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, 2021.
Second Quarter 2021 Financial Highlights
- Total net revenue of $39.5 million,
an increase of 97% compared to the second quarter of 2020 and 51%
compared to the second quarter of 2019
- MACI® net revenue of $26.5 million,
Epicel® net revenue of $12.2 million, and NexoBrid® revenue of $0.8
million related to the U.S. Biomedical Advanced Research and
Development Authority (BARDA) procurement for emergency response
preparedness
- Gross margin of 68%, compared to 57%
in the second quarter of 2020
- Net loss of $3.8 million, or $0.08
per share, compared to $8.3 million, or $0.18 per share, in the
second quarter of 2020
- Non-GAAP adjusted EBITDA of $7.8 million, or 20% of net
revenue, compared to adjusted EBITDA loss of $3.5 million in the
second quarter of 2020
- Operating cash flow of $4.8 million
- As of June 30,
2021, the Company had $116 million in cash and investments,
compared to $100 million as of December 31, 2020, and no debt
Business Highlights and Updates
- MACI net revenue growth of 76% compared to the second quarter
of 2020 and 27% compared to the second quarter of 2019
- MACI biopsy growth of more than 50% in the first half of 2021
compared to the same period in 2020, with a record quarterly high
in the number of biopsies and the number of surgeons taking
biopsies in the second quarter
- Record quarterly Epicel revenue, with growth of 148% compared
to the second quarter of 2020 and 128% compared to the second
quarter of 2019
- Record quarterly high in the number of Epicel biopsies and
grafting burn centers
“The Company continued to execute extremely well in the second
quarter as we delivered another quarter of strong financial and
commercial results,” said Nick Colangelo, President and CEO of
Vericel. “Based on the strength of the underlying growth drivers
for MACI and Epicel, we believe that the Company is well-positioned
to continue driving sustainable penetration into the addressable
markets for both products in the years ahead.”
Full-Year 2021 Financial Guidance
- Total net revenue now expected to be
in the range of $168-$171 million, compared to previous guidance of
approximately $165-$168 million
- Adjusted EBITDA margin now expected
to be in the range of 23% to 25%, compared to previous guidance of
21.5% to 23.5%
- Maintaining gross margin guidance of
70% to 71% and estimated operating expenses of approximately $115
million
Second Quarter 2021 ResultsTotal net revenue
for the quarter ended June 30, 2021 increased 97% to $39.5 million,
compared to $20.0 million in the second quarter of 2020. Total net
product revenue for the quarter included $26.5 million of MACI
(autologous cultured chondrocytes on porcine collagen membrane) net
revenue and $12.2 million of Epicel (cultured epidermal autografts)
net revenue, compared to $15.1 million of MACI net revenue and $4.9
million of Epicel net revenue, respectively, in the second quarter
of 2020. Total net revenue for the quarter also included $0.8
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 June 30, 2021 was $26.9
million, or 68% of net revenue, compared to $11.4 million, or 57%
of net revenue, for the second quarter of 2020.
Total operating expenses for the quarter ended June 30, 2021
were $30.6 million, compared to $19.7 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 and lower spend in the prior year
due to COVID-19-related factors.
Net loss for the quarter ended June 30, 2021 was $3.8 million,
or $0.08 per share, compared to $8.3 million, or $0.18 per share,
for the second quarter of 2020.
Non-GAAP adjusted EBITDA for the quarter ended June 30, 2021 was
$7.8 million, or 20% of net revenue, compared to an adjusted EBITDA
loss of $3.5 million in the second quarter of 2020. A table
reconciling non-GAAP measures is included in this press release for
reference.
As of June 30, 2021, the Company had $116 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 second 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 August 4, 2022. A replay of the call will also be available
until 11:30am (EDT) on August 11, 2021 by calling (855) 859-2056,
or from outside the U.S. by calling (404) 537-3406. The conference
ID is 2969646.
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.
