Cerus Corporation (CERS) Q1 2021 Earnings Call Transcript

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Cerus Corporation (CERS -1.19%)
Q1 2021 Earnings Call
May 4, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Cerus Corporation's First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

It is now, my pleasure to turn -- to introduce Matt Notarianni, Senior Director of Investor Relations. Please go ahead.

Matt Notarianni -- Senior Director of Investor Relations

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; Vivek Jayaraman, Cerus's Chief Operating Officer; Kevin Green, Cerus's Chief Financial Officer; Carol Moore, Cerus's Senior Vice President of Regulatory Affairs and Quality; and Jessica Hanover, Cerus's Vice President of Corporate Affairs. Cerus issued a press release today announcing our financial results for the first quarter ended March 31, 2021, 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 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 2021 product revenue guidance and goals, operating expenses, anticipated cash used from operations, and gross margins as well as commercial development efforts, future growth and growth strategy, future product sales, product launches, ongoing and future clinical trials, ongoing and future product development, and our regulatory activities, including the timing of these events and activities. These forward-looking statements involve risks and uncertainties that could cause actual events, performance, and results to differ materially. They are identified and described in today's press release and under the Risk Factors in Forms 10-K for the year ended December 31, 2020, and 10-Q for the quarter ended March 31, 2021, which we will file shortly. We undertake no duty or obligation to update our forward-looking statement.

On today's call, we'll begin with opening remarks from Obi followed by Vivek to provide the commercial update, and Kevin to review our financial results. We will conclude with commentary from Obi regarding recent announcements and update on our pipeline and closing remarks.

And now, it's my pleasure to introduce Obi Greenman, Cerus's President, and Chief Executive Officer.

Obi Greenman -- President & Chief Executive Officer

Thank you, Matt. And good afternoon, everyone. I'm pleased to report our Q1 results which I hope you've had a chance to review from our earnings release earlier today. Before Vivek and Kevin discuss some of our commercial and financial updates for the quarter in greater detail, I'd like to make a few remarks about the business and how we are thinking about the balance of the year.

As you can see from our results, we are off to a strong start in 2021 building on the momentum our business had exited in 2020. INTERCEPT platelet adoption in the US continued to be the driving force behind our revenue growth during the first quarter of 2021. With the FDA compliance deadline five months away, we are pleased to see customers moving in many cases more quickly than we had anticipated to ramp up production capabilities to provide INTERCEPT platelets to hospital customers across the country. On the therapeutics front, our commercial team responsible for INTERCEPT Fibrinogen Complex product is making good progress at hospitals ahead of our first sales, and we will share more details with you later on this call. Our US commercial team is executing well to support blood centers across the country as they prepare for compliance with the FDA guidance later this year. Vivek will provide more perspective in his prepared remarks.

Looking a little more closely at the Q1 product revenue, I'm proud to report that we were able to continue a pattern of consistent year-over-year product revenue growth that goes back multiple years now. Moving to our full-year product revenue guidance, the momentum we saw in the market at the start of 2021 has been strong and as a result, we are raising our 2021 product revenue guidance to a higher range of $110 million to $114 million, representing year-over-year growth of between 20% and 24% from our full-year 2020 results. Well, as usual, we are not providing quarterly guidance. We continue to expect the momentum of hospital adoption to build each quarter over the course of this year.

We talk often about the global opportunity for INTERCEPT being close to $7 billion, which includes opportunities and geographies where INTERCEPT is not yet approved in pipeline opportunities like INTERCEPT red blood cells. When considering our current portfolio of licensed products alone, we believe the near-term opportunity for our business is very significant in and of itself at about $1.4 billion. There remains a lot of commercial upside to penetrating the current total addressable markets for INTERCEPT platelets, plasma, and fibrinogen complex. In addition, with the organic growth of these end markets, our geographic expansion into Asia-Pacific and Latin America, and ultimately product line extensions, we continue to believe there are significant runway for future revenue growth.

