CERS - NASDAQ

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Cerus Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jessica Hanover, Cerus Vice President of Corporate Affairs. Dr. Hanover, 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.serus.com. With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Vivek Jayaraman, Cerus' Chief Operating Officer; Kevin Green, Cerus' Chief Financial Officer; and Carol Moore, Cerus' Senior Vice President of Regulatory Affairs and Quality. Cerus issued a press release today announcing our financial results for the first quarter ended March 31, 2024, and describing the company's recent business highlights. 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 related 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 2024 product revenue guidance, our expectations for operating cash flows and non-GAAP adjusted EBITDA performance and our expected expense levels, expected future growth and our growth trajectory, the availability and related timing of data from clinical trials, planned regulatory submissions and product launches, product expansion prospects and other statements that are not historical facts. 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 March 31, 2024, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements. On today's call, we will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA. These non-GAAP measures should be considered a supplement to and not a replacement for measures presented in accordance with GAAP. 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. We'll 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 2024 and lastly, closing remarks from Obi. And now it's my pleasure to introduce Obi Greenman, Cerus' President and Chief Executive Officer.

Thank you, Jessica, and good afternoon, everyone. I'd like to open the call by spending a few minutes reviewing our recent positive performance as well as looking ahead of the key milestones on path for the company. The first quarter of 2024 was an important one in the history of the company as we reported positive top line results from the Phase III ReCePI clinical trial, the first of our 2 U.S. BARDA-funded trials for INTERCEPT red blood cells or RBCs. We are thrilled that ReCePI met its primary efficacy endpoint of noninferiority of INTERCEPT RBCs compared to conventional RBCs in complex cardiovascular surgery patients. And while ReCePI was powered specifically for this primary efficacy endpoint, we are nonetheless also very pleased by the outcomes for the safety endpoints that we reported in March. We recognize that there is a great interest in the details of the ReCePI results, and we look forward to being able to share more by way of media presentations and journal publications targeted for later this year once the publications have been accepted. As we continue to enroll the RedeS study, our second U.S. BARDA-funded Phase III trial for INTERCEPT RBCs, we view the ReCePI readout as meaningful for the overall RBC program in supportive of our planned launch in Europe. We are looking forward to meeting with the ReCePI trial investigators next month to review the findings from the study and to gain their insights into the opportunities for how to position this important data set with the transfusion medicine community. In summary, at this stage, the ReCePI data give us confidence in our INTERCEPT RBC program, and we look forward to sharing more with you in 2024. On the commercial front, we are increasingly confident in our expectations for 2024 and are reiterating our overall product revenue guidance of $172 million to $175 million, inclusive of our INTERCEPT Fibrinogen Complex guidance of $8 million to $10 million. Vivek will provide color into the continued traction we see across our portfolio and geographies. Importantly, we also remain committed adjusted EBITDA breakeven for the full year 2024. Kevin will provide more insight into our pathway for continued improvement in this metric over time. I would like now to turn the call over to Vivek to discuss our commercial results and progress for the first quarter of 2024 as well as our outlook for the rest of the year.

