Operator standing by. Welcome to the Cerus Corporation conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. I would now like to hand the conference over to your speaker today, Kevin Green, Chief Financial Officer.
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.cerus.com. With me on the call are Obi Greenman, Cerus's President and Chief Executive Officer, Carol Moore, Cerus's Senior Vice President, Dr. Richard Benjamin, Cerus's Chief Medical Officer, and Dr. Nina Mufti, Senior Vice President of Research and Development. Cerus issued a press release today announcing updates on the INTERCEPT Red Blood Cell programs in the U.S. and Europe. You can access a copy of this announcement on the company website at www.cerus.com. I'd like to remind you that some of the statements we will make on this call relate to future events and performance, rather than historical facts and are forward-looking statements.
Examples of forward-looking statements include those relating to the therapeutic and commercial potential of INTERCEPT Red Blood Cells, the anticipated next steps for Cerus's red blood cell programs, the potential value of and funding opportunity under Cerus's new BARDA agreement, and other statements that are not historical fact. These forward-looking statements involve risks and uncertainties that could cause actual events, performance, and results to differ materially. They are identified and described in today's press release, in our slide presentation, and under Risk Factors in our Form 10-Q for the quarter ended June thirtieth, 2024. We undertake no duty or obligation to update our forward-looking statements. We'll begin today with opening remarks from Obi Greenman, followed by Carol Moore to discuss the status and next steps related to our CE Mark regulatory filing for INTERCEPT Red Blood Cells. Then Dr.
Richard Benjamin to review the US INTERCEPT red blood cell program, including data from RECIPE, our first US phase III clinical trial. And then back over to Obi to discuss the new BARDA agreement and to provide final remarks before the question-and-answer period. While we are not providing comments related to our quarterly performance on this call, we look forward to announcing our Q3 results in a few weeks. And now it's my pleasure to introduce Obi Greenman, Cerus's President and Chief Executive Officer.
Thank you, Kevin, and thank you all for joining us on this call today. At the close of market today, we issued a press release providing important updates regarding our INTERCEPT Blood System programs for red blood cells, or RBCs, in both the US and Europe. I appreciate the opportunity to share these new developments with all of you today. First, in Europe, as noted in our press release, our INTERCEPT RBCs' CE Mark review has now concluded without a product approval. Carol Moore will provide further details on our European efforts in a moment. However, I first want to say that we anticipate the issues that were raised in the review cycle by the competent authority, CBG-MEB, are addressable. We are confident in the merits of INTERCEPT RBCs and remain steadfast in our commitment to make this product commercially available to protect the world's blood supply.
With that mission in mind, we are collaborating with our notified body, TÜV SÜD, to determine our next steps to address the review issues that were raised, along with assessing the associated timeline for a potential new regulatory submission. In the U.S., we are extremely pleased to announce that we have entered into a new agreement with our long-standing partner, the U.S. Biomedical Advanced Research and Development Authority, or BARDA. This new contract has a value of up to $248 million, providing further support for the INTERCEPT RBC program.
As noted in the press release, this is intended to support the submission of a planned U.S. Food and Drug Administration Modular Premarket Approval, or PMA, application and potential post-approval studies to accelerate development of an advanced version of the INTERCEPT RBC system and to scale up the chemistry, manufacturing, and controls activities to enable a broad product launch, if approved. Later on this call, Dr. Richard Benjamin will discuss the positive top-line data from the completed U.S. phase III RECIPE trial, as well as provide an update on our second ongoing U.S. phase III REDS trial.
With both the AABB annual meeting and the Anesthesiology 2024 meeting taking place this weekend, there will be a number of oral plenary sessions covering the RECIPE clinical trial outcome, so we are pleased to be able to share details from the study that furthers our enthusiasm for the INTERCEPT RBC program. I will now turn the call over to Carol Moore, Cerus's Senior Vice President, to review the details of our European filing.