Before I turn the call over to Vivek for the commercial update, I would like to highlight a few updates for INTERCEPT Fibrinogen Complex or IFC. First, last week, we were very pleased to see that CMS released its preliminary decision to approve IFC for a New Technology Add-On Payment or NTAP. This is another step forward in the early days of our commercialization of IFC and CMS's provision of NTAPs for breakthrough technologies like IFC will help providers and their Medicare patients gain access early. We anticipate that CMS's final decision will be released in August, ahead of the start of their fiscal year and the effective date for new NTAPs on October 1, 2021.

Additionally, I want to share some of the sales and marketing materials our team has developed and reviewed with the FDA to use in the field that underscores the benefits of INTERCEPT Fibrinogen Complex. With a focus on improving timely access to clotting factors, including fibrinogen and correspondingly outcomes for critically bleeding patients, we are preparing for a nationwide launch once our production partners receive BLA approval, anticipated sometime next year. Some of the key messages for INTERCEPT Fibrinogen Complex that resonate with prospective hospital customers included some more immediate availability, as well as, its five-day per-stock shelf life, which has the potential to meaningfully reduce the challenging wastage rates associated with the product expiration for conventional cryoprecipitate. We're looking forward to getting this product to physicians and patients to enable better management of critical bleeding events.

With that, let me turn the call over to Vivek for a more detailed review of our commercial operations.

Vivek Jayaraman -- Chief Operating Officer

Thank you, Obi. And good afternoon, everyone. As discussed, 2021 is off to a strong start and I'm pleased to discuss the results of our first quarter with you today.

As Obi mentioned, the commercial team in the US is moving quickly and aggressively to offer the INTERCEPT blood system for platelet to blood centers ahead of the FDA compliance deadline in October. Quarterly demand for INTERCEPT platelet kits during Q1 in North America grew 51% year-over-year. Specific to the top-five blood centers in the US which is, you will recall responsible for about 72% to 75% of the overall platelet supply in the domestic market, our Q1 sales to these customers increased 59% year-over-year. This is the third consecutive quarter of year-over-year growth above 50% and is clear evidence that we are building a significant presence in the US platelet market ahead of the October 1 deadline.

For our largest customer in the US, the American Red Cross, INTERCEPT adoption continues to grow rapidly, and over half of the platelets they produce are now INTERCEPT-treated. The ARC continues to be a leader in the adoption of pathogen inactivation and is driving toward its stated goal of 100% pathogen-reduced platelets. Obi will share some more detail regarding our efforts to expand the approved shelf life for INTERCEPT platelets to seven days from five days. But even with the current five-day shelf life, we and our blood center partners clearly continue to see strong demand for INTERCEPT versus LVDS or Large Volume Delayed Sampling.

In the EMEA region, first-quarter reported product revenue increased 9% on a year-over-year basis. During the quarter, we saw contributions from our major customers and established markets in Western Europe, as well as sales of illuminators in EMEA. Offsetting this growth, Q1 was impacted by unfavorable timing of orders in certain regions, which we expect to normalize as the year progresses. Additionally, our international business has benefited from sales of INTERCEPT plasma over the last year and this continued in the first quarter. While not a significant driver of our business, the demand we've seen from customers during the COVID-19 pandemic is a reminder that INTERCEPT platform is an important tool that can aid in the safety of the blood supply, particularly in an epidemic when new pathogens emerge.

Moving to our therapeutics business unit, as Obi mentioned at the top of the call, our teams have been making a lot of operational and commercial progress in advance of the first customers coming online shortly. Our production partners are making strides toward operational readiness. We partners have already initiated or completed product validation and are actively building inventory that would be ready to release as new commercial agreements are signed and hospitals begin ordering. Finally, in addition to current production partners applying for BLAs in support of the nationwide launch next year, we are also in ongoing discussions with additional blood center production partners that will provide access to additional launch states in 2021 and production capacity to meet expected demand.

