Total Revenues of $14.1 Million Reported
for the Quarter
Vericel Corporation (NASDAQ:VCEL), a leading developer of
patient-specific expanded cellular therapies for the treatment of
severe diseases and conditions, today reported financial results
for the first quarter ended March 31, 2016.
Total net revenues for the quarter ended March 31, 2016 were
approximately $14.1 million and included approximately $8.8 million
of Carticel net revenues and approximately $5.3 million of Epicel
net revenues. Total Carticel and Epicel net revenues
increased 31% over the first quarter of 2015, with Carticel
revenues increasing 24% and Epicel revenues increasing 46%,
respectively, compared to the same period in 2015.
Gross profit for the quarter ended March 31, 2016 was $7.5
million, or 54% of net revenues, compared to $5.3 million, or 49%
of net product revenues, for the first quarter of 2015.Research and
development expenses for the quarter ended March 31, 2016 were $3.5
million, compared to $4.4 million in the first quarter of
2015. The decrease in research and development expenses in
the first quarter is primarily due to a reduction in clinical trial
expenses.
Selling, general and administrative expenses for the quarter
ended March 31, 2016 were $6.0 million compared to $5.5 million for
the same period in 2015. The increase in SG&A expenses is
primarily due to an increase in shared facility fees.Loss from
operations for the quarter ended March 31, 2016 was $2.0 million,
compared to $4.6 million for the first quarter of 2015.
Material non-cash items impacting the operating loss for the
quarter included $0.5 million of stock-based compensation expense
and $0.4 million in depreciation and amortization expense.Other
expense for the quarter ended March 31, 2016 was $1.7 million
compared to less than $0.3 million for the same period in
2015. The change in other expense for the quarter is
primarily due to the change in the fair value of warrants in the
first quarter of 2016 compared to the same period in 2015.Vericel
reported an adjusted net loss for the quarter ended March 31, 2016
of $2.0 million dollars, or $0.08 per share, compared to an
adjusted net loss of $4.5 million, or $0.19 per share, for the same
period in 2015. The adjusted net loss excludes the non-cash
change in the fair value of warrants and the non-cash accumulated
dividend on the Series B convertible preferred stock. The
adjusted earnings per share includes common shares reserved as
treasury shares received in exchange for the Series A non-voting
convertible preferred stock. Vericel’s GAAP net loss for the
quarter ended March 31, 2016 was $3.7 million, or $0.24 per share,
compared to a net loss of $4.9 million, or $0.27 per share, for the
same period in 2015.As of March 31, 2016, the company had $13.5
million in cash and cash equivalents compared to $14.6 million in
cash and cash equivalents at December 31, 2015.Recent
Business HighlightsDuring and since the first quarter of
2016, the company:
- Achieved 31% growth in total Carticel and Epicel net revenues
in the first quarter, including 24% and 46% growth in Carticel and
Epicel net revenues, respectively, versus the same period in
2015;
- Achieved gross margins of 54% of total net revenues in the
first quarter versus 49% in the same period in 2015;
- Received U.S. Food and Drug Administration (FDA) approval of
the Epicel Humanitarian Device Exemption (HDE) supplement, which
revised the Epicel label to include pediatric patients and specify
the probable benefit, mainly related to survival, for adult and
pediatric patients, and allows the company to sell Epicel for
profit on up to 360,400 grafts per year;
- Submitted a Biologics License Application for MACI for
the treatment of cartilage defects of the knee, which was accepted
for review by the FDA with a PDUFA goal date of January 3,
2017;
- Announced results from the company's Phase 2b ixCELL-DCM
clinical study of ixmyelocel-T in patients with advanced heart
failure due to ischemic dilated cardiomyopathy, which were
presented at the American College of Cardiology's (ACC) 65th Annual
Scientific Session and published in The Lancet;
- Entered into a $10 million credit facility and $5 million term
loan agreement with Silicon Valley Bank to access low-cost,
non-dilutive capital for the company; and
- Executed a service agreement with Dohmen Life Science Services,
LLC for clinical- and patient-support services for Carticel and
MACI, if approved.
“We had a very strong first quarter and made tremendous progress
across all facets of our business,” said Nick Colangelo, president
and CEO of Vericel. “Our strong revenue growth and margin
expansion reflect the success of our commercial team’s sales and
marketing initiatives, and our clinical and regulatory team made
substantial progress on our key clinical and regulatory priorities.
We believe that these results position the company for strong
growth moving forward.”
Conference Call InformationToday's conference
call will be available live at 8:00am Eastern time in the Investors
section of the Vericel website at
http://investors.vcel.com/events.cfm. 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 2016
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.cfm until May 10, 2017.
