Vericel (US:VCEL)2022-08-03 13:04Financial Performance - Total revenue for Q2 2022 was $37.046 million, a decrease of 6.3% from $39.519 million in Q2 2021[99] - Gross profit for Q2 2022 was $22.854 million, down 15.1% from $26.910 million in Q2 2021[99] - The net loss for Q2 2022 was $8.963 million, a 136.7% increase compared to a net loss of $3.786 million in Q2 2021[99] - Total revenue for the three months ended June 30, 2022, was $37.0 million, a decrease of 6.3% compared to $39.5 million in 2021, primarily driven by a decline in Epicel revenue[100] - MACI revenue increased by 7.9% to $28.6 million for the three months ended June 30, 2022, compared to $26.5 million in 2021, while Epicel revenue decreased by 32.4% to $8.2 million[100] Expenses - Research and development expenses increased by 7.7% to $4.792 million in Q2 2022, compared to $4.449 million in Q2 2021[99] - Selling, general and administrative expenses rose by 3.6% to $27.144 million in Q2 2022, up from $26.190 million in Q2 2021[99] - The total operating expenses for Q2 2022 were $31.936 million, reflecting a 4.2% increase from $30.639 million in Q2 2021[99] - Research and development expenses for the three months ended June 30, 2022, were $4.8 million, a 7.7% increase from $4.4 million in 2021, mainly due to additional spending on instrument design for Arthroscopic MACI delivery[103] - Selling, general and administrative expenses for the three months ended June 30, 2022, were $27.1 million, up from $26.2 million in 2021, attributed to increased travel and in-person events[105] - Stock-based compensation expense for the six months ended June 30, 2022, increased to $20.3 million from $17.9 million in 2021, reflecting fluctuations in stock prices[110] Cash Flow and Investments - Cash provided by operating activities for the six months ended June 30, 2022, was $6.6 million, a decrease from $14.9 million in 2021, influenced by a net loss of $16.1 million[111] - Net cash used in investing activities for the six months ended June 30, 2022, was $13.7 million, compared to $2.8 million in 2021, primarily due to investment purchases[114] - As of June 30, 2022, cash, cash equivalents, and restricted cash totaled $62.2 million, with short-term investments of $44.6 million and long-term investments of $23.7 million[112] - The company has entered into a $150 million five-year senior secured revolving credit agreement for working capital needs, with no immediate plans to borrow[122] Market and Operational Insights - The company experienced a 10.8% increase in cost of product sales, totaling $14.192 million in Q2 2022, compared to $12.609 million in Q2 2021[99] - The ongoing COVID-19 pandemic has disrupted the normal seasonality of the MACI business, affecting sales volumes and treatment prioritizations[101] - The company has a significant safety stock of key raw materials and does not expect current supply chain interruptions to impact manufacturing operations[87] - Epicel's Annual Distribution Number (ADN) is set at 360,400, significantly larger than the volume of grafts sold in 2021, indicating potential market expansion[95] Regulatory and Future Outlook - NexoBrid is in the registration stage and has a PDUFA date for review set for January 1, 2023, following a resubmission to the FDA[96] - Forward-looking statements include expectations regarding FDA approval of the NexoBrid BLA and potential impacts from the ongoing COVID-19 pandemic[128] - The company anticipates future losses and is evaluating its capital needs and financing sources[128] Accounting and Compliance - The company's financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments that may differ from actual results[125] - No material changes to critical accounting policies and estimates were reported for the six months ended June 30, 2022[126] - There have been no material changes to the company's contractual obligations and commitments since December 31, 2021[123] - Market risk exposures have not changed materially since December 31, 2021[129]