Q4 2020 Cerus Corp Earnings Call
Ladies and gentlemen, thank you for standing by.
Welcome to the Cerus Corporation's fourth quarter and full year 2020 financial results Conference call. At this time, all participants are on listen only mode.
After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press Star then one of your telephone.
Now my pleasure to introduce the Cerus management team. Please go ahead.
Thank you and good afternoon.
I'd like to begin by introducing myself my name is mandatory on them and I'm serious senior director of Investor Relations.
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 Dot Sirius Dot com.
With me on the call are Obi, Greenman, Cerus, President and Chief Executive Officer.
Jake J Robyn share since Chief operating officer.
Kevin Green Sirius as Chief Financial Officer, and Carol Moore, Sirius as senior Vice President of regulatory affairs and quality.
Cirrus issued a press release today announcing our financial results for the fourth quarter ended December 31, 2020, and describing the company's recent business highlights.
You can access a copy of this announcement on the company website at Www Dot Cirrus Dot 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 <unk>.
Examples of forward looking statements include those related to our future financial and operating results, including our 'twenty 'twenty, one financial guidance and goals operating expenses anticipated cash used from operations.
And gross margins as well as commercial development efforts future growth and growth strategy future product sales product launches ongoing and future clinical trials ongoing and future product development and our regulatory activities, including the timing of these events and activities.
These forward looking statements involve risks and uncertainties that could cause actual events performance and results to differ materially they are.
<unk> identified and described in today's press release and under risk factors in our form 10-K for the year ended December 31, 2020, which we will file shortly.
We undertake no duty or obligation to update our forward looking statement on.
On today's call will begin with opening remarks from Obi followed by Vivek to provide the commercial update.
Kevin to review our financial results.
Followed by Obi, who will comment on some recent announcements provide a pipeline update and make some closing remarks.
And now it's my pleasure to introduce Obi Greenman, Cerus, President and Chief Executive Officer.
Thank you, Matt and good afternoon, everyone.
Now hopefully you've had a chance to review our press release detailing our fourth quarter and full year 2020 results.
It goes without saying that the 2020 was a year filled with many challenges, but it turned out to be a significant year of progress for cirrus.
In the face of a global pandemic that stretch the capabilities of health care systems everywhere.
Our dedicated team rose to the challenge.
Moving to make progress on multiple fronts.
Our goal remains to establish intercept as the standard of care in transfusion medicine for safeguarding the global blood supply against pandemic threats.
As I think about the COVID-19 pandemic I'm reminded that the company was standard largely.
As a result of another global health emergency and our history HIV.
In those early days, our founders recognized the threats could emerge and influenced medicine.
Expected ways.
Thus sports day today, we are seeing display out in real time, and I'm proud that cerus is at the forefront of pandemic preparedness.
As evidenced by our 2020 results our team has been tirelessly working to commercialize the system.
With the goal of protecting the global blood supply from potential threats, including those that are not yet known.
It was not always easy to accomplish so much of this work virtually but I'm grateful to our employees for their dedication our partners for their commitment to our share goals.
And our customers for their unending commitment to the safety of the blood supply for patients around the world.
While the challenges we face did not end as we turned the calendar forward.
There is much to look forward to as we head into 2021.
As the experts of anticipated COVID-19 cases, hospitalizations and deaths surged during the winter months and remain elevated.
We do not expect COVID-19, and its associated disruptions to abate anytime soon.
Net cirrus remained focused on continuing the momentum we generated on multiple fronts during 2020.
Before we look ahead I am pleased to report our results for the fourth quarter and full year.
As you saw on January we announced record fourth quarter and full year 2020 product revenues with year over year growth of 35% and 23% respectively.
Demand for intercept continues to grow.
Despite the COVID-19 crisis.
Earlier this year, we provided a first look at our product revenue guidance for 2021.
Which at this time, we continue to expect will be in the range of $106 million to $110 million.
This range reflects year over year growth of between 15% to 20% from our full year 2020 results.
During the quarter and in response to the ongoing disruption blood centers have seen as a result of COVID-19.
The FDA announced a delay in the compliance deadline for its platelet safety guidance.
Previously you will recall the deadline was set for April one 2021.
As a result of the change the new compliance deadline is now October one 2021.
