Q4 2024 Cerus Corp Earnings Call
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Okay.
Good day, ladies and gentlemen, thank you for standing by and welcome to Sirius Corporation fourth quarter and full year 2024 earnings conference call.
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I would now like to hand, the conference over to Newport, Levek serious Investor Relations adviser Mysliwiec you may begin.
Thank you and good afternoon 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.
Speaker Change: With me on the call are Obi Greenman, Cerus, President and Chief Executive Officer, David J, Robyn Sirius as Chief operating Officer, Kevin Green, Sirius as Chief Financial Officer, and Carol Moore Senior Vice President.
Speaker Change: <unk> issued a press release today announcing our financial results for the fourth quarter and year ended December 31, 2024, and describing the company's recent business highlights.
Speaker Change: You can access a copy of this announcement on the company website at Www Dot Sirius Dot com.
Speaker Change: 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 related to our future financial and operating results, including our 2025 product revenue guidance, our expectations for bottomline or not.
Speaker Change: non-GAAP adjusted EBITDA performance, our operating expense and gross margin expectations and our expectation for positive operating cash flow for 2025.
Speaker Change: Expected future growth in our growth trajectory.
Speaker Change: Potential new and enhanced CE Mark submission for intercept red blood cell and other statements that are not historical fact.
Speaker Change: 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, and our slide presentation and under risk factors in our Form 10-K for the year ended December 31, 2020 for which we will file in the coming days.
Speaker Change: We undertake no duty or obligation to update our forward looking statements.
Speaker Change: On today's call. We will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA.
Speaker Change: These non-GAAP measures should be considered supplement to and not a replacement for measures presented in accordance with GAAP.
Speaker Change: For a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures. Please refer to today's press release and the slide presentation available on our website.
Speaker Change: We will begin today with opening remarks from Obi followed by Vivek to discuss recent business highlights then Kevin to review, our financial results and expectations for the rest of 2025, and lastly closing remarks from Obi.
Speaker Change: And now it's my pleasure to introduce Obi Greenman, Cerus, President and Chief Executive Officer.
Speaker Change: Thank you Nucor and good afternoon, everyone I'd like to open the call by spending a few minutes, reflecting on our strong performance in 2024 as well as our expectations for full year 2025, as we continue to establish our intercept blood system.
Speaker Change: As the standard of care medicine.
Speaker Change: 2024 was a milestone year for the company and his long history and that we successfully achieved positive adjusted EBITDA for the full year.
Speaker Change: This will allow us to invest in the continued growth of our business globally, and our full intercept portfolio and product improvements.
Speaker Change: Our year over year double digit product revenue growth for 2024 was fueled by continued expansion in our global platelets business.
Speaker Change: Along with the rising demand in our intercept by Brexit complex for IFC business in the U S.
Speaker Change: Rick will provide further insights into the strong demand we are experiencing in the IFC market, where we are providing an important and timely intervention for patients with major bleeding complications.
This momentum underscores the critical importance of intercept treated blood components and highlights the growing impact of our pathogen inactivation technology across transfusion services in the U S and internationally.
Speaker Change: For blood centers that manufacturer pathogen activated components to the hospitals and clinicians who transfuse them.
Speaker Change: For the fourth quarter and full year 2024, we executed our financial strategy effectively delivering strong bottom line performance and robust operating cash flows.
Kevin: As Kevin will detail shortly key.
Speaker Change: Key year over year financial highlights include double digit growth.
Speaker Change: <unk> GAAP net loss attributable to the company and positive non-GAAP adjusted EBITDA.
Speaker Change: That stronger foundation and in line with our 2025 product revenue guidance announced earlier this year.
We anticipate year over year growth of 8% to 11%, while focusing on the Ford health of our bottom line results.
Speaker Change: On the development front.
Speaker Change: In Europe, we are continuing to collaborate closely with our notified body.
Speaker Change: <unk> SUV.
Speaker Change: On a potential new and enhanced CE mark submission for intercept red blood cells Rbcs.
Speaker Change: We plan to have a more detailed update on these developments as those plans solidify in the coming months.
Speaker Change: I'd like now to turn the call over to Jose to discuss our commercial results and progress for the fourth quarter and full year 2024, along with color on the outlook for 2025.
Jose: Thank you Ali and good afternoon, everyone.
Jose: As we enter 2024, we committed to a return to topline growth.
