Cerus' 1Q financial report on track with Company's objectives

64% Year-over-Year Revenue Growth


Shares up 10.75% before Company's press release

Cerus Corporation (CERS) today announced financial results for the first quarter ended March 31, 2010.

Total revenue was $5.7 million during the first quarter of 2010, up 64% from the $3.5 million recognized during same period in 2009. Product revenue for the INTERCEPT Blood System was $5.5 million during the first quarter of 2010, up more than 75% from the $3.1 million recognized during the same period in 2009. First quarter 2010 product revenue marks the fourth consecutive quarter of growth. Disposable kit sales to customers was the primary contributor to the year-over-year growth, representing almost 90% of product revenue during the first quarter of 2010. Government grant revenue in the first quarter of 2010 was $0.2 million, compared to $0.4 million in the first quarter of 2009.

Total operating expenses for the first quarter of 2010 were $6.5 million, down from $8.8 million for the same period in 2009. The decrease in operating expenses was due to the Company's focused cost minimization and full implementation of its restructuring plans initiated in March 2009.

Net loss for the first quarter of 2010 was $5.0 million, or $0.13 per share, compared to a net loss of $7.4 million, or $0.23 per share, for the first quarter of 2009.

At March 31, 2010, the Company had cash, cash equivalents and short-term investments of $19.0 million compared to $19.9 million at December 31, 2009. During the first quarter of 2010, the Company closed a $10 million growth capital facility, under which it drew $5.0 million. The facility provides for nine months of interest-only payments on each draw, followed by thirty months of principal and interest payments. The Company believes that cash used for operations during the first quarter was unusually high compared to expected quarterly cash usage for the remainder of the year, primarily due to non-routine working capital payments during the first quarter.

"We continue to make significant progress on growing our European platelet and plasma business while maintaining our financial discipline and controlling costs," said Claes Glassell, president and CEO of Cerus Corporation. "We believe we have the necessary capital in place to execute on our plan of driving that business to profitability."

RECENT HIGHLIGHTS:
- New record high quarterly sales of INTERCEPT, totaling $5.5 million
- Signed agreement with the Swiss Red Cross for full implementation of INTERCEPT in 11 of 13 blood centers
- Secured $10 million growth capital facility.

Cerus Corp. (CERS) to disclose 1Q finance on Apr 29

Cerus Corporation (CERS) will be reporting its first quarter 2010 financial records on Thursday, April 29, 2010, after the close of the stock market. A company conference call along with webcast will be held at 4:15 p.m. ET that afternoon, during which a general business overview and outlook will be given by the management. Broadly speaking, analysts expect CERS to post a loss of $0.10 per share on sales of $6 million. For the full year, CERS is expected to put forth a loss of $0.36 versus $0.21 on sales of $3 million in the year-ago period.

Technology

The INTERCEPT Blood System® for Platelets and Plasma


The INTERCEPT Blood System for platelets and plasma is a technology developed to eliminate a hosts of potential pathogens (viruses, bacteria, parasites) residing in donated blood to be used for transfusion. Cerus' system introduces chemical entities (amotosalen HCl and S-303) that targets the spaces between the DNA/RNA base pairs. Upon UVA illumination (amotosalen for use with platelets and plasma) or a change in pH (S-303 for use with red blood cells), the compunds crosslinks the two strands of nucleic acid and renders DNA/RNA replication inactive for pathogens. This process effectively blocks the growth and survival of harmful pathogens in the blood, thereby sterilizing the blood before transfusion while leaving plasma/platelets and red blood cells untouched (platelets and RBC do not require nucleic acid to function; plasma is acellular, consisting of proteins and liquid). The INTERCEPT Blood System for platelets and plasma has received CE marking and is presently being distributed for sale in Europe. Regulatory approval for the platelet and plasma systems has not been granted in the United States.