(MediWound) 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 (FDA) of a Biologics License Application (BLA)
for NexoBrid for treatment of severe burns in the United States
following MediWound’s receipt of a complete response for NexoBrid
on June 28, 2021, the estimate of the commercial growth potential
of our products and product candidates, availability of funding
from BARDA under its agreement with MediWound 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 predict
whether a resurgence of COVID-19 infections or the spread of
COVID-19 variants that 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 NexoBrid, the COVID-19 pandemic may impact the FDA’s response
times to future 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 June 30, 2021, filed with the
SEC on August 4, 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)
|
June 30, |
|
December 31, |
|
2021 |
|
2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
51,761 |
|
|
$ |
33,620 |
|
Short-term investments |
39,214 |
|
|
42,187 |
|
Accounts receivable (net of allowance for doubtful accounts of $3
and $143, respectively) |
31,732 |
|
|
34,504 |
|
Inventory |
12,959 |
|
|
9,356 |
|
Other current assets |
2,854 |
|
|
3,893 |
|
Total current assets |
138,520 |
|
|
123,560 |
|
Property and equipment, net |
10,590 |
|
|
7,633 |
|
Restricted cash |
211 |
|
|
211 |
|
Right-of-use assets |
47,798 |
|
|
50,105 |
|
Long-term investments |
24,826 |
|
|
24,099 |
|
Total assets |
$ |
221,945 |
|
|
$ |
205,608 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
8,134 |
|
|
$ |
6,755 |
|
Accrued expenses |
11,077 |
|
|
11,293 |
|
Current portion of operating lease liabilities |
4,611 |
|
|
4,394 |
|
Other liabilities |
41 |
|
|
41 |
|
Total current liabilities |
23,863 |
|
|
22,483 |
|
Operating lease liabilities |
46,928 |
|
|
48,789 |
|
Other long-term liabilities |
62 |
|
|
76 |
|
Total liabilities |
$ |
70,853 |
|
|
$ |
71,348 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, no par value; shares authorized — 75,000; shares
issued and outstanding 46,579 and 45,804, respectively |
534,005 |
|
|
510,061 |
|
Accumulated other comprehensive income (loss) |
(23 |
) |
|
14 |
|
Accumulated deficit |
(382,890 |
) |
|
(375,815 |
) |
Total shareholders’ equity |
151,092 |
|
|
134,260 |
|
Total liabilities and shareholders’ equity |
$ |
221,945 |
|
|
$ |
205,608 |
|
VERICEL
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited, amounts in thousands, except
per share amounts)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Product sales, net |
$ |
38,680 |
|
|
$ |
20,014 |
|
|
$ |
72,307 |
|
|
$ |
46,692 |
|
Other revenue |
839 |
|
|
— |
|
|
1,780 |
|
|
— |
|
Total revenue |
39,519 |
|
|
20,014 |
|
|
74,087 |
|
|
46,692 |
|
Cost of product sales |
12,609 |
|
|
8,660 |
|
|
24,192 |
|
|
18,582 |
|
Gross profit |
26,910 |
|
|
11,354 |
|
|
49,895 |
|
|
28,110 |
|
Research and development |
4,449 |
|
|
3,226 |
|
|
8,079 |
|
|
6,989 |
|
Selling, general and administrative |
26,190 |
|
|
16,486 |
|
|
48,850 |
|
|
34,555 |
|
Total operating expenses |
30,639 |
|
|
19,712 |
|
|
56,929 |
|
|
41,544 |
|
Loss from operations |
(3,729 |
) |
|
(8,358 |
) |
|
(7,034 |
) |
|
(13,434 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
43 |
|
|
147 |
|
|
119 |
|
|
453 |
|
Interest expense |
(1 |
) |
|
(1 |
) |
|
(2 |
) |
|
(3 |
) |
Other income (expense) |
(27 |
) |
|
(57 |
) |
|
57 |
|
|
10 |
|
Total other income |
15 |
|
|
89 |
|
|
174 |
|
|
460 |
|
Net loss before tax
provision |
(3,714 |
) |
|
(8,269 |
) |
|
(6,860 |
) |
|
(12,974 |
) |
Tax provision |
(72 |
) |
|
— |
|
|
(215 |
) |
|
— |
|
Net loss |
$ |
(3,786 |
) |
|
$ |
(8,269 |
) |
|
$ |
(7,075 |
) |
|
$ |
(12,974 |
) |
Net loss per share
attributable to common shareholders (Basic and diluted) |
$ |
(0.08 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.29 |
) |
Weighted average number of
common shares outstanding (Basic and diluted) |
46,403 |
|
|
45,137 |
|
|
46,195 |
|
|
45,031 |
|
RECONCILIATION OF REPORTED NET LOSS (GAAP) |
TO ADJUSTED EBITDA (NON-GAAP MEASURE) -
UNAUDITED |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In
thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Net loss |
$ |
(3,786 |
) |
|
$ |
(8,269 |
) |
|
$ |
(7,075 |
) |
|
$ |
(12,974 |
) |
Stock compensation expense |
10,866 |
|
|
4,376 |
|
|
17,885 |
|
|
8,144 |
|
Depreciation and amortization |
695 |
|
|
546 |
|
|
1,506 |
|
|
1,079 |
|
Net interest income |
(42 |
) |
|
(146 |
) |
|
(117 |
) |
|
(450 |
) |
Income tax provision |
72 |
|
|
— |
|
|
215 |
|
|
— |
|
Adjusted EBITDA
(Non-GAAP) |
$ |
7,805 |
|
|
$ |
(3,493 |
) |
|
$ |
12,414 |
|
|
$ |
(4,201 |
) |
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