Jose: Well at that time, we believe in our ability to deliver compelling growth we were not without head.
Jose: Part of the year with six months shelf life on platelet kits in the U S and most of our IFC production partners have yet to receive BLA clearance to enable them to transport IFC across state lines.
Jose: Thanks to the solid performance of the cross functional team combined with strong partnership with our blood center customers.
Jose: We were able to successfully address many of these challenges and meet our commitment by delivering 15% topline growth compared to 2023.
Jose: In addition, we made meaningful progress on key strategic commercial initiatives that will set the stage for compelling growth for the balance of this decade.
Jose: We delivered strong results in the fourth quarter of 2024, driven primarily by growth in demand for our U S ISP business as well as our global platelet franchise.
Particular, we saw strong contributions from our international markets.
Jose: As an example, Canadian blood services is now at 100% PR adoption for their platelet production.
Jose: Overall, our core platelet market stabilized and we witnessed the normalization and donor trend in 2024, which were previously headwinds in 2023.
Jose: In addition, we made meaningful progress on several of our key growth initiatives.
Jose: As we start 2025.
Jose: Any signs of strong platelet traction across our global franchise.
Jose: As reported last quarter, we had an excellent showing at the annual <unk> meeting, which took place in Houston, Texas in October.
Jose: As we predicted the interests, we witness at ABB translated into a spike in inbound inquiries.
Jose: Some hospitals and blood centers.
Jose: During the quarter, a few of our blood Center ISP production partners seek BLA approvals and are in the process of ramping up manufacturing volume to meet increased demand.
Jose: As a real world experience with IFC growth, we're continuing to see that are in the value proposition is being validated.
Jose: Clinician highly value earlier access of fibrinogen and hospital blood banks greatly appreciate the reduction both product wastage as well as reduce time from order to availability.
Jose: We exited 2024 with strong momentum in our IFC franchise, and our acute focus is to ensure that production volumes ramp up in order to meet growing demand.
Jose: As we begin 2025 and as stated in our preliminary revenue guidance, we expect to continue to deliver compelling top line growth.
Jose: This growth is expected to come from and strengthen our global platelet franchise as we anticipate share capture in the U S and further expansion internationally.
Jose: We exited 2024 real momentum in our U S ISP business and with line of sight into expanded manufacturing capacity. We are confident in our ability to meet the growing clinical demand we are experiencing in the IFC franchise.
Jose: As we look forward in the year, we are excited to launch the new <unk> hundred illuminator in EMEA.
Jose: And reaffirm our commitment to new product innovation in this market.
Jose: This project as we felt the close collaboration with <unk>.
Jose: From our blood Center partners and can't wait to deliver that to them.
Jose: Outlook for 2025 exciting and we look forward to updating you on our progress during future quarterly call.
Jose: I am grateful to the global in our commercial and operational teams for their strong performance in 2024. It is great to be back on a growth trajectory and we are poised to continue to do so moving forward.
Jose: Most importantly, very rewarding that our efforts are helping to ensure that more patients around the world are gaining access to the FERC blood products.
Jose: I will now turn it over to Kevin to discuss our financial results and outlook in more detail.
Kevin: Thanks, <unk> and Hello to everyone listening.
Kevin: On today's call I'll be discussing our financial results for the fourth quarter and full year 2024.
Kevin: As well as our product revenue guidance for 2025.
Kevin: Finally, I'll highlight some of the key success factors that we are focused on as we move forward.
Kevin: Building off of 2024 solid base toward continued financial improvement over the long term.
Kevin: As pre announced in January full year 2020 for product revenues were $183 million.
Kevin: Ahead of our latest 2020 core product revenue guidance and.
Kevin: We're representing 15% growth year over year.
Kevin: For the fourth quarter of 2024, we posted product revenue of $50 8 million.
Kevin: Representing year over year growth of 9%.
Kevin: EMEA platelet sales as well as growth from U S. Platelet sales drove the bulk of our product revenue increases this quarter.
Kevin: While our platelet franchise drove much of the growth. We also realized IFC sales expansion.
Kevin: The IFC business was up almost 30% when comparing the fourth quarter of 2024 to the prior year.
Kevin: Full year 2024, North American product revenues were up 23% over 2023 levels in fourth quarter 2020 for product revenues exceeded prior year levels by 6%.
Kevin: This growth was driven largely by increased penetration at the top U S. Blood center organizations, where we continue to see significant growth opportunities for intercept uptake.
