Cerus Corporation (CERS) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Cerus Corporation ReCePI Clinical Trial Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jessica Hanover, Cerus' Vice President of Corporate Affairs. Dr. Hanover, you may begin.

Thank you, and good morning. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at ir.cerus.com. With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Dr. Richard Benjamin, Cerus' Chief Medical Officer; Dr. Nina Mufti, Vice President of Development and Red Blood Cell Program leader; and Carol Moore, Cerus' Senior Vice President of Regulatory Affairs and Quality. Cerus issued a press release today announcing positive top line results for the Phase III clinical trial of the INTERCEPT Blood System for red blood cells in cardiovascular surgery patients. You can access a copy of this announcement on the company website at www.cerus.com. I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and are forward-looking statements. Examples of forward-looking statements include those relating to the therapeutic and commercial potential of INTERCEPT red blood cells, the anticipated next steps for the U.S. INTERCEPT red blood cell program and other statements that are not historical facts. These forward-looking statements involve risks and uncertainties that could cause actual events, performance and results to differ materially. They are identified and described in today's press release, in our slide presentation and under Risk Factors in our Form 10-K for the year ended December 31, 2023. We undertake no duty or obligation to update our forward-looking statements. We'll begin today with opening remarks from Obi, followed by Dr. Richard Benjamin to review the top line results from the U.S. ReCePI Phase III clinical trial. And now it's my pleasure to introduce Obi Greenman, Cerus' President and Chief Executive Officer.

Thank you, Jessica, and good morning, everyone. Thank you for joining us on this early morning call today. We are very excited to announce the positive top line results of the Phase III ReCePI clinical trial. As many of you know well, the INTERCEPT red blood cell or RBC program has had a long development time line. Over that time frame, we have seen the evolution of the regulatory requirements for Phase III clinical study design and data, setting a high bar for our RBC program. During all this time, however, the need for safeguarding the global blood supply has endured. The COVID pandemic reminds us of the ongoing emergence of new pathogens and many of those unknown pathogens have the potential to contaminate RBCs as well as other blood components for transfusion. Due to the Cerus team's persistence and resilience and because of the strong support from the U.S. Biomedical Advanced Research and Development Authority, or BARDA, from the Zika epidemic and through the COVID pandemic, we now have a growing body of clinical results that we believe will be supportive of our planned regulatory submissions. By meeting the primary efficacy endpoint as discussed today, ReCePI marks our third successful Phase III clinical study for INTERCEPT RBCs following our 2 successful European studies, STARS and SPARC in acute and chronic RBC transfusion patients, respectfully. In enabling the majority of the U.S. RBC development plan over the last several years, BARDA has now committed $182 million of an overall contract of $240 million, which has allowed Phase III clinical development, including the ReCePI and RedeS Phase III trials, along with extensive in vitro function in pathogen inactivation studies and commercial manufacturing scale-up activities. We are extremely grateful for the strong and lasting partnership with BARDA. Today's announcement is a significant milestone for the INTERCEPT RBC program and for the company, given the importance of potentially bringing to market a pathogen reduction technology for red blood cells to complement our FDA-approved INTERCEPT systems for platelets and plasma and INTERCEPT for fibrinogen complex. Our singular mission as a company is to establish INTERCEPT as a standard of care in transfusion medicine to enable our blood center customers to do everything within their power to proactively maintain the safety and availability of the blood supply for patients. I would like now to turn the call over to Cerus' Chief Medical Officer; Dr. Richard Benjamin, who will provide an overview of the ReCePI clinical trial design and top line results.