On the commercial side of the therapeutics business, I'm pleased that we have a strong funnel with multiple perspective customers either in evaluation or in contracting. So, we look forward to updating you more on our success as we begin hospital contracting on a more broad basis throughout the year.

With that, I will turn the call over to Kevin for a review of the first quarter financials.

Kevin Green -- - Chief Financial Officer

Thank you, Vivek. And good afternoon, everyone. To recap what Obi mentioned, we reported first quarter 2021 product revenue of $23.4 million, a 26% increase from the $18.6 million recorded during Q1 of the prior year. Global demand for INTERCEPT continues to increase. For Q1, the calculated number of treatable platelet doses increased 13% year-over-year. In terms of product mix for the quarter, kit sales represented 95% of our Q1 product sales. Of those total kit sales, platelet kits accounted for approximately 90%, while plasma kit sales accounted for the remaining 10%.

As Vivek mentioned in his remarks, Q1 again, saw strong demand for INTERCEPT plasma outside of the US. In addition, we continue to see a healthy placement of illuminator devices globally which contributed about 3%. In addition to our product revenue and not included in our guidance, government contract revenue totaled $6.2 million in the Q1. Comparatively, government contract revenue totaled $6 million in the first quarter of 2020. For the remainder of 2021, we expect government contract revenue to increase with patient enrollment for BARDA reimbursed clinical trials and as activity associated with whole blood pathogen reduction initiative, funded by the FDA ramps.

Now, let's move the discussion to our reported gross margins. Gross margins for the quarter were 52.5% compared to 55.3% for the prior-year period. The 280 basis point decline from the prior year was in line with our expectations and commentary we provided on our Q4 call in February. As a reminder, this expected dip was driven by the outpaced growth in the US relative to our other commercial markets. As a general rule, US customers, and in particular the American Red Cross, predominantly use our single-dose platelet kits as opposed to EMEA customers who use more of our double-dose kits. Our single-dose platelet kits generally carry a lower gross margin contribution compared to our double-dose platelet kits. As a result, given the expected outperformance from the US relative to the rest of the world, we anticipate a similar dynamic to playout for the remainder of the year due to the mix difference in kit configuration sold in the US versus EMEA.

I'd now like to discuss operating expenses, which totaled $34.9 million during the first quarter and included $5.3 million in non-cash stock-based compensation. Of the total Q1 operating expenses, SG&A expenses accounted for approximately $19.2 million and were higher by about $3.3 million compared to the prior year driven by increased investments surrounding our INTERCEPT Fibrinogen Complex launch and increased non-cash stock-based compensation.

Research and development expenses for the quarter totaled $15.7 million compared to $15.8 million during the prior year. During the quarter, increased research and development spending associated with the red blood cell CE Mark and other INTERCEPT pipeline activities such as our LED illuminator in development were more than offset by lower expenses elsewhere. Reported net loss for the three months ended March 31, 2021, increased when compared to the same period in 2020. Reported net loss for Q1 totaled $17.5 million or $0.10 per diluted share compared to $16.5 million or $0.10 per diluted share for the prior-year period. In terms of our balance sheet, we ended the quarter in a strong position with approximately $132 million of cash, cash equivalents, and short-term investments on hand.

Cash used from operations for the first quarter was $18 million compared to $19.8 million for the prior-year period. As our visibility for continued revenue growth increases, we are leaning into our investments in supply chain and inventory to ensure that we are able to deliver products to our customers without interruption.

Finally, as we continue to see durable topline revenue growth as INTERCEPT adoption ramps globally, we are focused on driving significant operating leverage on our path to profitability or cash flow breakeven. While this is not intended to serve as long-term guidance, I mentioned it because it is a significant focus for us over the next few years, and we look forward to showing our progress based on upcoming quarterly results.