Thank you, Obi. As we've shared before, our CE Mark dossier for INTERCEPT RBC was submitted under European Medical Device Regulation.
... or MDR pathway. This process includes both a notified body and a competent authority playing different roles in the assessment of our product candidate under review. As we noted in our last earnings call, we've been waiting for some time for the response to our submission earlier this year from our competent authority, the Dutch Medicines Evaluation Board, known as CBG-MEB. For purposes of today's call, I will refer to them as CBG. Our notified body, known as TÜV SÜD or TUV, has already completed the major sections of their review of our regulatory filing and found them to be satisfactory. Let me expand a little further on the role of the competent authority. The competent authority acts independently from our notified body and looks at the scientific and technical information supporting the medicinal product, sometimes referred to as an active pharmaceutical ingredient, or API.
Cerus' pathogen inactivation products are reviewed as a drug-device combination since we have a technology to inactivate pathogens in blood products, and we produce a transfusable biological product. Thus, the MDR procedure requires the notified body to provide the medicinal product information to a qualified, competent authority for this specific review. In the case of the INTERCEPT Blood System for RBCs, Cerus presented extensive data and characterization of the medicinal product in the dossier, which CBG reviewed. After a review of the Cerus file, CBG and Cerus engaged in a question-and-answer exchange, but through which Cerus felt confident that all of CBG's questions had been addressed. However, in a recent communication from CBG late last month, they indicated to us that some of the information Cerus provided regarding the characterization of some impurities, which may be found in the final transfused RBC, was insufficient.
Based on their review, CBG decided they cannot recommend the file for approval. Unfortunately, CBG policy is to limit the review cycles and the number of interactions that a sponsor can have with them to resolve open issues. Given the technical nature of the new questions from CBG and the limited ability for follow-up, Cerus, in consultation with TÜV, will now work to close the CE Mark file. It's important to note that CBG's concern did not reference any kind of a signal from our non-clinical data or clinical trials. Rather, we believe that CaBG raised the concerns from a theoretical perspective based on their interpretation of risk. We would note that FDA asked similar questions two years ago, which Cerus successfully addressed by providing data, literature references, and a risk assessment. As you know, health authorities may take different approaches to interpretation of scientific data in making risk assessments.
In addition to how we plan to address the issues CBG has raised, we want to take this opportunity to be thoughtful about leveraging the additional data that we have accumulated since our original CE Mark submission. For example, we believe the positive results from our US phase III RECIPE trial substantially expand the data available to evaluate the clinical safety and efficacy of the INTERCEPT red cells. We will be assessing how these data could allow us to propose a broader clinical indication in a potential new regulatory submission in consultation with TUV. I will now turn the call over to Dr. Richard Benjamin for further discussion of INTERCEPT RBC clinical data.
Thank you, Carol. Cerus continues to make progress in its BARDA-funded clinical studies designed to support a planned modular PMA application. In March 2024, Cerus announced positive top-line results for the RECIPE study, a pivotal U.S. phase III clinical trial demonstrating non-inferiority for INTERCEPT red cells compared to conventional red cells when transfused to complex cardiac surgery patients. These data will be presented in plenary and other presentations at this weekend's AABB and Anesthesiology 2024 meetings. AABB abstracts were recently published in the journal Transfusion, allowing me to present some highlights of the upcoming talks. You will recall that the phase III RECIPE trial enrolled elective cardiovascular surgery patients to receive either pathogen-reduced or conventional red cells during and for seven days after surgery.
581 patients were enrolled, and 321 patients were transfused, constituting the modified intention-to-treat, or MITT, population, as defined in the statistical analysis plan. The primary endpoint was acute kidney injury, or AKI, and the safety endpoints were related adverse events and treatment-emergent antibodies to pathogen-reduced red cells. RECIPE met its predetermined non-inferiority margins robustly in both the MITT and per-protocol populations. We can now add that the test and control groups were well-balanced demographically in baseline characteristics, in types of surgery performed, and in surgical outcomes, including bleeding during and for seven days after surgery. Patients in both groups had near identical hemoglobin levels at baseline and for 28 days after surgery, an indicator of red cell transfusion efficacy.