Thank you, Obi, and good morning, everybody. It's a real pleasure to present the top line results from Cerus' ReCePI clinical trial. ReCePI was a prospective, randomized, controlled double-blind Phase III study that, as Obi mentioned, was supported through a contract with BARDA, a division of the Department of Health and Human Services. ReCePI sought to enroll and transfuse at least 292 patients undergoing complex cardiac or thoracic aortic surgery at 18 clinical trial sites in the U.S. Patients were randomized on a one-to-one basis to receive either conventional or controlled red cells or INTERCEPT pathogen-reduced test red cells during surgery and for 7 days thereafter. Adverse events were reported for 28 days after the last study transfusion and all subjects were screened for antibodies specific to INTERCEPT red cells at baseline at 28 days and 75 days after surgery. In the end, ReCePI enrolled and randomized 581 subjects. Of the randomized subjects, 260 did not receive any red cell transfusion within 28 -- sorry, within 48 hours and were replaced. 321 subjects were transfused within 48 hours and constituted the modified intent-to-treat population, which was the principal population for the primary efficacy endpoint analysis by agreement with the FDA. The primary efficacy endpoint was the incidence of acute kidney injury or AKI defined using an adaptation of the KDIGO criteria by agreement with the FDA prior to the study. AKI was defined as any raised serum creatinine level occurring after a study red cell transfusion of greater than 0.3 milligrams per deciliter from baseline within 48 hours of the end of surgery. This was a non-inferiority study with 80% power based on an assumption of a 30% incidence of AKI in subjects receiving controlled red cells and a 15% non-inferiority margin. Safety endpoints were the incidence of related treatment emergent adverse events, or TEAEs, and the incidence of antibodies specific to INTERCEPT red cells, but the study was not specifically powered on these endpoints. Complex cardiac surgery patients were chosen as the study population based on a need to evaluate noninferiority of INTERCEPT red cells in the setting of acute hemorrhagic blood loss. Cardiac and thoracic aortic surgery patients commonly require multiple red cell transfusions are a large group of patients and account for a significant proportion of transfused red cells in routine practice. Surgery is also a pro-inflammatory state, which might make patients particularly vulnerable to adverse consequence of the red cell transfusion, especially decreased tissue and organ oxygenation. AKI was chosen as a novel endpoint to assess red cell function as it is a sensitive marker for kidney hypoxia and is highly related to death or the need for dialysis within 30 days after cardiac surgery. Importantly, AKI can be defined using simple laboratory parameters. In other words, the changes in serum creatinine from baseline within 48 hours of surgery. We are ecstatic -- we're happy to report the successful outcome of the primary endpoint. 46 of 157 test patients and 45 of 151 controlled patients met the definition of AKI for an overall rate of 28.6%, close to our prediction at the start of the study. AKI rates in the test group were not inferior to rates in the control group with a noninferiority p value of 0.001, which is highly statistically significant. The difference in AKI rates between test and control subjects was 0.7%. And the upper limit of the 95% confidence interval is well clear of the noninferiority margin. In exploratory analysis of the protocol and per protocol study red-cell-only population, the study also achieved noninferiority. While the study was not powered for the safety endpoints, there was no significant difference between test and control patients in the incidence of related TEAEs. There were 5 treatment-emergent antibodies detected with specificity for Intercept red cells, 3 were detected at 28 days and are included in the TEA numbers. 2 were detected after the 28-day assessment. All 5 antibodies were fully investigated as described in the protocol for evidence of intravascular or extravascular analysis or increased rate of red cell clearance. The results were individually assessed by the Data Safety Monitoring Board, or DSMB, which expressed no concerns relating to the clinical relevance of the antibodies and allowed the study to continue enrolling. We continue to investigate the incidents and clinical relevance of antibodies to INTERCEPT red cells in all of our studies. To date, Cerus has not detected any antibodies with clinical relevance of intravascular or extravascular hemolysis or increased rate of red cell clearance. With the completion of the ReCePI clinical trial, Cerus remains fully engaged in execution of the companion U.S. Phase III RedeS clinical trial at multiple hospital sites. We remain on track to initiate our planned PMA modular submission anticipated for the second half of 2025 and to report out the top line RedeS results in 2026 prior to completing the planned modular PMA submission, which is anticipated in the second half of 2026. Thank you for your continued interest in Cerus and our red cell program, particularly as we have reached this important milestone. We are looking forward to disclosing this data to the ReCePI trial investigators data this morning. We thank them for their contributions to the study as well as the patients and clinicians who were integral in leading this to a successful outcome. I will now turn the call over to the operator for questions.

[Operator Instructions] Our first question comes from the line of Mathew Blackman with Stifel.

Maybe to start one clinical and then I'll follow up with more of a commercial question. On the clinical side, can you just first remind us what the antibody rate was in the EU studies? And then second, any more precision on the timing of when we might see the full data presented? And are there any notable secondary endpoints we'll see in that full data set that are worth calling out? I appreciate this was a small N, but can you comment whether there were any transfusion-related infections in the conventional red cell arm? And then I've got one follow-up.

Yes, Rich, why don't you ahead and handle that?

Okay. I heard 3 questions there, and I'm going to have to take them one at a time, and then I might ask you to repeat them. First of all, thank you for the questions. You will recall for our published SPARC and STARS studies in Europe, these were relatively small studies; STARS was 51 subjects enrolled and SPARC was 81 subjects enrolled, and we did not see any antibodies in those studies. But although we have published a paper to say that in normal nonexposed individuals, there is a low rate of antibody specific for S-303 and therefore, finding antibodies was not a surprise. Matt, could I ask you to repeat the second question?

Sure. Yes. Sorry about that. But just any more precision on the timing of when we might see the full results? Is it first half of the year, second half of the year? And then when we do get those full results, are there any other secondary endpoints that are worth calling out that may be notable? I appreciate that's probably not large enough study to see any transfusion transmitted infections. But curious if there were any in the conventional arm in this study. And then one follow-up on the commercial side.