Thank you, Obi, and good afternoon to everyone. We continued our return to growth in Q1 2024. Across both product lines and geographic regions, we delivered strong performance in the quarter, and I am pleased with the collaboration and execution of the global commercial team. In the U.S., our core platelet franchise is stabilizing, and we witnessed a return to growth in our base U.S. business. Anecdotally, we are hearing from blood center customers that collections are slowly starting to recover and that platelet demand from their hospital customers remains strong. Furthermore, as we announced earlier, we received positive news from the FDA regarding our ability to increase platelet processing set shelf life. While our current forecast does not assume a major rebuilding of inventory at blood centers, the extended shelf life relieves a meaningful amount of pressure from our supply chain. As we work to further increase shelf life on a going-forward basis, we would expect to see the benefit across both inventory and service levels. Turning to our efforts internationally. Our commercial team delivered a strong performance in the quarter, meeting the way was our continued progress in Canada in partnership with Canadian Blood Services or CBS. CBS is nearing full implementation of INTERCEPT platelets across their network and pathogen reduction is now the standard of care for platelet safety in Canada. The validation efforts at Hema-Quebec are also going well. As a reminder, the Canadian market is split roughly 80-20 between CBS and Hema-Quebec. Earlier in the quarter, I had the opportunity to attend the Annual MedLab Congress in Dubai. Of note, I was pleased to see the strong interest in INTERCEPT across the Middle East. This region is a targeted growth area for our franchise with a significant increase in health care investments in countries such as Saudi Arabia and a clinical focus on blood safety, we believe the Gulf region is an ideal area for market expansion. INTERCEPT is the only pathogen reduction system to be FDA approved and MDR cleared. We believe this regulatory distinction is a clear marker of advantage and really resonated with customers in the region. I'm encouraged by the ongoing cultivation of expansion prospects that will ensure growth for years to come. Our U.S. INTERCEPT Fibrinogen Complex, or IFC, delivered another strong quarter of growth in the period, and we feel confident in our ability to meet or exceed our full year revenue guidance for IFC. During the quarter, we hosted a Scientific Advisory Board meeting for IFC and the uptick in customer experience with and enthusiasm for the product was notable. We are beginning to see clear examples of peer-to-peer marketing on IFC, which is an effective tool for new product adoption. During the quarter, we continued our strong push at clinical conferences and saw an increase in lead generation and physician attendance at our symposium. As noted in prior calls, we are actively partnering with several large blood centers to enable them to offer IFC directly to their hospital customers, and we experienced a noted step-up in orders via the blood center channel. This is serving as a strong complement to our direct sales team who are now fully trained and are starting to see their hospital targets convert into ordering customers. Most importantly, we continue to receive strong clinical support for the utility of biopsy and for the patient benefit associated with earlier access to fibrinogen. I look forward to providing more updates on our progress with IFC as well as our global commercial progress overall during future calls. I will now turn the call over to Kevin to review our financial results.

Thanks, Vivek. Good afternoon, and thank you all for joining us today. On today's call, I'll be discussing our financial results for the first quarter of 2024, highlighting the progress we made on the top line, the bottom line and the balance sheet. I'll also be providing some commentary on our positive financial outlook for the rest of the year. To start, we posted product revenue of $38.4 million for the first quarter of 2024. This represents year-over-year growth of 24%, demonstrative of a strong underlying growth in the business and ahead of our Q1 guidance provided back in January. North American platelet sales were the major contributor to our product revenue growth during the quarter. In the U.S., first quarter 2024 product revenues exceeded prior year levels by more than 40%. As we anticipated, sales in Canada to Canadian Blood Services were also extremely strong and are now approaching nearly 100% adoption across their entire platelet production operations. In EMEA, first quarter product revenues were down 9% year-over-year and 8% compared to the fourth quarter of 2023. Certain delays and timing of order fulfillment primarily drove the decline, which is expected to reverse itself over the succeeding quarters. Year-over-year, FX rates provided a benefit for the EMEA business of around 1.1%. On a consolidated basis, FX provided a benefit of around 50 basis points when comparing Q1 [ 2023 ]. As we mentioned on our last quarterly call, we are providing a quarterly breakout of IFC product revenue. For Q1, we posted IFC revenue of $1.9 million, driven by increasing contributions from our national sales agreements with large U.S. blood center partners. As mentioned by Vivek, we believe the expanding recognition of IFC's clinical and operational utility will continue to drive the growth going forward. In addition to our product revenue and not included in our guidance, government contract revenue totaled $5 million in Q1 compared to $7.5 million for the prior year period. The completion of our U.S. Phase III ReCePI clinical trial was the primary driver for the decline. We expect this factor will result in government contract revenue remaining near Q1 levels until such time as our Turkish site begins enrollment for the RedeS trial. To remind you, included in our government contract revenue are the revenues recognized as reimbursement under our contract with BARDA, our agreement with the FDA to further hold blood pathogen reduction and our milestone-based agreement with the U.S. Department of Defense for lyophilized IFC. Let's now turn to our product gross profit and gross margins. Our first quarter product gross profit was $21.3 million compared to $17.3 million during the prior year period, an increase of 23% year-over-year. Product gross margins for the first quarter were 55.4%, relatively stable when compared to the prior year and Q4 2023. These results were consistent with our previously announced expectations and we continue to believe that we will achieve relative consistency in our gross margins this year. Moving on. Our first quarter operating expenses, which totaled $34.3 million were $4.6 million lower than the prior year period of $38.9 million, a year-over-year decline of 12%. Q1 2024 operating expenses included $5.9 million in noncash stock-based compensation. By specific expense type, first quarter R&D expenses totaled $14.5 million compared to $17.4 million during the prior year period. This 17% decline was driven primarily by the completion of the ReCePI clinical trial and the effects of the restructuring implemented in June of last year. First quarter SG&A expenses were $19.8 million compared to $21.6 million during the prior year period. The decline again driven by last year's restructuring. We believe this level of SG&A expense is sustainable for the remainder of 2024 and will allow us to drive our expected growth and to deliver against our revenue expectations. Let's now focus on the bottom line and non-GAAP adjusted EBITDA results. On the bottom line, reported net loss attributable to Cerus for the 3 months ended March 31, 2024, improved significantly when compared to the same period in the prior year. Net loss attributable to Cerus for Q1 narrowed by 38% to $9.7 million or $0.05 per diluted share compared to $15.6 million or $0.09 per diluted share for the prior year period. On a non-GAAP adjusted EBITDA basis, Q1 2024 generated a much narrower loss of $2.7 million compared to a loss of $9.8 million for the prior year period. As we look ahead to the balance of the year, we expect that as we deliver the top line growth in our guidance and maintain stable gross margins and operating expenses, we expect to achieve at least breakeven non-GAAP adjusted EBITDA for 2024 as a whole. On the balance sheet and associated cash flows, we ended the first quarter with a cash position of $72.2 million of cash, cash equivalents and short-term investments on the balance sheet. Importantly, as we previously announced was a possibility, we generated positive operating cash flows of $2 million for the first quarter compared to cash used from operations of $8.5 million during the prior year period. With our expected top line growth and anticipated declining inventory levels for the remainder of 2024, we continue to believe that with some possible quarterly fluctuations, we can potentially generate positive operating cash flows for 2024 as a whole. Turning now to our guidance. As Obi mentioned, we are increasingly confident in our growth expectations. And as such, we are reiterating our full year 2024 product revenue guidance in the range of $172 million to $175 million, reflecting double-digit growth from last year. As we stated previously, we anticipate this growth to be fueled by the continued expansion of the INTERCEPT platelet business, both in North America and in Europe as well as continued uptake of IFC in the U.S. We are also reiterating our full year 2024 revenue guidance for IFC, which we continue to expect to be in the range of $8 million to $10 million, representing growth of roughly 25% to 50% for 2023 IFC sales. I'd now like to turn the call back over to Obi for some closing remarks.