A replay of the call will also be available until 11:59 pm (EDT) on
May 14, 2016 by calling (855) 859-2056, or from outside the U.S.
(404) 537-3406. The conference ID is 93070867.
About Vericel CorporationVericel Corporation is
a leader in developing patient-specific expanded cellular therapies
for use in the treatment of patients with severe diseases and
conditions. The company markets two autologous cell therapy
products in the U.S.: Carticel® (autologous
cultured chondrocytes), an autologous chondrocyte implant for the
treatment of cartilage defects in the knee, and Epicel® (cultured
epidermal autografts), a permanent skin replacement for the
treatment of patients with deep-dermal or full-thickness burns
comprising greater than or equal to 30% of total body surface
area. Vericel is also developing MACI™, a third-generation
autologous chondrocyte implant for the treatment of cartilage
defects in the knee, and ixmyelocel-T, a patient-specific
multicellular therapy for the treatment of advanced heart failure
due to ischemic dilated cardiomyopathy. For more information,
please visit the company’s website at www.vcel.com.
Epicel® and Carticel® are registered trademarks and MACI™ is a
trademark of Vericel Corporation. © Vericel
Corporation. All rights reserved.
The Vericel Corporation logo is available
at http://www.globenewswire.com/NewsRoom/Attachment/30369.
Non-GAAP Financial Measures
Vericel has provided in this release financial information that
has not been prepared in accordance with generally accepted
accounting principles in the United States, or GAAP. Vericel
believes that the use of these non-GAAP financial measures provides
supplementary information for investors to use in evaluating
operating performance and in comparing its financial measures with
other companies in Vericel’s industry. The adjusted net loss
excludes the non-cash change in the fair value of warrants and the
non-cash accumulated dividend on the Series B convertible preferred
stock. The adjusted earnings per share includes common shares
reserved as treasury shares received in exchange for the Series A
non-voting convertible preferred stock. Non-GAAP financial measures
that Vericel uses may differ from measures that other companies may
use. In addition, 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.
This document contains forward-looking statements, including,
without limitation, statements concerning anticipated progress,
objectives and expectations regarding the commercial potential of
our products and growth in revenues, intended product development,
clinical activity timing, and objectives and expectations
regarding our company described herein, all of which involve
certain risks and uncertainties. These statements are often, but
are not always, made through the use of words or phrases such as
"anticipates," "intends," "estimates," "plans," "expects," "we
believe," "we intend," and similar words or phrases, or future or
conditional verbs such as "will," "would," "should," "potential,"
"could," "may," or similar expressions. Actual results may differ
significantly from the expectations contained in the
forward-looking statements. Among the factors that may result in
differences are the inherent uncertainties associated with
competitive developments, clinical trial and product development
activities, regulatory approval requirements, estimating the
commercial potential of our products and product candidates and
growth in revenues and improvement in costs, market demand for our
products, and our ability to supply or meet customer demand for our
products. These and other significant factors are discussed in
greater detail in Vericel's (formerly Aastrom Biosciences,
Inc.)Annual Report on Form 10-K for the year ended December 31,
2015, filed with the Securities and Exchange Commission ("SEC") on
March 14, 2016, Quarterly Reports on Form 10-Q and other filings
with the SEC. These forward-looking statements reflect management's
current views and Vericel does not undertake 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.