We will be planning on writing up the clinical study report and submitting that to the FDA, probably early -- I think the current plan is in Q3. We plan on releasing some high-level results at meetings in Q3, and we will plan on submitting papers in that time frame. So that is the current time frame for release of further information.

Sorry, go ahead.

In terms of further details on the study, the study is still subject to further exploration and the question around infections, I can't answer that top of my head, top of my mind, quite frankly. We will need to wait for the full results to be released for that question. And you had one fourth question there too?

Yes or maybe 6. Counting. And maybe this is for Obi or if Vivek is there. On the commercial side, now that we get to think about it more so with this data in hand. Just how should we think about, just in general, the trajectory of U.S. adoption of red cells following approval, does it move faster than platelets? Do we need a catalyst like the FDA guidelines that we needed for platelets to drive adoption? Just any thoughts on the potential shape of the adoption curve and any hurdles there may be along the way?

Yes. Thank you. Well, I think the one thing that has stood the test of time is that the blood centers that have implemented INTERCEPT for platelets or plasma or IFC definitely see a need for red blood cell pathogen activation so they can complete the portfolio and have a definitive safeguard against transfusion transmitted infections. So we obviously have to get through the right of study and file a PMA and ultimately see what the FDA has to say about the label and the approval. But I think it's been great to see the existing INTERCEPT customers express the demand for INTERCEPT red cells just because it's the largest -- the highest volume transfused blood component. So they really see a need for that. I think there are certain segments of the market that are also really interesting to target initially, specifically red cells that are gamma irradiated as well as washed. And so to the extent that INTERCEPT might be able to have a label that allows for replacement of those procedures would be really helpful to blood centers. So it's sort of hard to speculate right now, but I do believe that the interest coming from our existing INTERCEPT customers will convey a strong sort of launch dynamic.

Our next question comes from the line of Mark Massaro with BTIG.

This is Vivian on for Mark. Just a few more commercial type questions. So as today study population is supporting cardiovascular surgery patients. Can you just remind us how RedeS study population represents an expansion? And if today's data influences your confidence level in that expanded patient population that's to come?

Thanks. I'll cover the first part of that question, then maybe turn it over to Richard to just talk about the nature of the -- or the patients that are being enrolled into the RedeS study and what that trajectory looks like. So as we mentioned on the call today, there's the SPARC and STARS studies, which were successful Phase III studies in Europe, addressing both acute and chronic transfusion recipients. SPARC being one of the largest studies ever done in thalassemia patients. As we mentioned today, the ReCePI study really addresses acute transfusion recipients. Those patients who are undergoing cardiovascular -- complex cardiovascular surgery procedure. So we're looking at that indication in the ReCePI study. And then maybe, Rich, you can just talk about sort of what the goals and end points are for the RedeS study.

Sure. Thank you, thank you for the question. So our RedeS clinical study Phase III trial was designed as a broad safety study that was planning on enrolling both surgical and medical patients and has -- and is enrolling exactly that population and includes general medical, general surgical, liver transplant patients, sickle cell anemia patients, thalassemia patients, generally, any patient that may receive a patient population that may receive red cells in general routine care that has been or is eligible for certain areas in this study. So we are hoping that this study we're planning on this study will support a general use of our red cell product in routine care in all patient populations.

Perfect. Yes, then just a followup. So just following this top line readout, is it still reasonable to expect CE mark in the back half of this year? I don't believe there's any revenue contribution in the 24 guides in Europe. So just when we should expect to see that revenue ramp?

Yes. Thanks, Vivian. So as we've discussed, we're still expecting a decision around CE Mark in the second half of the year. We do have to see how the clinical study report from ReCePI will be factored into that evaluation. And so that's sort of TBD, but I think this is obviously a positive outcome for the program. And with regard to the revenue ramp in Europe, as we've discussed before, one of the commitments that we have in the context of the CE Mark review is to conduct a hemovigilance program at a number of sites throughout Europe, so that there's a sort of real-world experience data set that will precede the broader market rollout.

Okay. Understood. I think if I could squeeze in one more. Sorry, if I could just squeeze in one more. Just any further comments on the timing of the peer-review publication. I think you guys mentioned around Q3, but just any flavor you can give us for the type of journal or just what your expectations are tracking there?

Richard, do you want to have that?

Sure. Clearly, with these very exciting results, we have high hopes for the data but it's premature really as we further analyze the data and put the story together for a paper and work with the investigators. We will choose the very best Journal that would accept our publication. We're very excited about this result. We have to make sure that the Journal reviewers can pick up that excitement when they look at our paper.

Our next question comes from the line of Josh Jennings with TD Cowen.

Congratulations on these data. I was hoping to just build on your answer to Matt's question. It will be on just the demand you're seeing for blood cell -- INTERCEPT blood cells and how that's building and just maybe any synergies that you see once there's all three major blood products, whether there's INTERCEPT, pathogen [Technical Difficulty] in play?

