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, 2020.
Second Quarter 2020 Financial
Highlights
- Total net product revenues of $20.0 million, compared to $26.2
million in the second quarter of 2019;
- MACI® net revenue of $15.1 million and Epicel® net revenue of
$4.9 million;
- Gross margin of 57%, compared to gross margin of 66% in the
second quarter of 2019;
- Net loss of $8.3 million, or $0.18 per share, compared to $19.8
million, or $0.45 per share, in the second quarter of 2019, which
included the $17.5 million upfront license payment to MediWound
Ltd. for North American rights to NexoBrid®;
- Non-GAAP adjusted EBITDA loss of $3.5 million, compared to
positive adjusted EBITDA of $1.8 million in the second quarter of
2019; and
- As of June 30, 2020, the company had $80.9 million in cash and
investments, compared to $79.0 million as of December 31, 2019, and
no debt.
Business Highlights and Updates
- Total net product revenues, which decreased approximately 23%
for the quarter, declined approximately 78% in April and 32% in May
compared to the same periods in 2019, and increased approximately
29% in June compared to June 2019;
- MACI implants, which declined approximately 84% in April and
37% in May compared to the same periods in 2019, increased
approximately 21% in June compared June 2019;
- MACI biopsies declined approximately 79% in April and 22% in
May compared to the same periods in 2019, and increased
approximately 23% in June compared June 2019;
- Epicel graft volume, which declined 70% in April, increased
approximately 20% in the May through June period compared to the
same period in 2019;
- Epicel biopsies increased approximately 6% in the second
quarter compared to the second quarter of 2019; and
- The company announced the submission of a Biologics License
Application to the FDA for NexoBrid for the treatment of severe
thermal burns.
“In light of the ongoing pandemic, we are very pleased with our
second quarter results as we saw a strong recovery as the quarter
progressed and COVID-19 restrictions on elective surgeries were
lifted across the country,” said Nick Colangelo, President and CEO
of Vericel. “Looking ahead, while uncertainties remain, we
are confident in the fundamental prospects of our business and for
the third quarter we expect MACI revenue growth over the third
quarter of 2019, Epicel revenue to increase sequentially over the
second quarter of 2020 and return to recent historical levels, and
to recognize revenue in connection with the first delivery of
NexoBrid under the BARDA procurement contract, which is scheduled
to take place later this quarter.”Second Quarter 2020
ResultsTotal net product revenues for the quarter ended
June 30, 2020 decreased 23% to $20.0 million, compared to $26.2
million in the second quarter of 2019. Total net product
revenues for the quarter included $15.1 million of MACI (autologous
cultured chondrocytes on porcine collagen membrane) net revenue and
$4.9 million of Epicel (cultured epidermal autografts) net revenue,
compared to $20.8 million of MACI net revenue and $5.3 million of
Epicel net revenue, respectively, in the second quarter of
2019.Gross profit for the quarter ended June 30, 2020 was $11.4
million, or 57% of net revenues, compared to $17.1 million, or 66%
of net revenues, for the second quarter of 2019.Total operating
expenses for the quarter ended June 30, 2020 were $19.7 million,
compared to $37.3 million for the same period in 2019, which
included the $17.5 million upfront license payment to MediWound
Ltd. for North American rights to NexoBrid. Excluding the
$17.5 million license payment, operating expenses remained
essentially flat as reductions to discretionary spend and variable
cost reductions offset the cost increases associated with the
expanded MACI sales force.Vericel’s net loss for the quarter ended
June 30, 2020 was $8.3 million, or $0.18 per share, compared to
$19.8 million, or $0.45 per share, for the second quarter of 2019,
which included the $17.5 million license payment for
NexoBrid.Non-GAAP adjusted EBITDA loss was $3.5 million for the
quarter ended June 30, 2020, compared to positive adjusted EBITDA
of $1.8 million in the second quarter of 2019. A table
reconciling non-GAAP measures is included in this press release for
reference.As of June 30, 2020, the company had $80.9 million in
cash and investments, compared to $79.0 million as of December 31,
2019, 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 2020 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,
2021. A replay of the call will also be available until
11:00am (EDT) on August 12, 2020 by calling (855) 859-2056, or from
outside the U.S. by calling (404) 537-3406. The conference ID
is 5851304.