| VERICEL CORPORATION |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| (Unaudited, amounts in thousands) |
| |
| |
|
March 31, |
|
December 31, |
| |
|
2016 |
|
2015 |
|
ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash |
|
$ |
13,544 |
|
|
$ |
14,581 |
|
| Accounts receivable (net of
allowance for doubtful accounts of $68 for 2016 and 2015) |
|
9,669 |
|
|
10,919 |
|
| Inventory |
|
1,942 |
|
|
1,379 |
|
| Other current assets |
|
662 |
|
|
464 |
|
| Total current assets |
|
25,817 |
|
|
27,343 |
|
| Property and equipment,
net |
|
4,393 |
|
|
4,049 |
|
| Intangible assets,
net |
|
2,847 |
|
|
2,917 |
|
| Total assets |
|
$ |
33,057 |
|
|
$ |
34,309 |
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable |
|
$ |
6,293 |
|
|
$ |
7,588 |
|
| Accrued expenses |
|
4,943 |
|
|
3,603 |
|
| Warrant liabilities |
|
2,397 |
|
|
757 |
|
| Other |
|
136 |
|
|
160 |
|
| Total current liabilities |
|
13,769 |
|
|
12,108 |
|
| Long term debt |
|
62 |
|
|
71 |
|
| Total liabilities |
|
13,831 |
|
|
12,179 |
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
| Shareholders’ equity: |
|
|
|
|
| Series A non-voting convertible
preferred stock, no par value: shares authorized and reserved — 1;
shares issued and outstanding — 1 |
|
3,150 |
|
|
3,150 |
|
| Series B-2 voting convertible
preferred stock, no par value: shares authorized and
reserved — 39, shares issued and outstanding — 12 |
|
38,389 |
|
|
38,389 |
|
| Common stock, no par value; shares
authorized — 75,000; shares issued and outstanding — 23,891
and 23,789, respectively |
|
308,512 |
|
|
307,766 |
|
| Treasury stock — 1,250 shares |
|
(3,150 |
) |
|
(3,150 |
) |
| Accumulated deficit |
|
(327,675 |
) |
|
(324,025 |
) |
| Total shareholders’ equity |
|
19,226 |
|
|
22,130 |
|
| Total liabilities and shareholders’
equity |
|
$ |
33,057 |
|
|
$ |
34,309 |
|
| VERICEL CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
| (Unaudited, amounts in thousands except per
share amounts) |
| |
| |
|
Three Months Ended March 31, |
| |
|
2016 |
|
2015 |
| Revenues: |
|
|
|
|
| Product sales |
|
$ |
14,108 |
|
|
$ |
10,849 |
|
| Total revenues |
|
14,108 |
|
|
10,849 |
|
| Costs and expenses: |
|
|
|
|
| Cost of product sales |
|
6,560 |
|
|
5,568 |
|
| Gross profit |
|
7,548 |
|
|
5,281 |
|
| Research and development |
|
3,536 |
|
|
4,377 |
|
| Selling, general and
administrative |
|
6,004 |
|
|
5,476 |
|
| Total operating expenses |
|
9,540 |
|
|
9,853 |
|
| Loss from
operations |
|
(1,992 |
) |
|
(4,572 |
) |
| Other income
(expense): |
|
|
|
|
| Increase in fair value of
warrants |
|
(1,640 |
) |
|
(317 |
) |
| Foreign currency translation (loss)
gain |
|
(10 |
) |
|
16 |
|
| Interest income |
|
5 |
|
|
13 |
|
| Interest expense |
|
(3 |
) |
|
(2 |
) |
| Other expense |
|
(10 |
) |
|
— |
|
| Total other income (expense) |
|
(1,658 |
) |
|
(290 |
) |
| Net loss |
|
$ |
(3,650 |
) |
|
$ |
(4,862 |
) |
| |
|
|
|
|
| Net loss per share
attributable to common shareholders (Basic and Diluted) |
|
$ |
(0.24 |
) |
|
$ |
(0.27 |
) |
| Weighted average number of
common shares outstanding (Basic and Diluted) |
|
22,604 |
|
|
23,786 |
|
| RECONCILIATION OF REPORTED NUMERATOR AND
DENOMINATOR IN NET LOSS PER SHARE |
| (GAAP) TO ADJUSTED NET LOSS PER SHARE
(NON-GAAP MEASURE) – UNAUDITED |
| |
| |
|
Three Months Ended March 31, |
|
(Amounts In
thousands except per share amounts) |
|
2016 |
|
2015 |
|
Numerator: |
|
|
|
|
| Numerator of basic and
diluted EPS |
|
$ |
(5,454 |
) |
|
$ |
(6,452 |
) |
| Add: Increase in fair value of
warrants |
|
1,640 |
|
|
317 |
|
| Add: Dividends accumulated on
convertible preferred stock |
|
1,804 |
|
|
1,590 |
|
| Adjusted net loss –
Non-GAAP |
|
$ |
(2,010 |
) |
|
$ |
(4,545 |
) |
|
Denominator: |
|
|
|
|
| Denominator for basic
and diluted EPS: |
|
|
|
|
| Weighted-average common
shares outstanding |
|
22,604 |
|
|
23,786 |
|
| Add: Treasury stock |
|
1,250 |
|
|
— |
|
| Adjusted denominator
for basic and diluted EPS |
|
23,854 |
|
|
23,786 |
|
| Adjusted net loss per
share (basic and diluted) – Non-GAAP |
|
$ |
(0.08 |
) |
|
$ |
(0.19 |
) |
CONTACT: Chad RubinThe Trout
Groupcrubin@troutgroup.com(646) 378-2947orLee SternThe Trout
Grouplstern@troutgroup.com(646) 378-2922
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