Thank you, Lainie, and good afternoon. We are pleased to report another quarter of strong commercial execution, as we delivered our highest ever quarterly product revenue at $18.2 million. Growth was fueled by increasing adoption of INTERCEPT players, both in the US and abroad. Vivek will provide further detail later in the call. Based on this strong demand for INTERCEPT, we are raising our product revenue guidance range to $72 million to $75 million. Kevin will cover the specifics in his prepared remarks.

I'd like to share some recent evidence of the growing awareness and clinical acceptance of pathogen inactivation to help safeguard the blood supply, which we have seen since we shared on our Q1 conference call, -- since what we shared on our Q1 conference call. In mid-May, the FDA issued a final guidance document outlining strategies to reduce the risk of transfusion transmitted in the Babesiosis. Babesiosis transmitted by a microscopic tick-born parasite present in Northeast and upper Midwest regions of the US.

Many individuals infected with the Babesia are asymptomatic and their blood donations have been documented to transmit disease. The Babesias guidance document requires blood donors that collect donations in 14 states and Washington, D.C. to either test each donation from Babesia using the FDA approved nucleic acid test or to treat each platelet component with an FDA approved pathogen inactivation technology. The recommendation applies all three blood components and has a 12-month deadline for compliance.

We think that the inclusion of pathogen reduction in this new guidance document underscores the overall utility of the INTERCEPT blood system. The simplicity of having one intervention that can meet current FDA blood safety requirements, prospectively address the potential future threats for emerging infectious diseases can help maintain blood availability as a unique appeal. It can also potentially improve blood center logistics by minimizing the number of codes for blood components and the associated complexity of managing that inventory within blood centers and hospitals.

The recent AABB FDA liaison biannual meeting minutes posted on the AABB website provide several important observations. The minutes indicate that the FDA is actively working on several guidance documents in 2019, including a final version of the bacterial risk control strategies for platelets, which they note is due out this year. In addition, the Director of FDA Center for Biologics Evaluation and Research participant in this liaison meeting and has also co-authored an editorial in the dural transfusion in June titled Toward's Universal Pathogen Reduction of the blood supply.

In this article, the authors note the important role that pathogen reduction can play as an alternative to traditional testing methods. Thereby conferring a greater assurance of safety while potentially lowering costs due to the elimination of tests. The FDA continues to position pathogen reduction technology as a high priority for the blood safety and availability, and has requested an increased budget to support continued research in this field. As the market leader in pathogen inactivation, we are encouraged by this elevated level of engagement by the FDA and believe it will influence other regulators around the world and have implications for our global business over the mid to long-term.

With that, let me turn it over to Vivek for an update on our commercial business.

Vivek K. Jayaraman -- Chief Commercial Officer

Thank you, Obi. I'm pleased to report that global adoption of INTERCEPT continues to ramp. We believe INTERCEPT is becoming the preferred safety option, as awareness of bacterial contamination of platelets increases and the challenges associated with current bacterial detection strategies persist. As evidenced, during the last quarter, we experienced strong demand for INTERCEPT case in Europe, Middle East and Africa region, as well as in the US. As we've stated previously, the US platelet market is fairly concentrated with the top five blood center network distributing approximately 70% of the total platelet supply. We have contracts in place of all five of these large blood centers and are actively engaged with them to increase their production and distribution of INTERCEPT platelet.

Of note, the American Red Cross is at the forefront in embracing pathogen reduction technology. In fact, they have communicated broadly that pathogen reduction is a strategic priority for their organization. INTERCEPT is now being produced at 17 Red Cross manufacturing sites. Furthermore, 13 of these sites have a BLA clearance, which allows the INTERCEPT pathogen-reduced platelets across state line. Red Cross Hospital customers value INTERCEPT-treated platelet, given the compelling clinical and logistical advantages they confirm. For the Red Cross, pathogen reduction, pathogen-reduced platelets are an important contributor to restoring and sustainable blood supply, by allowing blood collectors to provide safe, effective blood products while offsetting certain costs.

