe, the CIS and the Middle East, Asia, and Latin America, and expenses for accounting, tax, internal control, legal, facility and infrastructure related expenses, and insurance premiums.
Selling, General and Administrative Expenses Selling, general and administrative expenses include salaries and related expenses for administrative personnel, non-cash stock-based compensation, expenses for our commercialization efforts in a number of countries around the world including those in U.S., Europe, the CIS and the Middle East, Asia, and Latin America, and expenses for accounting, tax, internal control, legal, facility and infrastructure related expenses, and insurance premiums.
See Note 8, Debt , to our audited consolidated financial statements included in Part IV, Item 15— Exhibits and Financial Statement of this Annual Report on Form 10-K for more information on the debt under our Term Loan Credit Agreement and the Revolving Loan Credit Agreement.
See Note 8, Debt , to our audited consolidated financial statements included in Part IV, Item 15— Exhibits and Financial Statement Schedules of this Annual Report on Form 10-K for more information on the debt under our Term Loan Credit Agreement and the Revolving Loan Credit Agreement.
Accordingly, we may never achieve a profitable level of operations in the future. In addition to the anticipated product revenues from sales of our platelet and plasma systems and sales of IFC, we anticipate that we will continue to recognize revenue from our government contracts.
Accordingly, we may never achieve a profitable level of operations in the future. 64 In addition to the anticipated product revenues from sales of our platelet and plasma systems and sales of IFC, we anticipate that we will continue to recognize revenue from our government contracts.
All U.S. blood centers must be compliant with the FDA guidance document, “Bacterial Risk Control Strategies for Blood Collection Establishments and Transfusion Services to Enhance the Safety and Availability of Platelets for Transfusion,” or the 63 Final Guidance Document.
All U.S. blood centers must be compliant with the FDA guidance document, “Bacterial Risk Control Strategies for Blood Collection Establishments and Transfusion Services to Enhance the Safety and Availability of Platelets for Transfusion,” or the Final Guidance Document.
We must allocate the transaction price to each performance obligation on a relative standalone selling price, or SSP basis, and recognize the revenue when the performance obligation is satisfied. We determine the SSP by using the historical selling price of the products and services.
We 66 must allocate the transaction price to each performance obligation on a relative standalone selling price, or SSP basis, and recognize the revenue when the performance obligation is satisfied. We determine the SSP by using the historical selling price of the products and services.
See Note 8, Debt, to our audited 69 consolidated financial statements included in Part IV, Item 15 “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for more information.
See Note 8, Debt, to our audited consolidated financial statements included in Part IV, Item 15 “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for more information.
We sell the platelet and plasma systems directly to blood banks, hospitals, universities, government agencies, 65 as well as to distributors in certain regions.
We sell the platelet and plasma systems directly to blood banks, hospitals, universities, government agencies, as well as to distributors in certain regions.
Due to our history of cumulative operating losses, management has concluded that, after considering all of the available objective evidence, it is not likely that all our net deferred tax assets as of December 31, 2023, will be realized.
Due to our history of cumulative operating losses, management has concluded that, after considering all of the available objective evidence, it is not likely that all our net deferred tax assets as of December 31, 2024, will be realized.
Under the agreement, we are reimbursed upon completion of each milestone and will recognize revenue based on the application of the cost-to-cost input method, which measures the extent of progress towards completion based on the ratio of actual costs incurred to the total estimated costs.
Under the agreement, we are paid upon completion of each milestone and will recognize revenue based on the application of the cost-to-cost input method, which measures the extent of progress towards completion based on the ratio of actual costs incurred to the total estimated costs.
Operating results for the year ended December 31, 2023, are not necessarily indicative of results that may occur in future periods. This discussion contains forward-looking statements that involve risks and uncertainties.
Operating results for the year ended December 31, 2024, are not necessarily indicative of results that may occur in future periods. This discussion contains forward-looking statements that involve risks and uncertainties.
If BARDA were to eliminate, reduce or delay funding under our agreement, this would have a significant negative impact on the programs associated with such funding and could have a significant negative impact on our revenues and cash flows.
If BARDA were to eliminate, reduce or delay funding under our agreements, this would have a significant negative impact on the programs associated with such funding and could have a significant negative impact on our revenues and cash flows.
In addition, we have also entered into certain agreements with blood centers who will purchase the finished IFC from us to sell to their hospital customers, and with blood center and blood center affiliate organizations to sell the INTERCEPT Blood System for Cryoprecipitation kits which will allow those blood centers and blood center affiliate organizations to produce finished IFC for their own sales efforts to hospitals.
In addition, we have also entered into certain agreements with blood centers who will purchase the finished IFC from us to sell to their hospital customers, and with blood center and blood center affiliate organizations to sell INTERCEPT Blood System for Cryoprecipitation kits to produce finished IFC for their own sales efforts to hospitals.
We sell IFC directly to hospital customers in the U.S. using a direct sales force, though we may in the future sell INTERCEPT Blood System for Cryoprecipitation disposable kits to strategic blood centers that are not manufacturing partners for our distribution and sale of IFC.
We sell IFC directly to hospital customers in the U.S. using a direct sales force and indirectly through certain blood centers, though we may in the future sell INTERCEPT Blood System for Cryoprecipitation disposable kits to strategic blood centers that are not manufacturing partners for our distribution and sale of IFC.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 1, 2023.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 5, 2024.
Accordingly, substantially all of our U.S. deferred tax assets continue to be subject to a valuation allowance as of December 31, 2023. Liquidity and Capital Resources In recent years, our sources of capital have primarily consisted of public issuance of common stock, debt instruments and, to a lesser extent, cash from product sales and reimbursements under our government agreements.
Accordingly, substantially all of our U.S. deferred tax assets continue to be subject to a valuation allowance as of December 31, 2024. Liquidity and Capital Resources In recent years, our sources of capital have primarily consisted of public issuance of common stock, debt arrangements and, to a lesser extent, cash from product sales and reimbursements under our government agreements.
We maintain portfolio liquidity by ensuring that the securities have active secondary or resale markets. We did not record any credit losses during the years ended December 31, 2023, 2022 and 2021. Adverse global economic conditions have had, and may continue to have, a negative impact on the market values of potential investments. 72
We maintain portfolio liquidity by ensuring that the securities have active secondary or resale markets. We did not record any credit losses during the years ended December 31, 2024, 2023 and 2022. Adverse global economic conditions have had, and may continue to have, a negative impact on the market values of potential investments. 73
Comparability This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses December 31, 2023 and December 31, 2022 items and year-to-year comparisons between 2023 and 2022, respectively.
