Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Cerus Corporation Third Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Tim Lee, Cerus Head of Investor Relations. Tim, 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.cerus.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. Cerus issued a press release today announcing our financial results for the third quarter ended September 30, 2025, and describing the company's recent business highlights. You can access a copy of the announcement on the company's 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 related to our future financial and operating results, including our 2025 product revenue guidance, our fourth quarter 2025 expected product revenue range, our expectations for operating cash flow 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 can 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-Q for the quarter ended September 30, 2025, 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 and the percentage growth in EMEA product revenue in constant currency. These non-GAAP measures should be considered as 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 to the extent reasonably available, please refer to today's press release and the slide presentation available on our website. We will begin today with opening remarks from Obi, followed by Vivek to discuss recent business highlights, and Kevin to review our financial results and expectations for the balance of 2025 and lastly, closing remarks from Obi. And now it's my pleasure to introduce Obi Greenman, Cerus' President and Chief Executive Officer.

Thank you, Tim, and good afternoon, everyone. I'm pleased to report that Cerus continues to build on its strong momentum, delivering another quarter of solid commercial, operational and financial execution as well as continued progress across our development priorities that we spelled out at the beginning of the year. As we close in on the end of 2025, it's clear that our disciplined focus on execution, coupled with the commitment of our global team and blood center partners is contributing to the sustainable revenue growth that has a solid base. The evolving standard of care in transfusion medicine that incorporates pathogen and activation has been established for about 25% of the global platelet supply, providing a great foundation for expected future revenue growth associated with our growing INTERCEPT product portfolio and our goal to address all transfused blood components. In the U.S., INTERCEPT adoption continues to grow as hospital demand for 100% pathogen inactivated platelet inventory increases because of the benefits associated with managing the logistics and inventories of platelet transfusion. We estimate the current U.S. market penetration in the mid-60% vicinity, up from the low 60s a year ago, and we believe we have additional runway well into the 70% range and ultimately north of 80% as we continue to enhance the value proposition of INTERCEPT with improvements in ease of use and new label claims. Adding to the growth from our platelet and plasma businesses, IFC continues to gain clinical traction as hospitals recognize its ability to meaningfully improve patient outcomes and streamline transfusion workflows. We continue to believe IFC provides tremendous growth potential for our base business as we move forward. Over the past 2 quarters, we experienced an acceleration in IFC kit sales to blood centers and a shift away from the direct sales to hospitals…

Thank you, Obi, and good afternoon, everyone. Q3 was another strong quarter of commercial execution for Cerus. Building on the solid first half of the year, we delivered double-digit product revenue growth with broad-based strength across our INTERCEPT portfolio. Demand remained robust in all key geographies and our teams once again demonstrated operational discipline and close partnership with our customers. Globally, adoption of INTERCEPT continues to grow. Our U.S. platelet franchise continues to serve as the foundation of our business. The feedback we receive from our partners is consistent. INTERCEPT platelets help improve patient safety, simplify logistics and enhance supply reliability. We expect our U.S. platelet franchise to be an important contributor to revenue growth for years to come and are grateful for the strong partnerships we have with U.S. blood centers. Internationally, we saw healthy growth in our EMEA platelet franchise and continue to garner positive feedback from the INT200 launch. As Obi referenced, it is encouraging to see the initial commercial activity in Germany, which is the single largest market in Europe. As noted, the INT200 launch is progressing well. Customer interest in INT200 is robust, and we converted that interest into revenue with multiple system installations during the quarter. Looking ahead, we expect a strong finish to the year with a marked pickup in INT200 installations in the fourth quarter. I'm pleased with the performance of our international team as we continue to drive product innovation that addresses customer needs. Together, our efforts are reinforcing INTERCEPT platelets as the global standard of care for platelet safety. In addition, the release of INT200 is a tangible demonstration of our commitment to product and technology innovation in the field of blood safety. Switching to IFC. Customer demand as measured by therapeutic dose equivalents more than doubled this quarter, while…

Thanks, Vivek. Hello to everyone listening on today's call. Thank you for your interest in Cerus and for joining us. On today's call, I'll be discussing our financial results for the third quarter of 2025, our increased full year product revenue guidance and our expectations surrounding key financial objectives we committed to earlier in the year. For the most part, I'll be limiting my historical results commentary to Q3 rather than year-to-date results. I'll start off with product revenue. For the third quarter of 2025, we reported record levels of product revenue totaling $52.7 million, which translates to a 15% year-over-year increase. Similarly, for the first 9 months of the year, product revenue increased 15% to $148.4 million compared to the first 9 months of 2024. Global platelet sales as well as IFC sales in the U.S. were the principal drivers for both the quarter and year-to-date growth. Breaking down product revenues by geography, you'll see that third quarter EMEA product revenues increased 21% compared to the same period last year, due in part to strength in the Middle Eastern platelet sales as well as initial shipments to Germany in support of the INITIATE study. On a non-GAAP basis, excluding the impact of foreign currency exchange rates, EMEA product revenue increased 14%. At the same time, third quarter North American product revenues increased 11% compared to the prior year, led by gains in the United States. IFC product revenue for the third quarter was $3.9 million compared to $2.3 million during the third quarter of 2024. As Vivek noted in his prepared remarks, we are experiencing a faster-than-expected shift in IFC sales from our historical model, which focused on Cerus selling finished IFC therapeutics directly to hospitals to now more of an IFC kit sale to blood center customers who…

