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, 2022, and provided full-year
2023 financial guidance.
Fourth Quarter 2022 Financial Highlights
- Total net revenue of $52.7
million
- MACI® net revenue of $46.3 million
and Epicel® net revenue of $6.3 million
- Gross margin of 73%
- Net income of $5.9 million, or $0.12
per diluted share
- Non-GAAP adjusted
EBITDA of $14.9 million, or adjusted EBITDA margin of 28%
- Operating cash
flow of $7.0 million
- As of December
31, 2022, the Company had approximately $140 million in cash and
investments, and no debt
Full Year 2022 Financial Highlights
- Total net revenue of $164.4
million
- MACI net revenue of $132 million,
Epicel net revenue of $31.7 million, and NexoBrid® revenue of $0.7
million
- Gross margin of 67%
- Net loss of $16.7 million, or $0.35
per diluted share
- Non-GAAP adjusted
EBITDA of $24.2 million, or adjusted EBITDA margin of 15%
- Operating cash
flow of $17.7 million
Business Highlights and Updates
- Record quarterly total revenue of $52.7 million
- Fourth-quarter MACI revenue growth of 24% compared to the prior
year and approximately 50% sequential growth versus the prior
quarter, representing the highest quarterly revenue since the
launch of MACI
- Fourth-quarter net income growth of 31% compared to the prior
year
- 10th straight quarter of positive adjusted EBITDA and operating
cash flow
- Announced FDA approval of NexoBrid (anacaulase-bcbd) for the
removal of eschar in adults with deep partial-thickness and/or
full-thickness thermal burns, with U.S. commercial availability
expected in the second quarter of 2023
- Announced that the Company is planning to initiate a human
factors validation study in 2023 to support expanding the MACI
label to include arthroscopic administration of MACI for the
treatment of cartilage defects of the knee and now anticipates an
accelerated commercial launch of arthroscopic MACI in 2024
- Announced that the Company will hold a pre-IND meeting with the
FDA during the first half of 2023 regarding the clinical
development program for MACI for the treatment of cartilage
injuries in the ankle
“The Company delivered strong financial and business results to
end the year as we generated record quarterly MACI and total
revenue and another quarter of profitability,” said Nick Colangelo,
President and CEO of Vericel. “We also achieved significant
development milestones for the Company with the approval of
NexoBrid and an accelerated regulatory pathway for the MACI
arthroscopic delivery program. Based on our current portfolio and
anticipated new product launches, we believe that the Company is
well-positioned to continue to deliver strong revenue and profit
growth over the long term.”
2023 Financial Guidance
- Total net revenue for 2023 expected
to be in the range of $180 to $188 million
- MACI revenue expected to be in the
range of $152 to $156 million
- Total Burn Care revenue, which
includes Epicel and NexoBrid, expected to be in the range of $28 to
$32 million
- Gross margin expected to be in the
high-60% range
- Adjusted EBITDA margin expected to
be in the mid-teens % range
Fourth Quarter 2022 ResultsTotal net revenue
for the quarter ended December 31, 2022 increased 11% to $52.7
million, compared to $47.6 million in the fourth quarter of 2021.
Total net product revenue for the quarter included $46.3 million of
MACI (autologous cultured chondrocytes on porcine collagen
membrane) net revenue and $6.3 million of Epicel (cultured
epidermal autografts) net revenue, compared to $37.3 million of
MACI net revenue and $9.7 million of Epicel net revenue,
respectively, in the fourth quarter of 2021.
Gross profit for the quarter ended December 31, 2022 was $38.2
million, or 73% of net revenue, compared to $34.0 million, or 72%
of net revenue, for the fourth quarter of 2021.
Total operating expenses for the quarter ended December 31, 2022
were $32.2 million, compared to $29.9 million for the same period
in 2021. The increase in operating expenses was primarily due to an
increase in headcount and higher sales and marketing expenses.