Kevin: In EMEA.
Kevin: Fourth quarter product revenues were up 16% year over year.
Kevin: When looking at Q4 2024 over the prior year.
Kevin: FX rates provided a slight headwind for the EMEA business of around 80 basis points.
Kevin: On a full year basis, FX rates had little impact on our EMEA business.
Kevin: And on a consolidated basis FX.
Kevin: FX provided a headwind of around 20 basis points when comparing Q4 2024, so that of the prior year period.
Kevin: And little to no impact on a full year comparative results.
Kevin: Beyond our platelet and plasma franchises for the full year.
Kevin: IFC sales were up over 2023 levels by 42% to $9 2 million.
Kevin: For Q4, 2024, we posted IFC product revenue of roughly $3 million.
Kevin: Up from $2 3 million in the prior year period.
Kevin: Driven by more standing orders.
Kevin: Depth within existing accounts.
Kevin: In addition to our product revenue were not included in our guidance.
Kevin: Government contract revenue totaled $21 1 million for 2024 <unk>.
Kevin: Compared to $34 million for 2023, and $5 9 million in Q4 compared to $6 6 million for the prior year period.
Kevin: Consistent with dialog in prior quarters, the completion of our U S phase III recipe clinical trial was the primary driver for the decline.
Kevin: As we look ahead, we expect to continue delivering on our contracts with the federal government and advancing patient access to safe blood components.
Kevin: Turning now to our product gross profit and gross margins.
Kevin: For the full year product gross profit was $99 $5 million.
Kevin: From the $86 4 million for 2023.
Kevin: Our fourth quarter product gross profit was $27 4 million.
Kevin: Compared to $26 million during the prior year period.
Kevin: An increase of five 5% year over year.
Kevin: Product gross margins for the year as a whole were consistent at 55, 2%.
Kevin: Within 10 basis points to 2023 levels.
For the fourth quarter product gross margins were down slightly to 53, 9% from the 55, 5% reported in Q4 of last year.
Kevin: The slight decline in gross margins was driven by a number of individually small items, including a stronger U S. Dollar in Q4.
Kevin: Freight cost to expedite product shipments into the U S and higher than expected discard rates for certain products.
Kevin: As we look ahead to 2025, we expect product gross margins will generally remain in the mid fifties.
Kevin: There are several factors that could drive quarterly variability, including but not limited to foreign exchange rates.
Kevin: Product mix.
Kevin: Production costs, the IFC to meet the increasing demand.
Kevin: Economies of scale in production volumes.
Kevin: The timing of Cogs reduction initiatives coming online.
Kevin: Moving on for the year operating expenses were down more than 8% to $134 8 million.
Kevin: Compared to a $146 9 million for 2023.
Kevin: Our fourth quarter operating expenses, which totaled $34 $8 million were up from the $31 6 million in Q4 of 2023.
Kevin: Q4, 2024 operating expenses included $5 5 million in noncash stock based compensation.
Kevin: My specific expense type 2024, R&D expenses were down 13% to $58 9 million from $67 6 million in the prior year.
Kevin: Fourth quarter, R&D expenses totaled $15 $4 million.
Kevin: Compared to $14 3 million during the prior year period.
Kevin: The increase in our R&D expenses for the fourth quarter can be attributed to work on our led based illuminator include.
Including submission for CE, marking.
Kevin: <unk> site ramp enrollment and activities covered under our new BARDA contract.
Kevin: 2020 for SG&A expenses were relatively flat at $75 9 million from $75 5 million.
Kevin: Fourth quarter, SG&A expenses were $19 3 million compared to $17 3 million.
Kevin: During the prior year period.
Kevin: During the quarter, we recognized a cumulative catch up of certain accrued expenses that had artificially distorted our SG&A expenses for the quarter.
Kevin: As we look ahead to 2025, we expect that SG&A expenses will go up modestly from 2024 levels, primarily as a function of cost of living and inflationary impact.
With that said, we are not planning on significant new investments and expect that we will continue to see compelling leverage from our SG&A spend relative to the expected revenue growth.
Kevin: Let's now focus on the bottom line and non-GAAP adjusted EBITDA results.
Kevin: On the bottom line reported net loss attributable to service for 2024 improved by 44% to $20 9 million.
Kevin: From $37 5 million for 2023.
Kevin: For the three months ended December 31, 2024, net loss attributable to Sirius was $2 5 billion.