Both this change in deadline as well as the ongoing impact of COVID-19 were factors that we contemplated and included when we put together our 2021 plan.
While we do not plan to provide quarterly guidance, we will say about the new timeline for compliance is that we expect continued momentum throughout the year as our existing customers increase their overall production of intercept treated platelets.
And those new blood centers come on line in order to be compliant by the new deadline.
Our discussions with blood centers and hospitals suggests that this new deadline provides additional time to increase production capacity of intercept platelets in order to meet strong hospital demand.
We continue to hear that the preference of our U S. Blood center on hospitals customers will be to implement single step methods in order to comply with FDA guidance.
On intercept <unk> large volume delayed sampling.
The extension of the deadline does not change our expectation that intercept will become the standard of care in the U S. Given the numerous advantages it has versus the other options for compliance with the FDA guidance.
So Vic will provide additional details on the U S platelet market during his remarks.
During the fourth quarter, we announced FDA approval for our pathogen reduced cryoprecipitate fibrinogen complex product.
<unk> crowd FC for short.
Well it means very early days for PR Cryo FC we're excited to be bringing to market a product that addresses a currently unmet need.
It has the potential to help stabilize bleeding events for hundreds of thousands of patients.
With the formation of the Cirrus Therapeutics business.
It puts us in front of a new set of customers and our therapeutics team is focused on building out these relationships.
We were pleased to see that the value proposition for PR Cryo F C.
Resonates well with the hospital clinicians.
Who value immediate access to a human therapeutic for controlling and treating hemorrhage and trauma and surgical patient populations.
With the current shortage of conventional cryo across the U S.
On the production advantages conferred by our PR Cryo FC product label, we believe we have a unique opportunity.
Increased not only.
Ease of access, but also overall availability once we are able to realize nationwide distribution.
Of the product post BLA approvals.
Our focus launch targeting the level, one and two trauma centers in four key states. This year will cover about 25% of the U S volume of serious trauma cases.
As the year progresses, we look forward to share insights on the commercial reception as well as expectations for the timing of a nationwide rollout in 2022.
On the reimbursement front, our new technology add on payment or untapped application is currently under review by the centers for Medicare and Medicaid services with a decision still expected later this year.
With that let me turn the call over to Vivek for a more detailed review of our commercial operations.
Thank you Obi and good afternoon, everyone.
I am pleased to discuss the results of another record quarter and full year for cerus.
Our team has done tremendous work executing on our commercial goals and I'd like to share some color on our efforts in the field that are positioning us for continued growth in the future.
Quarterly demand for intercept platelet kits in North America growth, almost 76% year over year and approximately 24% sequentially in the fourth quarter of 2020.
On the five largest blood center networks knee line.
On 80% year over year increase in product sales during the fourth quarter.
As we have shared previously the American Red Cross to remain a leader in terms of intercept uptake and they have publicly stated a goal of transitioning to a fully pathogen reduced platelets supply by 2023.
Platelet production site went live making for a total of all 22 American Red Cross platelet production site.
Do you think pathogen reduced platelets.
Roughly 40% of the platelets now produced by the air Sea or intercept treated.
As Obi mentioned, the FDA recently extended the compliance deadline for its platelet safety guidance from the end of March to October one 2021.
With all the disruption from COVID-19, this extension was disappointing, but not surprising while COVID-19 has caused priority then resources to shift at customer site.
<unk> remains debt bacterial contamination of platelets as a significant threat to patient and one that we are focused on globally with intercept in many ways. The global pandemic has also highlighted the need from blood safety and pandemic preparedness.
We had previously anticipated and still do you anticipate that the revenue ramp for intercept platelets.
<unk> well beyond the compliance deadline.
Team is active in the field, bringing customers online and I'm, just going to benefit action reduced versus alternative options for compliance.
We continue to expect that intercept platelets will become the standard of care in the U S. One of the key drivers will be the FDA approval on day seven day shelf life claim, which we are targeting to have in hand as early as possible from the new clients deadline.
We believe extending the shelf life beyond the current five days can enable better inventory management and lower wasted trades and will position intercept as a clearly superior solution compared to other options.
In the EMEA region fourth quarter reported product revenue increased 13% on a year over year basis led by product sales across western Europe.
The calculated number of treatable platelet doses in our international region was up 17% year over year contributing to the regional growth.