The INTERCEPT Blood System for Red Blood Cells

A two-armed Phase III clinical trial for red cells was terminated in 2003 when antibodies to treated red blood cells were detected in one patient in the chronic arm of the trial. Since then, the Company has created renewed processes such that the probability of antibody reactivity in red blood cells treated with this modified process is dramatically diminished. Findings related to the above improvements were presented in late 2004 and 2005 at several scientific and trade association meetings. Furthermore, the Company reported that, upon unblinding of the Phase III data, enpoints within the acute arm of the trial had been met. Based on the information available, Cerus has conducted additional preclinical and Phase I human clinical trials in the U.S. to test adjustments to the original process. In 4Q2008, the firm initiated a small Phase I clinical trial in healthy volunteers at two sites in the U.S. with a modified process, which was completed early in 2010. A Phase III clinical trial for the INTERCEPT red blood cell system is currently pending additional financing.

Convenience of Use

Cerus' INTERCEPT Blood System is devised to be simple and compatible with the operations of the world's blood centers. The system includes a UVA light source and a sterile disposable set pre-loaded with Helinx inactivation compounds (i.e. amotosalen). Over 450,000 INTERCEPT platelet and plasma kits have been shipped to date. The product has been applied in the clinic in Europe, Russia, the Middle East, Asia and in selected countries in other regions around the world.

Opinion & Alert

As always, it is critical to zoom in on the market value of the technology of interest before deciding to partake in a company's future. Cerus, a specialist in pathogen inactivation of donated blood, previously informed shareholders of third consecutive quarter of revenue growth and narrowing losses. Each year in the United States alone, more than 14 million units of blood are transfused. With the sizable volume of blood passing from donors to recipients, contaminated blood supplies can be a genuine threat for people receiving that blood. As such, there is an indisputable need for a technology that could offer a dependable and cost-effective way to clean blood and blood products. This technology would significantly reduce the costs associated with the screening process and alleviate blood shortage due to expansion of donor pools. Countries in Europe, including France, have entered into agreements to facilitate the development of the INTERCEPT system for red blood cells, which may tap into the multibillion-dollar business of transfusion blood sterilization, foreshadowing Cerus' success in clinical trials.


The upward trending stock prices as well as the promising advancement of the INTERCEPT system for both plasma/platelets and red blood cell should encourage investors to establish a long position in CERS before the release of the Company's financial report on Thursday (Apr 29, 2010), after which a jump in share prices will sure be notable if earnings outshine analysts' expectations.


*Source of figures: http://www.cerus.com/index.cfm/ProductOverview/How_INTERCEPT_Works

Delcath's shares up 31% upon release of postive clinical data!!!

URGENT UPDATES

- Pivotal study compared PHP to best alternative care

- Results surpass primary endpoint expectations
- DCTH to initiate rolling NDA submission in the next 30 days
- Shares hiked 31% in after-hours trade


Delcath Systems Inc. (DCTH) announced today that their pivotal phase III clinical study results have met the main study objective of demonstrating the efficacy of slowing cancer progression in the liver of patients with melanoma metastasizing to the organ.

In this study, Delcath's PHP (Percutaneous Hepatic Perfusion) system used with chemotherapy drug melphalan was tested against best alternative care. Based on the positive trial findings, DCTH expects to initiate their rolling NDA (new drug application submission) to the FDA within the next 30 days.

After detailed analysis to the study results, it was reported that PHP patients had a statistically significant longer median hepatic progression-free survival of 214 days compared with 70 days in the best alternative care arm. The company added, on a conference call, that while they were expecting the best alternative care arm to show progression-free survival of around 4 months instead of around 2 months, the PHP arm still produced a remarkable improvement in patients, showing progression-free survival of 7 months. The trial results certainly came as a pleasant surprise as patients, experiencing rapid disease progression, who crossed over from the best alternative care arm to the PHP treatment arm performed even better than those with 'milder' conditions.

"This certainly puts them on a good start," Craig-Hallum Capital analyst Brooks West commented on Delcath's odds of obtaining a regulatory approval, especially when the trial was run according to a special protocol assessment, which provides a company with a written agreement that the design and analysis of the trial are adequate to support a marketing application submission with the U.S. health regulators.

On June 5, the company will further announce news regarding overall patient survival as part of the trial's secondary end points at the annual meeting of the American Society of Clinical Oncology.

The PHP system is priced at $20,000/system at the moment and sees estimated revenue of $745 million in the US market alone.