While the median number of red cells transfused was three in both study arms, the control group were more likely to require five or more red cells in the seven-day transfusion period than the test arm, and the absolute amount of red cell hemoglobin required was significantly less, about 10% less, in patients who received pathogen-reduced red cells. These data speak to the utility of pathogen-reduced red cells. We previously reported that related adverse events were not different between the test and control arms of the study. We can now report similar outcomes for cardiac surgery-related adverse events, all adverse events, serious adverse events, and deaths on study. Finally, we previously reported that five test patients made treatment-emergent antibodies specific for pathogen-reduced red cells.
We can now report that none of these antibodies caused clinically significant hemolysis, and that flow cytometric analysis demonstrated persistent circulating pathogen-reduced red cells, further supporting the opinion that these antibodies were not clinically significant. Turning to our second U.S. pivotal trial, Cerus is currently enrolling patients in the ongoing BARDA-funded REDS clinical trial in patients requiring red cell transfusion for acute and chronic anemia. With two new sites recently initiating enrollment, including a Turkish site with access to a large thalassemia population and two additional sites starting this quarter, progress is being made, although these new sites began enrollment later than previously anticipated. We are still assessing the potential impact of this delayed start of the new sites to the REDS study completion timeline. With that, I'd like to hand over the call back to Obi for final remarks.
Thank you, Richard. Millions of RBC transfusions occur every year across the globe, and we believe that patients who rely on them should have access to a safe and available RBC supply. While we determine the next steps and timing for advancing the INTERCEPT RBC program in Europe, we continue to make strong progress on our late-stage INTERCEPT RBC development program in the U.S., including the new BARDA contract we announced today. Our mission remains the same, to establish INTERCEPT as the standard of care for transfused blood components globally and enable our customers to do everything in their power to deliver safe and effective blood products to patients. We are proud to be expanding our partnership with U.S. BARDA.
This new $248 million, six-year contract with BARDA is exciting in many ways and is designed to provide Cerus with the resources we need for our planned modular PMA submission and to enable a possible product launch. Coupled with our first BARDA agreement, this new agreement brings the partnership to a total potential value of over $400 million. As we advance towards our planned modular PMA submission that is expected to conclude with the clinical module going in upon completion of the REDS study, we are also focused on accelerating the development of an advanced version of our INTERCEPT RBC system, designed to scale the processing of red cells at blood centers more efficiently after an initial product launch. Fortunately, BARDA recognizes the importance of pathogen inactivation technology for pandemic preparedness, with its potential for adoption upon FDA approval.
BARDA is supporting the program with meaningful funding, not only for the advanced device, but also post-licensure studies. While we are disappointed in the CE Mark outcome, we remain confident in the potential of our system to support safe and effective RBC transfusions, transfusions around the world, and we look forward to solidifying our path to a potential approval in Europe. We remain energized by the continued adoption of our licensed INTERCEPT products, both in the U.S. and across many other geographies. In addition to the numerous INTERCEPT red blood cell abstracts and oral presentations at the AABB meeting this coming weekend, the expanded use of INTERCEPT Fibrinogen Complex, or IFC, is leading to a significant increase in the case studies presented by hospitals and blood centers that are realizing the unique operational and clinical benefits of the product.
We look forward to updating you on our Q3 earnings call in a few weeks. Today's news does not change our current strategy for achieving our financial goals for 2024. I will now turn the call over to the operator for questions.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for questions. Our first question comes from Josh Jennings with TD Cowen. You may proceed.