Comparability This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses December 31, 2024 and December 31, 2023 items and year-to-year comparisons between 2024 and 2023, respectively.
We did not have any off-balance sheet arrangements as of December 31, 2023. 71 Financial Instruments Our investment policy is to manage our marketable securities portfolio to preserve principal and liquidity while maximizing the return on the investment portfolio to assist us in funding our operations.
We did not have any off-balance sheet arrangements as of December 31, 2024. 72 Financial Instruments Our investment policy is to manage our marketable securities portfolio to preserve principal and liquidity while maximizing the return on the investment portfolio to assist us in funding our operations.
A summary of our restructuring charges for the twelve months ended December 31, 2023 is as follows (in thousands): Year Ended December 31, % Change 2023 2022 2021 2023 to 2022 2022 to 2021 Restructuring $ 3,728 $ — $ — N/A N/A See Note 7, Restructuring to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information regarding the restructuring charges related to one-time termination benefits.
A summary of our restructuring charges is as follows (in thousands): Year Ended December 31, % Change (in thousands, except percentages) 2024 2023 2022 2024 to 2023 2023 to 2022 Restructuring $ — $ 3,728 $ — N/A N/A See Note 7, Restructuring to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information regarding the restructuring charges related to one-time termination benefits.
INTERCEPT platelet kits that we expect to be temporary in nature. We expect product revenue for INTERCEPT disposable kits to increase in future periods driven by growth in our platelet business 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.
We expect product revenue for INTERCEPT disposable kits to increase in future periods driven by growth in our platelet business 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.
See Note 14, Development and License Agreements , to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information regarding the agreement with FDA. In September 2022, we entered into an agreement with the U.S.
See Note 14, Development and License Agreements , to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for further information regarding the agreement with the FDA. In September 2022, we entered into an agreement with the U.S.
We expect to incur additional research and development costs associated with inflationary pressures on labor and study costs, pursuing potential regulatory approvals in other geographies where we do not currently sell our platelet and plasma systems, planning and conducting in vitro studies and clinical development of our red blood cell system in Europe and the U.S., completing activities in support of our completed application for a CE Certificate of Conformity for our red blood cell system in the EU, new product development and product enhancements, including potential new label claims, design efforts on our new illuminator, and costs associated with performing the activities under our government contracts.
We expect to incur additional research and development costs associated with inflationary pressures on labor and study costs, pursuing potential regulatory approvals in other geographies where we do not currently sell our platelet and plasma systems, planning and conducting in vitro studies and clinical development of our red blood cell system in Europe and the U.S., any activities in support of any potential new MDR application for our red blood cell system in the EU, new product development and product enhancements, including potential new label claims, design efforts on our new illuminator, and costs associated with performing the activities under our government contracts.
Debt Agreements See Note 8, Debt, to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for more information on the debt under our Term Loan Credit Agreement and the Revolving Loan Credit Agreement.
Debt Agreements See Note 8, Debt, to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for more information on the debt under our Term Loan Credit Agreement and the Revolving Loan Credit Agreement.
Commitments See Note 8, Debt, to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for more information on the debt under our Term Loan Credit Agreement and the Revolving Loan Credit Agreement.
Commitments See Note 8, Debt, to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for more information on the debt under our Term Loan Credit Agreement and the Revolving Loan Credit Agreement.
The main source of our revenue is 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, spare parts, storage solutions, maintenance services of illuminators, and IFC.
The main source of our revenue is 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.
Equity Agreements See Note 11, Stockholders’ Equity , to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information regarding the Amended Sales Agreement.
Equity Agreements See Note 11, Stockholders’ Equity , to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for further information regarding the Amended Sales Agreement.
In any event, until we sell sufficient INTERCEPT Blood System for Cryoprecipitation kits to blood center affiliate organizations, expand the number of manufacturing partners producing IFC for us, or more of our manufacturing partners for IFC receive approval of their BLAs, our IFC sales will be limited.
However, until we sell sufficient INTERCEPT Blood System for Cryoprecipitation kits to blood center affiliate organizations, expand the number of manufacturing partners producing IFC for us, or more blood centers producing IFC receive approval of their BLAs, our IFC sales will be limited.
See Note 10, Commitments and Contingencies , to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for more information on the operating leases and purchase commitments.
See Note 10, Commitments and Contingencies , to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for more information on the operating leases and purchase commitments.
In addition, if we are unable to obtain from our suppliers sufficient clinical quantities of the active compounds for our red blood cell system meeting defined quality and regulatory specifications, if our suppliers are not able to maintain regulatory compliance or if we experience additional delays in enrollment for the RedeS study, we may experience delays in testing, conducting trials or obtaining approvals, and our product development costs would likely increase.
In addition, if we are unable to obtain from our suppliers sufficient clinical quantities of the active compounds for our red blood cell system meeting defined quality and regulatory specifications, if our suppliers are not able to maintain regulatory compliance or if we experience additional delays in enrollment or completion of the RedeS study, our product development costs would likely increase.
As a result of economic conditions, general global economic uncertainty, political change, war, the effects of inflationary pressures, and other factors including recent and potential U.S. bank failures, we do not know whether additional capital will be available when needed, or that, if available, whether we will be able to obtain additional capital on reasonable terms.
As a result of economic conditions, general global economic uncertainty, political change, war, the effects of inflationary pressures, tariffs and escalating trade tensions, and other factors including past and potential future U.S. bank failures, we do not know whether additional capital will be available when needed, or that, if available, whether we will be able to obtain additional capital on reasonable terms.
Additionally, we have received U.S. Food and Drug Administration, or FDA, approval for the INTERCEPT Blood System for Cryoprecipitation which uses our plasma system to produce IFC for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency. In addition, the INTERCEPT Blood System for Cryoprecipitation is used to produce pathogen reduced plasma, cryoprecipitate reduced.
Additionally, we have received FDA approval for the INTERCEPT Blood System for Cryoprecipitation which uses our plasma system to produce IFC for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency. In addition, the INTERCEPT Blood System for Cryoprecipitation is used to produce pathogen reduced plasma, cryoprecipitate reduced.