Our intercept plasma business also positively contributed to product revenue during 2020.
This was driven by the use of CCP among customers across the EMEA region.
We are pleased to be able to partner with our blood center customers in all of their efforts to address the pandemic.
As Obi mentioned since our last call. We also received FDA approval for the PR Cryo EM speed product, which we are now launching in four states initially.
I want to spend a moment to give an update on our commercial activities surrounding this launch as we have previously mentioned we have built on dedicated sales team and sales leadership group for this product.
This team has already done much work to put us on the best position to succeed during this rollout in.
In each of the four states that team has been calling on prospective hospital accounts to educate them on product and better understand who the early adopters are likely to be.
From those conversations it is clear that many health care providers already recognize the unmet need that PR client on civil address critical patient population.
There is much work to do in order to turn these hospitals into customers with the level of interest and engagement among large academic hospitals and level, one and two trauma centers is very encouraging.
I look forward to sharing more about the initial sales that could be as the year progresses.
With that I will turn the call over to Kevin for a review of the fourth quarter and year end financials.
Thank you Vivek and good afternoon, everyone.
Consistent with our pre announcement last month.
Today, we reported fourth quarter 2020 product revenue of $28 2 million, which represents a 35% increase from the $29 million.
Recorded during Q4 the prior year.
For the full year 2020 product revenue totaled $91 9 billion.
Up 23 per cent compared to the $74 6 million reported for 2019.
Global demand.
For intercept continued to increase during the fourth quarter and for the full year.
For Q4, the calculated number of treatable platelet doses increased 34% year over year and on.
A full year basis, the worldwide calculated number of treatable platelet doses increased 18%.
In terms of fourth quarter product mix.
It gets accounted for approximately 94% of total kit sales, while plasma sales accounted for the remaining 6%.
For the full year.
It gets accounted for 90% of total <unk> sales in plasma sales represented the remaining 10%.
As we've shared previously.
<unk> per pathogen activated CCP drove the share of plasma sales higher during 2020.
As we think about the 2021 plan, we do not anticipate a significant contribution from CCP production. So it's likely that the platelet kits as a percentage of product sales will continue to account for the majority of kit sales.
In addition to our product revenue and not included in our guidance.
Government contract revenues totaled $5 $4 million and $22 3 million for Q4 and full year 2020, respectively.
Comparatively government contract revenue totaled $5 6 million and $19 $1 million for the corresponding prior year periods.
For 2021.
Assuming the enrolling sites are not significantly delayed due to COVID-19, we expect government contract revenue to increase with patient enrollment for BARDA reimbursed clinical trials.
And as our work gets underway with the whole blood pathogen reduction initiatives funded by the FDA.
Now, let's move the discussion to our reported gross margins.
Gross margins for the quarter were 57% compared to 56% from the prior year period.
Gross margins during the quarter benefited from increased production of intercept disposable kits.
Driven by the growth we experienced in 2020 as well as the anticipated growth in demand for 2021.
These higher production volumes drove economies of scale and manufacturing.
Also contributing to the strong gross margins during the quarter was a benefit from a weakening U S dollar relative to the euro, particularly in the back half of 2020.
On a full year basis 2020, gross margins were flat compared to 2019 at 55%.
For 2021, we expect gross margins will be fairly stable to slightly down.
This is driven by the outpaced growth expected in the U S relative to our other commercial markets.
As a general rule U S customers predominantly use our single dose platelet kits compared to our EMEA customers.
Our single dose platelet kits generally carry a lower gross margin contribution compared to our double dose platelet kits.
I would now like to discuss operating expenses, which totaled $35 8 million during the quarter on a 131 $4 million during the full year.
Of the total Q4 operating expenses.
SG&A expenses accounted for approximately $18 7 million and were higher by about $1 5 billion compared to the prior year.
Driven by increased non cash stock based compensation.
And investments related to our PR Cryo FC launch.
For the full year 2020, SG&A spending totaled 67.0 million.
Compared to $66 2 million reported during 2019.
On a quarterly and annual basis, SG&A expenses were slightly lower than they would have otherwise paid.
Driven by lower travel and marketing related expenses as a result of the COVID-19 pandemic.
Research and development expenses for the quarter totaled $17 1 billion.