Hi, good afternoon. Thanks for taking the questions, and appreciate the time here and the update. I guess one, just wanted to better understand the controversy or there's a decision around. I think in the press release, you said that insufficient to support the proposed classification of the impurity profile of the final product. I mean, are there high-level concerns just that some of the preclinical data that was generated? I mean, my understanding is that for S303, there's extensive preclinical testing in vitro and animal models, and genotoxicity and reproductive toxicity studies were completed. Is that really what they're concerned about? And any kind of more detail just in terms of that concern would be helpful to understand.
Yeah, thanks a lot, Josh. I'll take a quick shot at it and then turn it over to Carol for maybe some more context. You know, so essentially, you know, there's a lot of publications about INTERCEPT Red Cell system and the tox profile, so we can refer you to that and send that out after the call. You know, but it really came down to the impurity profile for the product, and Carol can sort of speak to that and sort of how that, you know, sort of risk assessment was done versus other health authorities.
Sure. Thank you, OB, and thanks for the question. Let me answer that at a high level first to say that characterization of impurities is a general requirement for pharmaceutical products. So what the CBG did to look at our product was a standard of review, and there are ICH guidance documents, which are harmonized between the US and the EU, that give some guidance to regulatory authorities with regard to how to look at things like impurities and other things, how to look at the quality of the product. There's a variety of ICH-type documents. The difference in really how CBG might have looked at the document is really according to their own standards. They may set their own policies with regard to how to look at impurities, how to assess them, how to assess risk.
So we believe that we had a very robust presentation of our product and its characterization. And as in my prepared remarks, I indicated that FDA also had asked us similar questions, which we had answered. So we believe that this is really an individual interpretation of the characterization of the product, and from the CBPG, just a general interest in having some additional information to perhaps help them further their own understanding of our product characterization. So that's the best we understand at this point, and yet we believe that we have prepared a complete dossier, and that remains the base source of the kind of information that we would continue to rely on for a successful response to the types of questions that we could be asked.
Excellent. Maybe just to clarify my thinking and understanding, when you refer to final product, you're referring to the kit and S303 pre kind of treatment of a red blood cell unit? Or is this the final product after kind of you know running that red blood cell unit through the INTERCEPT system and is that the final product?
Yes, it's the red cells. So that's, as I mentioned before, we have the technology to inactivate the pathogens, but the interesting element in our product to health authorities is also the transfusible component, which in this case is the red cell.
Great. Thanks for all that help. And then wanted to congratulate on the BARDA contract. Was just hoping to better understand, I guess, the path to where you are today. And was there a catalyst? Was it the RECIPE data that kind of opened this door? Or has this just been kind of the conclusion of all the efforts of the Cerus team to continue to engage BARDA and BARDA recognizing the potential kind of clinical value proposition of INTERCEPT red blood cells?
Yeah, thanks a lot, Josh. You know, I fortunately have Dr. Nina Mufti here today, who's really led the program for many years, you know, it's been a very, you know, productive and constructive relationship with U.S. BARDA over the last several years. But she can give you a little bit more context about, you know, sort of how this evolved and where we're going.
Yeah. Hi, Josh. Happy to answer the question. And yes, we've had an eight-year relationship with BARDA. There were several catalysts involved in this, having the second contract. One was definitely the positive outcome of the recipe trial, and then the second is their continued support of pandemic preparedness and being able to see this product through licensure, any potential post-approval studies required, and then really developing the technology further for broad commercialization when approved.
And Josh, one last thing I'd say is that the origin of the initial BARDA agreement was around the Zika virus epidemic, and then the vertical transmissions that were happening at the time. And even today, you know, obviously post-COVID, but we're also seeing the evolution of a new virus called Oropouche that's also has similar characteristics to Zika, and so I think that the need doesn't go away.
Absolutely. And then the last question, sorry, sneak one more in here on the just the REDS progress. I'm not sure if you've shared an update on this call or recently. Can you just remind us where does enrollment stand today? I know there's new centers opening, and there's some assessments to be made before you can give timelines, but just, you know, how deep are we in enrollment and how many more patients? That'd be great to just have that kind of baseline here as you guys move forward. Thanks.