The contracts with customers can include various combinations of products, and to a lesser extent, services. We must determine whether products or services are capable of being distinct and accounted for as separate performance obligations, or are accounted for as a combined performance obligation.
The contracts with customers can include various combinations of products, and to a much lesser extent, services. In contracts where we sell both products and services, we must determine whether these products or services are capable of being distinct and accounted for as separate performance obligations, or are accounted for as a combined performance obligation.
In addition, if we are unable to generate sufficient prerequisite Phase 3 clinical data, our agreement with BARDA will be severely limited in scope or could be terminated altogether, and our ability to complete the development activities required for licensure in the U.S. may require additional capital beyond which we currently have.
In addition, if we are unable to meet the requisite milestones in our agreements, including generating sufficient prerequisite Phase 3 clinical data, our agreements with BARDA will be severely limited in scope or could be terminated altogether, and our ability to complete the development activities required for licensure in the U.S. may require additional capital beyond which we currently have.
Outside of the U.S., we have received CE Certificates of Conformity issued by our Notified Body in accordance with the European Union MDR, for the platelet system and the plasma system and affixed the CE Mark to these products.
Outside of the U.S., we have received CE Certificates of Conformity issued by our Notified Body in accordance with the European Union Medical Devices Regulation 2017/745, or MDR, for the platelet system and the plasma system and affixed the CE Mark to these products.
As of December 31, 2023, BARDA has committed to reimburse certain of our expenses related to the clinical development of the red blood cell system during a base period, or the Base Period, and under exercised option periods, or Option Periods, in an aggregate amount of up to $185.5 million.
As of September 30, 2024, BARDA has committed to reimburse certain of our expenses related to the clinical development of the red blood cell system during a base period, or the 2016 Base Period, and under exercised option periods, or 2016 Option Periods, in an aggregate amount of up to $185.5 million.
While we expect to receive significant funding under our agreement with BARDA, our ability to obtain the funding we expect to receive under this agreement is subject to various risks and uncertainties, including with respect to BARDA’s ability to terminate the agreement for convenience at any time and our ability to achieve the required milestones under this agreement, including the completion of the RedeS and ReCePI studies.
While we expect to receive significant funding under our agreements with BARDA, our ability to obtain the funding we expect to receive under both agreements is subject to various risks and uncertainties, including with respect to BARDA’s ability to terminate the agreements for convenience at any time and our ability to achieve the required milestones under the agreements, including the completion of the RedeS study.
In addition, unless we restructure our credit agreements prior to April 1, 2026, the principal amounts outstanding under our Term Loan Credit Agreement will begin amortizing and will require us to pay amounts as they come due in cash, which would negatively impact our available working capital beyond the next 12 months.
In addition, unless we restructure our credit agreements prior to April 1, 2026, or qualify for and exercise our option to delay amortization to April 1, 2027, the principal amounts outstanding under our Term Loan Credit Agreement will begin amortizing on April 1, 2026 and will require us to pay amounts as they come due in cash, which would negatively impact our available working capital beyond the next 12 months.
Capital Requirements Our near-term capital requirements are dependent on various factors, including operating costs and working capital investments associated with developing and commercializing the INTERCEPT Blood System, including in connection with the continuing U.S. commercialization of our platelet, plasma systems and IFC, costs to develop different configurations of existing products and new products, including our illuminator, costs associated with planning, enrolling and completing ongoing studies, and the post-approval studies we are required to conduct in connection with the FDA approval of the platelet system, costs associated with pursuing potential regulatory approvals in other geographies where we do not currently sell our platelet and plasma systems, costs associated with conducting in vitro studies and clinical development of our red blood cell system in Europe and the U.S., costs associated with performing the agreed-upon activities under our government agreements, costs related to legal compliance and cooperating with the ongoing civil investigative demand from the Department of Justice Antitrust Division, and costs related to creating, maintaining and defending our intellectual property.
Capital Requirements 70 Our near-term capital requirements are dependent on various factors, including operating costs and working capital investments associated with developing and commercializing the INTERCEPT Blood System, including in connection with the continuing U.S. commercialization of our platelet, plasma systems and IFC, costs to develop different configurations of existing product candidates and products, costs associated with the development of new products, including our illuminator, costs associated with planning, enrolling and completing ongoing clinical and non-clinical studies, including the post-approval studies or registry studies we are and may be required to conduct in connection with the approvals of the platelet system, costs associated with pursuing potential regulatory approvals in other geographies where we do not currently sell our platelet and plasma systems, costs associated with planning and conducting in vitro studies and clinical development of our red blood cell system in Europe and the U.S., costs associated with performing the agreed-upon activities under our government agreements, costs related to legal compliance, and costs related to creating, maintaining and defending our intellectual property.
Should interest rates continue to increase, the rates that we are obligated to pay under our credit agreements would likely increase, potentially leading to higher interest expense.
Should interest rates increase again, the rates that we are obligated to pay under our credit agreements would increase, leading to higher interest expense.
Restructuring In June 2023, we began implementing a restructuring plan to pursue greater efficiency and to realign our business and strategic priorities, which included a reduction in force of our employee base during the three months ended June 30, 2023.
Restructuring In June 2023, we began implementing a restructuring plan to pursue greater efficiency and to realign our business and strategic priorities, which included a reduction in force of our employee base during the second quarter of 2023.
During the period ended December 31, 2023, we did not sell shares of our common stock under the Amended Sales Agreement.
During the year ended December 31, 2024, we did not sell shares of our common stock under the Amended Sales Agreement.
See Note 14, Development and License Agreements , to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information regarding the Supply Agreement with Fresenius.
See Note 14, Development and License Agreements , to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for further information regarding the agreement with the DoD.
Due to the inherent uncertainties and risks associated with developing biomedical products, including, but not limited to, intense and changing government regulation, the impact of macroeconomic developments, including the ongoing conflict between Ukraine and Russia and the state of war between Israel and Hamas and the risk of a larger regional conflict, the uncertainty of future preclinical studies and clinical trial results and the uncertainty associated with manufacturing, it is not possible to reasonably estimate the costs to complete these research and development projects.
Due to the inherent uncertainties and risks associated with developing biomedical products, including, but not limited to, intense and changing government regulation, the impact of macroeconomic developments, including escalating trade tensions and the ongoing conflict between Ukraine and Russia, the uncertainty of future preclinical studies and clinical trial results and the uncertainty associated with manufacturing, it is not possible to reasonably estimate the costs to complete these research and development projects.
