Company Overview - Vericel is a leading provider of advanced therapies for the sports medicine and severe burn care market, focusing on innovative cell therapies and specialty biologics for tissue repair and function restoration [4] - The company was formed through the acquisition of MACI and Epicel from Sanofi in 2014, which were previously part of the Genzyme biosurgery business [4] Financial Performance - At the time of acquisition, the products were generating less than $50 million in revenue and were experiencing flat to declining sales [4] - Since the acquisition, Vericel has transformed into a leading medtech growth company, achieving high revenue and profit growth along with strong cash generation [4]

Vericel Corp Conference Call Summary Company Overview - **Company**: Vericel Corp - **Industry**: Healthcare, specifically advanced therapies for sports medicine and severe burn care - **Key Products**: MACI (cartilage repair), Epicel (skin graft), NexoBrid (eschar removal) [2][3][4] Core Points and Arguments Financial Performance - Vericel has transformed from a declining business to a leading medtech growth company since acquiring MACI and Epicel in 2014, with revenues growing from less than $50 million to projected revenues of approximately $276 million for 2025 [2][10] - The company has achieved a 20% compound annual growth rate (CAGR) in revenue since launching MACI in 2017, with MACI alone generating close to $240 million in 2025 [8][11] - Vericel maintains a strong financial profile with $200 million in cash, no debt, and consistent positive Adjusted EBITDA and operating cash flow for over five years [6][10] Product Highlights - **MACI**: - Leading cartilage repair product, FDA-approved for arthroscopic delivery, with a 24% CAGR since launch [3][8] - Unique in its ability to use a patient's own cells for cartilage repair, addressing a significant market need with an addressable market of over $4 billion [10][21] - Expected to expand into ankle cartilage repair, potentially increasing the addressable market to over $5 billion [10][33] - **Epicel**: - The only FDA-approved permanent skin replacement for large burns, addressing a critical need in severe burn care [4][41] - **NexoBrid**: - An orphan biologic product for eschar removal, with a market opportunity estimated at $300 million [35][39] Competitive Advantages - Vericel's products have significant competitive moats due to regulatory barriers, including the lack of a defined biosimilar pathway for MACI and Epicel [5] - Strong clinical outcomes and a broad FDA label for MACI enhance its market position, with a 95% approval rate for insurance coverage [26][27] Growth Strategies - Expansion of the sales force by 30% to enhance market penetration and support growth initiatives [12][45] - Ongoing clinical studies for MACI ankle indications and geographic expansion into international markets [9][33] - Focus on operational excellence and commercial execution to sustain growth momentum [49] Market Dynamics - The U.S. market for cartilage repair procedures is approximately 750,000 annually, with MACI positioned to capture a significant share due to its unique attributes [21][22] - The burn care market is also substantial, with around 40,000 hospitalized burn patients annually, creating a strong demand for NexoBrid and Epicel [34][35] Additional Important Insights - The company has a robust pipeline for future growth, with expectations to double revenues again by 2029, reaching approximately $500 million [13] - MACI's innovative delivery method and less invasive procedure compared to previous products have led to broader adoption among orthopedic surgeons [25][32] - Vericel is actively seeking opportunities for business development to enhance its portfolio, particularly in sports medicine and cell therapy [42][43] This summary encapsulates the key points discussed during the conference call, highlighting Vericel's strong market position, financial health, and strategic growth initiatives.

Advanced Therapies for the Sports Medicine & Severe Burn Care Markets 44TH ANNUAL J.P. MORGAN HEALTHCARE CONFERENCE JANUARY 14, 2026 Safe Harbor PORTFOLIO OF INNOVATIVE CELL THERAPIES AND SPECIALTY BIOLOGICS WITH SIGNIFICANT BARRIERS TO ENTRY ongoing internal control, review and audit procedures. Additional 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 our expectations regardi ...