Kevin: Or a penny per share compared to $1 $3 billion or also a penny per share for the prior year period.
Kevin: As a measure of the operating leverage we are generating the net loss for Q4 and the full year was less than our noncash stock based compensation.
Kevin: Beyond the achievement of double digit topline growth as Vivek mentioned and suggestive of the leverage we are generating we are pleased to announce the achievement of another one of our stated 2024 objectives.
Kevin: Positive adjusted EBITDA of $5 $7 million for the year.
Kevin: This represents a significant improvement over the negative $10 7 million for the prior year.
Kevin: Q4, 2024 was the third straight quarter of generating positive adjusted EBITDA, which was $3 3 million.
Kevin: Compared to a positive adjusted EBITDA of $4 7 million for the prior year period.
Kevin: While we are thrilled with this achievement, we plan to build off of this strong foundation and expect our positive adjusted EBITDA will be durable.
Kevin: Underpinning our confidence.
Kevin: We expect that as suggested by our 2025 product revenue guidance coupled.
Kevin: Coupled with planned gross margins in the mid fifties.
Kevin: Close management and continued leverage of operating expenses.
Kevin: We will maintain or improve on this measure for 2025.
Kevin: On the balance sheet and associated cash flows.
Kevin: We ended the fourth quarter with $85 million of cash cash equivalents and short term investments on the balance sheet.
Kevin: Operationally, we posted our fourth consecutive quarter of positive operating cash flows.
Kevin: For the fourth quarter and full year 2024, we generated positive operating cash flows of $4 9 million and 11 4 million respectively compared.
Kevin: Compared with cash used for the operations of $15 2 million and $43 2 million for.
Kevin: For the fourth quarter and full year 2023, respectively.
Kevin: Although we expect to make working capital investments in support of our growing business, namely.
Kevin: Namely finished goods inventory and receivables, we expect to generate continued positive operating cash flows for 2025.
Kevin: On that note I would now like to turn the call back over to Obi for some closing remarks.
Obi Greenman: Thank you Kevin with the first two months of 2025, almost behind US we remain positive about the rest of the year ahead of us.
Obi Greenman: Our growth reflects the confidence and trust our customers place in service in the intercept technology, which addresses a significant unmet need in blood safety and availability.
Obi Greenman: A total addressable market estimated to exceed $7 billion annually.
Obi Greenman: All we have realized strong revenue growth for both our platelet and IFC products. We are sub 10% penetrated in those markets globally, meaning there is a lot of runway for continued revenue growth for our existing license intercept product portfolio.
Obi Greenman: With our first mover advantage superior technology and strong barriers to entry we are setting a new standard in transfusion medicine.
Obi Greenman: Are concentrated in the expanding customer base allows us to drive significant leverage from our SG&A generated a strong recurring revenue stream.
Obi Greenman: With a solid financial profile and our mature pipeline I believe cirrus is well positioned for continued success.
Obi Greenman: Thank you for your continued interest in <unk> I will now turn the call over to the operator for questions.
Obi Greenman: Thank you as a reminder to ask a question. Please press star one wondering your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby what we compile the Q&A roster.
Obi Greenman: Our first question comes from the line of Joshua Jennings with TD Cowen. Your line is now open.
Joshua Jennings: Hi, good afternoon, and thanks for taking the questions.
Speaker Change: Graduations on the.
Speaker Change: Strong performance in 2024, I was hoping to just start on the IFC. The foundation for that franchise continues to build it seems like it's on the cusp.
Speaker Change: And beginning to inflect just in terms of adoption and utilization just with customer demand.
Speaker Change: So hoping you could just walk us through the steps that are left before kind of full use mark to market access is unlocked.
Speaker Change: And then kind of secondary to that just yet.
Speaker Change: State of optimism that service can can capture up to 50% of our multi $100 million U S market opportunity in front of me with IFC.
Speaker Change: Thanks, a lot Josh for the question Victor would you like to cover that question.
Victor: Sure I'd be happy to.
Speaker Change: Good to hear from me Josh Thanks for the question.
Speaker Change: I think you categorized the state of the market well I mean, we're excited about the increase in demand.
Validation, we received coming out of ABB.
Speaker Change: On the podium and peer to peer discussions are certainly.
Speaker Change: Our strong boots and added to the momentum we saw at the end of the year and entering into 2025 in parallel as we mentioned we receive BLA.
