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 fourth
quarter and year ended December 31, 2023, and provided full-year
2024 financial guidance.
Fourth Quarter 2023 Financial Highlights
- Total net revenue increased 23% to
$65.0 million
- MACI® net revenue growth of 22% to $56.7 million
- Burn Care net revenue growth of 31% to $8.3 million, consisting
of $7.8 million of Epicel® revenue and $0.5 million of NexoBrid®
revenue
- Gross margin of 75%
- Net income growth of 119% to $13.0
million, or $0.26 per diluted share
- Non-GAAP adjusted EBITDA increased
50% to $22.3 million, representing adjusted EBITDA margin of
34%
- Operating cash flow of $10.1
million
- As of December 31, 2023, the Company
had $152.6 million in cash, restricted cash and investments, and no
debt
Full Year 2023 Financial Highlights
- Total net revenue increased 20% to
$197.5 million
- MACI net revenue growth of 25% to $164.8 million
- Burn Care net revenue of $32.7 million, consisting of $31.6
million of Epicel revenue and $1.1 million of NexoBrid revenue
- Gross margin of 69%
- Net loss of $3.2 million, or $0.07
per diluted share
- Non-GAAP adjusted EBITDA of $33.9
million, or adjusted EBITDA margin of 17%
- Operating cash
flow of $35.3 million
Fourth Quarter Business Highlights and
Updates
- Highest number of MACI implants, implanting surgeons, surgeons
taking biopsies and MACI biopsies in a quarter since launch
- Highest number of Epicel biopsies in a quarter since 2021
- NexoBrid commercial launch in the U.S., with more than 50 burn
centers submitting packages to Pharmacy and Therapeutics (P&T)
committees and more than 25 burn centers with P&T committee
approvals
- MACI arthroscopic delivery submission accepted for review by
the FDA, with commercial launch expected in the third quarter of
2024
- Announced that MACI clinical study to treat cartilage injuries
in the ankle is expected to initiate in 2025
- Prospective study reporting 10-year outcomes in patients
treated with MACI published in the American Journal of Sports
Medicine showed improved clinical scores, high levels of patient
satisfaction, and clinical and MRI-based outcomes that were
maintained out to 10 years
- Supplemental BLA for NexoBrid pediatric indication accepted for
review by the FDA
“The Company executed exceptionally well in 2023 and delivered
outstanding financial and business results in the fourth quarter,
generating top-tier revenue growth and even higher growth in our
profitability metrics,” said Nick Colangelo, President and CEO of
Vericel. “We expect that the momentum in our core portfolio and new
product launches across our MACI and Burn Care commercial
franchises will drive continued strong revenue growth and
profitability in 2024 and the years ahead.”
2024 Financial Guidance
- Total net revenue for 2024 expected
to be in the range of $237 to $241 million
- Gross margin expected to be
approximately 70%
- Adjusted EBITDA margin expected to
be approximately 20%
Fourth Quarter 2023 ResultsTotal net revenue
for the quarter ended December 31, 2023 increased 23% to $65.0
million, compared to $52.7 million in the fourth quarter of 2022.
Total net product revenue for the quarter included $56.7 million of
MACI (autologous cultured chondrocytes on porcine collagen
membrane) net revenue, $7.8 million of Epicel (cultured epidermal
autografts) net revenue, and $0.5 million of NexoBrid
(anacaulase-bcdb) net revenue, compared to $46.3 million of MACI
net revenue and $6.3 million of Epicel net revenue in the fourth
quarter of 2022.
Gross profit for the quarter ended December 31, 2023 was $48.5
million, or 75% of net revenue, compared to $38.2 million, or 73%
of net revenue, for the fourth quarter of 2022.
Total operating expenses for the quarter ended December 31, 2023
were $35.8 million, compared to $32.2 million for the same period
in 2022. The increase in operating expenses was primarily due to an
increase in headcount and lease expenses associated with the
Company’s new facility, which is under construction.
Net income for the quarter ended December 31, 2023 was $13.0
million, or $0.26 per diluted share, compared to net income of $5.9
million, or $0.12 per diluted share, for the fourth quarter of
2022.
Non-GAAP adjusted EBITDA for the quarter ended December 31, 2023
was $22.3 million, or 34% of net revenue, compared to $14.9
million, or 28% of net revenue, for the fourth quarter of 2022. A
table reconciling non-GAAP measures is included in this press
release for reference.
As of December 31, 2023, the Company had $152.6 million in cash,
restricted cash and investments, and no debt.
Full-Year 2023 ResultsTotal net revenue for the
year ended December 31, 2023 was $197.5 million, compared to $164.4
million in 2022. Total net product revenue for the year included
$164.8 million of MACI net revenue, $31.6 million of Epicel net
revenue and $1.1 million of NexoBrid net revenue, compared to
$132.0 million of MACI net revenue, $31.7 million of Epicel net
revenue and $0.7 million of NexoBrid revenue, respectively, in
2022.
Gross profit for the year ended December 31, 2023 was $135.6
million, or 69% of net revenue, compared to $109.8 million, or 67%
of net revenue, in 2022.
Total operating expenses for the year ended December 31, 2023
were $142.0 million, compared to $126.8 million in 2022. The
increase in operating expenses was primarily due to an increase in
headcount, lease expenses associated with the Company’s new
facility, variable sales and marketing expenses and other external
expenses.
Net loss for the year ended December 31, 2023 was $3.2 million,
or $0.07 per diluted share, compared to net loss of $16.7 million,
or $0.35 per diluted share, in 2022.
Non-GAAP adjusted EBITDA for the year ended December 31, 2023
was $33.9 million, or 17% of net revenue, compared to $24.2
million, or 15% of net revenue, in 2022. A table reconciling
non-GAAP measures is included in this press release for
reference.
