What happened

Shares of Cerus Corporation (NASDAQ:CERS) gained over 14% Wednesday after announcing that an expected supply disruption of its main product could be less severe than previously feared. Fresenius Kabi announced weeks ago that it was experiencing delays gaining U.S. Food and Drug Administration approval for changes to a medical device used to manufacture platelet additive solution (PAS), which led to shortages across the United States. That was a problem for Cerus Corporation, which relies on a steady supply of PAS to go along with one of two approved formulations containing Intercept platelets manufactured at blood centers across the country.

On Wednesday, management said the FDA is reviewing changes to Fresenius Kabi's medical device through a mechanism called Changes Being Effected in 30 Days (CBE-30). That allows sales of the medical device to continue while the application is being reviewed, thus lessening the impact on sales of Intercept platelets. As of 12:46 p.m. EDT, the stock had settled to a 15.3% gain.

A woman looking at her phone and celebrating as $20 bills fall around her.

Image source: Getty Images.

So what

It's been a rough year for Cerus Corporation stock, which headed toward six-year lows weeks ago. A rough start during the first quarter of 2017 forced management to gently reduce its original full-year financial guidance. The threat of a severe supply disruption of PAS announced on May 25 led to a second reduction to full-year expectations.

The most recent expectations call for 2017 revenue to fall in the range of $38 million to $46 million, down from the original range of $45 million to $50 million. Although that's still about as good as 2016 revenue of $39 million, it's a sharp kick in the gut to investors that were told to expect rapid growth this year.

Wednesday's news provides some hope that significant revenue growth is still attainable in 2017. However, management spared investors by forgoing the opportunity to announce a fourth version of full-year guidance, and will instead wait to see how the market for Intercept plays out while the FDA reviews changes to Fresenius Kabi's medical device.

Now what

Wednesday's announcement is a piece of much-needed good news for investors. While a few details still need to be sorted out, Cerus Corporation is cautiously optimistic that the supply disruption will be less severe than the worst-case scenario anticipated just a few weeks ago. That gets the company one small step closer to turning a profit, although that goal -- an important one for investors -- remains very far away.

Maxx Chatsko has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.