Speaker Change: BLA is in a couple of our production partners, which will enable them to.
Speaker Change: Transport product across state lines that will unlock demand in states, where there wasn't previously in St manufacturers. So in terms of thinking about how we unlock the marketing continue to drive forward progress.
Speaker Change: The key things, making sure we constantly balance demand and supply so as we're seeing demand spiking, it's nice to have.
Speaker Change: Anthony is with which supply can grow and I think as we add that with continued real world experience maturing clinical evidence. Those are the factors that are going to continue to allow us to.
Speaker Change: This market and certainly the user experience and what we're seeing where.
Speaker Change: Hospitals may bring it into one clinical category and then it fairly quickly to users across the institution that gives us confidence that the broad market opportunity that IFC presented in fact realizable.
Speaker Change: Excellent and then maybe one just follow up on.
Speaker Change: Just the China opportunity I know you have a JV I think we've talked a little bit about this earlier in January.
Speaker Change: Yes.
Speaker Change: The next steps to unlocking.
Speaker Change: China, Tim which is.
Speaker Change: Meaningful piece of that $7 billion global Tam that you referenced.
Speaker Change: Prepared remarks, there will be maybe just the outlook there and when when ferrous could could start seeing.
Speaker Change: China franchise contribute revenues.
Speaker Change: Thank you, yes, thanks, Josh for the question.
Speaker Change: We are expecting an NPA approval sometime this year and subsequent to that Chinese approval there'll be sort of provincial reimbursement process.
Speaker Change: We estimate it will take about a year to complete.
Speaker Change: We are actively discussing with various provincial blood centers in China their interest and that will continue on until the MPA approval happens and then it's really just sort of how do we sequence. The rollout once we have that provincial reimbursement in place. So it's not going to contribute meaningfully to revenue this year.
Speaker Change: But once that provincial reimbursements in place once we have the approval and then the parental reimburses in place, we do see that being a very meaningful market opportunity for the company and it allows us to continue to penetrate the platelet market.
Speaker Change: I mentioned in the prepared remarks, we're still sub 10% globally. So there's a lot of continued.
Speaker Change: Opportunity for for the play of the business.
Josh: Thanks, Josh.
Speaker Change: It's a lottery.
Speaker Change: Thank you. Our next question comes from the line of Jacob Johnson with Stephens. Your line is now open.
Jacob Johnson: Hey, Thanks, good afternoon everybody.
Speaker Change: Alright perfect.
Speaker Change: Thank you mentioned on IFC, bringing on.
Speaker Change: Additional supply to meet demand can you just talk about that dynamic and then as we think about the outlook for $12 million to $15 million of IFC revenue. This year, how much of that is predicated on additional supply coming online and do we need to.
Speaker Change: Are there any timing to that that we need to think about as we think about.
Speaker Change: Revenues playing out throughout the year. Thanks.
Speaker Change: Alright, thanks for the question.
Speaker Change: With respect to the.
Speaker Change: The benefit of having the BLA that impact on supply what that enables us to do is it allows us to address demand that we have now have known for some time exists in states without and state manufacturer.
Speaker Change: Those hospitals have an avenue to access.
Speaker Change: And the blood centers that have the BLA is in hands or are now operationalized.
Speaker Change: That license so that they can ramp up supply and meet the hospital demand as we contemplated guidance for the year, we lend we.
Speaker Change: Went into the year with line of sight into having sufficient manufacturing supply to meet demand, but we're going to continue to work on increasing supply because we continue to see demand increase as well but.
Speaker Change: We feel that with the progress, we're making we will be in a good spot where supply shouldn't be constrained on a going forward basis.
Speaker Change: Got it that's helpful. And then maybe Kevin one for you just on on product gross margins I heard kind of mid fifties for the year, Amit you called out some kind of.
Speaker Change: Couple of items in <unk> that kind of.
Speaker Change: Can you just talk about whether it's U S dollar freight costs discard rates IFC investments just any.
Speaker Change: Any of those that we should be monitoring or keeping in mind. This year that could kind of repeat from <unk> or any of that were kind of isolated to four can you just how should we think about gross margins. This year. Thanks.
Speaker Change: Yes, Jacob Thanks for the question I think most of those items that I called out for for Q were episodic we don't expect them to last the one watch out I would say is FX rates. If the dollar continues to strengthen relative to the euro.
Speaker Change: Obviously, that's going to have an impact across our P&L, what I would say is since most of our product is sourced in euro.
