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 first
quarter ended March 31, 2021.
First Quarter 2021 Financial Highlights
- Total net revenue increased 30% to
$34.6 million, compared to $26.7 million in the first quarter of
2020
- MACI® net revenue of $23.8 million,
Epicel® net revenue of $9.8 million and NexoBrid® revenue of $0.9
million related to the U.S. Biomedical Advanced Research and
Development Authority (BARDA) procurement for emergency response
preparedness
- Gross margin of 66%, compared to 63%
in the first quarter of 2020
- Net loss of $3.3 million, or $0.07
per share, compared to $4.7 million, or $0.10 per share, in the
first quarter of 2020
- Non-GAAP adjusted
EBITDA of $4.6 million, or 13% of net revenue, compared to adjusted
EBITDA loss of $0.7 million in the first quarter of 2020
- Operating cash
flow of $10.1 million
- As of March 31,
2021, the Company had $110 million in cash and investments,
compared to $100 million as of December 31, 2020, and no debt
Business Highlights and Updates
- MACI implant and biopsy growth of more than 20% compared to the
first quarter of 2020
- Epicel net revenue growth of 54% compared to the first quarter
of 2020, with record monthly volume in February and the second
highest quarterly Epicel revenue in history
- Expansion of UnitedHealthcare’s MACI medical policy to include
patella and multiple cartilage defects in the knee
- Joined the S&P SmallCap 600®
“We entered 2021 with a great deal of momentum and delivered
another quarter of strong results across both our sports medicine
and burn care franchises,” said Nick Colangelo, President and CEO
of Vericel. “Our first quarter results demonstrate the strength of
the Company’s financial profile as we continue to generate strong
revenue growth and increase profitability and cash
flow. Based on these results and our strong underlying
business fundamentals, we remain on track for significant growth
across both of our franchises and have raised our full-year 2021
revenue and adjusted EBITDA guidance.”
Full-Year 2021 Financial Guidance
- Total net revenue now expected to be
in the range of $165-$168 million, compared to previous guidance of
approximately $161-$164 million
- Adjusted EBITDA margin now expected
to be in the range of 21.5% to 23.5%, compared to previous guidance
of 21 to 23%
- Gross margin guidance of 70% to 71%
and estimated operating expenses of approximately $115 million
maintained
First Quarter 2021 ResultsTotal net revenue for
the quarter ended March 31, 2021 increased 30% to $34.6 million,
compared to $26.7 million in the first quarter of 2020. Total net
product revenue for the quarter included $23.8 million of MACI
(autologous cultured chondrocytes on porcine collagen membrane) net
revenue and $9.8 million of Epicel (cultured epidermal autografts)
net revenue, compared to $20.3 million of MACI net revenue and $6.4
million of Epicel net revenue, respectively, in the first quarter
of 2020. Total net revenue for the quarter also included $0.9
million of revenue related to the procurement of NexoBrid
(concentrate of proteolytic enzymes enriched in bromelain) by BARDA
for emergency response preparedness.
Gross profit for the quarter ended March 31, 2021 was $23.0
million, or 66% of net revenue, compared to $16.8 million, or 63%
of net revenue, for the first quarter of 2020.
Total operating expenses for the quarter ended March 31, 2021
were $26.3 million, compared to $21.8 million for the same period
in 2020. The increase in operating expenses was primarily due to an
increase in stock-based compensation expense driven by share price
appreciation over the past year.
Net loss for the quarter ended March 31, 2021 was $3.3 million,
or $0.07 per share, compared to $4.7 million, or $0.10 per share,
for the first quarter of 2020.
Non-GAAP adjusted EBITDA for the quarter ended March 31, 2021
was $4.6 million, or 13% of net revenue, compared to an adjusted
EBITDA loss of $0.7 million in the first quarter of 2020. A table
reconciling non-GAAP measures is included in this press release for
reference.
As of March 31, 2021, the Company had $110 million in cash and
investments, compared to $100 million as of December 31, 2020, and
no debt.
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 in the live call by
telephone, please call (877) 312-5881 and reference Vericel
Corporation’s first quarter 2021 investor conference call. If
calling from outside the U.S., please use the international phone
number (253) 237-1173.
If you are unable to participate in the live call, the webcast
will be available at http://investors.vcel.com/events-presentations
until May 5, 2022. A replay of the call will also be available
until 11:30am (EDT) on May 12, 2021 by calling (855) 859-2056, or
from outside the U.S. by calling (404) 537-3406. The conference ID
is 9036676.
About Vericel CorporationVericel is a leader in
advanced therapies for the sports medicine and severe burn care
markets. The Company markets two cell therapy 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. The Company also holds an exclusive
license for North American rights to NexoBrid, a registration-stage
biological orphan product for debridement of severe thermal
burns. For more information, please visit the Company’s
website at 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. © 2021 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 and Epicel, growth in profit, gross margins
and operating margins, 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 or likelihood of approval by the U.S. Food &
Drug Administration of the NexoBrid Biologics License Application
(BLA) for treatment of severe burns in the United States or other
North American markets, the estimate of the commercial growth
potential of our products and product candidates, availability of
funding from BARDA under its agreement with MediWound Ltd. for use
in connection with NexoBrid development activities, competitive
developments, changes in third-party coverage and reimbursement,
our ability to supply or meet customer demand for our products, and
the wide-ranging impacts of the COVID-19 pandemic on our business
or the economy generally.
With respect to COVID-19, we are currently unable to reasonably
estimate the specific extent, or duration of the impact of the
COVID-19 pandemic on our business, financial and operating results.
