Cerus Corp. (CERS) filed Quarterly Report for the period ended 2009-09-30.
Cerus Corporation is developing medical products based on a platformtechnology that prevents nucleic acid replication. The company's initialapplication of this technology is the development of systems to inactivateviruses bacteria and other pathogens in blood components used for transfusion. The company is also focusing research and development efforts on other potential health care applications for this platform technology including pathogen inactivation of source plasma used for fractionation improving the outcomes of stem cell transplantation. Cerus Corp. has a market cap of $72.7 million; its shares were traded at around $1.88 with and P/S ratio of 4.3.
Highlight of Business Operations:
We recognized $0.2 million of revenue from government grants and cooperative agreements for the three months ended September 30, 2009, compared to $0.8 million for the comparable period in 2008. The decrease was due primarily to decreased activities covered under the award with the U.S. Department of Defense, or Department of Defense, or DoD. We anticipate recognizing $0.7 million, the remainder of the award, throughout 2009 and possibly into 2010. We anticipate applying for new awards with the Department of Defense to the extent such awards become available. However, we can provide no assurance that should such awards become available, our bids will be accepted by the Department of Defense or at what funding levels.
Product revenue decreased $0.5 million to $11.5 million during the nine months ended September 30, 2009, compared to $12.0 million during the comparable period in the prior year. The decrease in product revenue was primarily due to the recognition in 2008 of $1.5 million in revenue originally deferred in 2007.
Government grant revenue increased by $0.1 million to $1.0 million during the nine months ended September 30, 2009, compared to $0.9 million during the comparable period in the prior year. The increase in government grant revenue was primarily due to an award with the Department of Defense, received in 2009 relating to the research and development of the red blood cell system.
Similarly, cost of product revenue increased $2.2 million to $8.9 million during the nine months ended September 30, 2009, from $6.7 million during the comparable period in the prior year. The increase in cost of product revenue was due to the higher number of consumable units sold during the nine months ended September 30, 2009, and certain period costs which resulted from our decision to sell down existing inventory and optimize inventory levels.
Research and development expenses decreased $3.1 million to $4.9 million for the nine months ended September 30, 2009, from $7.9 million for the comparable period in 2008. Of our total research and development expenses incurred, non-cash stock based compensation represented $0.4 million and $0.5 million for the nine months ended September 30, 2009 and 2008, respectively. The decrease in our research and development expenses during the nine months ended September 30, 2009, compared to 2008 was a result of the effect of our March 2009 restructuring and the associated reduction in force.
Selling, general, and administrative expenses decreased $4.8 million to $16.9 million for the nine months ended September 30, 2009, from $21.6 million for the comparable period in 2008. Of the $16.9 million and $21.6 million of selling, general and administrative expenses recognized during the nine months ended September 30, 2009 and 2008, $1.1 million was due to non-cash stock-based compensation recognized during the respective periods. Overall, the decrease in selling, general and administrative expenses for the nine months ended September 30, 2009, was primarily due to decreased personnel costs and lower marketing and public affairs costs driven primarily by our March 2009 restructuring plan and the associated reductions in force. We anticipate that selling, general, and administrative expenses will continue to level-out as the full effect of our restructuring plan is realized.
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