On November 8, 2023 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, 2023 (Press release, Vericel, NOV 8, 2023, View Source [SID1234637276]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Third Quarter 2023 Financial Highlights
•Total net revenue of $45.6 million
•MACI net revenue of $37.6 million, Epicel net revenue of $7.4 million and NexoBrid net revenue of $0.6 million
•Gross margin of 67%
•Net loss of $3.7 million, or $0.08 per diluted share
•Non-GAAP adjusted EBITDA of $5.4 million
•Operating cash flow of $7.2 million
•As of September 30, 2023, the Company had approximately $149 million in cash, restricted cash and investments, and no debt
Business Highlights and Updates
•Record third quarter total revenue, representing 18% growth versus the prior year
•Year-to-date total revenue increased 19% to $132.5 million
•MACI third-quarter revenue growth of 21%, marking the fifth straight quarter of 20%+ growth
•13th straight quarter of positive adjusted EBITDA and operating cash flow, with adjusted EBITDA growth of 64% versus the prior year
•Record third-quarter highs for MACI biopsies and the number of surgeons taking biopsies
•Completed human factors validation study for MACI arthroscopic delivery program during the third quarter, with commercial launch anticipated in the first half of 2024
•Announced U.S. commercial availability of NexoBrid, significantly expanding the total addressable market for Vericel Burn Care
•Announced publication of positive results from NexoBrid Phase 3 DETECT study in the Journal of Burn Care & Research, demonstrating that treatment with NexoBrid resulted in early complete eschar removal in more than 90% of treated burn patients and reduced the need for surgical excision compared to Gel Vehicle and standard of care
"The Company continued to execute well in the third quarter, delivering strong financial results and achieving significant milestones, and as a result we are once again raising our full-year 2023 revenue guidance," said Nick Colangelo, President and CEO of Vericel. "We believe that we are very well-positioned for a strong close to the year and to generate even stronger financial results in 2024 as we expect higher revenue growth next year driven by continued strength in our core business and contributions from NexoBrid and arthroscopic MACI, as well as significant margin expansion driven by sustained strong revenue growth."
2023 Financial Guidance
•Total net revenue for 2023 now expected to be in the range of $192.5 to $197.5 million, compared to the previous guidance of $190 to $197 million
•Maintaining profitability guidance of gross margin in the high-60% range and adjusted EBITDA margin in the mid-teens % range
Third Quarter 2023 Results
Total net revenue for the quarter ended September 30, 2023 increased 18% to $45.6 million, compared to $38.6 million in the third quarter of 2022. Total net product revenue for the quarter included $37.6 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue, $7.4 million of Epicel (cultured epidermal autografts) net revenue, and $0.6 million of NexoBrid (anacaulase-bcdb) net revenue compared to $31.0 million of MACI net revenue, $7.3 million of Epicel net revenue, and $0.2 million of NexoBrid net revenue, respectively, in the third quarter of 2022.
Gross profit for the quarter ended September 30, 2023 was $30.6 million, or 67% of net revenue, compared to $25.2 million, or 65% of net revenue, for the third quarter of 2022.
Total operating expenses for the quarter ended September 30, 2023 were $35.7 million, compared to $32.0 million for the same period in 2022. The increase in operating expenses was primarily due to higher sales and marketing expenses and research and development program costs.
Net loss for the quarter ended September 30, 2023 was $3.7 million, or $0.08 per diluted share, compared to $6.6 million, or $0.14 per diluted share, for the third quarter of 2022.
Non-GAAP adjusted EBITDA for the quarter ended September 30, 2023 was $5.4 million, or 12% of net revenue, compared to $3.3 million, or 9% of net revenue, for the third quarter of 2022. A table reconciling non-GAAP measures is included in this press release for reference.
As of September 30, 2023, the Company had approximately $149 million in cash, restricted cash and investments, 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 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 November 8, 2024.