Similar to our platelet and plasma products, any blood center manufacturing IFC will need to complete its process validations and obtain site-specific licenses from the FDA Center for Biologics Evaluation and Research, or CBER, before we or they can sell finished IFC to hospital customers outside of the states producing IFC.
Similar to our platelet and plasma products, any blood center manufacturing IFC will need to complete its process validations and obtain site-specific licenses from the FDA Center for Biologics Evaluation and Research, or CBER, before we or they can sell finished IFC in interstate commerce.
Contract liabilities related to DoD of $1.5 million and zero as of December 31, 2023 and December 31, 2022, respectively, are excluded from the working capital.
Contract liabilities related to DoD of $0.5 million and $1.5 million as of December 31, 2024 and December 31, 2023, respectively, are excluded from working capital.
Provision for Income Taxes 68 Year Ended December 31, % Change (in thousands, except percentages) 2023 2022 2021 2023 to 2022 2022 to 2021 Provision for income taxes $ 325 $ 488 $ 319 (33 %) 53 % The tax expenses were primarily a result of our Cerus Europe B.V. subsidiary’s operations.
Provision for Income Taxes Year Ended December 31, % Change (in thousands, except percentages) 2024 2023 2022 2024 to 2023 2023 to 2022 Provision for income taxes $ 205 $ 325 $ 488 (37 %) (33 %) The tax expenses were primarily a result of our Cerus Europe B.V. subsidiary’s activities.
However, if we are unable to generate sufficient product revenue, or access sufficient funds under our government contracts or the public and private equity and debt capital markets, we may be unable to execute successfully on our operating plan.
However, if we are unable to generate sufficient product revenue, or access sufficient funds under our government contracts or the public and private equity and debt capital markets, we may be unable to execute successfully on our operating plan. We have based our cash sufficiency estimate on assumptions that may prove to be incorrect.
See also the risk factor entitled “The red blood cell system is currently in development and may never receive any marketing approvals or CE Certificates of Conformity” under “Item 1A— Risk Factors ” of this Annual Report on Form 10-K for additional information with respect timing of the ultimate decision on our CE Certificate of Conformity application.
See also the risk factor entitled “The red blood cell system is currently in development and may never receive any marketing approvals or CE Certificates of Conformity” under “Item 1A— Risk Factors ” of this Annual Report on Form 10-K.
We filed our application to obtain a CE Certificate of Conformity to affix the CE Mark to the red blood cell system in December 2018 under the MDD, and in June 2021, we completed the resubmission of our application under the MDR.
We filed our application for conformity assessment to obtain a CE Certificate of Conformity to affix the CE Mark to the red blood cell system in December 2018 under the Medical Device Directive 93/42/EEC, or MDD, and in June 2021, we completed the resubmission of our application under the MDR.
In addition, we may need to obtain additional funds to complete development activities for the red blood cell system necessary for potential regulatory approval or certification in the EU, if costs are higher than anticipated or we encounter delays.
In addition, we may need to obtain additional funds to complete development activities for the red blood cell system necessary for CE Certificates of Conformity in the EU, if costs are higher than anticipated or we encounter further delays.
In addition, we may need to obtain additional funds to complete development activities for the red blood cell system necessary for potential regulatory approval or certification in the EU if costs are higher than anticipated or we encounter delays.
In addition, we may need to obtain additional funds to complete development activities for the red blood cell system necessary for CE Certificates of Conformity in the EU, if costs are higher than anticipated or we encounter further delays.
Management’s Discussion and Analysis of Financial Condition and Results of Operations This discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in this Annual Report on Form 10-K for the year ended December 31, 2023.
Item 6. R e served It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 61 This discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in this Annual Report on Form 10-K for the year ended December 31, 2024.
As of December 31, 2023 and December 31, 2022, we had the following cash and cash equivalents, short-term investments and restricted cash (in thousands): December 31, 2023 December 31, 2022 Cash and cash equivalents $ 11,647 $ 35,585 Short-term investments 54,205 66,569 Restricted cash 1,712 1,773 Total $ 67,564 $ 103,927 Cash is typically invested in highly liquid instruments of short-term investments with high-quality credit rated corporate and government agency fixed-income securities in accordance with our investment policy.
As of December 31, 2024 and December 31, 2023, we had the following cash and cash equivalents, short-term investments and restricted cash (in thousands): 69 December 31, 2024 December 31, 2023 Cash and cash equivalents $ 20,266 $ 11,647 Short-term investments 60,186 54,205 Restricted cash 1,095 1,712 Total $ 81,547 $ 67,564 Cash is typically invested in highly liquid instruments of short-term investments with high-quality credit rated corporate and government agency fixed-income securities in accordance with our investment policy.
We must demonstrate to the FDA an ability to define, test and meet acceptable specifications for our current Good Manufacturing Practice and ISO standards for the manufactured compounds used to prepare INTERCEPT-treated red blood cells before we can submit and seek regulatory approval of our red blood cell system from the FDA.
We must also demonstrate to the FDA an ability to define, test and meet acceptable specifications for our current manufactured compounds used to prepare INTERCEPT-treated red blood cells before we can initiate our planned modular PMA application submission to and seek regulatory approval of the red blood cell system from the FDA.
Until we are able to generate a sufficient amount of product revenue and generate positive net cash flows from operations, which we may never do, meeting our long-term capital requirements is in large part reliant on access to funds under our government contracts and the public and private equity and debt capital markets, as well as on collaborative arrangements with partners, augmented by cash generated from operations, if at all, and interest income earned on the investment of our cash balances.
If we are unable to continue to produce positive operating cash flows or at sufficient levels, meeting our long-term capital requirements is in large part reliant on continued access to funds under our government contracts and the public and private equity and debt capital markets, as well as on collaborative arrangements with partners, augmented by cash generated from operations, if at all, and interest income earned on the investment of our cash balances.
We have recently completed enrollment of a Phase 3 clinical trial, known as the ReCePI study that is designed to evaluate the efficacy and safety of INTERCEPT-treated red blood cells in patients requiring transfusion for acute blood loss during surgery.
We also recently announced positive topline results from a Phase 3 clinical trial in the U.S., known as the ReCePI study, that was designed to evaluate the efficacy and safety of INTERCEPT-treated red blood cells in patients requiring transfusion for acute blood loss during surgery.