<unk> to $16 $4 million during the prior year.
On a full year basis.
R&D expenses totaled $64 4 million compared.
Compared to $64 million during the prior year period.
The increase in R&D expenses was tied to product enhancement initiatives and programs intended to expand label claims for our U S platelet business.
Costs associated with our Red blood cell program as well as the ongoing development of a new illuminator.
Reported net loss and per share losses for the three and 12 months ended December 31, 2020 narrowed when compared to the same period in 2019.
Reported net loss for Q4 totaled $14 4 billion or nine cents per diluted share.
Compared to $16 9 million or <unk> 12 per diluted share from the prior year period.
Similarly on a full year basis net loss was $59 9 billion.
<unk> 37 per diluted share compared to a net loss of $71 2 million.
Or <unk> 51 per diluted share for 2019.
In terms of our balance sheet. We ended the year on a strong position with approximately $133 $6 million of cash cash equivalents and short term investments on hand.
In addition in December we expanded the availability of our revolving line of credit, which will allow us to continue to invest in the growth of our business.
Primarily in regards to working capital.
We also extended the availability of the remaining $30 million of our debt facility.
Later in 2021.
Providing us with additional flexibility.
Cash used from operations for the full year was $40 $7 million compared to $65 8 million from 2019.
The improvement was driven by increased revenues.
Steady gross margins.
Continued leverage on our SG&A spend and improved working capital damage there.
Moving on to guidance for 2021.
There'll be mentioned earlier and as you saw last month, we expect total product revenue for the year to be in the range of $106 million to $110 million, reflecting 15% to 20% of year over year growth.
As we look ahead.
We continue to expect strong leverage from our SG&A investments and the transition to additional value, adding pipeline initiatives as some of our more mature development programs conclude.
Transition to commercial enhancements.
Cash management and a strong focus on achieving profitability over the course of our operating plan horizon or.
And we will continue to be a focus of ours.
With that let me turn the call back over to Obi for some closing comments.
Thank you Kevin before I open up the call for questions I would like to spend a few minutes discussing some additional news we have announced since our last quarterly call.
But also provide a pipeline update.
First our team has made some significant progress from a geographic expansion standpoint, and I'm excited about these opportunities longer term and just wanted to touch on them briefly.
In December we announced that our partner in Brazil Cei on a.
Three year tender with the chemo Minas Foundation for intercept platelets and.
Intercept remains the only pathogen reduction system with local regulatory approval for platelets and plasma.
And this represents a meaningful beachhead for us into the Latam region.
And we just announced our plans to create a joint venture with Z BK for the Chinese transfusion market.
China represents one of the largest blood transfusion markets worldwide and as a result, it has the potential to be a significant opportunity for intercept.
We expect it to be the largest market opportunity for our products over the coming decade, given the growth in demand for transfused blood components in China.
And VK, we have identified a leader in the transfusion market, which.
Which we felt was critical and would position us for long term success in the region.
Alongside our new partner, we will work to develop and register and ultimately manufacturing fully commercialized the intercept blood system for platelets and red blood cells.
This is a long term partnership that will have many phases, but we are excited to get to work and we will update you on our progress as we move forward together with <unk>.
On the size of the Chinese transfusion market has eclipsed that of the U S. The growth over the next 10 years is still unlikely to abate.
Moving on to our Red blood cell development program intercept for Red cells remains an attractive market opportunity given the large number of red cells transfused globally, and the benefits of potentially having a complete intercept portfolio for all transfused blood components for our blood center customers.
Our RBC program efforts are currently focused on key work streams.
CE Mark for European commercialization and.
And progress toward a PMA submission with the FDA for future commercialization in the U S.
Beginning with Europe, you will recall, we have already submitted the first two modules as part of the CE Mark review process.
We remain on track to submit the final two modules in the second quarter of 2021.
Based upon the progress the team has made in our expectations around regulatory timelines.
Our launch of intercept for Red blood cells in Europe could began for specific patient populations in the second half of 2022.
As we approach launch we plan to focus on targeted segments of the market and bought some of the most critical patient populations.
Such as chronic anemia, where we are.
Generated the most clinical data for intercept red cells.
In the U S. Our team has made significant strides on preparing various elements of the PMA submission leveraging the work being done for the CE Mark dossier.
