<SEC-DOCUMENT>0001193125-22-267674.txt : 20221206
<SEC-HEADER>0001193125-22-267674.hdr.sgml : 20221206
<ACCEPTANCE-DATETIME>20221024172653
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-22-267674
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20221024

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CERUS CORP
		CENTRAL INDEX KEY:			0001020214
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				680262011
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1220 CONCORD AVENUE
		STREET 2:		SUITE 600
		CITY:			CONCORD
		STATE:			CA
		ZIP:			94520
		BUSINESS PHONE:		9252886000

	MAIL ADDRESS:	
		STREET 1:		1220 CONCORD AVENUE
		STREET 2:		SUITE 600
		CITY:			CONCORD
		STATE:			CA
		ZIP:			94520

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CERUS TECHNOLOGIES INC
		DATE OF NAME CHANGE:	19960731
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;24, 2022 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of
Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Life Sciences </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street,
N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left">Attn:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Lynn Dicker </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:5%; font-size:10pt; font-family:Times New Roman">Tara Harkins </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Cerus Corporation </B></P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:5%; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2021 filed February&nbsp;22, 2022</B> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:5%; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">8-K</FONT> filed August&nbsp;4, 2022</B> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:5%; font-size:10pt; font-family:Times New Roman"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;000-21937</FONT></B> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are in receipt of the comment letter,
dated September&nbsp;23, 2022, from the staff (the &#147;<B><I>Staff</I></B>&#148;) of the Securities and Exchange Commission (the &#147;<B><I>SEC</I></B>&#148;) regarding the above captioned filings on Form
<FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2021, filed on February&nbsp;22, 2022 (the &#147;<B><I>Form <FONT STYLE="white-space:nowrap">10-K</FONT></I></B>&#148;) and
<FONT STYLE="white-space:nowrap">Form&nbsp;8-K,</FONT> filed on August&nbsp;4, 2022 (the &#147;<B><I>Form <FONT STYLE="white-space:nowrap">8-K</FONT></I></B>&#148;).&nbsp;Below is the response of Cerus Corporation (the
&#147;<B><I>Company</I></B>,&#148; &#147;<B><I>we</I></B>,&#148; &#147;<B><I>our</I></B>&#148; or similar terminology) to the Staff&#146;s comments. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For
the Staff&#146;s convenience, we have incorporated the Staff&#146;s comments into this response letter in italics. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I><U>Form <FONT
STYLE="white-space:nowrap">8-K</FONT> Filed on August&nbsp;4, 2022 </U></I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I><U>Exhibits </U></I></B></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>1.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>We note that you are adjusting your <FONT STYLE="white-space:nowrap">non-GAAP</FONT> measure, Adjusted
EBITDA, for nonoperating expenses, government contract revenue, and for direct expenses related to work supporting government contracts, which are reimbursed and reflected under government contract revenue in the condensed consolidated statement of
operations. Please tell us why you believe the adjustment for government contract revenue and for direct expenses related to working government contracts is consistent with the guidance in Question 100.01 of the
<FONT STYLE="white-space:nowrap">Non-GAAP</FONT> Financial Measures Compliance and Disclosure Interpretations, given that these items appear to be normal and recurring. Please also explain to us in more detail the nature of the <FONT
STYLE="white-space:nowrap">non-operating</FONT> expenses that are being in adjusted for in your measure. </I></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response</B>: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In response to
the Staff&acute;s comment, the Company respectfully advises the Staff that it considered Question 100.01 of <FONT STYLE="white-space:nowrap">the&nbsp;Non-GAAP&nbsp;Compliance</FONT> and Disclosure Interpretations
<FONT STYLE="white-space:nowrap">(&#147;Non-GAAP</FONT> C&amp;DIs&#148;), as well as Rule 100(b) of Regulation G to which Question 100.01 relates, at the outset of deriving and presenting its Adjusted EBIDTA measure. In this regard, the Company
believes that its presentation <FONT STYLE="white-space:nowrap">of&nbsp;non-GAAP&nbsp;Adjusted</FONT> EBIDTA that excludes government contract revenue and the expenses directly related to working government contracts is appropriate and is otherwise
not misleading. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Since the Company&#146;s inception, the Company has devoted substantially all of its efforts and resources to the
research, development, clinical testing and commercialization of the INTERCEPT </P>
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Blood System. While the Company also conducts activities under two contracts with U.S. federal agencies, these activities are conducted at the request of such federal agencies, are ancillary to