Thanks a lot, Josh. So, yeah, I think we are very deep into enrollment. From an overall numbers, we haven't provided those numbers to date. But I think Richard can give you a little bit more context around why we're excited about these new sites that are coming up, and specifically the site in Turkey that we historically had used in our SPARC study, and the ability of that site to really deliver. Richard, do you want to?
Yeah. Thank you, Obi, and thanks, Josh, for the question. You know, we are really very encouraged with where we are. It, the whole REDS trial has been a long road from the Zika epidemic through COVID, when things were really held back. We've brought on a number of sites, and over the last year, brought on, and planning on new sites. They've taken a little time to come up. However, we've now brought on the Turkey site. You remember that in the SPARC study that we published, the Turkey site was really the backbone of that study, and they were able to enroll many thalassemia patients.
It took a while, longer than we expected, for them to get up to speed, but they now are online and are enrolling patients at a pace, at an encouraging pace. We brought on a second site in the US, and we're planning on two other sites in the next quarter. We believe that we now have the sites we need to take the trial to completion. The only dependency is how quickly they can get up to the speed we need them to be enrolling at, and that's what we're judging at the moment. We're being a little cautious at giving endpoints, but we are very encouraged by after a lot of hard work to be where we are.
Appreciate that. Thank you, Drs. Edwin.
Thank you. Our next question comes from Emily Christie with Stifel. You may proceed.
Hi, thanks for taking the questions. Just want to understand a couple more things about the Europe situation. So from what I heard, the FDA looked, raised similar questions, but you were able to respond with a dossier of information. And the EU body didn't- did they not see that dossier? Was that not included in the original filings, or did they see it and just interpret it differently?
Yeah, thanks, Emily. Carol, would you mind taking that again?
Sure, happy to take your question. We didn't present the exact same dossier response because the questions, you know, they are nuanced specifically for the regulatory authority concern. But we did present a lot of common data. So the FDA and the CPG saw common data between the two, between the questions and the geographies. There's a sensitivity between US and EU. The EU likes to believe, and so does the FDA, that they're autonomous scientific bodies, and they judge the questions and their interests to be somewhat different.
So, as I commented in my remarks, we believe CPG had just had a different way to interpret the guidance documents and the data that we provided that was not consistent with the way that the FDA had reviewed it and considered it. So, I think that that's really it. There's just a difference in the thinking.
Okay. And then in terms of a resubmission potential, thinking about a timeline, I mean, are there options other than starting from square one here that could be a more accelerated timeline? Or I think your last submission for this one was in 2021. Are we looking at a three-year potential pushout or any way we can think about that?
Yeah. Thanks, Emily. You know, so I think, again, I'll turn it over to Carol in a second, but, you know, really, obviously, we've been through the whole modular submission process with TÜV SÜD, and then we're looking at, you know, ways we can leverage that and enhance it. And Carol can give you some more specifics on how we will go about that process with TÜV SÜD, as well as sort of evaluating, you know, which competent authority with TÜV SÜD to proceed with.
Sure. Thank you for that question. TÜV SÜD has been our notified body for many, many years, and we've worked very effectively with them. They hold our files for platelets and plasma. We've been through the MDR process successfully with them for both platelets and plasma. So we consider them to be a very competent advisor, as well as our notified body for these technical reviews. So I think that we will work in close collaboration with them to identify how best to prepare the next CE Mark file, and also how to consider the best competent authority for the next review. I think they have a lot of experience.
They've worked with a lot of competent authorities, and I know between our experience and their experience that we will work together to identify the best path forward for the next application.
Okay. Thank you very much.
Thank you. And as a reminder, to ask a question, please press star one one on your telephone. Our next question comes from Mark Massaro with BTIG. You may proceed.
Hey, guys. This is Vivian on for Mark. Thanks for taking the questions. So I understand the commentary around CBG's, I guess, rationale. I think you had previously hoped to obtain a CE Mark in the back half of this year or maybe twenty twenty-five. So just to what extent have you baked this into any modeling expectations for twenty twenty-five and onwards? Thanks.