Beginning item to filing the PMA with the FDA remains the completion of our two ongoing phase III studies lettuce and recipe.
We are still on a period of site expansion and patient enrollment for both studies and COVID-19 has slowed our addition of new sites and patient enrollment.
We continue to calibrate our estimates for study completion and ultimately regulatory submission.
However, without a clearer line of sight on a return to normal post pandemic. It is premature for us to speculate on a precise timeline.
It is likely that intercept for red cells will be commercialized outside the U S. For few years before we are able to bring the system to the market in the U S.
During that period in addition to executing on our U S. Phase III trials, we will be working to build the clinical body of evidence and real world experience for pathogen reduced red blood cells with our early adopters and EMEA.
In closing we made considerable progress in 2020 on our mission to make intercept the global standard of care, despite having to adapt to new ways of working and achieving our goals safely.
I'm pleased to report that our momentum continues in 2021 on many fronts. We look forward to updating you on progress throughout the year and hopefully returning to normal at some point during 2021.
With that let me turn it back over to the operator for Q&A.
As a reminder to ask a question. Please press Star then one.
If your question has been answered and you'd like to remove yourself from the queue press the pound key.
Our first question comes from Jacob Johnson with Stephens, Inc. Your line is open.
Hey, guys. This is mason on for Jacob just a few quick ones from me.
With the Hong Kong announcement, and then yesterday the JV announcement could you give us some color on the regulatory pathway in China, just from a high level.
And how should we just think about that looking forward.
Yeah. Thanks, Nathan so working with Z BK now on on putting together the.
Dossier, Unfortunately, we'd actually translated.
The full submission and we just have to work through what the clinical trial requirements will be.
As you May recall historically, we did.
Our clinical study in Hong Kong.
That's not going to be completely sufficient for the submission, but just sort of working through.
You know what the requirements are going to be for a clinical trial relatively limited relative relatively limited scope and then once we have that clarity will be able to give you more specificity about when we would plan to get that submission in.
Got it.
And then on the PR cryo launch this year outside of.
Manufacturing partners filing their BLA and hiring the sales force, which seems to be largely done is there anything else you're focused on here do you plan on adding more manufacturers throughout the year.
Yes.
It would be nice to have a couple more states included in the sort of initial launch.
This year and into early next before we have the BLA is.
That being said as we sort of highlighted in the prepared remarks. The four states were currently in Washington to represent roughly 25 per cent of the trauma cases in the United States and theirs.
Almost a 100 level one level two trauma hospitals in those four states.
I guess, Paul I can give you a little bit more color on sort of where we're at with regard to the launch and through the enthusiasm that we're hearing from the sales team.
Yeah.
Captured the key themes that will be I mean that the other issue that we're working on right. Now is just ensuring we can get hospital access.
Little bit restricted with everything thats going on with Covid.
We anticipate that those prescriptions will lift as we get through.
From the pandemic related.
Issues and on the key thing will be contracting with hospitals, but.
As Obi attention clinical feedback remains positive there's a lot of enthusiasm out there. So I think the things that we went into.
This submission believes to be true about the marketplace still resonate two and will certainly be talking more about this as being further along in terms of our commercialization.
Awesome, Thanks for taking the questions guys.
Thank you.
Our next question comes from Mathew Blackman with Stifel. Your line is open.
Good afternoon, everyone and thanks for taking my questions.
Start maybe for Kevin I appreciate you're not giving explicit quarterly guidance, but just as we think about the shape of the year. It would be fair to think about and then also just the first quarter or maybe just the first half of the year being at the lower end of the 15 to 20 per cent range in <unk>.
Half of the year at the upper end is that a fair way to think about the shape of the year and then I've got a couple of follow ups.
Yes, Matt Thanks.
Following our pre release I think you know how we would characterize this as debt.
Q1, which is typically a slower quarter.
Of the four will likely be at the lower end of that guidance range and that we will see steady growth from here clearly the.
The acute COVID-19 impact will occur we hope in the first half of the year before resolves.
And.
With that I think.
You've characterized it right in the back half of the year, we would expect it to be.
To the higher end of the range on a on a quarterly basis. So I think youre thinking about it correctly.
Okay, Great and then while I've got you.
On a couple of questions on the illuminator side of the business.
