Vericel (US:VCEL)2022-08-03 18:57Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $37 million, with adjusted EBITDA of approximately $3 million, marking the eighth consecutive quarter of profitability and positive cash flow [8][28] - MACI revenue reached $28.6 million, an 8% increase year-over-year and over 10% sequential growth from Q1 2022 [9][23] - Epicel revenue was $8.2 million, which was below the expected run rate, impacted by fewer biopsies and a lower average burn size [15][24] - Gross profit for the quarter was $22.9 million, representing a gross margin of 62%, down from 68% in Q2 2021 [25] - Net loss for the quarter was $9 million, or $0.19 per share, compared to a net loss of $3.8 million, or $0.08 per share, in Q2 2021 [27] Business Line Data and Key Metrics Changes - MACI continued to outperform the overall cartilage repair procedure market, with expectations for mid to high 20% growth in Q3 and mid to high 30% growth in Q4 compared to the same periods in 2021 [10][12] - Epicel's revenue was significantly impacted by inherent volatility due to the small patient population and treatment dynamics, despite solid underlying fundamentals [15][24] - NexoBrid's BLA resubmission has been accepted for review by the FDA, with a PDUFA date set for January 1, 2023, indicating potential for future growth [18][19] Market Data and Key Metrics Changes - The company expects MACI adoption to continue to be supported through medical education and publications, with a focus on timely treatment for patients [13] - The burn care franchise, represented by Epicel, is experiencing volatility due to the concentrated number of burn centers treating patients, affecting quarterly revenue [15][24] Company Strategy and Development Direction - The company is maintaining its full-year revenue guidance for MACI, expecting it to return to a high growth profile [30] - A $150 million revolving credit facility has been established to enhance strategic flexibility for pursuing growth opportunities [29][44] - The company is focused on delivering strong financial results while preparing for a potential NexoBrid launch in the first half of 2023 [22][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in MACI's long-term growth trajectory, anticipating continued improvement in the healthcare environment [41][43] - The company is managing operating expenses effectively, reducing guidance for the full year to approximately $130 million to $132 million [33][65] - Management highlighted the importance of maintaining a strong cash position and the availability of tools for potential business development opportunities [46][47] Other Important Information - The company issued its inaugural ESG report, reflecting its commitment to incorporating ESG principles across all business activities [20] - The company is focused on expanding its positive impact and building upon its ESG performance in the coming years [20] Q&A Session Summary Question: Guidance for Epicel and MACI - Management maintained full-year guidance of $178 million to $189 million, with MACI on track for its revenue range [36][37] - Epicel is expected to trend below original expectations, with Q3 revenue anticipated to be similar to the first half of the year [38] Question: MACI Growth and Long-term Outlook - Management is confident in MACI's long-term growth profile, projecting continued growth in the low 20% range for 2023 and beyond [41][43] Question: Commercial Launch Preparations for NexoBrid - Preparations for a commercial launch of NexoBrid are ongoing, with expectations for a first-half launch in 2023 [67][69] Question: Biopsy Growth Metrics for MACI - Management indicated that biopsy growth metrics have been consistent with revenue growth, although specific metrics were not disclosed [73] Question: Backlog Expectations for MACI - The backlog is not expected to significantly contribute to results in the second half of the year, unless conversion rates improve [75]