Yeah, Kevin, do you wanna handle that? Yeah, sure. Yeah, we had not contemplated any commercial revenue generation from the red cell program in Europe. We knew that one of the requirements under discussion was a hemovigilance study post-approval, and we needed to complete that before we would really, truly be able to model in revenue. So we haven't modeled that in historically. As we stated in our prepared remarks, we don't expect this announcement today to have any impact on our overall progress and trajectory towards our financial goals. I think, you know, the core business is as it was, and is a focus of ours, and, you know, we'll pursue next steps for licensure in Europe as we move forward.
Perfect. Understood. And then just one on the BARDA award, could you just elaborate on what the, I guess, contractual milestones are for obtaining the remaining $216 million of the funding? And just when does this contract go live? I understand it's a six-year contract, but just any color you can give us on the timing of that revenue recognition. Thanks.
Yeah. Again, Nina, as the architect of this BARDA program, why don't you go ahead and take this?
Sure, sure. So the contract took effect as of September thirtieth of 2024, so just at the end of last month. And the contract is structured time-based, and as we proceed through the certain activities and complete those, that triggers then us to pursue additional funding for the next step of the project. So there are some sequential options that we have in the contract. We've also anticipated potential post-marketing studies. As we get farther along and working with FDA and understand those, we have that earmarked to do those studies as well.
Great. Thanks for taking the questions.
Thank you, Vivian.
Thank you. Our next question comes from William Bonello with Craig-Hallum Capital Group. You may proceed.
Hey, guys. Thanks for taking the call. I just wanted to follow up on the call that Emily asked earlier, and maybe, you know, putting it in, you know, dumbing down language. So I understand that you're gonna work with TÜV to figure out next steps. But from a more layperson's perspective, are we correct in understanding that essentially in terms of the process, you're back to the beginning? And you know, do you know if there are steps you don't have to complete in the process that you've already completed? I mean, just something that gives us a better sense of how... You know, based on what you know so far, how much a lift is in front of you in terms of CE Mark?
Yeah, thank you very much. I'll, you know, I'll take a shot at this first, Carol, and then you please, feel free to provide additional context. So, you know, clearly, they've been through and reviewed the modules, and we, you know, to Carol's previous point, we put together a very, you know, comprehensive and substantial submission, not only for TUV, but also for CPG and at the competent authority. And so with that, you know, what, what do we do then to, you know, update the modules? Because, you know, there's new information from when we initially submitted. We mentioned the desire to include the RECIPE data as well, to look at a broader clinical indication. Initially, we were constrained to just chronic transfusions based upon the SPARC data.
But now we have a much more robust data set around acute transfusions, and so, we'll be looking at that with TÜV to say, "What do we need to update there with regard to the clinical module?" And then, you know, ultimately, we also need to, you know, understand, you know, what's gonna be required for the new competent authority review, and, you know, how do we address the CBG questions? Because, you know, our... It's our understanding there's gonna be transparency there. So it's hard for us right now to give you a timeline for how this previous exercise can be leveraged. And I think the only thing we can do at this point in time is just update you when we do have that clarity. Carol, is there any other context you'd like to provide?
Thank you, OB. And so I would just add that there are a couple of steps. So we have to withdraw the current file, and then that will take a short amount of time. And then we're going to go on to, just as OB said, updating some of the modules. But I believe that TÜV will feel that most of the new information we've provided will be in the context of updates, not that they will have to review everything all over again. So I think it will come down to the completion of that review, and then identification of another competent authority and having that review begin.
Okay. That's very helpful. That's all I needed. Thank you.
Thank you.
Thank you. I would now like to turn the call back over to Obi Greenman for any closing remarks.
Thank you all for joining us on today's call. We appreciate your continued interest, and we look forward to speaking with you again on our quarterly earnings call in the coming weeks. Thanks again.
Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.