Vericel (US:VCEL)2023-11-08 19:43Financial Data and Key Metrics Changes - Total revenue for Q3 2023 increased 18% to approximately $45.6 million, exceeding guidance for the quarter [8][23] - Gross profit for the quarter was $30.6 million, representing a gross margin of 67%, which increased compared to both the prior quarter and the prior year [25] - The company ended Q3 with nearly $150 million in cash and investments, and no debt [8][27] Business Line Data and Key Metrics Changes - MACI revenue for Q3 reached a record $37.6 million, reflecting a 21% increase year-over-year and five consecutive quarters of over 20% growth [10][24] - Burn care revenue totaled approximately $8 million in Q3, with Epicel performing solidly and initial stocking revenue for NexoBrid contributing [18][24] Market Data and Key Metrics Changes - The anticipated launch of arthroscopic MACI is expected to significantly expand the addressable market, targeting approximately 20,000 patients annually [13][14] - NexoBrid is now commercially available in the U.S., with launch activities underway and initial patient treatments expected soon [19][21] Company Strategy and Development Direction - The company is focused on expanding its burn care franchise and anticipates NexoBrid to contribute significantly to revenue growth in 2024 [21][32] - The introduction of arthroscopic MACI is expected to drive further growth, with a commercial launch planned for the first half of 2024 [12][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving higher total revenue growth in 2024, driven by continued strength in the core MACI business and the launch of new products [9][33] - The company expects to enhance profitability metrics and gross margins in 2024, supported by sustained revenue growth [10][81] Other Important Information - The company has raised its full-year revenue guidance for 2023 to between $192.5 million and $197.5 million, marking the third increase this year [28][29] - Non-GAAP adjusted EBITDA for Q3 was $5.4 million, reflecting a 64% increase year-over-year [27] Q&A Session Summary Question: Can you elaborate on the commercialization of NexoBrid and revenue expectations for Q4? - Management indicated that they are ahead of their commercial plan for NexoBrid and expect meaningful revenue contributions in Q4, with initial stocking revenue recognized in Q3 [36][39] Question: What are the expectations for supply continuity of NexoBrid amid geopolitical concerns? - Management confirmed that manufacturing operations are ongoing and supply issues are currently under control, with deliveries received in October [54] Question: Will the arthroscopic MACI contribute to revenue growth in 2024? - Management confirmed that the launch of arthroscopic MACI is expected to contribute to revenue growth, particularly in the second half of 2024 [56][70] Question: What is the expected mix between traditional and arthroscopic MACI revenue? - Management indicated that while the exact mix is still to be determined, a significant portion of the addressable market falls into the arthroscopic category [71] Question: How will the company support the rollout of the arthroscopic delivery option? - Management plans to add a small number of support representatives to assist with the rollout, without significantly impacting the margin profile [75]