Net income for the quarter ended December 31, 2022 was $5.9
million, or $0.12 per diluted share, compared to net income of $4.5
million, or $0.09 per diluted share, for the fourth quarter of
2021.
Non-GAAP adjusted EBITDA for the quarter ended December 31, 2022
was $14.9 million, or 28% of net revenue, compared to $12.8
million, or 27% of net revenue, for the fourth quarter of 2021. A
table reconciling non-GAAP measures is included in this press
release for reference.
As of December 31, 2022, the Company had approximately $140
million in cash and investments, and no debt.
Full-Year 2022 ResultsTotal net revenue for the
year ended December 31, 2022 was $164.4 million, compared to $156.2
million in 2021. Total net product revenue for the year included
$132.0 million of MACI net revenue and $31.7 million of Epicel net
revenue, compared to $111.6 million of MACI net revenue and $41.5
million of Epicel net revenue, respectively, in 2021. Total net
revenue in 2022 also included $0.7 million of revenue related to
the procurement of NexoBrid by the U.S. Biomedical Advanced
Research and Development Authority (BARDA) for emergency response
preparedness, compared to $3.1 million of revenue in 2021.
Gross profit for the year ended December 31, 2022 was $109.8
million, or 67% of net revenue, compared to $106.0 million, or 68%
of net revenue, in 2021.
Total operating expenses for the year ended December 31, 2022
were $126.8 million, compared to $113.9 million in 2021. The
increase in operating expenses was primarily due to an increase in
headcount, higher sales and marketing expenses and a $2.9 million
increase in non-cash stock-based compensation expense.
Net loss for the year ended December 31, 2022 was $16.7 million,
or $0.35 per diluted share, compared to net income of $7.5 million,
or $0.16 per diluted share, in 2021.
Non-GAAP adjusted EBITDA for the year ended December 31, 2022
was $24.2 million, or 15% of net revenue, compared to $29.5
million, or 19% of net revenue, in 2021. 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 23, 2024.
About Vericel Corporation
Vericel is a leader in advanced therapies for the sports
medicine and severe burn care markets. The Company markets two cell
therapy products and one specialty biologic product 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® (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. © 2023
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 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, the ultimate timing of the commercial launch of
NexoBrid in the United States, physician and burn center adoption
of NexoBrid, supply chain disruptions or other events affecting
MediWound Ltd.’s ability to manufacture and supply sufficient
quantities of NexoBrid to meet customer demand, negative impacts on
the global economy and capital markets resulting from the conflict
in Ukraine, global geopolitical tensions or record inflation and
the ongoing or future impacts of the COVID-19 pandemic on our
business or the economy generally.
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, 2022, filed with the Securities and Exchange
Commission (SEC) on February 23, 2023, 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 EndedDecember 31, |
|
|
Twelve Months EndedDecember 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Product sales,
net |
$ |
52,694 |
|
$ |
47,050 |
|
$ |
163,698 |
|
$ |
153,075 |
Other revenue |
|
— |
|
|
541 |
|
|
667 |
|
|
3,109 |
Total
revenue |
|