Do you can you provide what.
What the illuminator revenue generated in the quarter was I noticed a little bit outsized.
Perhaps relative to <unk>.
Historical trends on.
And then a couple of follow ups there.
Got that I'll wait for that.
Yeah, I mean for this particular quarter as we pointed out.
Earlier, you know we had a bolus of illuminator that workplace, we think that bodes well for future kit demand.
For the quarter.
Roughly a million and a half or.
So that's on somewhat of an outsized quarter for us.
And to that point that eliminated as are a pretty good leading indicator for kit sales is there any rule of thumb on how quickly our new box is up and generating revenue and then is there any way to sort of characterize where some of these.
Illuminator has went whether they are existing customers that are expanding capacity or newer customers that are starting to adopt it skewed any which way towards are either of those.
From accounts any color there would be great. Thanks.
Yeah, I mean, there's no real rule of thumb.
As far as the delay from when the devices placed until we see the day to Kip.
Kipp throughput or a throughput per device to some centers.
Our higher capacity centers and they require one in most cases have two devices other centers have much lower throughput and required the same numbers. So there's no real.
Rule of thumb metric.
Our algorithm that I can provide you that will allow you to model it but.
As far as the mix of customers and characterizing those customers, it's really a mixed bag.
A lot of new sites and a lot of existing sites that have placed illuminator to increase their overall production.
And efficiency, so we remain bullish and optimistic about.
What that foreshadows and expect that it will contribute to the growth in 2021.
I really appreciate it thanks so much.
Our next question comes from Josh Jennings with Cowen Your line is open.
Hi. Thank you. This is Eric on for Josh. Thanks for taking the question and congrats on a strong into the year here.
Thinking about the U S market for a second we've seen some articles in recent months discussing blood centers are they're facing exceptionally low donation figures. So I'm just curious now that we're starting to emerge from the harder hit winter months. What you guys are hearing from customers regarding donation levels and just how they're trending.
Thank you on handle that just based on some of the information we saw on the last couple of days.
Sure.
On the sort of severe weather.
To have an impact from in terms of overall.
On downgrades and donation.
For the most part.
On the blood centers are capable of.
Dealing with these acute issues.
On overcoming them. So I don't anticipate any longer term impact we have seen a recovery in donations.
As the pandemic kind of drags on but now the other thing to note is in the <unk>.
Of course I'm on this loan total debt.
Nations may drop a bit.
A portion of debt.
Nations and ultimately become PR treated has steadily grown and so.
We think ultimately you'll see recovery on both ends but yeah.
But we believe we don't believe Amit durable long term impact in terms of ton on volumes.
Understood. Thank you and then in Asia Pac you've had some great progress there on the region.
What other countries do you think we could be hearing updates on in the near to medium term could Japan be something that we're hearing in the coming quarters.
Yes, it depends on.
Our large market opportunity as I mentioned on the prepared remarks.
It's been fascinating to see how quickly the.
The.
Chinese market grow over the last let's say five years, I mean double digit growth and theyre still sort of not enough places to go around in China as their healthcare system evolves.
Beyond Japan, I think Japan will continue to sort of take a little bit of a wait and see attitude with regards to what's happening in the United States. So I think the progress we're making in the U S and specifically with the American Red Cross will will really have a bearing on sort of how the Japan Red cross looks at intercept going forward, but there's other large.
Market opportunities like in Taiwan, and Korea, and elsewhere, where we have ongoing discussions and I think that's sort of true actually globally, where we've done a lot of large national transfusion services that are evaluating intercept and in our general approach to communicating progress on that front is that we don't really say anything until we're each february on routine years, but.
It's encouraging to see the broader.
Global realization of the utility that pathogen activation can play.
Excellent. Thank you for taking the question, yes, thanks, Eric.
Our next question comes from Brandon Folkes with Cantor Fitzgerald. Your line is open.
Hi, Thanks for taking my questions and congratulations on another good quarter and maybe just following on from that as you look on sort of longer term, obviously I think on a real familiar with the growth that we expect in the near term, but how should we think about the size of the ex U S opportunity and sort of growth on a longer term basis.
Versus what we have in the U S.
And then maybe my second question I'll, just ask it upfront because thats okay.
You gave guidance about a month ago. So.
Net.