Yes. Thanks a lot, Josh, and thanks for the question this morning. Yes. So what we hear routinely from our existing customers is, "Hey, you really need to have something for red cells so that we can sort of complete the protection that we're seeing with platelets or plasma or IFC." So it's sort of hard to speculate on how that will roll out. I do believe that it's somewhat challenging for major blood centers given the sheer volume of red cells that they process on a daily basis to sort of take on that complete budget for implementing pathogen activation. Obviously, we're trying to provide a value to the blood banking -- blood center operations as well as to their overall sort of business model and so as part of that, you sort of look at what are the cost offsets that potentially INTERCEPT for red cells could convey or afford? And specifically, as I mentioned before, you look irradiation of red cell components. And that varies between sort of 10% and 20% of overall red cell transfusion, just primarily for patients that are immune compromised and are at risk for transfusion-associated graft versus host disease. But a lot of hospitals actually irradiate all their components because they're concerned about transfusions to recipients that should get irradiated components but don't and so they end up irradiating all their components. And that's also typical at pediatric hospitals, where children are more at risk for transfusion-associated graft versus host disease. And typically, there's a price premium that blood centers put on their irradiated red cells. The other concern with the irradiated red cells is that the irradiation of red cells leads to a shortened shelf life of red cells. So you get damage to the potassium ion channels in red cells that leads to increased potassium, which can lead to hyperkalemia in recipients, especially children. So we believe that's sort of an obvious target to initially go after but more broadly, when we talk to our INTERCEPT's routine use customers, they also see certain patient populations that they think are at risk for transfusion transmitted disease as well. And I guess I'd turn it over to Richard or Nina, if you guys have anything else you'd like to add to that?

Nina, do you have a...

Yes. No, I don't have any comments. Covered it well, Obi.

Thank you. Does that answer your question, Josh?

That does. And just a follow-up. I mean, as investors are thinking about this, INTERCEPT red blood opportunity. I mean one of the ways our team has thought about it is potentially, as you were referencing, immunocompromised patients who are receiving transfusions were also patients that are receiving chronic transfusions, the clinical value proposition may resonate a little bit more with blood centers. But is that kind of -- should we be considering those two populations as the low-hanging fruit? I know you reviewed some of that in your last answer. But thinking about that 10% to 20% of red cell transfusion volumes potentially converting over and as the early ramp of adoption in post CE mark approval and post FDA approval?

I think that's clearly from a blood center value proposition perspective, how -- what value they're conveying to their hospital customers and not having to manage multiple inventories. I think that's one of the main ways we're looking at the launch. But we also have to see how the transfusion medicine community looks at this Phase III data as well because I think we have very strong top line results, but we have to ultimately see how they review the publication once it comes out.

[Operator Instructions] Our next question comes from the line of Ross Osborn with Cantor Fitzgerald.

Congrats on the top line results. Maybe just one for me at this point. Could you discuss the level or amount of overall data needed to drive adoptions and any challenges you foresee in collecting that data?

Ross, I think that -- sorry, you broke up a little bit there, but I think your question is what challenges do we see to adoption? Is that correct?

Yes. And just around the need for overall data kind of the level you expect to see a material adoption.

Okay. Thanks. Yes. So as I mentioned in Vivian's question, we do have a commitment to the regulatory authorities in Europe, specifically TUV, which is our notified body to conduct a post-approval hemovigilance study, looking at transfusion of INTERCEPT red cells in multiple patient -- and primarily in the chronic transfusion recipient population. I think what we've seen historically with INTERCEPT is that you conduct large randomized controlled Phase III studies, but ultimately, the marketplace does need to see sort of real-world experience. And so we're very committed to that. And given the experience we have with INTERCEPT platelets, where it took several years to do that, we're focus on how do we accelerate that over the first couple of years post approval in Europe, just so that we have that data set to support discussions with national transfusion services and large blood centers across Europe. I think inevitably, the challenge comes down to budget for a lot of these national transfusion services and blood centers. And so you really have to have a strong economic rationale for what the cost offsets are versus what the cost of INTERCEPT is. But as I mentioned in Josh's question, answer to Josh's question, we do believe there are some really compelling economic opportunities for blood centers when they look at replacing certain test or procedures that they currently do today, but that's obviously a function of whatever label we ultimately get, but we believe the data is strong to support that.

[Operator Instructions] And I'm currently showing no further questions at this time. I'd like to hand the call back over to Obi Greenman for closing remarks.

Well, I thank you all for joining us on today's call, at least on the West Coast here, it's pretty early in the morning, but we really look forward to providing you with additional updates on our progress in the future, and thanks so much for joining us today.

This concludes today's conference call. Thank you for your participation. You may now disconnect.