Once the FDA guidance is published, we anticipate our engagement with the other major blood center to increase, as they seek to realize similar benefits and follow the American Red Cross. As Obi mentioned, there are many reasons to expect issuance of a final bacterial safety guidance this year. Our recently released Department of Agriculture Appropriations Bill includes a statement that it is to be published during this FDA fiscal year, which ends September 30. What's most encouraging is an independent of a final guidance document many blood centers and hospitals are proactively embracing pathogen reduction technology in order to be ahead of the curve and provide the safest possible product to their customers and patients.

In anticipation of the final guidance publication, we have been actively engaging the organization for potential acceleration, guidance for the product demand. We are prepared to scale our efforts to meet customer needs at both the hospital and blood center. Historically, FDA guidance documents specify a 12-month compliance period for a newly issued guidance, which then requires all blood centers and hospitals in the US to move expeditiously in order to meet the new standard. Within such a timeframe, our focus will be on collaboration with our blood center customers on their production ramp, while assisting hospitals in their conversion to use the pathogen-reduced platelets. Much of this work has been under way for some time and we have made strong progress.

Our growth story extends beyond the US. Last quarter, we experienced strong year-over-year revenue growth in multiple country. International growth was driven by multiple factors across several geography. For example, we secured important wins in key strategic accounts like the Dubai Blood Bank and Warsaw Blood Center. In addition, we witnessed a marked increase in customer interest INTERCEPT at the most recent International Society of Blood Transfusion meeting in Basel, Switzerland. Furthermore, the recent CE Mark clearance for our INTERCEPT plasma kit with DEHP-free plastic will enable us to fulfill increasing customer demand for plasma, which is growing as INTERCEPT platelet adoption increases.

In summary, I continue to be very encouraged by the customer enthusiasm for INTERCEPT across the globe, and we are committed to ensuring that our blood center partners and their hospital customers can offer patients the safest blood possible.

Now, let me turn over the call to Kevin to provide an update on Q2 financial results.

Kevin D. Green -- Vice President, Finance and Chief Financial Officer

Thank you, Vivek and good afternoon, everyone. Today, we reported second quarter product revenue of $18.2 million, an 18% increase compared to the $15.4 million reported during Q2 of 2018. On a year-to-date basis, product revenue totaled $35.7 million, up 23% compared to the $29 million reported during the first half of 2018. The recent revenue growth has been strong. The underlying number of INTERCEPT platelet doses produced has been growing even faster. One reason for the differential between reported revenue and growth in demand is year-over-year changes in foreign currency exchange rates, which resulted in an FX headwind of approximately 6% compared to Q2 2018 reported revenues.

French conversion to double dose kits is another factor. And I'd like to share some statistics that demonstrate the true expansion, we are seeing in INTERCEPT treated platelets being made available to patients. Global demand for INTERCEPT kits increased 23% during Q2 2019, compared to the prior year period, with a greatest percentage of growth coming from the US. However, taking into account the French product mix shift to double dose kits, the calculated number of treated platelet doses increased approximately 40% during the second quarter, compared to the prior year.

When looking at the first half of 2019 compared to that of 2018, worldwide demand for INTERCEPT kits increased nearly 30%, while the calculated number of treatable platelet doses increased by roughly 40%. In terms of product mix sold during the quarter, platelet kits sales accounted for the majority of our reported product revenue at approximately 90%. Separately reported from our product revenue, government contract revenue during the second quarter totaled $4.3 million compared to $4.0 million during the prior year period. On a year-to-date basis, government contract revenue was $8.7 million compared to $7.5 million during the 2018 period.

Before discussing other second quarter financial results, I want to remind you that historically, we often see a seasonal impact to third quarter revenue, particularly in Europe, which slows down in the summer months as potential blood donors head off for holiday. Nevertheless, despite expected Q3 seasonality and potential FX headwinds, the continued out performance in our EMEA business and the growing demand for INTERCEPT in the US, gives us confidence in raising our product revenue guidance to a range of $72 million to $75 million from our previous range of $71 million to $74 million. This new guidance represents growth of approximately 18% to 23% over 2018.

