Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies
for the sports medicine and severe burn care markets, today
reported financial results and business highlights for the second
quarter ended June 30, 2024.
Second Quarter 2024 Financial Highlights
- Total net revenue of $52.7 million
- MACI® net revenue growth of 21% to $44.1 million
- Burn Care net revenue of $8.5 million, consisting of $7.8
million of Epicel® revenue and $0.8 million of NexoBrid®
revenue
- Gross margin of 70%, an increase of 430 basis points versus the
prior year
- Net loss of $4.7 million, or $0.10 per diluted share
- Non-GAAP adjusted EBITDA increased 42% to $6.3 million,
representing adjusted EBITDA margin of 12%, an increase of
approximately 230 basis points versus the prior year
- Operating cash flow of approximately $18.5 million
- As of June 30, 2024, the Company had approximately $154 million
in cash, restricted cash and investments, and no debt
First Half 2024 Financial Highlights
- Total net revenue increased 20% to $103.9 million
- MACI net revenue growth of 20% to $84.3 million
- Burn Care net revenue growth of 20% to $19.6 million
- Gross margin of 69%, an increase of approximately 430 basis
points versus the prior year
- Net loss of $8.5 million, or $0.18 per diluted share
- Non-GAAP adjusted EBITDA increased 120% to $13.5 million,
representing adjusted EBITDA margin of 13%, an increase of
approximately 600 basis points versus the prior year
- Operating cash flow of approximately $26 million
Business Highlights and Updates
- Record second quarter total revenue and MACI revenue
- Second highest number of MACI biopsies and surgeons taking
biopsies in a quarter since launch, including the highest number of
biopsies in any month since launch
- Commercial plans progressing for MACI Arthro™ in advance of
anticipated launch later this quarter
- NexoBrid launch progressing with approximately 70 Pharmacy and
Therapeutics (P&T) committee submissions, more than 40 burn
centers obtaining approval and approximately 40 centers placing
initial orders
- FDA approval of pediatric indication for NexoBrid expected in
the third quarter of 2024
“The Company had another strong quarter as we generated record
second quarter revenue, highlighted by continued high growth for
MACI and solid progression in NexoBrid demand, and delivered
another quarter of significant margin expansion as our growth in
profitability continues to outpace our high revenue growth,” said
Nick Colangelo, President and CEO of Vericel. “In light of the
strong performance of our core portfolio in the first half of the
year, with both MACI and the Burn Care franchise delivering 20%
growth, and with the expected contributions from new product
launches, we believe that the Company is very well-positioned for
continued high revenue and profit growth in 2024 and beyond.”
2024 Financial Guidance
- Reaffirmed total net revenue
guidance of $238 to $242 million, or 20% to 23% growth
- Profitability guidance raised to 71%
gross margin and 21% adjusted EBITDA margin, compared to the
previous guidance of 70% and 20%, respectively
Second Quarter 2024 ResultsTotal net revenue
for the quarter ended June 30, 2024 increased 15% to $52.7 million,
compared to $45.9 million in the second quarter of 2023. Total net
product revenue for the quarter included $44.1 million of MACI
(autologous cultured chondrocytes on porcine collagen membrane) net
revenue, $7.8 million of Epicel (cultured epidermal autografts) net
revenue, and $0.8 million of NexoBrid (anacaulase-bcdb) net
revenue, compared to $36.3 million of MACI net revenue and $9.6
million of Epicel net revenue, respectively, in the second quarter
of 2023.
Gross profit for the quarter ended June 30, 2024 was $36.6
million, or 70% of net revenue, compared to $29.9 million, or 65%
of net revenue, for the second quarter of 2023.
Total operating expenses for the quarter ended June 30, 2024
were $42.6 million, compared to $35.9 million for the same period
in 2023. The increase in operating expenses was primarily due to
development and pre-launch activities for MACI Arthro, increased
headcount and related employee expenses, and lease expense
associated with the Company’s new facility that is under
construction.
Net loss for the quarter ended June 30, 2024 was $4.7 million,
or $0.10 per diluted share, compared to $5.0 million, or $0.11 per
diluted share, for the second quarter of 2023.
Non-GAAP adjusted EBITDA for the quarter ended June 30, 2024 was
$6.3 million, or 12% of net revenue, compared to $4.4 million, or
10% of net revenue, for the second quarter of 2023. A table
reconciling non-GAAP measures is included in this press release for
reference.
As of June 30, 2024, the Company had approximately $154 million
in cash, restricted cash and investments, and no debt.
Conference Call Information Today’s conference
call will be available live at 8:30 a.m. Eastern Time and can be
accessed through the Investor Relations section of the Vericel
website at http://investors.vcel.com/events-presentations. A slide
presentation with highlights from today’s conference call will be
available on the webcast and in the Investor Relations section of
the Vericel website. Please access the site at least 15 minutes
prior to the scheduled start time in order to download the required
audio software, if necessary. To participate by telephone, please
register here to receive dial-in details and your personal
passcode. A replay of the webcast will be available on the Vericel
website until August 1, 2025.