Thank you, Kevin. We are pleased with our momentum from the start of 2024, and we expect to see it carried through the rest of the year. The company is making strong progress towards our commercial pipeline and financial goals, allowing us to expand the access to and applicability of the INTERCEPT Blood System on a global basis. Thank you for your continued interest in Cerus. I will now turn the call over to the operator for questions.

[Operator Instructions]. Our first question comes from Joshua Jennings with TD Cowen.

This is Eric on for Josh. I wanted to just start with guidance. I appreciate the commentary that you provided there for 2024. I was hoping to just hear a little bit more about the cadence of revenue growth that you would expect to deliver through the remainder of this year?

Yes. Thanks a lot, Eric. Vivek, would you like to take that question?

Sure, I'd be happy to. We're pleased with the performance in Q1. As you'll note, and you probably recall, Q1 of 2023 was sort of artificially low given some onetime issues that we were dealing with respect to dating and then also some issues internationally. So we anticipated a fairly solid bounce back in Q1, but as our full year guidance suggests, we believe in our ability to deliver double-digit growth throughout the balance of the year. And so Q1, both from a core product line standpoint as well as our IFC franchise were solid results, and we anticipate continuing to deliver that sort of growth, at least in the double-digit percentage throughout the balance of 2024. So that's currently are out for the year.

That's great. And then on the shelf life extension, I know it was on the March that you received a 12-month shelf life approval. But have you and your customers already started to see some of the benefits of that extended life or is that something that might take a few quarters to have a real impact here?

Yes. Thanks again for the question, Eric. And Vivek, I think it's right up your alley to take as well.

Sure. Yes, I'd be happy to. As you probably are aware, there's a little bit of time involved in terms of being able to flow those changes through our manufacturing process and get that new product out. We are able to utilize that dating for product that's already in the field. So that relieve some of the pressure on our supply chain and mitigate some of the risk of product obsoleting on customer shelves. So that's certainly a benefit. But as I indicated earlier, our current forecast doesn't assume a material rebuild of inventory at the customer level. Certainly, as customers get accustomed to longer shelf life, they may feel like they want to rebuild their inventory levels and hold more products at their locations. But I think the relief on the supply chain and sort of avoidance of any acute obsolescence issues or something that certainly benefited customers, and we've heard positive feedback about that.