Core Insights - Vericel Corporation expects total revenue of approximately $276 million for the fourth quarter of 2025, with MACI revenue projected at $239.5 million, indicating a growth of 23% in both total revenue and MACI revenue compared to the previous year [1][6]. Financial Performance - The company anticipates a gross margin of 74% and an adjusted EBITDA margin of 26% for the fourth quarter [6]. - Vericel is expected to report GAAP net income profitability for the second consecutive year [6]. - The company holds $200 million in cash and investments with no debt [6]. Product and Market Developments - The fourth quarter of 2025 saw the highest number of MACI implants and trained surgeons since the product's launch, with MACI revenue growth exceeding 20% for the third consecutive year [6]. - Vericel has completed the expansion of its MACI sales force and has over 900 trained surgeons as of year-end 2025 [6]. - The company has initiated the MACI Ankle™ MASCOT clinical study and is on track to begin MACI commercial manufacturing in a new facility in 2026 [6]. Leadership Commentary - Nick Colangelo, President and CEO, stated that the company executed extremely well in 2025 and is entering 2026 with strong momentum, expecting continued high revenue growth and increased MACI utilization [3].

Core Viewpoint - Vericel Corporation (NASDAQ:VCEL) is highlighted as a promising small-cap stock with significant upside potential, despite recent adjustments in price targets by analysts [1][2]. Financial Performance - In fiscal Q3 2025, Vericel reported total net revenue of $67.5 million, an increase from $57.9 million in the same quarter of the previous year [2]. - The net product revenue included $55.7 million from MACI, up from $44.7 million year-over-year, and $10.4 million from Epicel, down from $44.7 million [2]. - NexoBrid generated $1.5 million in revenue, a slight increase from $1.1 million in fiscal Q3 2024 [2]. Operating Expenses - Total operating expenses for the quarter rose to $46.1 million, compared to $44.1 million in the same period of 2024, primarily due to increased headcount and costs associated with the new Burlington facility [3]. Revenue Guidance - The company provided full-year revenue guidance of $272 to $276 million, reaffirming MACI revenue growth in the low 20% range, estimated at $237.5 to $239.5 million [4]. - Full-year profitability guidance includes a gross margin of 74% and an adjusted EBITDA margin of 26% [4]. Company Overview - Vericel is engaged in the development, research, manufacturing, and distribution of patient-specific expanded cellular therapies, with products including Epicel for skin replacement and MACI for tissue engineering using the patient's own cartilage [5].

Market Trends - The market rotation trend is shifting from mega-cap tech stocks towards small caps, cyclicals, and financials, with expectations for this trend to continue due to easy monetary policy from the Fed and upcoming rate cuts [2][3] - Small caps are viewed as undervalued and are expected to outperform as the Fed enters a rate-cutting cycle, supported by fiscal policies and a new tax bill that benefits R&D intensive small caps [2][3] Investment Methodology - A list of small cap stocks was created using stock screeners, focusing on those with high analyst upside potential and hedge fund interest, with data sourced from Insider Monkey's database [6][7] - The methodology aims to identify stocks that hedge funds are investing in, as this strategy has historically outperformed the market [7] Company Highlights UP Fintech Holding Ltd. (NASDAQ:TIGR) - UP Fintech Holding Ltd. has a market cap of $1.54 billion and an analyst upside of 72.79%, with 18 hedge fund holders [8][9] - The company reported a fiscal Q3 revenue of $175.2 million, reflecting a 73.3% year-over-year growth, and a net income of $53.8 million, up 29.9% quarter-over-quarter [12] - Despite strong fiscal results, analysts maintain a cautious outlook due to anticipated rate cuts, slowing client acquisition, and market volatility [10][11] Vericel Corporation (NASDAQ:VCEL) - Vericel Corporation has a market cap of $1.84 billion and an analyst upside of 53.33%, also with 18 hedge fund holders [14] - The company reported fiscal Q3 revenue of $67.5 million, an increase from $57.9 million in the prior year, with net product revenue driven by MACI and Epicel products [15] - Vericel reaffirmed its full-year revenue guidance of $272 to $276 million, with a projected growth rate for MACI in the low 20% range [17]