Speaker Change: As the U S becomes a bigger and bigger contributor to the top line and the dollar strengthening we actually see a bottom line benefit.
But it does obviously have a negative impact on our on our revenue line. So that's the one watch out there obviously, we don't have absolute control over as far as shipping costs.
Speaker Change: The ancillary product, where we saw some discharge those are truly episodic we don't expect those to continue.
Speaker Change: Okay. That's helpful I'll leave it there thanks for taking the questions. Thanks Jacob.
Speaker Change: Our next question comes from the line of Ross <unk> with Cantor Fitzgerald. Your line is now open.
Ross: Hey, guys. Thanks for taking our questions.
Speaker Change: Maybe just one clarifying question on the SG&A guidance I believe you said slightly up and 25 relative to 'twenty four.
Speaker Change: Does slightly up include the one time item that occurred during the fourth quarter or is it slightly up versus an adjusted number.
Speaker Change: Yes, I think.
Speaker Change: Ross, sorry, I'm, just going to take that Obi if that's okay. Please sorry.
Speaker Change: Yes, so we're really talking about 2024 as a whole I mean.
Speaker Change: Clearly we saw this cumulative catch up I'd characterize it as probably a roughly $2 million.
Speaker Change: Impact for the quarter that was anomalous.
Speaker Change: Where we're going to see continued growth is really from inflationary pressures, we're not making significant investments as we mentioned incremental investments.
Speaker Change: But we expect it will be able to generate continued leverage with those investments relative to the topline growth.
Speaker Change: It's really.
Speaker Change: Comment that was predicated on 2024, as well as a whole rather than a specific quarter.
Speaker Change: Okay. It sounds great.
Speaker Change: And then sorry for jumping around the debt I heard the comments around China.
Speaker Change: With regards to Brazil, we walked through that commercialization timeline.
Speaker Change: The steps you need to take that.
Speaker Change: Yes, jud to cover that.
Speaker Change: Sure so.
You are aware, we currently are commercial and the private sector on the film, but Thats a small portion of the market we're in the process.
Speaker Change: Trying to gain access.
Speaker Change: The public sector and Thats really the.
Speaker Change: Combination of health Ministry, our distributor partner or not putting together, a dossier and receiving approval from the government agencies to gain access to the public sector that process is ongoing.
Speaker Change: We would anticipate getting hearing from them later this year from there it really becomes about operationalized thing.
Speaker Change: The rollout so working with our distributors deployment organization getting devices into the market.
Speaker Change: On a rolling it out there in our.
Speaker Change: Dissimilar from what happened in France, but the first step really awaiting decision from the government between anticipate would happen at some point later this calendar year.
Speaker Change: Got it thanks for taking my questions.
Ross: Thank you Ross.
Ross: Our next question comes from the line of John Wilson with Craig Hallum. Your line is now open.
John Wilson: Hey, guys I just wanted to ask it looks like platelet growth in North America started to slow down pretty meaningfully in the quarter. I was just wondering if thats is that due to just tougher year on year comps now after some very easy ones earlier in the year or are there other reasons driving that.
John Wilson: Yes, Kevin or of acreage you guys like to take that.
John Wilson: Okay.
Speaker Change: Sure I'd be happy to jump in and Kevin can certainly weigh in if you have any other thoughts.
Speaker Change: You hit a little bit to do with comps. We also one of the things that we had talked about.
Speaker Change: Essentially.
Speaker Change: One thing when we came towards.
Speaker Change: When you were going to have a shelf life issue.
Speaker Change: So this year, we knew that there was some stocking taking place at the end of last year, and so that we would seek to get more normal inventory level through the course of 2025, we potentially thought we might do that towards 2024, but we did not but we continue to capture share in the north American market through the course of 2024 and anticipate.
Speaker Change: So in 2025, so if you think about.
Speaker Change: Underlying adoption trends.
Speaker Change: Where our business is heading that continues to be strengthening business.
Speaker Change: But there was no beyond that there is really no underlying issue within our North American platelet franchise, we certainly benefited from a full year of 100% with Canadian blood services. So youll see that hammack will that come down to Florida.
Speaker Change: The growth in Canada, but fundamentally.
Speaker Change: We anticipate the U S market will continue to capture share.
Speaker Change: Got it. Thanks, that's helpful and then any other updates around other specific countries or geographies that are maybe in the early stages or potentially adopting intercept in the near future.