Moving on to guidance for 2021. As Obi mentioned earlier, we continue to believe that we have good visibility into the demand for our products leading us to raise our 2021 product revenue guidance range from $106 million and $110 million to the new range of $110 million to $114 million. This new range reflects 20% to 24 % growth when compared to 2020. While the US platelet business is the primary driver for the 2021 strength, we are launching our INTERCEPT Fibrinogen Complex product. We remain enthusiastic for the product's potential, but continue to expect relatively modest sales from this launch in the immediate term prior to a nationwide rollout.

With that, let me turn the call back over to Obi for some closing comments.

Obi Greenman -- President & Chief Executive Officer

Thank you, Kevin. Beyond the commercial progress, I would like to provide you with some insight into our pipeline initiatives. First, with respect to our efforts around seven-day INTERCEPT platelets in the US, our team has been working to complete the ongoing study and remains on track to submit the FDA -- to the FDA later this quarter. Assuming a 180-day review window, we hope to have approval by the end of the calendar year.

Moving on to a quick update on our red blood cell program. I'm pleased to share with you that the third module of our four-part modular submission for a CE Mark was submitted last month and we are on track to submit the fourth and final module by the end of Q2. As we have stated previously, based on our discussions with the regulatory authorities, we think a potential launch during the second half of 2022 focused on specific patient populations as possible. In the US, we continue to enroll patients in our Phase 3 ReCePI and RedeS studies and anticipate the enrollment trend to ramp throughout the year assuming COVID-19 disruptions continue to abate.

Another effort I want to take a moment to highlight is a clinical trial in which we are collaborating with the Coalition for National Trauma Research. The study is called PROpOLIs or the Plasma Resuscitation without Lung Injury Study. The focus of this study is on the use of INTERCEPT plasma as part of the resuscitation plan in the initial 24-hours of treatment for Burn Injuries versus current standard of care methods. It is still early days for this study. But I mentioned it because it highlights a potential use case for INTERCEPT plasma in the Burn market which has treatment challenges today with food resuscitation, using crystalloid solutions, and associated safety concerns. We appreciate the support of CNTR and look forward to updating you as this program moves forward at the six US sites enrolling in the study.

In closing, our first quarter was a solid start to this decisive year for Cerus. Our entire organization is aligned and focused on taking advantage of the unique opportunity we have with a truly differentiated product offering in a market that is rapidly adopting solutions against a near-term deadline. Our INTERCEPT Fibrinogen Complex launch continues to gain steam. The market reception for the product has been very encouraging as it relates to availability and operational ease of use for the transfusion service and we are actively putting the various levers in place for this business to grow and succeed in 2021 and beyond.

And finally, as I think about our results and the guidance we have updated on today's call, I'm confident that the momentum in our favor, coupled with a strong recurring revenue nature of our business will translate into solid top-line growth for the full year.

With that, let me turn the call back over to the operator for Q&A.

Questions and Answers:

Operator

Speaker O-Operator

Thank you. [Operator Instructions] Our first question comes from Josh Jennings with Cowen. You may proceed with your question.

Jacob Johnson -- Stephens -- Analyst

Thanks. Good afternoon and congratulations on a nice start to the year and the guidance revision. I wanted to ask about guidance to start off. And $4 million raised at the midpoint beat our estimate by about $2 million. So it suggests the trends are improving and you have more confidence at the beginning of the year, which makes a ton of sense just considering elective procedure trends and your 1Q results. But I wanted to get a better understanding of what's driving that kind of better than beat [Phonetic] guidance raise, better than 1Q beat guidance range in that $4 million range. Is it just anticipation of stronger -- you've seen stronger trends in April of INTERCEPT platelet adoption, is there anything incremental on the PR cryoprecipitate fibrinogen complex launch that you're adding into guidance. But anything I think you can parse out on the guidance revision would be fantastic.

Obi Greenman -- President & Chief Executive Officer

Yes. Thanks, Josh. So the guidance revision is largely driven off the performance of the business in the United States. But I'll turn it over to Vivek to provide maybe a little bit more context for that.