Vericel (NasdaqGM:VCEL) FY Conference Summary Company Overview - **Company**: Vericel Corporation - **Industry**: Biotechnology, specifically in regenerative medicine and cell therapy Key Financial Highlights - **Q3 Revenue**: Achieved record revenue of approximately **$67.5 million** [4] - **MACI Revenue**: Contributed about **$56 million**, reflecting a **25% growth** [4] - **Burn Care Revenue**: Recorded its strongest quarter with approximately **$12 million** [4] - **Adjusted EBITDA**: Increased by **70%** to about **$17 million**, achieving a **25% margin** [5] - **GAAP Net Income**: Positive at approximately **$5 million** [5] - **Cash Generation**: Generated roughly **$20 million** in operating and free cash flow [5] Market and Product Insights - **Total Addressable Market (TAM)**: Identified a **60,000-patient TAM** for MACI [8] - **Market Segmentation**: - Key growth drivers include patella and larger defects, making up about **one-third** of the market [9] - Smaller defects, particularly in the femoral condyles (2-4 sq cm), represent about **two-thirds** of the market, with low penetration currently [10] - **Surgeon Adoption**: Growth in surgeon adoption is crucial, with expectations for continued growth in MACI usage among surgeons [12] Strategic Initiatives - **Salesforce Expansion**: - Expansion to approximately **100 territories** from **75**, with hiring ahead of schedule [26] - Focus on increasing surgeon activation and deeper penetration in existing accounts [29] - **International Expansion**: - Plans to target the U.K. for MACI rollout, with potential launch in **2027** [46] - New manufacturing facility in Burlington, MA, set to support both U.S. and international standards [46] Product Development and Pipeline - **MACI Ankle Study**: On track for initiation in Q4 [6] - **Arthro Training**: Surgeons trained in Arthro are showing higher biopsy growth rates compared to non-trained surgeons [18] - **Trochlear Defects**: Notable increase in utilization for trochlear defects, indicating a potential growth area [15] Financial Outlook - **2026 Growth Expectations**: Anticipated strong growth driven by MACI, with a cautious outlook for 2024 at around **20% growth** [34] - **Margin Guidance**: Projected **74% gross margin** and **26% adjusted EBITDA margin** for the current year, with expectations for margin expansion moving forward [49] Challenges and Considerations - **Burn Care Variability**: Epicel's revenue has shown variability, with efforts to stabilize and grow the burn care franchise [37] - **Nexabrid Utilization**: Despite achieving **70 P&T approvals**, utilization has been slower than expected due to workflow and training challenges [42] Conclusion - **Overall Positioning**: Vericel is well-positioned for continued growth with strong financial performance, strategic initiatives in place, and a focus on expanding its market presence both domestically and internationally. The company is optimistic about its future trajectory, particularly with the anticipated contributions from its expanded Salesforce and new product offerings.

Company Overview - Vericel Corporation is a leader in advanced therapies for the sports medicine and severe burn care markets, combining innovations in biology with medical technologies to create a differentiated portfolio of cell therapies and specialty biologics [2] - The company markets three main products in the United States: MACI, Epicel, and holds an exclusive license for NexoBrid [2] Product Details - MACI is an autologous cellularized scaffold product for repairing symptomatic, full-thickness cartilage defects of the knee in adults [2] - Epicel is a permanent skin replacement for treating patients with deep dermal or full-thickness burns covering 30% or more of total body surface area [2] - NexoBrid is a biological orphan product indicated for eschar removal in patients with deep partial-thickness and/or full-thickness thermal burns [2] Upcoming Events - Vericel Corporation will participate in a fireside chat at the Stephens Annual Investment Conference on November 20, 2025, at 11:00 a.m. ET [1]