Our next question comes from Matt Blackman with Stifel.

This is Emily on for Matt. Just a couple of questions for me on the international business, the weakness there. Just if you could give any additional color if it was certain markets or related to any of the geopolitical things that are happening. Just a little bit more color there, if you could?

Yes. Thanks a lot, Emily. I think Kevin has some thoughts on that.

Yes. I think it really is, as we mentioned in the prepared remarks, more of a timing issue than anything. I don't think there's any fundamental weakness in the overseas market. In fact, as we indicated in the prepared remarks, we expect that it will rebound after these timing issues and order patterns for the balance of the year, and we expect growth coming out of EMEA as well as the U.S. So it sometimes happens with distributor orders or other factors where there's a timing issue, and I think that's what was at play here.

Okay. Great. And then if you could just give us an update on the regulatory progress in China at this time?

Yes. Thanks, Emily. So we have the planet file under review by the NMPA. There obviously a lot of Chinese holidays over the last couple of months. So we're still awaiting any additional questions that they may have. We expect those questions in the second quarter here. And then with those questions, we'll be able to provide a lot more clarity around the likely timing for an approval.

Our next question comes from Jacob Johnson with Stephens.

Maybe for Obi for Kevin on guidance. I heard that just say kind of double-digit growth for the balance of the year. I run that through my Excel spreadsheet. I get something towards the higher end of the guidance, Obi you said in the release, increasingly confident in the guidance this year. I understand we're just a quarter in, but fair to say kind of expectations now versus the beginning of the year, you're trending maybe towards the higher end of the guidance? And Kevin, maybe any words of caution from a CFO?

Give me a little kick on the table. I think we're very optimistic about the growth trajectory for the year. We'd like to sort of get Q2 under our belt just to see how things play out. As Vivek mentioned as well, there's really not a lot factored in at the moment for the extension of the shelf life and any kind of restocking opportunities. So that's sort of the logic behind maintenance of guidance at this time.

Yes. I mean from my perspective, Jacob, I think that's absolutely right. We don't know what FX rates are going to do. So there's potential downside from that. But I think fundamentally, we are more confident as we sit here today than we were in January when we provided the initial guidance. And as things unfold, we'll be in a better position to provide up to you all.

Got it. I just figured I had to try. And then maybe for Vivek. Just on the IFC growth, it sounds like maybe some traction with some of the larger blood centers you partnered with. I'm just kind of curious on the IFC side of things, kind of trends on those blood centers you partnered with versus some of the manufacturing partners you have on the IFC side of things?

Yes, happy to address that. Thanks for the question. If I think about our IFC business, and I think as we stated earlier, coming out of Q1, we feel even more confident about our ability to deliver against the annual guidance and see strong growth in that franchise. And there are really a few reasons for our sort of increased confidence. The first, we announced late last year that we had formed partnerships with large blood centers for them to distribute IFC directly to their hospital customers. And in Q1, we saw a material step-up in terms of blood center customers who are ordering IFC directly through that channel. So it was good initial validation of the strength of that channel and our ability to broaden access to IFC. The second sort of area of encouragement for us was in the account that we had opened up in late 2023, we saw a pretty significant increase in use ad accounts sort of same-store sales. We may have entered initially and through one clinical department. Perhaps it was high risk or trauma. And what we saw was a broadening out across that institution of availability of IFC as the clinicians start to engage with one another and they sort of saw firsthand the benefit of having that product available. So that's encouraging to you because it shows that not only can we get access to more hospitals, but once we get in, we have the ability to go deeper within those accounts. And then lastly, with our manufacturing partners, which you referenced, we have sufficient manufacturing capacity in 2024 to meet or exceed our guidance. What we're doing is we're working actively to increase capacity because we want to make sure that as we generate demand, we have supply available to meet it. So similar to what Kevin said about overall product guidance for 2024, specifically to IFC guidance for the calendar year, we feel much better about things here in early May than we did back in January when we issued that guidance. And so that's certainly a positive progress.