Vivek Jayaraman -- Chief Operating Officer

Sure. I'd be happy to. Hey, Josh. How are you doing?

Jacob Johnson -- Stephens -- Analyst

Great. Thank you.

Vivek Jayaraman -- Chief Operating Officer

Your -- I think your sentiment is the correct one. We do have increasing confidence about the strength of our business in the US. But we have also seen strong contributions internationally. And so, as we look out through the balance of the year there are few factors that are starting to converge that we think will create continued tailwinds for the business.

The first in the US is the fact that the guidance compliance deadline is approaching and we see an increase in the production capability with respect to PR platelets at the big five blood centers. As we've discussed numerous times before, our focus strategically has been on partnering with the big five blood centers, making sure their operations team can produce PR platelets efficiently, and then assisting them were needed to engage and get their hospital customers on board. And the American Red Cross has certainly led the way, but we've seen great progress at the other four blood centers, families as well. And so that's the driver that we're seeing continuing to contribute about the course of the year.

We do -- we are starting to see a bit of an increase in terms of hospital access in the US as the COVID pandemic hopefully starts to sunset, and so customer access issues appear to be improving. And then we will -- while we don't anticipate huge contributions this calendar year, we will start to see cryo commercialization contribute in the second half of the year and that will certainly help the top line as well. So it's really a combination of all those factors that give us confidence in terms of our ability to continue to post strong results and most importantly, provide this -- these products and technologies to patients in need.

Jacob Johnson -- Stephens -- Analyst

Thanks for those extra details. I mean, just one follow-up. It was great to see the NTAP proposal and the recommendation by CMS for pathogen-reduced cryo fibrinogen complex. Just wanted to ask on the pricing that was mentioned in the document. It's around $3,900 per patient on average. Is that pricing kind of built into your TAM calculation, so that $300 million-plus TAM for PR CFC in the US? Or is that a little bit of a stronger pricing level that's baked into that TAM? Thanks for taking the questions.

Obi Greenman -- President & Chief Executive Officer

I'll start with the answer to that question, Josh. And then probably, turn it over to Dr. Hanover who's joined us on the call as well today. She is really the architect behind our global reimbursement strategy but just specifically around this new technology add-on payment that we were happy to see the preliminary ruling on last week.

So historically, I think the way we've talked about pricing on a per-gram basis is that the INTERCEPT Fibrinogen Complex product would be somewhere at the midpoint between sort of conventional cryo, which on a price per fibrinogen. A gram of fibrinogen is about $250 to $300 per gram versus the other end of the spectrum which is fibrinogen concentrate, which is in the range of $800 to $900 per gram. And that we'd be sort of somewhere in the middle of that. But Jess can give you some more perspective on sort of what we put into the NTAP application, and then sort of the implications of what that NTAP ruling -- the preliminary really looks like. Jessica?

Jessica Hanover -- Vice President of Corporate Affairs

Yes, sure. I'm happy to. Thanks for the question. So, following up on what Obi said, that is the pricing that we had proposed to CMS and our NTAP application. So, we were pleased to see it reiterated at this preliminary stage of the decision. And that $3,900 per patient is the average based on what we anticipate Medicare patients would receive based on clinical studies that have been conducted in a similar patient population.

And just a reminder, that the Medicare population that we anticipate will be most applicable is more of a surgical population as opposed to a trauma population, which is usually in a younger patient group. So, overall the NTAP is applicable for Medicare patients and provides incremental reimbursement over a DRG-based payment rate which is the typical inpatient payment system that Medicare uses and that's something that is not currently available -- that incremental reimbursement is not currently available for conventional cryoprecipitate so that's something we see that will be quite positive for hospitals as they're looking at bringing the new product in-house.