In part, we will seek to introduce supplemental clinical data we obtained from European clinical trials, though we cannot assure you that we will be able to demonstrate comparability or that the FDA will allow supplemental clinical European data.
In any event, for our planned modular PMA application, we will seek to introduce supplemental clinical data we 62 obtained from European clinical trials, though we cannot assure you that we will be able to demonstrate comparability or that the FDA will allow supplemental clinical European data.
In addition, we may face competition which may limit our ability to maintain existing selling prices for our products which in turn would negatively affect our reported gross margins on product sales.
In addition, we may face competition which may limit our ability to maintain existing selling prices for our products which in turn would negatively affect our reported gross margins on product sales. Our gross margins on product sales may be impacted in the future based on all of these and other factors.
While three of our manufacturing partners received their Biologics License Application, or BLAs, from CBER, we plan to continue working with our other U.S.-based blood centers manufacturing partners to support these activities and any further delay in obtaining these licenses would adversely impact the nationwide availability of our finished IFC in the U.S.
While all of our manufacturing partners have now received their Biologics License Application, or BLAs, from CBER, we plan to continue working with any other U.S.-based blood centers producing IFC to support their licensure applications. Delays in obtaining these licenses have adversely impacted and additional delays will adversely impact the nationwide availability of IFC in the U.S.
We have based our cash sufficiency estimate on assumptions that may prove to be incorrect, therefore, we could consume our available capital resources sooner than we currently expect or in excess of amounts than we currently expect, which could adversely affect our commercialization and clinical development activities.
If our assumptions prove to be incorrect, including inflationary assumptions, we could consume our available capital resources sooner than we currently expect or in excess of amounts than we currently expect, which could adversely affect our commercialization and clinical development activities.
The existing agreement provides funding from BARDA to support the development of our red blood cell system, including clinical and regulatory development programs in support of potential licensure, and development, manufacturing and scale-up activities, as well as activities related to broader implementation of all three INTERCEPT systems in areas of emerging pathogens.
Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response, under which we receive funding from BARDA to support the development of our red blood cell system, including clinical and regulatory development programs in support of potential licensure, and development, manufacturing and scale-up activities, as well as activities related to broader implementation of all three INTERCEPT systems in areas of emerging pathogens.
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, with platelet kit sales representing a larger proportion of overall sales during the year ended December 31, 2023, compared to the year ended December 31, 2022.
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.
Furthermore, we may experience cost pressure due to the inflationary environment, increased transportation costs and an adverse impact on the efficiency of our supply chain.
Furthermore, we 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 our supply chain.
We commercialize and sell the finished IFC made by our manufacturing blood center partners directly to hospitals and indirectly through certain blood centers.
In November 2020, we received FDA approval for the INTERCEPT Blood System for Cryoprecipitation. We commercialize and sell finished IFC made by our manufacturing blood center partners and other blood centers directly to hospitals and indirectly through certain blood centers.
Year Ended December 31, % Change (in thousands, except percentages) 2023 2022 2021 2023 to 2022 2022 to 2021 Foreign exchange loss $ (648 ) $ (690 ) $ (572 ) (6 %) 21 % Interest expense (8,386 ) (5,831 ) (4,923 ) 44 % 18 % Other income (expense), net 1,765 (1,735 ) 374 (202 %) (564 %) Total non-operating expense, net $ (7,269 ) $ (8,256 ) $ (5,121 ) (12 %) 61 % Foreign Exchange Loss Foreign exchange losses decreased during the year ended December 31, 2023, compared to the year ended December 31, 2022.
Year Ended December 31, % Change (in thousands, except percentages) 2024 2023 2022 2024 to 2023 2023 to 2022 Foreign exchange gain (loss) $ 370 $ (648 ) $ (690 ) (157 %) (6 %) Interest expense (8,877 ) (8,386 ) (5,831 ) 6 % 44 % Other income (expense), net 1,976 1,765 (1,735 ) 12 % (202 %) Total non-operating expense, net $ (6,531 ) $ (7,269 ) $ (8,256 ) (10 %) (12 %) Foreign Exchange Gain (Loss) We had foreign exchange gain during the year ended December 31, 2024, compared to foreign exchange loss during the year ended December 31, 2023.
The RedeS and ReCePI and other studies are being funded as part of our agreement with BARDA. Under the existing contract, BARDA reimburses us for allowable direct contract costs, as such costs are incurred, and for allowable indirect costs.
The initial agreement currently expires in September 2026 and the new agreement currently expires in September 2030. The ReCePI study was funded and the RedeS and other studies are being funded as part of our initial BARDA agreement and BARDA reimburses us for allowable direct contract costs, as such costs are incurred, and for allowable indirect costs under both agreements.
In addition, we will need to generate acceptable Phase 3 clinical data from chronic anemia patients in the U.S. before the FDA will consider our red blood cell system for approval.
We continue to believe that we will need to conduct and complete, and generate acceptable data from an additional Phase 3 clinical trial in chronic anemia patients in the U.S., in vitro studies, and other necessary activities before the FDA will consider our red blood cell system for potential approval.
Under the agreement, we are reimbursed and recognize revenue as qualified direct contract costs are incurred plus allowable indirect costs, based on approved provisional indirect billing rates, which permit recovery of fringe benefits, overhead and general and administrative expenses.
Under the contract, we will be reimbursed and recognize revenue as qualified direct contract costs are incurred plus allowable indirect costs, based on approved provisional indirect billing rates, which permit recovery of fringe benefits, overhead and general and administrative expenses. The U.S. Federal Government has imposed a standardized indirect cost rate on grants administered by the National Institutes of Health.
Year Ended December 31, % Change (in thousands, except percentages) 2023 2022 2021 2023 to 2022 2022 to 2021 Selling, general and administrative $ 75,516 $ 83,335 $ 81,288 (9 %) 3 % Selling, general, and administrative expenses decreased during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily driven by the decreased headcount due to the reduction in force in the second quarter of 2023 and decreased non-cash stock-based compensation.
Year Ended December 31, % Change (in thousands, except percentages) 2024 2023 2022 2024 to 2023 2023 to 2022 Selling, general and administrative $ 75,891 $ 75,516 $ 83,335 0 % (9 %) 68 Selling, general, and administrative expenses increased slightly during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily driven by non-cash stock-based compensation expense.
