What happened

Shares of biomedical products company Cerus Corporation (NASDAQ:CERS) jumped over 21% this morning, after the company released third-quarter 2017 financial results following market close yesterday. Cerus reported growing revenue and a shrinking net loss, and said it had made several inroads to expand its business in Europe.

Management narrowed its full-year 2017 product revenue range to between $41 million and $43 million, which is within the broader previous range of $40 million to $46 million. Lowering the high end of the range didn't seem to matter to Mr. Market, which appears to be giving the company the benefit of the doubt following several favorable business updates.

As of 12:58 p.m. EDT, the stock had settled to a 23.6% gain.

A woman checks her smartphone and pumps her fist as dollar bills float down around her from above.

Image source: Getty Images.

So what

This has been a difficult year for Cerus Corporation. Already racing to grow its top line and achieve profitable operations, the company was thrown a curveball when a third-party medical device company announced supply disruptions to a platelet additive solution that major customers of Cerus' Intercept Blood System rely upon. That forced management to make several downward revisions for its full-year 2017 outlook.

The situation has slowly improved. Shareholders were greeted with several positive business announcements in October alone:

  • The U.S. Food and Drug Administration approved a Biologic License Application from the Rhode Island Blood Center. Approval will allow the center to manufacture platelets using the Intercept Blood System and ship them across state lines, which could help grow availability of Cerus' products.
  • Beginning on the first day of 2018, Cerus is eligible to receive reimbursement for pathogen-inactivated platelets in Germany, the largest platelet market in Europe.
  • Cerus has a new distribution agreement with a private company in Italy and a new supply agreement with one of the largest blood banks in Spain.

Simply put, Wall Street is excited that the company is inching closer to delivering on its full potential. With a net loss of $49 million through the first nine months of 2017, that can't come soon enough.

Now what

Shareholders should be happy with the recent pace of developments. Management appears to be handling the factors within its control, while doing its best to navigate choppy external developments. Cerus Corporation is moving in the right direction, but it will be quite some time before it reaches profitable operations, if it achieves that milestone at all.