Kevin Green -- - Chief Financial Officer

Hey, Josh. This is Kevin. If I could I just wanted to circle back on your guidance question. I'm not sure if it was clear or not. But our thinking around the cryo or IFC contribution this year hasn't changed. And as a result, it's not the driver for the increased guidance. The increased guidance is really as Vivek described, coming from US and EMEA.

Jacob Johnson -- Stephens -- Analyst

Excellent. And then just any recalculation of the cryo TAM. I think you guys have been at $300 million-plus in the US and is this pricing or any of your -- just the early days of getting approval, and customer discussions increased your optimism of that TAM or increased your -- taking the calculation up to a higher level? Thanks.

Obi Greenman -- President & Chief Executive Officer

Yes. Thanks, Josh. It really hasn't -- I mean, sort of that was in the range that we considered when we've talked about the TAM for INTERCEPT Fibrinogen Complex.

I think the challenge still is just sort of that market organically is growing roughly sort of high single-digits on an annual basis. And so, when we, I think, put that TAM out there a couple of years ago using roughly a sort of 750,000-gram equivalents of fibrinogen annually, that's likely gone up and we're attempting to get better sort of real-time information for how large that market is today.

But, I think the NTAP preliminary ruling certainly provides us with more confidence in the market opportunity. As Jessica mentioned, this does provide hospitals with a payment per patient that is incremental to the DRG and that doesn't exist for the other products right now. So, I think it's really -- it's been very well received by customers thus far even though it's only been a week.

Josh Jennings -- Cowen & Company -- Analyst

Excellent. Well, congrats on the entrance of your first therapeutic product into the marketplace, but I appreciate taking all the questions.

Obi Greenman -- President & Chief Executive Officer

Thanks, Josh.

Operator

Thank you. Our next question comes from Mathew Blackman with Stifel. You may proceed with your question.

Mathew Blackman -- Stifel -- Analyst

Good afternoon, everyone. Thanks for taking my questions. Just a couple from me. Obi, I was curious, you said and this is in relation to I think US platelet adoption. You said there were some customers that perhaps are moving faster than you had anticipated. Could you expand on that a little bit? Are these the accounts that were sort of heading down the INTERCEPT path already, similar trajectory to Red Cross? Are you seeing some acceleration in some of those accounts that may have been hedging a bit and dragging their feet a bit? Just any color there would be helpful. And then one follow-up.

Obi Greenman -- President & Chief Executive Officer

Yes. Thanks, Matt. I'll start with the answer to that question then turn it back over to Vivek because he really can provide the best sort of context for the US market.

But we are seeing beyond just the Red Cross, which is moving toward their 100% and really having a lot of success with their hospital or their key account discussions. But we are also seeing that translate to the other sort of four families of the big five, and a few of them moving sort of quickly like the Red Cross. So I think that's what we, I guess, would say was sort of unexpected starting the year. But Vivek, you want to provide a little more color?

Vivek Jayaraman -- Chief Operating Officer

Sure. I'd be happy to. Hey, Matt. As Obi indicated, that certainly did play a role. I think another driver in terms of how we're seeing accelerated growth is the COVID-19 pandemic did increase awareness of the need for safety and to be prepared, so a lot of the discussions we've been having about preparedness and being ready in front of an event started to really resonate because was going on. And you do start to see, you have certain hospital customers that have multiple blood center suppliers. And if one of the blood center suppliers moved to PR, they would start to put pressure on the other blood center supplier to offer PR products as well. And so you started to see a bit of a network effect start to take place where the more certain blood centers and hospitals started to adopt the technology sort of keep -- almost keeping up with the Joneses type of effect that starts to dissipate across both the blood center and hospital market. So, we still have plenty of headroom and a way to go in the US, but certainly, the rate at which things are trending gives us all reasons for encouraging that.

Mathew Blackman -- Stifel -- Analyst

Okay. I appreciate that. But, I was wondering if there was a fear of missing out sort of phenomenon that was playing out perhaps. And maybe, Vivek, while I have you, just curious, a little bit on cryo. Can you maybe give us a little bit more color on some of these conversations you've had, I'd appreciate it. It's early days, I understand there has been significant interest. Yes, what's the push back then, if any?