52,694 |
|
|
47,591 |
|
|
164,365 |
|
|
156,184 |
Cost of product sales |
|
14,445 |
|
|
13,559 |
|
|
54,577 |
|
|
50,159 |
Gross profit |
|
38,249 |
|
|
34,032 |
|
|
109,788 |
|
|
106,025 |
Research and development |
|
5,245 |
|
|
3,924 |
|
|
19,943 |
|
|
16,287 |
Selling, general and administrative |
|
26,919 |
|
|
25,967 |
|
|
106,903 |
|
|
97,592 |
Total operating expenses |
|
32,164 |
|
|
29,891 |
|
|
126,846 |
|
|
113,879 |
Income (loss)
from operations |
|
6,085 |
|
|
4,141 |
|
|
(17,058) |
|
|
(7,854) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
763 |
|
|
61 |
|
|
1,341 |
|
|
224 |
Interest expense |
|
(223) |
|
|
(1) |
|
|
(366) |
|
|
(4) |
Other income (expense) |
|
(3) |
|
|
8 |
|
|
95 |
|
|
52 |
Total other income |
|
537 |
|
|
68 |
|
|
1,070 |
|
|
272 |
Income (loss)
before income taxes |
|
6,622 |
|
|
4,209 |
|
|
(15,988) |
|
|
(7,582) |
Income tax expense (benefit) |
|
700 |
|
|
(326) |
|
|
721 |
|
|
(111) |
Net income
(loss) |
$ |
5,922 |
|
$ |
4,535 |
|
$ |
(16,709) |
|
$ |
(7,471) |
Net income (loss)
per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.13 |
|
$ |
0.10 |
|
$ |
(0.35) |
|
$ |
(0.16) |
Diluted |
$ |
0.12 |
|
$ |
0.09 |
|
$ |
(0.35) |
|
$ |
(0.16) |
Weighted-average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
47,232 |
|
|
46,821 |
|
|
47,130 |
|
|
46,472 |
Diluted |
|
49,204 |
|
|
49,939 |
|
|
47,130 |
|
|
46,472 |
RECONCILIATION OF REPORTED NET INCOME (LOSS) (GAAP) TO
ADJUSTED EBITDA (NON-GAAP MEASURE) - UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
(In
thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Net income
(loss) |
$ |
5,922 |
|
$ |
4,535 |
|
$ |
(16,709) |
|
$ |
(7,471) |
Stock-based compensation expense |
|
7,740 |
|
|
7,841 |
|
|
37,183 |
|
|
34,322 |
Depreciation and amortization |
|
1,039 |
|
|
780 |
|
|
3,981 |
|
|
2,965 |
Net interest income |
|
(540) |
|
|
(60) |
|
|
(975) |
|
|
(220) |
Income tax expense (benefit) |
|
700 |
|
|
(326) |
|
|
721 |
|
|
(111) |
Adjusted EBITDA
(Non-GAAP) |
$ |
14,861 |
|
$ |
12,770 |
|
$ |
24,201 |
|
$ |
29,485 |
VERICEL CORPORATIONCONDENSED CONSOLIDATED
BALANCE SHEETS(In thousands –
unaudited) |
|
|
|
December 31, |
|
|
2022 |
|
|
2021 |
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
51,067 |
|
$ |
68,330 |
Short-term investments |
|
68,471 |
|
|
35,068 |
Accounts receivable (net of allowance for doubtful accounts of $47
and $40, respectively) |
|
46,539 |
|
|
37,437 |
Inventory |
|
15,986 |
|
|
13,381 |
Other current assets |
|
4,803 |
|
|
4,246 |
Total current assets |
|
186,866 |
|
|
158,462 |
Property and equipment, net |
|
15,837 |
|
|
13,308 |
Intangible assets, net |
|
7,500 |
|
|
— |
Restricted cash |
|
— |
|
|
211 |
Right-of-use assets |
|
41,535 |
|
|
45,720 |
Long-term investments |
|
19,962 |
|
|
25,687 |
Other long-term assets |
|
1,303 |
|
|
317 |
Total assets |
$ |
273,003 |
|
$ |
243,705 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
$ |
16,930 |
|
$ |
9,016 |
Accrued expenses |
|
16,190 |
|
|
14,045 |
Current portion of operating lease liabilities |
|
4,302 |
|
|
2,950 |
Other current liabilities |
|
41 |
|
|
41 |
Total current liabilities |
|
37,463 |
|
|
26,052 |
Operating lease liabilities |
|
43,268 |
|
|
47,147 |
Other long-term liabilities |
|
— |
|
|
44 |
Total liabilities |
|
80,731 |
|
|
73,243 |
Total shareholders’ equity |
|
192,272 |
|
|
170,462 |
Total liabilities and shareholders’ equity |
$ |
273,003 |
|
$ |
243,705 |
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