We believe that revenue for periods not yet audited has been recorded in amounts that are expected to be realized upon final audit and settlement. When the final determination of the allowable costs for any year has been made, revenue and billings may be adjusted accordingly in the period that the adjustment is known.
When the final determination of the allowable costs for any year has been made, revenue and billings may be adjusted accordingly in the period that the adjustment is known.
Revenue is recorded as a percentage of the overall contract price based on the extent of progress towards completion. See Note 14, Development and License Agreements, to our audited consolidated financial statements included in Part IV, Item 15, “Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for further information regarding the agreement with the DoD.
See Note 14, Development and License Agreements , to our audited consolidated financial statements included in Part IV, Item 15, “ Exhibits and Financial Statement Schedules ” of this Annual Report on Form 10-K for further information regarding the 2022 Agreement.
Financing Activities Year Ended (in thousands) December 31, 2023 December 31, 2022 Net cash provided by financing activities $ 10,673 $ 4,192 The increase in net cash provided by financing activities for the year ended December 31, 2023, was primarily due to the increased proceeds from the Term Loan Credit Agreement and the Revolving Loan Credit Agreement, partially offset by the decreased proceeds from equity incentives during the year ended December 31, 2023 compared to the same period in 2022.
Financing Activities Year Ended (in thousands) December 31, 2024 December 31, 2023 Net cash provided by financing activities $ 4,964 $ 10,673 The decrease in net cash provided by financing activities for the twelve months ended December 31, 2024 was primarily due to payments related to the Revolving Loan Credit Agreement during the twelve months ended December 31, 2024 compared to proceeds from the Revolving Loan Credit Agreement during the twelve months ended December 31, 2023.
Results of Operations Years Ended December 31, 2023, 2022 and 2021 Revenue Year Ended December 31, % Change (in thousands, except percentages) 2023 2022 2021 2023 to 2022 2022 to 2021 Product revenue $ 156,367 $ 162,048 $ 130,859 (4 %) 24 % Government contract revenue 30,430 26,267 28,659 16 % (8 %) Total revenue $ 186,797 $ 188,315 $ 159,518 (1 %) 18 % Product revenue decreased during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to year-over-year sales volume decrease of disposable platelet system kit sales as a result of U.S. customers lowering their inventory levels due to the reduction of the FDA approved shelf life for U.S.
Results of Operations Years Ended December 31, 2024, 2023 and 2022 Revenue Year Ended December 31, % Change (in thousands, except percentages) 2024 2023 2022 2024 to 2023 2023 to 2022 Product revenue $ 180,270 $ 156,367 $ 162,048 15 % (4 %) Government contract revenue 21,051 30,430 26,267 (31 %) 16 % Total revenue $ 201,321 $ 186,797 $ 188,315 8 % (1 %) Product revenue increased during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to year-over-year sales volume increase of disposable platelet kit sales to U.S. customers.
Year Ended December 31, % Change (in thousands, except percentages) 2023 2022 2021 2023 to 2022 2022 to 2021 Cost of product revenue $ 69,967 $ 74,954 $ 63,475 (7 %) 18 % Cost of product revenue decreased during the year ended December 31, 2023, compared to the year ended December 31, 2022.
Year Ended December 31, % Change (in thousands, except percentages) 2024 2023 2022 2024 to 2023 2023 to 2022 Cost of product revenue $ 80,748 $ 69,967 $ 74,954 15 % (7 %) Cost of product revenue increased during the year ended December 31, 2024, compared to the year ended December 31, 2023, consistent with the increase in product revenue for the same comparative periods.
Our gross margins on product sales may be impacted in the future based on all of these and other criteria. We expect to build inventory levels that we believe will be sufficient to meet forecasted demand. At times, we may purchase quantities of materials, components or finished products that are expected to be on-hand for longer than one year.
We expect to build inventory levels that we believe will be sufficient to meet forecasted demand. At times, we may purchase quantities of materials, components or finished products that are expected to be on-hand for longer than one year. We may procure and carry this inventory to mitigate obsolescence, supply chain disruption and for business continuity reasons.
Investing Activities Year Ended (in thousands) December 31, 2023 December 31, 2022 Net cash provided by investing activities $ 8,624 $ 8,464 The increase in net cash provided by investing activities was primarily due to lower purchases of investments offset by lower proceeds from the maturity and sale of our investments during the year ended December 31, 2023, compared to the same period in 2022.
The change was primarily due to higher purchases of investments offset by higher proceeds from the maturity and sale of our investments during the twelve months ended December 31, 2024, compared to the same period in 2023.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese forward-looking statements may include, but are not limited to, statements about: • the impact of macroeconomic developments, including the ongoing conflict between Ukraine and Russia and the state of war between Israel and Hamas and the risk of a larger regional conflict on our business and operations as well as the business or operations of our customers, manufacturers, research partners, and other third parties with whom we conduct business; • future sales of and anticipated demand for, and our ability to effectively commercialize and achieve market acceptance of the INTERCEPT™ Blood System, including our ability to comply with applicable United States, or U.S., and foreign laws, regulations and regulatory requirements; • our ability to successfully complete the development of, receive regulatory approvals for and commercialize the red blood cell system; • our strategy and the potential therapeutic applications for the INTERCEPT Blood System; • our ability to manage the growth of our business and attendant cost increases, including in connection with the commercialization of the INTERCEPT Blood System in the U.S., as well as our ability to manage the risks attendant to our international operations; • the timing or likelihood of regulatory submissions and approvals and other regulatory actions or interactions, including whether existing clinical data will be sufficient in order to obtain a CE Certificate of Conformity and affix a CE Mark to the red blood cell system; • our ability to obtain and maintain regulatory approvals of the INTERCEPT Blood System; • our ability to obtain adequate clinical and commercial supplies of the INTERCEPT Blood System from our sole source suppliers for a particular product or component they manufacture; • the initiation, scope, rate of progress, results and timing of our ongoing and proposed preclinical and clinical trials of the INTERCEPT Blood System; • the successful completion of our research, development and clinical programs and our ability to manage cost increases associated with preclinical and clinical development of the INTERCEPT Blood System; • the amount and availability of funding we may receive under our government contracts with the Biomedical Advanced Research and Development Authority, or BARDA, the U.S.