We are also unable to predict whether a resurgence of COVID-19
infections or the spread of COVID-19 variants, which may limit the
effectiveness of approved vaccines, will result in future
restrictions on the performance of elective surgical procedures or
affect the availability of physicians and/or their treatment
prioritizations, the willingness or ability of patients to seek
treatment, or heighten the impact of the outbreak on the overall
healthcare infrastructure. Other disruptions or potential
disruptions include restrictions on the ability of Company
personnel to travel and access customers for training, promotion
and case support, delays in product development efforts, and
additional government-imposed quarantines and requirements to
“shelter at home” or other incremental mitigation efforts or
initiatives that may impact our ability to source supplies for our
operations or our ability or capacity to manufacture, sell and
support the use of our products. With respect to FDA’s review of
the pending NexoBrid BLA, the COVID-19 pandemic may impact the
FDA’s response times to regulatory submissions, its ability to
monitor our clinical trials, and/or conduct necessary reviews or
inspections of manufacturing facilities involved in the production
of NexoBrid, any or all of which may result in timelines being
materially delayed, which could affect the development and ultimate
commercialization of NexoBrid. The total impact of these
disruptions could have a material impact on the Company’s financial
condition, cash flows and results of operations.
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, 2020, filed with the Securities and Exchange
Commission (SEC) on February 24, 2021, Vericel’s Quarterly Report
on Form 10-Q for the quarter ended March 31, 2021, filed with the
SEC on May 5, 2021, 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
VERICEL
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited, amounts in
thousands)
|
March 31, |
|
December 31, |
|
2021 |
|
2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
58,154 |
|
|
$ |
33,620 |
|
Short-term investments |
25,402 |
|
|
42,187 |
|
Accounts receivable (net of allowance for doubtful accounts of $121
and $143, respectively) |
29,122 |
|
|
34,504 |
|
Inventory |
10,322 |
|
|
9,356 |
|
Other current assets |
4,213 |
|
|
3,893 |
|
Total current assets |
127,213 |
|
|
123,560 |
|
Property and equipment, net |
9,076 |
|
|
7,633 |
|
Restricted cash |
211 |
|
|
211 |
|
Right-of-use assets |
48,943 |
|
|
50,105 |
|
Long-term investments |
26,021 |
|
|
24,099 |
|
Total assets |
$ |
211,464 |
|
|
$ |
205,608 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
8,826 |
|
|
$ |
6,755 |
|
Accrued expenses |
9,965 |
|
|
11,293 |
|
Current portion of operating lease liabilities |
4,398 |
|
|
4,394 |
|
Other liabilities |
41 |
|
|
41 |
|
Total current liabilities |
23,230 |
|
|
22,483 |
|
Operating lease liabilities |
47,968 |
|
|
48,789 |
|
Other long-term liabilities |
57 |
|
|
76 |
|
Total liabilities |
$ |
71,255 |
|
|
$ |
71,348 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, no par value; shares authorized — 75,000; shares
issued and outstanding 46,225 and 45,804, respectively |
$ |
519,360 |
|
|
$ |
510,061 |
|
Accumulated other comprehensive income (loss) |
(47 |
) |
|
14 |
|
Accumulated deficit |
(379,104 |
) |
|
(375,815 |
) |
Total shareholders’ equity |
140,209 |
|
|
134,260 |
|
Total liabilities and shareholders’ equity |
$ |
211,464 |
|
|
$ |
205,608 |
|
VERICEL
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited, amounts in thousands, except
per share amounts)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Product sales, net |
$ |
33,627 |
|
|
$ |
26,678 |
|
Other revenue |
941 |
|
|
— |
|
Total revenue |
34,568 |
|
|
26,678 |
|
Cost of product sales |
11,583 |
|
|
9,922 |
|
Gross profit |
22,985 |
|
|
16,756 |
|
Research and development |
3,630 |
|
|
3,763 |
|
Selling, general and administrative |
22,660 |
|
|
18,069 |
|
Total operating expenses |
26,290 |
|
|
21,832 |
|
Loss from operations |
(3,305 |
) |
|
(5,076 |
) |
Other income (expense): |
|
|
|
Interest income |
76 |
|
|
306 |
|
Interest expense |
(1 |
) |
|
(2 |
) |
Other income |
84 |
|
|
67 |
|
Total other income |
159 |
|
|
371 |
|
Net loss before tax
provision |
$ |
(3,146 |
) |
|
$ |
(4,705 |
) |
Tax provision |
(143 |
) |
|
— |
|
Net loss |
$ |
(3,289 |
) |
|
$ |
(4,705 |
) |
Net loss per share
attributable to common shareholders (Basic and diluted) |
$ |
(0.07 |
) |
|
$ |
(0.10 |
) |
Weighted average number of
common shares outstanding (Basic and diluted) |
45,984 |
|
|
44,924 |
|
RECONCILIATION OF REPORTED NET LOSS (GAAP) |
TO ADJUSTED EBITDA (NON-GAAP MEASURE) -
UNAUDITED |
|
|
|
|
|
Three Months Ended March 31, |
(In
thousands) |
2021 |
|
2020 |
Net loss |
$ |
(3,289 |
) |
|
$ |
(4,705 |
) |
Stock compensation expense |
7,019 |
|
|
3,768 |
|
Depreciation and amortization |
811 |
|
|
533 |
|
Net interest income |
(75 |
) |
|
(304 |
) |
Income tax provision |
143 |
|
|
— |
|
Adjusted EBITDA
(Non-GAAP) |
$ |
4,609 |
|
|
$ |
(708 |
) |
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