Conference Call Information Today’s conference
call will be available live at 8:30am 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 February 28, 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
the 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, 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, 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
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share amounts
– unaudited)
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Product sales, net |
|
$ |
64,996 |
|
|
$ |
52,694 |
|
|
$ |
197,516 |
|
|
$ |
163,698 |
|
Other revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
667 |
|
Total revenue |
|
|
64,996 |
|
|
|
52,694 |
|
|
|
197,516 |
|
|
|
164,365 |
|
Cost of product sales |
|
|
16,489 |
|
|
|
14,445 |
|
|
|
61,940 |
|
|
|
54,577 |
|
Gross profit |
|
|
48,507 |
|
|
|
38,249 |
|
|
|
135,576 |
|
|
|
109,788 |
|
Research and development |
|
|
4,901 |
|
|
|
5,245 |
|
|
|
21,042 |
|
|
|
19,943 |
|
Selling, general and administrative |
|
|
30,875 |
|
|
|
26,919 |
|
|
|
120,998 |
|
|
|
106,903 |
|
Total operating expenses |
|
|
35,776 |
|
|
|
32,164 |
|
|
|
142,040 |
|
|
|
126,846 |
|
Income (loss) from
operations |
|
|
12,731 |
|
|
|
6,085 |
|
|
|
(6,464 |
) |
|
|
(17,058 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
1,436 |
|
|
|
763 |
|
|
|
4,632 |
|
|
|
1,341 |
|
Interest expense |
|
|
(156 |
) |
|
|
(223 |
) |
|
|
(600 |
) |
|
|
(366 |
) |
Other income (expense) |
|
|
82 |
|
|
|
(3 |
) |
|
|
64 |
|
|
|
95 |
|
Total other income |
|
|
1,362 |
|
|
|
537 |
|
|
|
4,096 |
|
|
|
1,070 |
|
Income (loss) before income
taxes |
|
|
14,093 |
|
|
|
6,622 |
|
|
|
(2,368 |
) |
|
|
(15,988 |
) |
Income tax expense |
|
|
1,100 |
|
|
|
700 |
|
|
|
814 |
|
|
|
721 |
|
Net income (loss) |
|
$ |
12,993 |
|
|
$ |
5,922 |
|
|
$ |
(3,182 |
) |
|
$ |
(16,709 |
) |
Net income (loss) per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.27 |
|
|
$ |
0.13 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
Diluted |
|
$ |
0.26 |
|
|
$ |
0.12 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
47,745 |
|
|
|
47,232 |
|
|
|
47,590 |
|
|
|
47,130 |
|
Diluted |
|
|
50,512 |
|
|
|
49,204 |
|
|
|
47,590 |
|
|
|
47,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VERICEL
CORPORATIONRECONCILIATION OF REPORTED NET INCOME
(LOSS) (GAAP) TO ADJUSTED EBITDA (NON-GAAP
MEASURE)(in thousands – unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
|
$ |
12,993 |
|
|
$ |
5,922 |
|
|
$ |
(3,182 |
) |
|
$ |
(16,709 |
) |
Stock-based compensation expense |
|
|
6,909 |
|
|
|
7,740 |
|
|
|
32,325 |
|
|
|
37,183 |
|
Depreciation and amortization |
|
|
1,149 |
|
|
|
1,039 |
|
|
|
4,632 |
|
|
|
3,981 |
|
Net interest income |
|
|
(1,280 |
) |
|
|
(540 |
) |
|
|
(4,032 |
) |
|
|
(975 |
) |
Income tax expense |
|
|
1,100 |
|
|
|
700 |
|
|
|
814 |
|
|
|
721 |
|
Pre-occupancy lease expense |
|
|
1,424 |
|
|
|
— |
|
|
|
3,323 |
|
|
|
— |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
22,295 |
|
|
$ |
14,861 |
|
|
$ |
33,880 |
|
|
$ |
24,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VERICEL
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands – unaudited)
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
69,088 |
|
$ |
51,067 |
Restricted cash |
|
|
17,778 |
|
|
— |
Short-term investments |
|
|
40,469 |
|
|
68,471 |
Accounts receivable (net of allowance for doubtful accounts of $43
and $47, respectively) |
|
|
58,356 |
|
|
46,539 |
Inventory |
|
|
13,087 |
|
|
15,986 |
Other current assets |
|
|
6,853 |
|
|
4,803 |
Total current assets |
|
|
205,631 |
|
|
186,866 |
Property and equipment, net |
|
|
41,635 |
|
|
15,837 |
Intangible assets, net |
|
|
6,875 |
|
|
7,500 |
Right-of-use assets |
|
|
73,462 |
|
|
41,535 |
Long-term investments |
|
|
25,283 |
|
|
19,962 |
Other long-term assets |
|
|
771 |
|
|
1,303 |
Total assets |
|
$ |
353,657 |
|
$ |
273,003 |
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
22,347 |
|
$ |
16,930 |
Accrued expenses |
|
|
17,215 |
|
|
16,190 |
Current portion of operating lease liabilities |
|
|
6,187 |
|
|
4,302 |
Other current liabilities |
|
|
— |
|
|
41 |
Total current liabilities |
|
|
45,749 |
|
|
37,463 |
Operating lease liabilities |
|
|
81,856 |
|
|
43,268 |
Other long-term liabilities |
|
|
100 |
|
|
— |
Total liabilities |
|
|
127,705 |
|
|
80,731 |
Total shareholders’ equity |
|
|
225,952 |
|
|
192,272 |
Total liabilities and shareholders’ equity |
|
$ |
353,657 |
|
$ |
273,003 |
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