Biggest changeThese forward-looking statements may include, but are not limited to, statements about: • the impact of macroeconomic developments, including escalating trade tensions and the ongoing conflict between Ukraine and Russia on our business and operations as well as the business or operations of our customers, manufacturers, research partners, and other third parties with whom we conduct business; • future sales of and anticipated demand for, and our ability to effectively commercialize and achieve market acceptance of the INTERCEPT™ Blood System, including our ability to comply with applicable United States, or U.S., and foreign laws, regulations and regulatory requirements; • our ability to successfully complete the development of, receive regulatory approvals for and commercialize the red blood cell system; • our strategy and the potential therapeutic applications for the INTERCEPT Blood System; • our ability to manage the growth of our business and attendant cost increases, including in connection with the commercialization of the INTERCEPT Blood System in the U.S., as well as our ability to manage the risks attendant to our international operations; • the timing or likelihood of regulatory submissions and approvals and other regulatory actions or interactions, including whether we will submit a new application for conformity assessment to obtain a CE Certificate of Conformity to affix the CE Mark to the red blood cell system, whether data exist to support a classification of compounds for approval, whether existing clinical data would be sufficient to either submit or potentially obtain approval of any such new application, and whether our planned modular premarket approval, or PMA, application for the red blood cell system will be submitted to the U.S.
There can be no assurance that any of the events anticipated by forward-looking statements will occur or, if any of them do occur, what impact they will have on our business, results of operations and 3 financial condition.
There can be no assurance that any of the events anticipated by 3 forward-looking statements will occur or, if any of them do occur, what impact they will have on our business, results of operations and financial condition.
As a result, we may not be able to successfully educate the market on the value of pathogen reduction or commercialize our products in the U.S. • We have very limited experience selling directly to hospitals or expertise complying with regulations governing finished biologics, and our inability to successfully commercialize the INTERCEPT Blood System for cryoprecipitation in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects. • If our competitors develop products superior to ours, market their products more effectively, or receive regulatory approval or certification before our products, our commercial opportunities could be reduced or be eliminated.
As a result, we may not be able to successfully educate the market on the value of pathogen reduction or commercialize our products. • We have very limited experience selling directly to hospitals or expertise complying with regulations governing finished biologics, and our inability to successfully commercialize the INTERCEPT Blood System for cryoprecipitation in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects. • If our competitors develop products superior to ours, market their products more effectively, or receive regulatory approval or certification before our products, our commercial opportunities could be reduced or be eliminated.
Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be found under the heading “Item 1A— Risk Factors ” in Part I of this Annual Report on Form 10-K. • We depend substantially upon the commercial success of the INTERCEPT Blood System for platelets, plasma and cryoprecipitation in the U.S., and our inability to successfully commercialize the INTERCEPT Blood System in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects. • The INTERCEPT Blood System may not achieve or be able to sustain broad market adoption. • We are exposed to risks associated with the highly concentrated market for the INTERCEPT Blood System. • We may be unable to develop and maintain an effective and qualified U.S. based commercial organization or educate blood centers, clinicians and hospital personnel.
Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be found under the heading “Item 1A— Risk Factors ” in Part I of this Annual Report on Form 10-K. • We depend substantially upon the commercial success of the INTERCEPT Blood System for platelets, plasma and cryoprecipitation in the U.S., and our inability to successfully commercialize the INTERCEPT Blood System in the U.S. would have a material adverse effect on our business, financial condition, results of operations and growth prospects. • The INTERCEPT Blood System may not achieve or be able to sustain broad market adoption. • We are exposed to risks associated with the highly concentrated market for the INTERCEPT Blood System. • We may be unable to develop and maintain an effective and qualified commercial organization or educate blood centers, clinicians and hospital personnel.
Food and Drug Administration’s, or FDA’s, or other regulatory authorities’ good manufacturing practice regulations, it could impair our ability to market our products in a cost-effective and timely manner. • If we modify our FDA-approved or CE Marked products, we may need to seek additional approvals or certification, which, if not granted, would prevent us from selling our modified products. • We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business. • 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 our BARDA agreement, and if BARDA were to eliminate, reduce or delay, or object to extensions for funding of our agreement, it would have a significant, negative impact on our government contract revenues and cash flows, and we may be forced to suspend or terminate our U.S. red blood cell development program or obtain alternative sources of funding.
Food and Drug Administration’s, or FDA’s, or other regulatory authorities’ good manufacturing practice regulations, it could impair our ability to market our products in a cost-effective and timely manner. • If we modify our FDA-approved or CE Marked products, we may need to seek additional approvals or certification, which, if not granted, would prevent us from selling our modified products. • We are subject to federal, state and foreign laws governing our business practices which, if violated, could result in substantial penalties and harm our reputation and business. • 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 our BARDA agreements, and if BARDA were to eliminate, reduce or delay, or object to extensions for funding of our agreements, it would have a significant, negative impact on our government contract revenues and cash flows, and we may be forced to suspend or terminate our U.S. red blood cell development program or obtain alternative sources of funding.
A failure to generate data in clinical trials to support expanded label claims or to support marketing approvals or certification for our product candidates could materially and adversely affect our business, financial condition, results of operations and growth prospects. • The red blood cell system is currently in development and may never receive any marketing approvals or CE Certificates of Conformity. • Our company, our products, and blood products treated with the INTERCEPT Blood System are subject to extensive regulation by domestic and foreign authorities. 4 • If we or our third-party suppliers fail to comply with the U.S.
A failure to generate data in clinical trials to support expanded label claims or to support marketing approvals or certification for our product candidates could materially and adversely affect our business, financial condition, results of operations and growth prospects. • The red blood cell system is currently in development and may never receive any marketing approvals or CE Certificates of Conformity. • Our company, our products, and blood products treated with the INTERCEPT Blood System are subject to extensive regulation by domestic authorities, foreign authorities and Notified Bodies. 4 • If we or our third-party suppliers fail to comply with the U.S.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 76 PART III Item 10. Directors, Executive Officers and Corporate Governance 77 Item 11. Executive Compensation 77 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 77 Item 13. Certain Relationships and Related Transactions, and Director Independence 78 Item 14.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 77 PART III Item 10. Directors, Executive Officers and Corporate Governance 78 Item 11. Executive Compensation 78 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 78 Item 13. Certain Relationships and Related Transactions, and Director Independence 79 Item 14.