About Vericel CorporationVericel is a leading
provider of advanced therapies for the sports medicine and severe
burn care markets. The Company combines innovations in biology
with medical technologies, resulting in a highly differentiated
portfolio of innovative cell therapies and specialty biologics that
repair injuries and restore lives. Vericel markets three products
in the United States. MACI (autologous cultured chondrocytes on
porcine collagen membrane) is an autologous cellularized scaffold
product indicated for the repair of symptomatic, single or multiple
full-thickness cartilage defects of the knee with or without bone
involvement in adults. Epicel (cultured epidermal autografts) is a
permanent skin replacement for the treatment of patients with deep
dermal or full thickness burns greater than or equal to 30% of
total body surface area. Vericel also holds an exclusive license
for North American rights to NexoBrid (anacaulase-bcdb), a
biological orphan product containing proteolytic enzymes, which is
indicated for the removal of eschar in adults with deep
partial-thickness and/or full-thickness burns. For more
information, please visit www.vcel.com.
GAAP v. Non-GAAP MeasuresVericel’s reported
earnings are prepared in accordance with generally accepted
accounting principles in the United States, or GAAP, and represent
earnings as reported to the Securities and Exchange Commission.
Vericel has provided in this release certain financial information
that has not been prepared in accordance with GAAP. Vericel’s
management believes that the non-GAAP adjusted EBITDA described in
this release, which includes adjustments for specific items that
are generally not indicative of our core operations, provides
additional information that is useful to investors in understanding
Vericel’s underlying performance, business and performance trends,
and helps facilitate period-to-period comparisons and comparisons
of its financial measures with other companies in Vericel’s
industry. However, the non-GAAP financial measures that Vericel
uses may differ from measures that other companies may use.
Non-GAAP financial measures are not required to be uniformly
applied, are not audited and should not be considered in isolation
or as substitutes for results prepared in accordance with GAAP.
Epicel® and MACI® are registered trademarks of Vericel
Corporation. NexoBrid® is a registered trademark of MediWound
Ltd. and is used under license to Vericel Corporation. © 2024
Vericel Corporation. All rights reserved.
Forward-Looking StatementsVericel cautions you
that all statements other than statements of historical fact
included in this press release that address activities, events or
developments that we expect, believe or anticipate will or may
occur in the future are forward-looking statements. Although we
believe that we have a reasonable basis for the forward-looking
statements contained herein, they are based on current expectations
about future events affecting us and are subject to risks,
assumptions, uncertainties and factors relating to our operations
and business environment, all of which are difficult to predict and
many of which are beyond our control. Our actual results may differ
materially from those expressed or implied by the forward-looking
statements in this press release. These statements are often, but
are not always, made through the use of words or phrases such as
“anticipates,” “intends,” “estimates,” “plans,” “expects,”
“continues,” “believe,” “guidance,” “outlook,” “target,” “future,”
“potential,” “goals” and similar words or phrases, or future or
conditional verbs such as “will,” “would,” “should,” “could,”
“may,” or similar expressions.
Among the factors that could cause actual results to differ
materially from those set forth in the forward-looking statements
include, but are not limited to, uncertainties associated with our
expectations regarding future revenue, growth in revenue, market
penetration for MACI, Epicel, and NexoBrid, growth in profit, gross
margins and operating margins, the ability to continue to scale our
manufacturing operations to meet the demand for our cell therapy
products, including the timely completion of a new headquarters and
manufacturing facility in Burlington, Massachusetts, the ability to
achieve or sustain profitability, contributions to adjusted EBITDA,
the expected target surgeon audience, potential fluctuations in
sales and volumes and our results of operations over the course of
the year, timing and conduct of clinical trial and product
development activities, timing and likelihood of the FDA’s
potential approval of the arthroscopic delivery of MACI to the knee
or the use of MACI to treat cartilage defects in the ankle, the
estimate of the commercial growth potential of our products and
product candidates, competitive developments, changes in
third-party coverage and reimbursement, physician and burn center
adoption of NexoBrid, supply chain disruptions or other events or
factors affecting MediWound’s ability to manufacture and supply
sufficient quantities of NexoBrid to meet customer demand,
including but not limited to the ongoing Israel-Hamas war or other
military conflicts in the Middle East, negative impacts on the
global economy and capital markets resulting from the conflict in
Ukraine and the Israel-Hamas war, adverse developments affecting
financial institutions, companies in the financial services
industry or the financial services industry generally, global
geopolitical tensions or record inflation and potential future
impacts on our business or the economy generally stemming from a
resurgence of COVID-19 or another similar public health
emergency.
These and other significant factors are discussed in greater
detail in Vericel’s Annual Report on Form 10-K for the year ended
December 31, 2023, filed with the Securities and Exchange
Commission (SEC) on February 29, 2024, Vericel’s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2024, filed with the
SEC on August 1, 2024, and in other filings with the SEC. These
forward-looking statements reflect our views as of the date hereof
and Vericel does not assume and specifically disclaims any
obligation to update any of these forward-looking statements to
reflect a change in its views or events or circumstances that occur
after the date of this release except as required by law.