the Company&#146;s business of commercializing the INTERCEPT Blood System, and generally relate to preparedness for and responding to health security threats. Accordingly, the Company views these activities differently from its normal ongoing
operating performance, which is substantially focused on commercializing the INTERCEPT Blood System, and therefore we believe that adjustment for these activities provides important clarity to investors in this regard. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In addition, the Company respectfully advises the Staff that qualified costs associated with the Company&#146;s government contract activities
are incurred for reimbursement under such contracts. In this regard, government contract revenue consists of allowable direct contract costs plus allowable calculated indirect costs based on approved provisional indirect rates, conceptually covering
a portion of the fringe benefits, overhead and general and administrative expenses. Importantly, because the Company&#146;s government contract revenue includes allowable calculated indirect costs (which calculated costs are <I>not</I> excluded from
the Company&#146;s Adjusted EBITDA measure), government contract revenue for any period will always exceed the reimbursed direct contract costs, which factors the Company took into account in determining the appropriateness of excluding these items
from its Adjusted EBITDA measure. Therefore, we respectfully note that, by excluding the benefit from these ancillary items from our Adjusted EBITDA measure, this is a conservative approach that enables the Company&#146;s investors to measure
Company performance based on its business of commercializing the INTERCEPT Blood System, which the Company believes is the metric that is most important to investors as well as enabling investors to view the operating performance of the Company
through the eyes of management. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In addition, consistent with Question 102.03 of the <FONT STYLE="white-space:nowrap">Non-GAAP</FONT>
C&amp;DIs, the Company does not describe government contract revenue and related direct costs <FONT STYLE="white-space:nowrap">as&nbsp;non-recurring,&nbsp;infrequent</FONT> or unusual, or in other terms that mischaracterize their frequency. The
Company also clearly explains the limitations of <FONT STYLE="white-space:nowrap">its&nbsp;non-GAAP&nbsp;financial</FONT> measures, including by explaining that such financial measures should not be considered in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP, and should only be used to supplement an understanding of the Company&#146;s operating results as reported under GAAP. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">As a result of the factors summarized above, the Company respectfully advises the Staff that it believes that excluding government contract
revenue and the related direct costs from its&nbsp;Adjusted EBITDA measure is appropriate, is not misleading and does not violate Rule 100(b) of Regulation G. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In response to the last sentence of the Staff&#146;s comment, the Company respectfully advises the Staff that
<FONT STYLE="white-space:nowrap">non-operating</FONT> expenses being adjusted for in its Adjusted EBITDA measure primarily includes (1)&nbsp;net loss attributable to noncontrolling interest; (2)&nbsp;provision for income taxes; (3)&nbsp;interest
income and interest expense; and (4)&nbsp;foreign exchange gains and losses. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges that it is responsible for the
adequacy and accuracy of the disclosure in the Form <FONT STYLE="white-space:nowrap">10-K</FONT> and the Form <FONT STYLE="white-space:nowrap">8-K.</FONT> Further, the Company respectfully advises the Staff that it will continue to regularly review
the appropriateness of <FONT STYLE="white-space:nowrap">its&nbsp;non-GAAP&nbsp;financial</FONT> measures and related adjustments to ensure that such financial measures are not misleading. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">* * * * * </P> <P STYLE="font-size:18pt; margin-top:0pt; margin-bottom:0pt">&nbsp;</P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Please advise us if we can provide any further information or assistance to facilitate your review. Please
direct any questions or further comments regarding this response letter to the undersigned at (925) <FONT STYLE="white-space:nowrap">288-6000.</FONT> Thank you. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sincerely, </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Kevin Green</P></TD></TR>
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<TD VALIGN="top">Kevin Green</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Vice President, Finance and Chief Financial Officer</TD></TR>
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<TD VALIGN="top">Cerus Corporation</TD></TR>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Chrystal Menard, Cerus Corporation </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Chadwick L. Mills, Cooley LLP </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>
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