Now let's move the discussion to reported gross margins. Gross margins on product sales for the quarter were 55%, compared to 50 % for Q2 2018. Year-to-date gross margins were 54% compared to 48 % during the first half of 2018. These margin increases were primarily due to economies of scale we realized over the past six months. Given the larger production levels year-over-year, which drove down costs on our kids sold.

I now like to discuss operating expenses, which totaled $31.2 million during the quarter, compared to $24.3 million during Q2 of 2018. Specifically, SGA expenses during the quarter, accounted for $16.7 million compared to $14.4 million during Q2 2018, with the increase driven from investments made in manufacturing and quality oversight of production and preparatory investments in advance of the expected Cryoprecipitate launch. On a year-to-date basis, SG&A spending during the first half, totaled $32.9 million compared to $28 million during the first half of 2018.

Research and development expenses for the quarter totaled $14.4 million compared to $9.9 million during the prior year. The increase in R&D expenses was driven from increased costs for red blood cell program, including BARDA related activities. Investments for anticipated PMA supplement submission for pathogen-reduced Cryoprecipitate and label expansion for our platelet and plasma kits in the US. On a year-to-date basis, R&D expenses totaled $27.9 million compared to $19.3 million during the prior year period. As clinical activities tied to our US Red Cell program progress and accelerate, we expect R&D expenses to increase with a corresponding increase in BARDA funded revenues.

Net loss for the second quarter totaled $17.6 million or $0.13 per diluted share compared to a net loss of $13.3 million or $0.10 per diluted share for the prior year period. Year-to-date net loss was $36.4 million or$0.26 per diluted share compared to a net loss of $27.2 million or $0.21 per diluted share during the first half of 2018. In terms of our balance sheet, we ended the second quarter with approximately $96.2 million of cash, cash equivalents and short term investments on hand. During the quarter, we began utilizing our revolving line of credit to finance investments in working capital. Notably in inventory, as we position ourselves to supply customers in advance of anticipated demand growth.

With that, let me turn the call back over to Obi.

William M. Greenman -- President and Chief Executive Officer

Thanks, Kevin. Today, I also wanted to provide an update on three key development projects, including INTERCEPT plasma, INTERCEPT red blood cells and pathogen-reduced cryoprecipitate. It's an exciting time to be able to discuss these significant opportunities as they progress toward potential approvals. First Vivek already noted the potential significance of a recent CE Mark approval for an INTERCEPT plasma kit with DEHP-free plastic. We planned a similar submission in the US by year end and have already heard an interest from hospitals that are converting to universal use of pathogen-reduce platelets.

Second, our CE Mark filing on INTERCEPT Red Blood Cells is still under accurate review and we are engaging frequently with our notified body the TUV and our Competent Authority, the Irish Health Products Regulatory Authority on questions arising from our submission. We've already responded too and addressed a key subset of questions by the TUV and the dialogue with the TUV around the new medical device regulation framework continues to be constructive, as we transition from the Medical Device Directive for Intercept Red Cell submission and for all of our products in 2020. Further, in the US, our two active Phase III site studies for Intercept Red Cells are continuing to enroll with a number of additional study sites coming online through the end of the year.

Finally, we continue to be excited about pathogen reduced cryoprecipitate, given the potential benefit for bleeding patients and the size of the market opportunity. To help increase clinicians awareness about our cryo program. Over the past year, we have participated in a number of conferences, such as the Society of Cardiovascular Anesthesiologists and the Society for Obstetric Anesthesia and Perinatology. Feedback from clinicians at these meetings on the utility of a thought five date thought. [Indecipherable] has been very encouraging. We believe the US market opportunity for pathogen reduced cryo could be north of $200 million annually and potentially growing with the increasing use of coagulation monitoring in the hospitals.