Thank you, Kevin. As you just heard, Q3 2025 was another strong quarter for Cerus both operationally and financially. This quarter highlights the foundation we have built for durable growth. We delivered record quarterly product revenue of $52.7 million, driven by strong platelet demand and growing IFC adoption. We raised our full year 2025 product revenue guidance for the second time this year, reflecting confidence in continued momentum across our franchises. And we achieved our sixth consecutive quarter of positive non-GAAP adjusted EBITDA, underscoring the scalability and consistency of our model. Looking ahead, we remain focused on execution and innovation. With the early but encouraging activities in the German market, the continued rollout of the INT200 LED illuminator across Europe. The completion of enrollment in our U.S. Phase III RedeS trial and ongoing regulatory review of INTERCEPT red blood cells in Europe, we are steadily advancing towards our goal of enabling a complete portfolio of pathogen inactivated blood components worldwide. At the same time, the transition of IFC to a kit-based model and the sustained growth in platelet adoption reaffirm the strength of our commercial strategy and the partnerships that make our mission possible. I want to thank the entire Cerus team and our global network of blood center partners for their relentless commitment to improving blood safety and availability for patients around the world. With more than 20 million INTERCEPT treated components transfused globally, our impact on the field of transfusion medicine continues to expand and we are only at the beginning of what's possible. With that, let me turn it over to the operator for questions.

[Operator Instructions] our first question comes from Matthew Park with Cantor Fitzgerald.

Congrats on the quarter. I guess starting on gross margin, I appreciate you guys highlighting some of the puts and takes in the quarter. And as we look into 2026, I guess, which of these headwinds do you expect to ease versus persist? And what levers can you guys pull to kind of get some stabilization in margins?

Thanks, Matthew. Yes, some of these are out of our control, right? Obviously, FX rates, the tariff environment, which, as everyone knows, is extremely volatile or has been, are out of our control. What we can control is growing the business, economies of scale and product mix. Furthermore, I'd say our continued push for the IFC business to move from a therapeutics business where we're selling the finished therapeutics to hospitals to one of a kit sale where we sell the kits to blood centers to produce IFC for their own hospital accounts will help drive margin expansion from here. So while we have some near-term headwinds, some of them out of our control, I think we're well positioned on the things that we can control to see margin expansion once those subside.

Got it. That's super helpful. And then I guess just one more for me on IFC. I guess, can you guys just talk about your ability to meet growing demand over the next couple of quarters? And if there's anything you guys can do on the supply chain or manufacturing side to kind of ensure consistent product availability?

Yes. Thanks, Matt. Vivek, do you want to handle that one?

Yes, sure. I'd be happy to. We've seen really strong improvement in terms of our production and supply capability through the course of this year. I think we mentioned in a prior call, a fairly large blood center received their BLA. And so we feel good that with demand growing, supply shouldn't be a constraint for the foreseeable future. We continue to have blood centers express an interest in producing IFC and those that are currently producing are actively seeking BLA so that they can transport product across state lines. So we feel as though we're in a very solid position with respect to supply both today and for the foreseeable future. So thanks for the question.

[Operator Instructions] our next question comes from John Wilkin with Craig-Hallum.

Congrats on the good quarter. So first off, just on IFC, could you talk a little bit about what -- like when the decision was made to start shifting more towards the kit-based model and what drove that decision, whether it was to try and offset some of the gross margin pressure or just to leverage the existing sales channel?

Yes. Thanks for the question. Vivek, I think you share this one as well.

Sure. I'd be happy to. You addressed some of the key issues. Number one, I'd say the primary reason to shift to the kit model is really twofold, and they're both market access related. The first being that we can leverage the existing sales channels of the blood center to significantly amplify and multiply our field sales personnel and folks engaging with hospitals and detailing IFC without the associated SG&A expense. And so that's proven to be incredibly invaluable as we drive awareness and clinical education about IFC. Secondarily and also under the umbrella of market access is we can leverage existing blood center and hospital contracts where they contract across the number of products that the blood center provides to the hospital. We can slide IFC into those contracts. And so that materially reduces the cycle time in terms of getting a contract in place, having to develop a bespoke product contract for IFC through Cerus directly to the hospital. So those are two pretty significant market access levers that provide the rationale for the shift. And then as you mentioned, too, there is a gross margin benefit associated with selling kits through blood centers versus selling a finished therapeutic directly to the hospital. So those are all the reasons that drove our decision to shift the distribution strategy and it's encouraging to see that adoption only increased as we're going through the process of doing that.

That makes sense. That's helpful. And then on the OpEx side, you guys came in kind of well below where we have been modeling and a pretty significant step down from where you were in Q2. Could you talk about a little bit more about what drove that and how sustainable that is going forward? And as much as you're able to say right now, how you envision that progressing into 2026?

Yes. There were a couple of things. I think in Q2, as we mentioned, we had some compensation costs that were a cumulative catch-up. So we saw probably a bit of outsized impact on that particular period. So I don't know that the step down is all that relevant. As we think about OpEx going forward, you got to think about our business model as a whole, we've got a concentrated customer base that we try and serve extremely well, but we're able to get a lot of leverage out of that. And so that's a focus of the company is to continue to generate outsized revenue growth for those SG&A investments. And then as it pertains to R&D, any variability is going to be driven from our awards with BARDA and then probably in the nearer term, the PMA for the LED illuminator here in the U.S. So I would expect them to be fairly consistent as we get into next year and RedeS reads out, we should see them tick down slightly, but nothing too significant. Hopefully, that answers your question.

[Operator Instructions] with no further questions in queue, this concludes today's conference call. Thank you for participating. You may now disconnect.