Got it. That's helpful. And if I could just sneak in one more, sorry to keep you on the hot seat, Vivek. But just on the Middle East opportunity, it sounds like there's an opportunity in that region. I'm just kind of curious are there any areas you need to invest? Or are there any kind of hoops you need to jump through to kind of better realize that opportunity as we start thinking about that?

Yes. Great question. Thanks. As I mentioned, the opportunity to spend some time in the region at the annual MedLab Conference, which was held in Dubai. And candidly, the most challenging hoops to jump through are ones that we've already cleared and that's receiving both FDA approval and MDR clearance. I'm sure you hear a lot about the onerous nature of the MDD to MDR transition and the fact that we have achieved that milestone and in addition to the fact that we're the only pathogen reduced technology that has an FDA approval, that really resonates with customers in that region. They tend to take their cues from the AABB and look to the U.S. in terms of technology adoption. So that's sort of the major driver of the community and market interest there. It also is tied to an overall -- as you're probably aware of investment strategy in Saudi in particular, where they recognize there's a -- sort of a defined runway in terms of their economy being driven by natural resources. So they're investing in health care, they're investing in entertainment and the rest. So there's a big push to invest in health care, and there's a view to what technologies are approved in the U.S. and MDR cleared as things that they want to bring in locally. And so those are some of the factors that accrue to our benefit when we think about growth in that region.

Our next question comes from Ross Osborn with Cantor Fitzgerald.

Congrats on the progress. So starting off, will you discuss how reimbursement has gone with IFC in terms of accounts being able to receive an NTAP?

Thanks, Ross. I think your voice broke up a little bit, at least on our end. So I think your question was around reimbursement for IFC and the evolution there linked to the NTAP, is that correct?

Yes, that's correct.

Okay. Great. Thanks, Ross. Vivek, sorry to put you on this, ask it again, but could you address that?

I can't get the question, you broke up a little bit.

Yes, it's basically around how the reimbursement evolution for IFC has occurred in the context of the NTAP. So really, how does IFC reimbursement take place at the hospital level?

[Technical Difficulty] and it allows us to do initially getting the NTAP designation as it created more awareness and interest from clinicians. But fundamentally, the way in which products paid for us through the -- depending upon the case through the associated DRG. So what we've been able to see, which has been encouraging is initially, we thought we'd get quite a bit of pushback on price and cost. And once we get through the value added thing, the value analysis committees or in the case of leveraging the blood center relationship with the hospital and going through that channel, we've actually seen much less pushback on price than we'd anticipated. So we're going to have to track that on an ongoing basis now so we have to continue to prove the clinical utility. But that hasn't been a governor in terms of getting new accounts on board. It's really been just getting through the process of getting new products into an institution if we're selling directly and then getting the blood center channel up and trained if we were going through that channel partner.

Yes. I'd add that the value proposition around the timely availability of the product to the patient really seems to resonate over time as does the dramatic reduction in wastage that we're seeing at the hospitals that have taken on IFC.

Great. And then lastly and looking at the smaller geographies for those that could provide some upside. Could you discuss the state of the U.K. and Germany?

Yes, I'll start there, and maybe I'll take U.K. and Vivek can take Germany. So the U.K. has been a long story as a lot of these accounts that are sort of deferring the decision around improving the safety and availability of the blood supply. That's an increasingly sort of challenging position to take when so many other countries have established pathogen activation and INTERCEPT specifically as the standard of care and the results that they're seeing from real-world experience with the product. The U.K. is about ready to release a report on blood safety coming from the HIV and hepatitis epidemics of the '80s and '90s. It's called the infected blood inquiry. That's supposed to be published on May 20 in the U.K., and it's estimated that there'll be multibillion-dollar restitutions to the victims. So I think that will have some impact on sort of how the U.K. looks at blood safety and availability going forward. That being said, it's a single payer system, as you know. And so the national health service, blood and tissue has a fairly formal process for how they would take on pathogen activation. But we're optimistic that at some point in time, that market will convert. It's just hard to predict when, Vivek, do you mind covering on Germany?