And I guess as you sort of work your way through this process, how quickly can these conversations turn into revenues? I'm just trying to understand how sort of longer the lag or lead time, however, you want to phrase it would be sort of getting a new customer on board and generating revenues? Any sense of that turn-on time. That's it for me. Thanks.

Vivek Jayaraman -- Chief Operating Officer

Yes. Of course, happy to answer on that. And as you can appreciate seeing new product introductions in a variety of different markets whether in Medtech or pharma, their environment, there isn't a uniform answer necessarily to that question. What I can tell you is, the pre-approval market research that we did customer sensing activity that gave us confidence that there would be strong clinical interest and reception, that has been validated by the conversations we have had with clinicians since approval. And so, that was certainly very encouraging for us this year and that's been, whether it's trauma docs or physicians who are cancer treaters, who are responsible for blood center management within hospitals that there's been uniform interest and enthusiasm for the product in recognition and understanding of its clinical value and application.

The long pole in the tent not surprisingly is hospital contracting. And if a hospital is a stand-alone independent hospital or it's a part of the GPO or IDN, or a part of a larger family of hospitals that really plays a role in terms of how long the process may take. And a number of these things candidly were put on hold in terms of new product introductions that raised during COVID, because that was such a big sucking sound in terms of dominating attention at the hospital level. We're starting to see that dissipate and starting to see a healthier level of engagement and interest in collab. But there isn't sort of the cookie-cutter single answer in terms of how long it takes to translate clinical interest into product ordering.

But, what I can tell you is, we have a few leading indicators that give us confidence that we're fairly close on that end. But it really is hospital-by-hospital in terms of getting to that process. Then it gives us the most confidence because there has been consistent clinical enthusiasm in champions [Phonetic] that we can identify in individual institutions.

Mathew Blackman -- Stifel -- Analyst

Got it. Thanks, again.

Obi Greenman -- President & Chief Executive Officer

Thanks, Matt.

Operator

Thank you. Our next question comes from Jacob Johnson with Stephens. You may proceed with your question.

Jacob Johnson -- Stephens -- Analyst

Hey. Good afternoon. Congrats on a nice start to the year. Maybe, Obi, just first question. Can you just remind us, you called out $1.4 billion TAM today. Can you just roughly break that out between cryo platelets and plasma as you sit here today?

Obi Greenman -- President & Chief Executive Officer

Yes. I mean, I wish I had that slide that we have a lot of time. So I -- maybe Kevin or Jess, correct me if I get this wrong. But you know it's roughly $300 million we identified for the TAM for fibrinogen concentrates. And then the platelet and plasma opportunities are roughly equivalent in the markets where we currently sell. So I think the main point of that comment in the prepared remarks was, we're right now providing guidance of $110 million to $114 million. But there is a lot of room to grow the business in the markets where we're currently approved and with the current product portfolio.

That being said, once we get red cells approved and once we start expanding geographically into APAC and LATAM more aggressively, that really opens up the full $7 billion [Phonetic] TAM.

Jacob Johnson -- Stephens -- Analyst

Got it. Thanks, Obi. And then Kevin, you said to expect a similar dynamic for gross margins for the remainder of the year. Should we just assume kind of 52.5% or so for product gross margins throughout the rest of the year or any caution against that?

Kevin Green -- - Chief Financial Officer

No. I think that's right. I mean when we had the Q4 call, we kind of predicted this was going to happen. It's really the function of the growth coming from the US and to the extent that it's overweighted from the Red Cross that's going to have an impact since they are single-dose consumers. So, we expected 200 to 300 basis points from last year's results and that's what we're seeing. And we have no reason to believe that it's going to be different as we move forward given our commentary on the revised guidance.

Jacob Johnson -- Stephens -- Analyst

Great. I'll leave it there. Thanks.