Financial Data and Key Metrics Changes - The company reported record total revenue of $67.5 million for Q3 2025, exceeding guidance, with MACI revenue growing 25% to $55.7 million [11][12] - GAAP net income was over $5 million, and adjusted EBITDA margin reached 25%, reflecting a nearly 800 basis points increase year-over-year [3][12] - Operating cash flow for the quarter was a record $22.1 million, contributing to a free cash flow of nearly $20 million [12] Business Line Data and Key Metrics Changes - MACI revenue growth was driven by strong biopsy growth, with record highs in both MACI biopsies and the number of surgeons taking biopsies [4][5] - Burn care revenue was $11.8 million, a 21% sequential increase, with EPICEL revenue at $10.4 million, marking its highest quarter of the year [11][12] - NexoBrid revenue reached $1.5 million, its highest since launch, growing 38% year-over-year [11] Market Data and Key Metrics Changes - The company has over 800 MACI Arthro-trained surgeons, with significant growth in biopsy and implant rates among trained surgeons compared to untrained ones [5][6] - The U.K. is targeted for MACI's international expansion, with plans to submit a marketing application in mid-2026 and a potential launch in the first half of 2027 [8][9] Company Strategy and Development Direction - The company is focused on expanding its MACI Salesforce and investing in sales operations, marketing, and medical functions to enhance operational excellence [10] - A phased approach to MACI's international expansion is being initiated, starting with the U.K. due to favorable market conditions [8][9] - The company plans to initiate a phase 3 MACI Ankle Clinical Study, representing a substantial growth opportunity [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong top-line growth and profitability, with expectations for continued revenue growth in 2026 and beyond [16][41] - The company anticipates a significant acceleration in MACI revenue growth from 18% in the first half of the year to approximately 23% in the second half [13][14] - Management highlighted the importance of maintaining a prudent approach to guidance, especially in light of potential variability in the burn care segment [45] Other Important Information - The company achieved a gross profit margin of 73.5%, with expectations for a gross margin of approximately 77% in Q4 [12][15] - The company is not assuming additional NexoBrid revenue related to the BARDA RFP process initiated in August, although there is potential for incremental revenue [14][15] Q&A Session Summary Question: Insights on MACI Arthro contributions in 2026 - Management indicated that they expect high contributions from MACI Arthro but will be prudent in guidance, starting with a baseline of around 20% growth for MACI [20][24] Question: MACI Arthro sales in Q3 and expectations for 2026 - Management clarified that they do not view MACI Arthro as cannibalizing legacy MACI but rather as expanding overall MACI utilization [47][49] Question: Trends in MACI biopsy growth and surgeon adoption - Management noted strong biopsy growth across all surgeon types, with a significant increase in trained surgeons leading to higher implant rates [70][71] Question: R&D spending and expectations for Q4 - Management confirmed total operating expenses of about $50 million for Q4, with increased investments in salesforce expansion and the ankle trial [75][78] Question: Post-surgical pain and recovery times with MACI Arthro - Management highlighted positive early indicators of reduced post-surgical pain and faster recovery times associated with MACI Arthro procedures [78][79]

Financial Performance - Total Q3 revenue reached $67.5 million[6], driven by strong performance across franchises[7] - Gross margin was 73.5%[7] - Net income was $5.1 million[7] - Adjusted EBITDA was $17.0 million, representing a 25% margin[7] - Operating cash flow was $22.1 million[7] - Cash and investments totaled $185 million[7, 13] Product Performance - MACI revenue grew by 25%, achieving a record third-quarter revenue of nearly $56 million[7] - NexoBrid achieved record quarterly revenue[7] - Epicel had its highest revenue quarter of the year[7] Strategic Initiatives - MACI sales force expansion is on track to be completed in Q4, with new hires starting in territories in Q1 2026[7] - The company remains on track to initiate the MACI Ankle study in Q4[7]