Anything you're seeing in the environment that.
You may have changed a little bit in terms of the assumptions you've made at that stage.
Themes.
Hopefully at least that we sort of moving in the right direction, but I guess I'd love to hear from your pocket if anything.
That may have changed or anything you're watching.
From a months ago. Thank you.
Yes, Thanks, Brendan I'll take the first part of that question and then I'll ask you to maybe to handle the second part so I think that.
So your question is where do you see the growth opportunities from medium to long term and.
Obviously for this year and going into 2022, and 2023 Theres just a lot of growth coming out of the United States were very excited about the product launch for our PR Cryo FC and the.
The us as well.
But these are fairly large sales, but really small compared to the global opportunity for intercept platelets plasma red cells and for cryo. So then obviously, we move into launching the red cell system in 2022, and then trying to expand on that in EMEA. Initially and then ultimately more broad.
So I think it's this is setting up very nicely for our long term longer term growth prospects.
This announcement, we made yesterday about the China JV has been something that we've been working on for the last five years really trying to identify the right partner there was a lot of interest in intercept from various Chinese companies, just given the opportunity to really transform.
Safety and availability in China.
On the likelihood that the Chinese government will play a role in how they think about.
Safety and availability and related leapfrogging sort of conventional approaches.
And so we'll see VK, we found someone who.
Not only has <unk>.
Strong.
Foothold with regard to that.
Our direct sales force and selling into the blood centers across China.
But also.
Very modern manufacturing operations. So we're looking forward to initially focusing just on platelets, but also.
On a rolling out.
The Red cell program there with.
The considerable size of that opportunity in China.
The other color that you want you want to add to that and then I guess, we'll handle the second part of your question around.
How our guidance thoughts have evolved over the last month.
Yeah, I think you captured most of the key points of being as we've talked about in the past and you know are.
Our strategy has really been to line up opportunity from kind of continue to add arrows to deliver such that we can maintain compelling growth through their near term midterm and long term and that's a combination of geographic expansion and expanding in the new product line and then.
Furthermore, adding augmenting what we have in terms of pipeline extensions from Alaska.
Asia Pacific and emerging markets will play key role in terms of driving growth, but there are also some did.
Developed market opportunities that we're starting to realize from penetrating from Germany would be an example of a large market opportunity and investments on we should start to see that pay off in the coming years and so we continue to believe that AD technology.
On adoption in key markets and this is debt.
Relatively small community that are sort of engage is quite a bit with one another and it'll create a positive flywheel that should allow us to continue that.
Post compelling growth numbers and most importantly allow us to realize our mission, which is to expand access day. Thanks, a lot on a global basis in terms of what we're seeing in the environment.
Is it any change point of view relative to when we first issued guidance I'd say, even though it's been about a month now it's still a bit premature.
To conclude anything that would cause us to change guidance at this point I certainly welcome.
And Kevin the way in.
There have been some encouraging signs certainly approval of new vaccine and associated rollout.
It's encouraging to the extent that it enables some travel restrictions on hospital access issues to be alleviated over time, but we're still very much early days.
When it comes to that.
We do continue to see strong demand.
For the product and I think our team understands how to navigate that.
Current pandemic related issues to ensure that we can provide high levels of service and support to our customers on our supply chain and logistics teams continues to show a lot of resilience on the face of these ongoing challenges. So we remain confident that we can deliver.
Deliver compelling growth number but in terms of any material changes in the past month that lead us to believe will things could accelerate even further.
So a bit premature.
To point anything dependent on I don't know if you'd like to expand on that.
No I think you've characterized.
On the way we were looking at guidance for 2021, very excited about the opportunities, but until we sort of get better clarity around.
Getting back to.
Some kind of normalcy, then yeah, I think it's premature to say anything.
Great. Thank you very much I appreciate it when they come on.
Thanks Brent.
There are no further questions I'd like to turn the call back over to Obi Greenman for any closing remarks.
Well thanks, everyone for joining the call today, we will be presenting at the Cowen 41st annual Health Care Conference next week and I imagine, we'll be speaking with many of you on the phone.
Today on Monday, and Tuesday of next week, Thanks, again for joining the day and I appreciate it.
Ladies and gentlemen, this does conclude the program and you may now disconnect everyone have a great day.
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Yes.
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