Our ability to be repaid and compensated by the DoD is predicated on our ability to achieve the stated milestones in the agreement and for the DoD to agree with the successful completion of each. • We rely on third parties to market, sell, distribute and maintain our products and to maintain customer relationships in certain countries. • Our manufacturing supply chain exposes us to significant risks. • We expect to continue to generate losses and we may never achieve a profitable level of operations. • If we fail to obtain the capital necessary to fund our future operations or if we are unable to generate positive cash flows from our operations, we will need to curtail planned development or sales and commercialization activities. • We operate a complex global commercial organization, with limited experience in many countries.
Our ability to be paid by the DoD is predicated on our ability to achieve the stated milestones in the agreement and for the DoD to agree with the successful completion of each. • We rely on third parties to market, sell, distribute and maintain our products and to maintain customer relationships in certain countries. • Our manufacturing supply chain exposes us to significant risks. • We may continue to generate losses and never achieve a profitable level of operations. • If we fail to obtain the capital necessary to fund our future operations or if we are unable to generate continued positive cash flows from our operations, we will need to curtail planned development or sales and commercialization activities. • We operate a complex global commercial organization, with limited experience in many countries.
Food and Drug Administration, or FDA; • our ability to transition distribution of the INTERCEPT Blood System from third parties to a direct sales model in certain international markets; • the ability of our products to inactivate the emerging viruses and other pathogens that we may target in the future; • our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; • our estimates regarding the sufficiency of our cash resources, our ability to continue as a going concern and our need for additional funding; and • our plans, objectives, expectations and intentions and any other statements that are not historical facts.
Department of Defense, or DoD, and the FDA; • our ability to transition distribution of the INTERCEPT Blood System from third parties to a direct sales model in certain international markets; • the ability of our products to inactivate the emerging viruses and other pathogens that we may target in the future; • our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; • our estimates regarding the sufficiency of our cash resources, our ability to continue as a going concern and our need for additional funding; and • our plans, objectives, expectations and intentions and any other statements that are not historical facts.
Form 10-K Summary 84 SIGNATURES 112 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties.
Form 10-K Summary 85 SIGNATURES 114 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties.
Principal Accountant Fees and Services 78 PART IV Item 15. Exhibits and Financial Statement Schedules 79 Item 16.
Principal Accountant Fees and Services 79 PART IV Item 15. Exhibits and Financial Statement Schedules 80 Item 16.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 73 Item 8. Financial Statements and Supplementary Data 73 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 73 Item 9A. Controls and Procedures 74 Item 9B. Other Information 76 Item 9C.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 61 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 74 Item 8. Financial Statements and Supplementary Data 74 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 74 Item 9A. Controls and Procedures 75 Item 9B. Other Information 77 Item 9C.
We may be distracted by expansion into new geographies where we do not have experience and we may be unsuccessful in monetizing such opportunities for the benefit of our organization at large. • Adverse market and economic conditions, including those resulting from the effects of macroeconomic conditions such as pandemics or other health crises, civil or political unrest or military conflicts around the world, such as the military conflict between Ukraine and Russia and the state of war between Israel and Hamas and the risk of a larger regional conflict, inflation, rising interest rates and/or the prospects of a recession, may exacerbate certain risks affecting our business. • Risks associated with our operations outside of the United States could adversely affect our business. • We may not be able to protect our intellectual property or operate our business without infringing intellectual property rights of others. • Our stock price is volatile.
We may be distracted by expansion into new geographies where we do not have experience and we may be unsuccessful in monetizing such opportunities for the benefit of our organization at large. • Adverse market and economic conditions may exacerbate certain risks affecting our business. • Risks associated with our operations outside of the United States could adversely affect our business. • We may not be able to protect our intellectual property or operate our business without infringing intellectual property rights of others. • Our stock price is volatile and your investment may suffer a decline in value.
Removed
Department of Defense, or DoD, and the U.S.
Added
Food and Drug Administration, or FDA, on the timeline we anticipate or at all; • our ability to obtain and maintain regulatory approvals of the INTERCEPT Blood System; • our ability to obtain adequate clinical and commercial supplies of the INTERCEPT Blood System from our sole source suppliers for a particular product or component they manufacture; • the initiation, scope, rate of progress, results and timing of our ongoing and proposed preclinical and clinical trials of the INTERCEPT Blood System; • the successful completion of our research, development and clinical programs and our ability to manage cost increases associated with preclinical and clinical development of the INTERCEPT Blood System; • the amount and availability of funding we may receive under our government contracts with the Biomedical Advanced Research and Development Authority, or BARDA, the U.S.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on our indebtedness under the Term Loan Credit Agreement of $60.0 million and Revolving Loan Credit Agreement of $20.0 million as of December 31, 2023, and the interest rate on such borrowings then in effect, a hypothetical 100 basis point increase in interest rates could increase our net interest expense in 2023 by approximately $0.8 million subject to certain limitations in each agreement.
Biggest changeBased on our indebtedness under the Term Loan Credit Agreement of $65.0 million and Revolving Loan Credit Agreement of $19.3 million as of December 31, 2024, and the interest rate on such borrowings then in effect, a hypothetical 100 basis point increase in interest rates could increase our net interest expense in 2024 by approximately $0.8 million subject to certain limitations in each agreement.
An unfavorable 10% change in foreign currency exchange rates for our cash, accounts receivable, accounts payable and accrued liabilities that are denominated in foreign currencies at December 31, 2023, would have negatively impacted our annual financial results by $1.0 million.
An unfavorable 10% change in foreign currency exchange rates for our cash, accounts receivable, accounts payable and accrued liabilities that are denominated in foreign currencies at December 31, 2024, would have negatively impacted our annual financial results by $1.0 million.
The weighted average interest rate of our cash and cash equivalents at December 31, 2023, was 2.7%. Our exposure to market rate risk for changes in interest rates relates primarily to our money market instruments, corporate debt securities and the amounts borrowed pursuant to the Term Loan Credit Agreement and Revolving Loan Credit Agreement.
The weighted average interest rate of our cash and cash equivalents at December 31, 2024, was 4.4%. Our exposure to market rate risk for changes in interest rates relates primarily to our money market instruments, corporate debt securities and the amounts borrowed pursuant to the Term Loan Credit Agreement and Revolving Loan Credit Agreement.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk Interest Rate Risk At December 31, 2023, we held cash, cash equivalents, short-term investments and investments in marketable equity securities of $65.9 million.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk Interest Rate Risk At December 31, 2024, we held cash, cash equivalents, short-term investments and investments in marketable equity securities of $80.5 million.

Other CERS 10-K year-over-year comparisons