Following our FDA Breakthrough Device designation, we have been engaging with the FDA and the agency has been responsive, timely and helpful. We've been encouraged by the recent feedback that could both allow for improved production efficiencies and a potential label that will allow final delivery dose specifications that are important to the transition physicians, given the timing criticality for transfusion of cryo. We're in the process of generating additional data to support our anticipated product label, which we think will allow us to meaningfully differentiate ourselves from conventional cryo. They're looking forward to our expected US product launch in 2020.

Before I turn it back to the operator for questions, I want to remind everyone about our growth prospects that we outlined at our Institutional Investor Meeting last October. At that time, we provided a framework and how we plan to double our product revenue base from our existing product lines INTERCEPT platelet and plasma over four to five years, which translates into 15% and 20% compound annual growth. We are well on our way to deliver on this goal, given the 40% growth we reported in 2018 and with our increased guidance today, that translates into a targeted 18% to 23% for this year.

As we look further ahead, we think our plan in plasma product lines in North America and EMEA alone can translate into well over $100 million in annual product revenue. New geographies and new product lines such as pathogen-reduced cryoprecipitate and INTERCEPT Red Blood Cells and further to our growth prospects. In closing, I would like to acknowledge the efforts of the Cerus team to make INTERCEPT the global standard of care. The team of Cerus stands out in managing the multiple priorities required to transform transfusion medicine. While maintaining a focus on being a great partner for expanding number of national blood services and large blood centers.

With that, operator, please open the call for questions.

Questions and Answers:

Operator

[Operator Instructions] And our first question comes from the line of Sung Ji Nam with BTIG. Your line is now open.

Sung Ji Nam -- BTIG -- Analyst

Hi. Thanks for taking the questions. Congratulations on the quarter. I just have a few quick questions. First, the 13 American Red Cross sites receiving BLA clearance, that's pretty much constitute all the sites that are pursuing that, the BLA, is that correct?

William M. Greenman -- President and Chief Executive Officer

Go ahead, Vivek.

Vivek K. Jayaraman -- Chief Commercial Officer

Yeah. All the manufacturing sites are fulfilling in BLA so there are 17 sites that are currently manufacturing, 13 of them have a BLA. The other four are in process.

Sung Ji Nam -- BTIG -- Analyst

I see. Okay. And then secondly, just curious about it sounds like the enrollment for the red cell trials are progressing nicely in the US. Just trying to get a sense of when that kind of -- when you might see that ramping up. Is that -- do you think that could happen in the second half of the year? I'm just trying to get a better sense of BARDA revenue recognition for the remainder of the year or do you think that's something that would kind of ramp up more over in 2020 timeframe?

William M. Greenman -- President and Chief Executive Officer

Thanks, Sung Ji. I'll let Kevin handle the second part of that question. We are seeing the two study sites rolling at a faster clip with RedeS performing really well, rest of these still has a number of sites to add through other end of the year. Kevin, do you have anything you want to comment about BARDA funding revenue?

Kevin D. Green -- Vice President, Finance and Chief Financial Officer

No. I think that's right. We do expect it to increase as more sites and more patients are rolling and that has kind of a cumulative effect. So sites are not rolling off, we are just adding additional sites, so we expect it to go up.

Sung Ji Nam -- BTIG -- Analyst

Okay. Great. And then just lastly from me, in terms of the red blood cell review process in Europe. Could you give us -- is there any update in terms of the timeline that you guys provided last quarter? We'd love to hear any kind of additional thoughts there. Thank you.

William M. Greenman -- President and Chief Executive Officer

Yeah. Thanks, Sung Ji. So, obviously qualifying a new GSH suppliers as a top priority for us. We were actively doing that at the moment that just came out of a trip to Switzerland meeting with one of those suppliers are really encouraged by their engagement and then they are looking to have the new GSH suppliers validated by the middle of next year. As far as the overall timelines for CE Mark approval, I think its still a little premature for us to try and give a compressed timeline versus what we gave on the last call, but we are looking at multiple ways to try and compress that timeline.