Shares of the company were up 30.78 percent to $14.19 in after-hours trade. DCTH closed at $10.85 Wednesday on Nasdaq.

Delcath Systems (DCTH) - next generation of localized cancer treatment

Stock Alert

Share prices have been on the rise for Delcath Systems (DCTH), soaring 80% in a month (Mar - Apr 2010). DCTH is near the end of their phase 3 data (malphalan using PHP) analysis and is planning to have their plant inspected by the FDA by end of month. In addition, the company will attend 3 conferences in the last 2 weeks of April. These conferences include:

• The 9th World Congress of the International Hepato-Pancreato-Biliary Association, Buenos Aires, Argentina, April 18-22
• The 2nd European Conference on Interventional Oncology, Florence, Italy, April 21-24
• The AmSECT 48th International Conference, Reno, NV, April 28-May 1.
  

The solid confidence, expressed by Delcath's management, in meeting the end points in the pivotal trial warrants the potential of the company's cancer fighting technology!

Medical technology company Delcath Systems Inc. (DCTH: News ), whose PHP (Percutaneous Hepatic Perfusion) system is currently under late-stage testing on patients with metastatic melanoma and inoperable liver tumors, is expected to release the trial data in the coming days. The stock was trading around $5 when it was profiled on RTTNews site last October.

Delcath's patented Percutaneous Hepatic Perfusion technology allows physicians to deliver significantly higher doses of anti-cancer drugs to the liver without exposing the patient's entire body to those same potent levels of drug, thereby limiting the toxic side-effects due to chemotherapy treatments.

Besides being non-surgical, Percutaneous Hepatic Perfusion, or PHP, is a repeatable procedure. With 2.6 million liver cancer patients worldwide, there is a large unmet market opportunity for Delcath's PHP.

In the late-stage study, Delcath is testing its PHP System for the regional delivery of anti-cancer drug Melphalan for the treatment of patients with metastatic melanoma and inoperable liver tumors. The 92-patient, randomized, multi-center, phase III study commenced patient enrollment in February 2006, and the company began data analysis of the trial in February of this year.

The study's primary objective is to demonstrate a statistically significant improvement in the hepatic progression free survival of patients with metastatic melanoma to the liver treated with the Delcath PHP System versus patients in the control arm.

Last month, Delcath confirmed that it intends to release data from the metastatic melanoma trial in April. The company remains highly confident that the study results will meet the primary endpoint.

Amlylin Pharmaceuticals (AMLN) posts 1Q2010 financial report

AMLN announced today that the company earned total revenue of $174.1M for the quarter ended Mar. 31, 2010, while accumulating non-GAAP operating loss of $3.8M (an 81% improvement from the same period in 2009), beating analysts' expectation of -$0.29 by 2 cents per share. Prepared to hand in their Bydureon (Byetta once-weekly) response to the FDA this week, the San Diego-base biotech is in line with the hope to launch the new diabetes drug by the end of this year - a catalyst for shareholders and cheerful news for patients.

AMLN's shares slid 61 cents or 2.80% today, closing at $21.14 as investors remain on the sidelines after hearing the company's first quarter financial updates. Amylin's president and CEO, Daniel M. Bradbury, reassures the shareholders that "with the submission of [the] BYDUREON response this week, [AMLN] is preparing to make this revolutionary treatment option available this year to the millions of patients living with type 2 diabetes." Mr. Bradbury emphasized that "[his company] remains focused on driving revenue from their currently marketed products, BYETTA and SYMLIN, and continues to exercise financial discipline so that the firm remains on track to generate sustainable positive operating cash flow by year end."

