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Cerus climbs on strong 4Q blood system sales

NEW YORK (AP) -- Shares of Cerus Corp. climbed Wednesday after the biotechnology company posted strong sales of its Intercept blood screening system.

THE SPARK: The Concord, Calif., company reported fourth-quarter results after the market closed on Tuesday. Cerus said its revenue grew 61 percent to $10.4 million. Most of that growth came from greater sales of disposable kits used on the Intercept system, which is designed to clean bacteria, viruses, and parasites out of donated blood platelets.

Cerus said it lost $7.7 million, or 16 cents per share, during the December quarter. In the fourth quarter of 2010 it lost $2.4 million, or 6 cents per share. Product sales rose to $9.9 million from $6 million. The rest of the company's revenue comes from government grants and other cooperative agreements.

Analysts expected a loss of 9 cents per share on $8.1 million in revenue, according to FactSet.

THE BIG PICTURE: Cerus is developing a system a blood screening system for red blood cells. Its products have not been approved in the U.S. The company said Tuesday that it is preparing to start two late-stage clinical trials that are intended to support approval of the red blood cell system in Europe. It is also designing a study in the U.S.

Cerus lost $17 million for all of 2011, slightly more than it lost in 2010. Because its share count increased, the loss per share in 2011 was 35 cents after losing 42 cents per share in 2010. Revenue grew 43 percent, to $33 million from $23.1 million, as product sales increased 41 percent, to $30.6 million.

The company said its product revenue will grow another 11 to 18 percent in 2012, to $34 million to $36 million.

Analysts expected the company to report $35.9 million in annual revenue.

THE ANALYSIS: Robert W. Baird & Co. analyst Christopher Raymond said Cerus is making progress toward approval of the Intercept red blood cell system, and added that Cerus has reported strong growth in Intercept kit sales over the last few quarters.

"We think at long last, Cerus may be turning the corner toward sustainable momentum on numerous fronts," he wrote. Raymond upgraded the stock to "Outperform" from "Neutral" and raised his price target to $6 per share from $3.

SHARE ACTION: Cerus stock rose 38 cents, or 10.8 percent, to $3.90 in afternoon trading. The shares hit a 52-week high of $4.09 earlier in the session.