Sung Ji Nam -- BTIG -- Analyst

Great. Thank you so much.

William M. Greenman -- President and Chief Executive Officer

Thanks.

Operator

Thank you. And our next question comes from the line of Josh Jennings with Cowen. Your line is now open.

Josh Jennings -- Cowen and Company -- Analyst

Hi. Thanks for taking the questions and congratulations on another record quarter. I was hoping to just start off with just a couple of questions on the US red blood franchise and with those five blood centers that represent 70% of volumes in the US. Are you -- you have contracts with all of them, but is the revenue generation distributed evenly throughout those five? Is it mostly driven by one or two? Just trying to think about where you guys fit with those contracts and then how all five of them make up the 70% have started to ramp up manufacturing, so that you can speak to from a high level?

William M. Greenman -- President and Chief Executive Officer

Yeah. I think, Vivek is best placed to answer that question.

Vivek K. Jayaraman -- Chief Commercial Officer

Hey, Josh. As we indicated in the past, I mentioned earlier in the call, the American Red Cross really is leading the way and they've determined that pathogen reduction is the strategic priority for them. So they represent our single largest customer in the US and certainly the largest of the Take Five and they're often carrying BLAs and the rest. The remaining four have all started the process of producing INTERCEPT and distributing to hospital customers and there are varying degrees in terms of the level of production. But out of the five, the ARC, which is by far the largest and they represent about 40% of the market, they're out front in terms of INTERCEPT adoption.

Josh Jennings -- Cowen and Company -- Analyst

Great. Thanks, Vivek, for that. And I guess one of the follow up. I mean, clearly the FDA bacterial risk guidance document is coming soon. You guys have been ramping up manufacturing over the last two years. Can you just give us an idea of where you are from a capacity standpoint and where you're sitting in terms of handling the increased demand that we forecast will be there posted the guidance document?

William M. Greenman -- President and Chief Executive Officer

Yeah. I think we're really in a good spot now with additional capacity coming online in 2020. I think some of Kevin's comments during the prepared remarks were really focused on that as well, as far as getting our inventory in the right position to be able to take advantage of the guidance once it is finalized. So I think, all in all, we feel very confident on where we are going into 2020 and assuming some kind of 12-month compliance period.

Josh Jennings -- Cowen and Company -- Analyst

Great. Just one last follow up on the INTERCEPT cryo. Sounds like there's some burgeoning interest there within a couple of society and you've had some constructive discussions with the FDA. Could you just help us -- just went through just what are the next steps? And when should we be thinking about submission and potential approval just so we can think about when we could start to seeing cryo revenues in the US and in our model? Thanks a lot.

William M. Greenman -- President and Chief Executive Officer

Yeah. Thanks, Josh. So, as I mentioned on the last call, there are some things that we're looking to do with regard to the private label. We subsequently had a discussion with the FDA on these topics, and so really love that discussion, encouraged about what's possible to incorporate the final label. It does require that we do some stability and sterility studies on going forward and read out of that data will be sort of toward the end of this year into early next. So we're looking at a submission in the first half of 2020 with an approval in the second half of 2020. So I think we're still looking to see revenue contributions in the 2020 timeframe for the cryoprecipitate product.

Josh Jennings -- Cowen and Company -- Analyst

Thanks again.

William M. Greenman -- President and Chief Executive Officer

Thank you.

Operator

Thank you. And our next question comes from the line of Jordan Abrams with Cantor Fitzgerald. Your line is now open.

Jordan Abrams -- Cantor Fitzgerald -- Analyst

Hey, guys. Thanks for taking the questions. Guidance implies second half product growth of 18% at the midpoint and which is below first half product growth. What are the reasons for the slowdown, just typical conservatism. Thanks.

William M. Greenman -- President and Chief Executive Officer

Kevin, you want to handle that?