Generex (GNBT) - more than a mouthful

The past three weeks have been tough for the oral insulin developing company, Generex Biotechnology (GNBT), previously covered in this blog. The turmoil started out with a pair of articles (Mar. 19 and Mar. 26, 2010) by Adam Feuerstein posted on TheStreet.com, questioning the science behind the biotech firm's product candidate, Oral-lyn, currently under a worldwide phase III trial. You can read more about GNBT in my earlier posts: here and here. To guard the company's reputation and to defend itself from damaging misinformation, the leader in buccal mucosal drug delivery for metabolic diseases determined to speak up Tuesday (Apr. 6, 2010) and pursue legal actions against TheStreet.com, Inc. and Adam Feuerstein in the Supreme Court of the State of New York, demanding $250,000,000 in "damages for business defamation, product disparagement, and injurious falsehood". In marked frustration, Executive Vice-President & General Counsel of Generex, Mark Fletcher, stated "These articles go well beyond the expression of disparaging opinion or fair comment and Feuerstein and TheStreet.com have abused their public forum by spreading categorical falsehoods about Generex and Generex Oral-lyn when a modicum of due diligence would have revealed the truth, an injury then compounded by unfounded and libelous allegation and innuendo. We are now seeking to hold Feuerstein and TheStreet.com accountable for the damage they have unjustifiably inflicted on Generex and its stockholders."

Meanwhile, GNBT shares tumbled 10.9% from 55 to 49 cents a share. Piling on top of the business of propelling the oral insulin forward into the market, securing investor confidence and patient trust in the midst of an exhausting lawsuit will likely be more than a mouthful for the news-laden biotech.

Provenge - A potential catastrophe brewing for late comers

Drug of wonder???

Provenge, a therapeutic vaccine under development by Dendreon Corp. (DNDN), is on the verge of winning FDA's approval for the treatment of advanced stage metastatic prostate cancer with the PDUFA date scheduled on May 1, 2010. Previously suggested as a short term hit in this blog, DNDN has many qualities of a biotech jackpot (revolutionary product, large market, ~600% return from a year ago). Nevertheless, convincing the FDA has not been smooth sailing for the Seattle-based biotech (see Provenge development history). This makes the light at the end of the tunnel that much more attractive for the company's shareholders, for whom things just get better and better. The most recent pivotal trial updates, released by DNDN a little over a month ago, are summarized below:

Trial summary
- Increased 3-year survival by 38% compared to placebo (31.7 vs. 23.0%)
- Extended median survivak by 4.1 months compared to placebo (25.8 vs. 21.7 months)
- Reduced risk of death [HR=0.775], p-value = 0.032
- Summary: pre-specified primary endpoint of significantly improving overall survival compared to placebo was met in the pivotal trail of Provenge

In addition to the promising efficacy, Provenge, unlike conventional chemo drugs, displays side effects, mainly resembling flu-like illness, that are much more tolerable for cancer patients, thereby presenting a pleasing alternative to the standard of care in castrate-resistant prostate cancer, Docetaxel (Taxotere®).

Trial design
Trial name: IMPACT (IMmunotherapy for Prostate AdenoCarcinoma Treatment)
Patient number: 512 (2 : 1 treatment-to-placebo arm)
Patient population: men with asymptomatic or minimally symptomatic, metastatic, castrate-resistant prostate cancer
Trial type: multi-centre, randomized, double-blind, placebo-controlled
Primary endpoint: overall survival

What's the concern?!

Dendreon Corp's shares leaped from $6.58 (Apr 6, 2009) to $39.40 (Apr 6, 2010) in as little as one year. The whopping ~600% increase may be enticing for investors, but if you just became aware of this company and hope to jump on the bandwagon, you might be in for big trouble. Why? Let's take a look at the risk to reward ratio. To do this, first determine how high DNDN's share price could reach if Provenge was approved (reward) and, conversely, how low it could drop if the drug was rejected (risk)? Based on JP Morgan's price target of $48, there is still room for another 21.8% increase (from today's $39.40), which is a stunning return by itself. Pretty tempting right? Hold on! Let's take a look at risk? Well, normally when FDA rejects a drug, shares of emerging biotech firms with no product on the market, such as Dendreon, are immediately dumped like there's no tomorrow, resulting in 40-80% slash in share price. Read this article on how FDA's rejection or delay drives down share prices. Assuming a 60% reduction in DNDN's stocks follows FDA's denial (something not unfamiliar to the biotech firm), the risk to reward ratio would then be 60% : 21.8% or roughly 3 : 1 (i.e. three times more risk than reward), a ratio that would only be embarked on by irrational casino gamblers. What's the verdict? Well, if you don't own any DNDN shares right now, then you might as well be a spectator and marvel at the ending of this dramatic roller coaster ride, hands off!