Obi Greenman -- President & Chief Executive Officer

Thanks, Jacob.

Operator

Thank you. [Operator Instructions] Our next question comes from Mark Massaro with BTIG. You may proceed with your question.

Unidentified Participant

Hey, this is Vivian [Phonetic] on for Mark. Thanks for taking the question.

Obi Greenman -- President & Chief Executive Officer

Hi, Vivian.

Unidentified Participant

Hi. So on cryo, I believe you mentioned a broad national launch post-BLA approval sometime in 2021. Should we be expecting a Q1 2022 launch there or is it too early to call? And if you could also walk us through some of the steps involved in securing the BLA approval? Thanks

Obi Greenman -- President & Chief Executive Officer

Yes. So the BLA submissions will take place sort of in the middle of this year and we still anticipate that that will take 12 months unless it moves more quickly than that with the FDA. And again, this is the production partners -- the blood centers that we've partnered with, they're going to be making that submission with our support. So, that's under way right now as far as the submission process, but it hasn't -- they haven't submitted their BLAs yet. So that would sort of predict a middle of 2022 nationwide rollout.

In parallel with that, in order to access some additional states that are significant and where patients, there's obviously a clear unmet need for this product. We are looking and are in advanced discussions with additional production partners to add additional states over the course of the next several quarters. So that allows us to access those states in advance of the nationwide rollout in mid-2022.

Unidentified Participant

Okay. Great. Thank you. And if I could also ask how the partnerships in the LATAM region, as well as China have been progressing with ZBK specifically. And if you could provide an update on the [indecipherable] in China.

Obi Greenman -- President & Chief Executive Officer

Yes. I'll start there and maybe Vivek or Kevin can add. Because you guys are participating in this joint venture discussions more frequently than I am. But ZBK has proven to be a great partner thus far and we're really excited to be working with them. Right now, the discussion really is around -- is what's the scope of a clinical trial that's required in China to provide that data, that the NMPA is looking for with regard to transfusion in Chinese patients. To remind you, we did do a study historically in Hong Kong, a relatively large study in stem cell transplant recipients. And just looking at sort of the aggregate of not only our clinical data, our hemovigilance data from all the years we've been on the market in Europe and the US now, and that significant combined with that Hong Kong study and then what if any additional studies are required for that NMPA submission.

Vivek, any other context can you provide?

Vivek Jayaraman -- Chief Operating Officer

I think that covers by and large for China. I think there was a question about LATAM [Phonetic]. Just one point I'd make -- will get announced in -- fairly recently securing a couple of tenders in Brazil. The COVID impact in Latin America, in particular, in Brazil has been pretty significant. So, we have seen that as a bit of a headwind in terms of further penetration. Having said that, we continue to put -- bring blood centers online across Latin America, but there is certainly been a headwind, COVID-related that we're facing in Brazil. But, I think the China point will be captured well.

Unidentified Participant

Okay, great. Thanks for taking the questions.

Obi Greenman -- President & Chief Executive Officer

Thanks a lot, Vivian.

Operator

Thank you. [Operator Instructions] And I'm not showing any further questions at this time. I would now like to turn the call back over to Obi Greenman for any closing remarks.

Obi Greenman -- President & Chief Executive Officer

Well, thank you all for joining us today. It's an exciting year for Cerus and we look forward to updating you further on our Q2 call which will likely be at the end of July. Thanks very much.

Duration: 42 minutes

Call participants:

Matt Notarianni -- Senior Director of Investor Relations

Obi Greenman -- President & Chief Executive Officer

Vivek Jayaraman -- Chief Operating Officer

Kevin Green -- - Chief Financial Officer

Jessica Hanover -- Vice President of Corporate Affairs

Jacob Johnson -- Stephens -- Analyst

Josh Jennings -- Cowen & Company -- Analyst

Mathew Blackman -- Stifel -- Analyst

Unidentified Participant

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