Investor Contact:Eric Burnsir@vcel.com+1 (734)
418-4411
Media Contact:Julie Downsmedia@vcel.com
VERICEL CORPORATIONCONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(in thousands, except per
share amounts - unaudited) |
|
|
Three Months Ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Product sales, net |
$ |
52,662 |
|
|
$ |
45,922 |
|
|
$ |
103,943 |
|
|
$ |
86,939 |
|
Total revenue |
|
52,662 |
|
|
|
45,922 |
|
|
|
103,943 |
|
|
|
86,939 |
|
Cost of product sales |
|
16,061 |
|
|
|
15,981 |
|
|
|
31,988 |
|
|
|
30,478 |
|
Gross profit |
|
36,601 |
|
|
|
29,941 |
|
|
|
71,955 |
|
|
|
56,461 |
|
Research and development |
|
7,363 |
|
|
|
5,253 |
|
|
|
13,781 |
|
|
|
10,465 |
|
Selling, general and administrative |
|
35,269 |
|
|
|
30,649 |
|
|
|
69,669 |
|
|
|
60,134 |
|
Total operating expenses |
|
42,632 |
|
|
|
35,902 |
|
|
|
83,450 |
|
|
|
70,599 |
|
Loss from operations |
|
(6,031 |
) |
|
|
(5,961 |
) |
|
|
(11,495 |
) |
|
|
(14,138 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
|
1,510 |
|
|
|
1,095 |
|
|
|
3,272 |
|
|
|
1,934 |
|
Interest expense |
|
(153 |
) |
|
|
(149 |
) |
|
|
(306 |
) |
|
|
(294 |
) |
Other expense |
|
(8 |
) |
|
|
(5 |
) |
|
|
(15 |
) |
|
|
(17 |
) |
Total other income |
|
1,349 |
|
|
|
941 |
|
|
|
2,951 |
|
|
|
1,623 |
|
Net loss |
$ |
(4,682 |
) |
|
$ |
(5,020 |
) |
|
$ |
(8,544 |
) |
|
$ |
(12,515 |
) |
Net loss per common
share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.10 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.26 |
) |
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
48,686 |
|
|
|
47,572 |
|
|
|
48,413 |
|
|
|
47,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VERICEL CORPORATIONRECONCILIATION OF
REPORTED NET LOSS (GAAP) TO ADJUSTED EBITDA
(NON-GAAP MEASURE)(in thousands -
unaudited) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net loss |
|
$ |
(4,682 |
) |
|
$ |
(5,020 |
) |
|
$ |
(8,544 |
) |
|
$ |
(12,515 |
) |
Stock-based compensation expense |
|
|
9,520 |
|
|
|
8,761 |
|
|
|
19,354 |
|
|
|
17,492 |
|
Depreciation and amortization |
|
|
1,323 |
|
|
|
1,171 |
|
|
|
2,701 |
|
|
|
2,329 |
|
Net interest income |
|
|
(1,357 |
) |
|
|
(946 |
) |
|
|
(2,966 |
) |
|
|
(1,640 |
) |
Pre-occupancy lease expense |
|
|
1,509 |
|
|
|
475 |
|
|
|
2,986 |
|
|
|
475 |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
6,313 |
|
|
$ |
4,441 |
|
|
$ |
13,531 |
|
|
$ |
6,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VERICEL CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands - unaudited) |
|
June 30, |
|
December 31, |
|
|
2024 |
|
|
|
2023 |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
50,291 |
|
|
$ |
69,088 |
|
Restricted cash |
|
25,563 |
|
|
|
17,778 |
|
Short-term investments |
|
52,217 |
|
|
|
40,469 |
|
Accounts receivable (net of allowance for doubtful accounts of $10
and $43, respectively) |
|
47,996 |
|
|
|
58,356 |
|
Inventory |
|
14,887 |
|
|
|
13,087 |
|
Other current assets |
|
6,432 |
|
|
|
6,853 |
|
Total current assets |
|
197,386 |
|
|
|
205,631 |
|
Property and equipment, net |
|
73,086 |
|
|
|
41,635 |
|
Intangible assets, net |
|
6,563 |
|
|
|
6,875 |
|
Right-of-use assets |
|
73,020 |
|
|
|
73,462 |
|
Long-term investments |
|
26,120 |
|
|
|
25,283 |
|
Other long-term assets |
|
664 |
|
|
|
771 |
|
Total assets |
$ |
376,839 |
|
|
$ |
353,657 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
25,216 |
|
|
$ |
22,347 |
|
Accrued expenses |
|
12,856 |
|
|
|
17,215 |
|
Current portion of operating lease liabilities |
|
5,791 |
|
|
|
6,187 |
|
Total current liabilities |
|
43,863 |
|
|
|
45,749 |
|
Operating lease liabilities |
|
89,801 |
|
|
|
81,856 |
|
Other long-term liabilities |
|
198 |
|
|
|
100 |
|
Total liabilities |
$ |
133,862 |
|
|
$ |
127,705 |
|
Total shareholders’ equity |
|
242,977 |
|
|
|
225,952 |
|
Total liabilities and shareholders’ equity |
$ |
376,839 |
|
|
$ |
353,657 |
|
|
|
|
|
|
|
|
|
Vericel (NASDAQ:VCEL)
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