Kevin D. Green -- Vice President, Finance and Chief Financial Officer

Yeah. I mean, look, there's FX headwinds, we commented, which continue and we saw FX rates closer to the 114 level and we're down at the 110 level. So we think that has the potential to persist. I think if you look at the midpoint of our guidance, it would suggest roughly $19 million a quarter for Q3 and Q4. We certainly think that given the seasonality, that will be back end loaded, but still strong growth nonetheless.

Jordan Abrams -- Cantor Fitzgerald -- Analyst

Great. Thanks. And last we spoke, you mentioned for CE Mark approval or red cells in Europe, the newly year requirements would only require a repackaging of clinical information that you already have. Is that still your belief or is there a chance that you'll have to rerun any clinical trials?

William M. Greenman -- President and Chief Executive Officer

I'll let Carol handle the details here. I think we're confident with regard to the submission that we put in. But, we never know what the ultimate questions will be. So we are working through those questions real time with TUV and we'll be doing that, so where [Indecipherable] I think all in all, we feel confident about the submission that we've put in t and the data that's enclosing that. Carol, do you have any additional color on that?

Carol Moore -- Senior Vice President, Regulatory Affairs and Quality

No, I think that's exactly right. We have a lot of data and I think we've put it together in a convincing way. We now just need to wait for those reviews and questions and I think we're in good position.

Jordan Abrams -- Cantor Fitzgerald -- Analyst

Thanks.

Operator

Thank you. [Operator Instructions] And our next question comes from the line of Catherine Schulte with Baird. Your line is now open.

Tom Peterson -- Baird -- Analyst

Hi. This is actually Tom Peterson on for Catherine. Thanks for taking the question. And you guys mentioned last quarter on the conversion, the double dose hits in France. So just wondering what does the mix in terms of the overall conversion and we are looking at something like 50/50, or we still ramping toward that?

William M. Greenman -- President and Chief Executive Officer

Vivek?

Vivek K. Jayaraman -- Chief Commercial Officer

Yeah. We are estimating that exiting last quarter were about a 70:30 split between DS and single in France. So, they've increased their DS conversion since we last reported. We think we're getting fairly close to steady state at this point, but there are a few sites that need to continue the conversion.

Tom Peterson -- Baird -- Analyst

Great. Thanks. And then moving to Germany maybe for a minute. Do you see any contributions in the quarter, I know you were expecting maybe some small revenue in the second half, but you are still expecting sort of that get larger revenue contribution sort of kicking in 2020?

Vivek K. Jayaraman -- Chief Commercial Officer

Yeah. We didn't see contribution from Germany in the quarter. As we mentioned before, we anticipate Germany starts to kick in on the top line toward the end of this calendar year with the real impact being noticeable in 2020. We continue to see good progress securing marketing authorization and continuing to get regulatory clearances, but we really view Germany in 2020 growth story.

Tom Peterson -- Baird -- Analyst

Great. Thanks.

William M. Greenman -- President and Chief Executive Officer

Thank you.

Operator

Thank you. And that does conclude today's question-and-answer session. I'd now like to turn the call back to Obi Greenman for any further remarks.

William M. Greenman -- President and Chief Executive Officer

Yeah. Thank you. Next month, we'll be participating in various 2019 Global Healthcare Conference and Morgan Stanley's Global Healthcare Conference in New York. Look forward to seeing many of you there in person. Thank you again for joining us today and for your interest in Cerus.

Operator

[Operator Closing Remarks]

Duration: 32 minutes

Call participants:

Lainie Corten -- Director of Global Communications and Marketing

William M. Greenman -- President and Chief Executive Officer

Vivek K. Jayaraman -- Chief Commercial Officer

Kevin D. Green -- Vice President, Finance and Chief Financial Officer

Carol Moore -- Senior Vice President, Regulatory Affairs and Quality

Sung Ji Nam -- BTIG -- Analyst

Josh Jennings -- Cowen and Company -- Analyst

Jordan Abrams -- Cantor Fitzgerald -- Analyst

Tom Peterson -- Baird -- Analyst

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