Sure. I'd be happy to. For Germany, if you think about the market dynamics that's more similar to the U.S. as opposed to situation in France where you have a single decision maker. And once they decide to go, it really becomes about partnering with them from an operations standpoint around implementation. So we are actively involved in continue in Germany with getting accounts online, working with them to get their MAA and ML and marketing license approvals and what's been most encouraging is we're starting to get some institutions to start Berlin. We put about Berlin Charite hospital beginning with pathogen reduction. That's one of the top 10 leading hospitals in the world. And so you get these luminary institutions on board, and that's kind of where we see progress driving. So the German Red Cross GRK is also the other area of customers where we're working towards getting them up on pathogen reduction. One of the things that we'll need to work through is getting an extended day label claim like a 6-day claim in the marketplace. But in terms of where we stand now, Germany continues to be a growth opportunity for us in EMEA. We've got a direct team on the ground there, and we're starting to see product adoption. So it's a slower process, like I said, in some geographies where you have a single decision maker. But on balance, we feel good about our growth prospects for Germany through the balance of the decade.

[Operator Instructions] Our next question comes from William Bonello with Craig-Hallum Capital Group.

Obviously, great recovery in North America. Just trying to understand a little bit more about EMEA outside North America. I get the quarter and what you said there. But just more generally, I mean, it's been sort of a several year trend of sort of declining revenue. What's sort of the underlying dynamic that's happening there? And how does that change? Does it only change by more countries coming on board? Are you pretty much not expecting growth where you already are? Or how do we think about that?

Well, I think last year was somewhat of an anomaly that we traditionally see sort of single digit or low single-digit organic growth in markets where we have 100% penetration, for example, in France and Belgium. And last year, we don't know if it was a function of sort of COVID or just change in transfusion practices around transfusion thresholds for platelets, but we saw a decline last year in the organic growth in the overall platelet demand in those markets. That's recovered this year, as we mentioned in our prepared remarks. I think as far as longer-term growth trajectory, it really is about new geographies as well as ultimately having some growth in the plasma business, which has been lagging the platelet adoption. So I think we feel pretty confident about the geographic opportunities for us in Europe. And that being said, it's really hard to predict exactly when these large accounts will come online. So I don't know if that answers your question, Bill?

Yes. No, absolutely. That's really helpful. And then just on CE Mark, is there anything more you can tell us there? I think you've said hopeful expected timing by the end of this year, but just what sort of has to happen between now and then? And any other color you can give us on timing would be great on red blood cell, obviously.

Thanks a lot, Bill. So your question is specific to CE Mark timing under the MDR process. And unfortunately, Carol Moore is on the call with us. So I'll turn it over to Carol. She's our Senior Vice President of Regulatory and Quality.

Thank you. Thanks for the question. We are working closely with our competent authority, which is in the Netherlands to finish up any questions they might have on the responses we provided earlier this year. We have not heard back from them, but we did provide a complete response. And between receiving some feedback from our component authority, we still will go back and talk to our notified body, which is the TUV and determine what the next steps are towards completing the application. So we'll be in a better position once we hear back from our component authority about the responses that we provided earlier this year.

Okay. And based on what you know thus far, though, I mean, any change to your thinking on timing?

Well, I think we're just in an active review process. So at times, it's hard to predict what might come up next. But I think we're working hard to make sure that we fulfill any requests that we receive in the most timely way.

Okay. That's helpful. And then just one last question on cash flow and happy to hear your thoughts about potentially being operating cash flow for the year and obviously seeing it for Q1. Just anything particularly unusual. I think we had some unusual working capital moves in Q4, probably that hurt operating cash flow. Do we sort of see a reverse of that helping Q1? Or how do we sort of think about it in the future quarters?

Yes, Bill, I'll take that one. So you're right. In Q4, actually 2023 at large, we saw kind of atypical working capital movements with increased inventory and rapidly declining payables. I think when we ended the year, we felt like we were in a position where we could reverse that. Q1 was really the first time. I think you see the inventories coming down. Obviously, our receivables have come down, for that matter, payables have come down. I think we're cautiously optimistic for the balance of the year. Obviously, there could be chop in any given quarter. But if you think about our guidance in Q1 being kind of the low watermark for the year, I think we expect to see continued growth in the top line will continue to work down inventory levels. And then really, it comes down to managing the payables and the receivables at the current DSO and DPO levels, which we think is manageable. So I think there's a lot of fundamental reasons to be confident that we can generate operating cash flow, and we'll manage towards that.

Thank you. I would now like to turn the call back over to Obi Greenman for any closing remarks.

Well, thank you again for joining us today and for your interest in Cerus. We look forward to keeping you informed of our progress throughout the rest of 2024. Thank you.