Speaker Change: Sure.
Speaker Change: We've talked about previously on this call we've got a joint venture partnership in China.
Speaker Change: Need to walk through there, but we are encouraged by not only the progress, we're making but the caliber of our partner as well as the <unk>.
Speaker Change: Level of clinical interest and enthusiasm in that marketplace.
Speaker Change: I think we've mentioned previously that's early days for us in terms of progress in Germany of that represents the single largest remaining market in Western Europe and then we recently had a number of our so at the annual Med Lab Congress in Dubai, and the market opportunity for us in the Middle East in particular in Saudi Arabia continues to.
Speaker Change: To be quite strong there is quite a bit of investment in healthcare happening in the kingdom and they tend to mirror off of ABB and FDA standards.
Speaker Change: There's a lot of awareness of interest and enthusiasm to adopt intercept so those would be some examples of geographies, where we feel there's a reasonable path towards growth and that could represent.
Speaker Change: Growth drivers through the balance of really over the course of the next couple of years.
Speaker Change: Great. Thanks, guys.
Speaker Change: Yes, Thank you John.
Speaker Change: Thank you as a reminder to ask a question at this time. Please press star one on your Touchtone telephone. Our next question comes from the line of Mark Massaro with BTG. Your line is now open.
Speaker Change: Taking on for Mark Thanks for taking the questions and congrats on a nice quarter.
Speaker Change: Could you just discussed in terms of the major five major blood centers in the U S. I think I heard you call out a new drove an increase penetration there.
Speaker Change: Could you just walk us through what the level of penetration and that currently.
Speaker Change: And just how you're thinking about that remaining opportunity. Thanks.
Tien Tsin: Thanks, Tien tsin.
Speaker Change: Another one for you I think.
Speaker Change: Thanks, Toby and thanks for the question Vivien.
Speaker Change: There continues to be upside with U S blood centers in particular with the and.
Speaker Change: And as we see consolidation of market some of the larger blood centers family.
Speaker Change: Today, we have provided.
Speaker Change: Share level at those centers with the exception when the American Red Cross announced of their own volition publicly their intention to move to 100% PR, So really out of respect for.
Speaker Change: Those centers.
Speaker Change: Yes, keep that information internal but what I can say is if you just look at our overall penetration in the U S and where the opportunities exist as well as what we're seeing in terms of continuing maturity of our real world evidence in support of intercept.
Not only in the context of compliance with the.
Speaker Change: Bacterial guidance from the FDA, but more importantly in terms of pandemic preparedness and other financial and operational benefit to confirm the blood centers.
Speaker Change: We're seeing continued inbound inquiries from blood centers to adopt intercept which is by then locked up the guidance compliance period, we're seeing share capture and increased penetration in the total market. So.
Speaker Change: It was a big contributor to 2020 for performance and we anticipate that being the case as well in 2025.
Speaker Change: Perfect. Thanks for the color there.
Speaker Change: And then just one on the government contract revenue I understand you guys guide to that.
Speaker Change: They came in a little bit above our model in the quarter.
Speaker Change: And do you think that $5 9 million would be a good run rate for 2025 are there.
Speaker Change: Thanks.
Speaker Change: Thank you Kevin do you recover this one yes sure.
Speaker Change: Yes.
Speaker Change: I don't know that its a good baseline for 2025.
Speaker Change: Youll recall, we were awarded 2020 for BARDA agreement late in the year. Some of those activities have started but theyre not really contributing meaningfully towards the overall government contract revenue. We do expect in 2025 that all of the awards will be running concurrently and then we'll see.
Speaker Change: Bump up in the overall government contract revenue.
Speaker Change: And the initiatives that we're we're spending on those contracts. So I wouldn't model. It off of Q4, I think it's going to continue to grow as those initiatives kicked way and contribute.
Speaker Change: Okay, great. Thanks, so much for taking my question.
Speaker Change: Thank you.
Thank you and I'm currently showing no further questions at this time I would like to hand, the call back over to Obi Greenman for closing remarks.
Obi Greenman: Well. Thank you all again for joining us today and for your interesting Cirrus next month, we will be participating in the 40 <unk> annual TD Cowen Health Care Conference.
Obi Greenman: And we look forward to sharing our progress with you throughout 2020 should be a great year. Thank you.
Obi Greenman: This concludes today's conference call. Thank you for your participation you may now disconnect.
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