On November 9, 2021 Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, reported financial results and business highlights for the third quarter ended September 30, 2021 (Press release, Vericel, NOV 9, 2021, View Source [SID1234594873]).
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Third Quarter 2021 Financial Highlights
Total net revenue of $34.5 million, compared to $32.3 million in the third quarter of 2020
MACI net revenue of $23.9 million, Epicel net revenue of $9.8 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 64%, compared to 70% in the third quarter of 2020
Net loss of $4.9 million, or $0.11 per share, compared to net income of $3.6 million, or $0.08 per share, in the third quarter of 2020
Non-GAAP adjusted EBITDA of $4.3 million, compared to $6.7 million in the third quarter of 2020
Operating cash flow of $3.6 million
As of September 30, 2021, the Company had approximately $119 million in cash and investments, compared to approximately $100 million as of December 31, 2020, and no debt
Year-to-Date 2021 Financial Highlights
Total net revenue of $108.6 million, compared to $79.0 million in 2020
MACI net revenue of $74.2 million, Epicel net revenue of $31.8 million, and NexoBrid revenue of $2.6 million related to BARDA procurement for emergency response preparedness
Gross margin of 66%, compared to 64% for the same period in 2020
Net loss of $12.0 million, or $0.26 per share, compared to net loss of $9.4 million, or $0.21 per share, for the same period in 2020
Non-GAAP adjusted EBITDA of $16.7 million, compared to $2.5 million for the same period in 2020
Operating cash flow of $18.5 million
Business Highlights and Updates
Growth in surgeons taking MACI biopsies in 2021 is on track to exceed 20% and growth in total MACI biopsies is expected to exceed 30%, compared to 2020
Epicel net revenue growth of 48% compared to the third quarter of 2020 and the fourth straight quarter with Epicel revenue over $9 million
Growth of over 30% in Epicel biopsies and treated patients through the first nine months of 2021 compared to the same period in 2020
Following a Type A meeting with the FDA, the Company anticipates resubmission of the NexoBrid Biologics License Application in mid-2022
Expanded executive leadership team and appointed Patrick Fowler as Vericel’s Senior Vice President of Corporate Development and Strategy
"Despite additional COVID-19 disruptions in the third quarter, the Company delivered solid commercial and operational results and continued to generate top-line revenue growth, positive adjusted EBITDA and operating cash flow for the quarter," said Nick Colangelo, President and CEO of Vericel. "Based on the strength of the underlying growth drivers for MACI and Epicel, we are poised to deliver strong growth for both of our franchises this year with Epicel growth of approximately 50% for the year and with MACI expected to achieve the highest fourth quarter sequential revenue growth since launch and record quarterly revenue to close the year."
Full-Year 2021 Financial Guidance Update
Total net revenue now expected to increase 27%-30% to approximately $158-$161 million
Gross margin now expected to be approximately 70%
Adjusted EBITDA margin now expected to be approximately 22%
Estimated operating expenses of approximately $114 million
Third Quarter 2021 Results
Total net revenue for the quarter ended September 30, 2021 increased 7% to $34.5 million, compared to $32.3 million in the third quarter of 2020. Total net product revenue for the quarter included $23.9 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $9.8 million of Epicel (cultured epidermal autografts) net revenue, compared to $24.4 million of MACI net revenue and $6.7 million of Epicel net revenue, respectively, in the third 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, compared to $1.2 million in the third quarter of 2020.
Gross profit for the quarter ended September 30, 2021 was $22.1 million, or 64% of net revenue, compared to $22.5 million, or 70% of net revenue, for the third quarter of 2020.
Total operating expenses for the quarter ended September 30, 2021 were $27.1 million, compared to $19.0 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 and lower spend in the prior year due to COVID-19-related factors.
Net loss for the quarter ended September 30, 2021 was $4.9 million, or $0.11 per share, compared to net income of $3.6 million, or $0.08 per share, for the third quarter of 2020.
Non-GAAP adjusted EBITDA for the quarter ended September 30, 2021 was $4.3 million, or 12% of net revenue, compared to $6.7 million, or 21% of net revenue, for the third quarter of 2020. A table reconciling non-GAAP measures is included in this press release for reference.
As of September 30, 2021, the Company had approximately $119 million in cash and investments, compared to approximately $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 View Source." target="_blank" title="View Source." rel="nofollow">View Source 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 View Source until November 9, 2022. A replay of the call will also be available until 11:30am (EDT) on November 13, 2021 by calling (855) 859-2056, or from outside the U.S. by calling (404) 537-3406. The conference ID is 2998214.