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 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. © 2020 Vericel Corporation. All rights
reserved.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 the
scope, scale and duration of the impact of the COVID-19 pandemic,
growth in revenues for MACI and Epicel, the expected target surgeon
audience, the estimate of the commercial growth potential of our
products and product candidates, availability of funding from the
Biomedical Research and Development Authority under its agreement
with MediWound Ltd. for use in connection with NexoBrid development
activities, potential fluctuations in sales and volumes and our
results of operations over the course of the year, competitive
developments, timing and conduct of clinical trial and product
development activities, timing or likelihood of regulatory
approvals, market demand for our products, changes in third party
coverage and reimbursement, and our ability to supply or meet
customer demand for our products.With respect to COVID-19, we are
currently unable to reasonably estimate the specific extent, or
duration, of the impact of the COVID-19 outbreak on our business,
financial and operating results. We are also unable to
predict how the outbreak will affect the pace with which state and
local governments lift restrictions on the performance of elective
surgical procedures or whether additional such restrictions may be
imposed by states in the future, the availability of physicians
and/or their treatment prioritizations or the impact of the
outbreak on the overall healthcare infrastructure. In addition,
patients who have cancelled or postponed surgeries may not
reschedule cases in a timely fashion, or at all. 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 approvals by
regulatory bodies, delays in product development efforts, and
additional government-imposed quarantines and requirements to
“shelter at home” or other incremental mitigation efforts 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. 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, 2019, filed with the Securities and
Exchange Commission (“SEC”) on February 25, 2020, Vericel’s
Quarterly Report on Form 10-Q for the quarter ended June, 30, 2020,
filed with the SEC on August 5, 2020, 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 Contacts:Lee SternSolebury
Troutlstern@troutgroup.com+1 (646) 378-2922
VERICEL CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited, amounts in thousands) |
|
|
June 30, |
|
December 31, |
|
|
2020 |
|
2019 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
55,704 |
|
|
|
$ |
26,889 |
|
|
Short term investments |
|
25,086 |
|
|
|
42,829 |
|
|
Accounts receivable (net of allowance for doubtful accounts of $207
and $306, respectively) |
|
23,655 |
|
|
|
32,168 |
|
|
Inventory |
|
8,417 |
|
|
|
6,816 |
|
|
Other current assets |
|
2,900 |
|
|
|
2,953 |
|
|
Total current assets |
|
115,762 |
|
|
|
111,655 |
|
|
Property and equipment, net |
|
7,040 |
|
|
|
7,144 |
|
|
Restricted cash |
|
89 |
|
|
|
89 |
|
|
Right-of-use leased assets |
|
23,800 |
|
|
|
25,103 |
|
|
Long term investments |
|
— |
|
|
|
9,247 |
|
|
Total assets |
|
$ |
146,691 |
|
|
|
$ |
153,238 |
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
4,535 |
|
|
|
$ |
6,345 |
|
|
Accrued expenses |
|
7,975 |
|
|
|
7,948 |
|
|
Current portion of operating lease liabilities |
|
5,570 |
|
|
|
5,461 |
|
|
Other liabilities |
|
41 |
|
|
|
41 |
|
|
Total current liabilities |
|
18,121 |
|
|
|
19,795 |
|
|
Operating lease liabilities |
|
20,881 |
|
|
|
22,242 |
|
|
Other long-term liabilities |
|
93 |
|
|
|
110 |
|
|
Total liabilities |
|
$ |
39,095 |
|
|
|
$ |
42,147 |
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Common stock, no par value; shares authorized — 75,000; shares
issued and outstanding — 45,194 and 44,864, respectively |
|
$ |
499,103 |
|
|
|
$ |
489,749 |
|
|
Other comprehensive gain |
|
146 |
|
|
|
21 |
|
|
Accumulated deficit |
|
(391,653 |
) |
|
|
(378,679 |
) |
|
Total shareholders’ equity |
|
107,596 |
|
|
|
111,091 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
146,691 |
|
|
|
$ |
153,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
VERICEL CORPORATIONCONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(Unaudited, amounts in thousands,
except per share amounts) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Product sales, net |
|
$ |
20,014 |
|
|
|
$ |
26,151 |
|
|
|
$ |
46,692 |
|
|
|
$ |
47,961 |
|
|
Cost of product sales |
|
8,660 |
|
|
|
9,022 |
|
|
|
18,582 |
|
|
|
17,662 |
|
|
Gross profit |
|
11,354 |
|
|
|
17,129 |
|
|
|
28,110 |
|
|
|
30,299 |
|
|
Research and development |
|
3,226 |
|
|
|
21,070 |
|
|
|
6,989 |
|
|
|
24,078 |
|
|
Selling, general and administrative |
|
16,486 |
|
|
|
16,259 |
|
|
|
34,555 |
|
|
|
29,779 |
|
|
Total operating expenses |
|
19,712 |
|
|
|
37,329 |
|
|
|
41,544 |
|
|
|
53,857 |
|
|
Loss from operations |
|
(8,358 |
) |
|
|
(20,200 |
) |
|
|
(13,434 |
) |
|
|
(23,558 |
) |
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
147 |
|
|
|
428 |
|
|
|
453 |
|
|
|
908 |
|
|
Interest expense |
|
(1 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(4 |
) |
|
Other income (expense) |
|
(57 |
) |
|
|
(18 |
) |
|
|
10 |
|
|
|
18 |
|
|
Total other income (expense) |
|
89 |
|
|
|
408 |
|
|
|
460 |
|
|
|
922 |
|
|
Net loss |
|
$ |
(8,269 |
) |
|
|
$ |
(19,792 |
) |
|
|
$ |
(12,974 |
) |
|
|
$ |
(22,636 |
) |
|
Net loss per share attributable
to common shareholders (Basic and Diluted) |
|
$ |
(0.18 |
) |
|
|
$ |
(0.45 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(0.52 |
) |
|
Weighted average number of common
shares outstanding (Basic and Diluted) |
|
45,137 |
|
|
|
43,956 |
|
|
|
45,031 |
|
|
|
43,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Net loss |
|
$ |
(8,269 |
) |
|
|
$ |
(19,792 |
) |
|
|
$ |
(12,974 |
) |
|
|
$ |
(22,636 |
) |
Non-recurring license agreement purchase |
|
— |
|
|
|
17,500 |
|
|
|
— |
|
|
|
17,500 |
|
Stock compensation expense |
|
4,376 |
|
|
|
4,182 |
|
|
|
8,144 |
|
|
|
6,810 |
|
Depreciation and amortization |
|
546 |
|
|
|
376 |
|
|
|
1,079 |
|
|
|
700 |
|
Net interest income |
|
(146 |
) |
|
|
(426 |
) |
|
|
(450 |
) |
|
|
(904 |
) |
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(3,493 |
) |
|
|
$ |
1,840 |
|
|
|
$ |
(4,201 |
) |
|
|
$ |
1,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vericel (NASDAQ:VCEL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Vericel (NASDAQ:VCEL)
Historical Stock Chart
From Apr 2023 to Apr 2024