Vericel Reports Fourth Quarter and Full-Year 2023 Financial Results and Provides Full-Year 2024 Financial Guidance
- Strong fourth-quarter financial performance with a 23% increase in total revenue to $65.0 million
- MACI net revenue grew by 22% to $56.7 million, and Burn Care net revenue increased by 31% to $8.3 million
- Net income surged by 119% to $13.0 million, with adjusted EBITDA rising by 50% to $22.3 million
- Full-year 2023 total revenue grew by 20% to $197.5 million, with MACI net revenue increasing by 25% to $164.8 million
- Company had $152.6 million in cash, restricted cash, and investments with no debt as of December 31, 2023
- 2024 financial guidance includes total revenue in the range of $237 to $241 million, gross margin around 70%, and adjusted EBITDA margin approximately 20%
- None.
Insights
The reported financial results from Vericel Corporation indicate a robust fiscal performance with significant year-over-year growth in total revenue and adjusted EBITDA. The gross margin expansion to 75% in Q4 and 69% for the full year, combined with a 50% increase in adjusted EBITDA for the same quarter, are particularly noteworthy. These figures suggest operational efficiency and effective cost management, likely contributing to the company's net income growth of 119% in Q4. The positive financial trajectory is further supported by a strong balance sheet highlighted by $152.6 million in cash and no debt.
From an investment perspective, the projected revenue guidance for 2024 implies continued growth momentum. However, it is essential to consider the potential volatility of the biotechnology sector and the impact of R&D expenses on future earnings. The company's investment in a new facility and increased headcount may signal strategic expansion but also warrant monitoring for their impact on operating expenses.
Vericel's performance in the advanced therapies market, particularly in sports medicine and severe burn care, is impressive, with the highest number of MACI implants and biopsies reported. The 31% growth in Burn Care net revenue and the successful commercial launch of NexoBrid in the U.S. reflect the company's ability to penetrate the market effectively. The anticipated FDA review of MACI for arthroscopic delivery and the initiation of a clinical study for ankle cartilage injuries in 2025 could further solidify Vericel's market position.
It is crucial to analyze the competitive landscape and potential market size for these advanced therapies. Vericel's growth strategy, including its R&D pipeline and new product launches, should be evaluated against emerging technologies and competitors' activities. The company's focus on innovation and clinical outcomes, as demonstrated by the published 10-year study results, may provide it with a competitive edge and enhance its reputation among healthcare providers.
The clinical advancements and FDA submissions mentioned, such as the acceptance of the supplemental BLA for NexoBrid's pediatric indication, are critical for Vericel's future growth. The successful commercial launch and P&T committee approvals for NexoBrid indicate a positive reception in the burn care space. Additionally, the long-term clinical and MRI-based outcomes of MACI treatments, as reported in the American Journal of Sports Medicine, provide evidence of the therapy's efficacy and durability.
These clinical milestones have significant implications for stakeholder confidence and patient outcomes. They also reflect the company's commitment to evidence-based therapies, which can drive adoption rates and support premium pricing strategies. The medical community's response to these advancements and their integration into standard care protocols will be pivotal for Vericel's sustained growth and market share expansion.
Full-Year 2023 Total Revenue Growth of
Fourth Quarter Total Revenue Growth of
Fourth Quarter Gross Margin of
Full-Year 2024 Total Revenue Guidance of
Conference Call Today at 8:30am Eastern Time
CAMBRIDGE, Mass., Feb. 29, 2024 (GLOBE NEWSWIRE) -- 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 of34% - 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 of17% - 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 t o$241 million - Gross margin expected to be approximately
70% - Adjusted EBITDA margin expected to be approximately
20%
Fourth Quarter 2023 Results
Total net revenue for the quarter ended December 31, 2023 increased
Gross profit for the quarter ended December 31, 2023 was
Total operating expenses for the quarter ended December 31, 2023 were
Net income for the quarter ended December 31, 2023 was
Non-GAAP adjusted EBITDA for the quarter ended December 31, 2023 was
As of December 31, 2023, the Company had
Full-Year 2023 Results
Total net revenue for the year ended December 31, 2023 was
Gross profit for the year ended December 31, 2023 was
Total operating expenses for the year ended December 31, 2023 were
Net loss for the year ended December 31, 2023 was
Non-GAAP adjusted EBITDA for the year ended December 31, 2023 was
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 Corporation
Vericel 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
GAAP v. Non-GAAP Measures
Vericel’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 Statements
Vericel 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 Burns
ir@vcel.com
+1 (734) 418-4411
Media Contact:
Julie Downs
media@vcel.com
VERICEL CORPORATION
CONSOLIDATED 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 CORPORATION
RECONCILIATION 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 CORPORATION
CONDENSED 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 | 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 | ||
FAQ
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