Vericel (VCEL) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved record total net revenue of $52.6 million for Q1 2025, with MACI revenue of$46.3 million, Epicel revenue of $5 million, and NexoBrid revenue of$1.3 million [12] - MACI revenue grew by 15% year-over-year, which adjusts to approximately 17% growth when accounting for one fewer selling day in the quarter [12] - NexoBrid revenue increased by 207% year-over-year and 31% sequentially [12] - The net loss for the quarter was $11.2 million, or$0.23 per share, with non-GAAP adjusted EBITDA of $3.2 million, representing 6$46 million, driven by strong underlying fundamentals and a growing surgeon customer base [6] - NexoBrid revenue showed significant growth, indicating progress in its launch and deeper penetration in ordering centers [10] - Epicel revenue was lower than anticipated due to a high percentage of canceled cases related to patient health issues, despite the highest number of biopsies since 2023 [10][13] Market Data and Key Metrics Changes - The company expects total revenue growth of 22% to 25% for Q2 2025, with MACI revenue projected to be approximately $54 million [17] - The addressable market for MACI is estimated at 60,000 patients annually, with significant opportunities in treating femoral condyle and trochlear defects [24][25] Company Strategy and Development Direction - The company plans to expand its MACI sales force in the second half of 2025, driven by strong early indicators from the MACI Arthro launch [9][19] - The MACI Ankle Development Program is on track to initiate Phase III clinical studies, representing a substantial long-term growth driver with an estimated market of$1 billion [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong underlying MACI business fundamentals and early indicators from the MACI Arthro launch, suggesting potential for incremental growth [20] - The company reaffirmed its full-year revenue guidance of 20% to 23% growth and raised profitability guidance, expecting gross margins to reach 75% and adjusted EBITDA margins to 26% for the year [17] Other Important Information - The company ended the quarter with approximately $162 million in cash, restricted cash, and investments, with no debt [15] - Management noted that tariffs are expected to have a negligible impact on the business due to domestic manufacturing and significant safety stock [16] Q&A Session Summary Question: Can you discuss the market opportunity for femoral condyle and trochlear specifically? - Management indicated that the MACI Arthro instruments are designed for femoral condyle defects, representing a significant portion of the addressable market, and surgeons are also using them for trochlear defects, expanding the potential market [24][25] Question: How do you see seasonality and pacing for MACI in the second half of the year? - Management acknowledged that while MACI typically follows a seasonal pattern, strong leading indicators suggest potential for enhanced growth in the second half of the year [30][31] Question: What is the contribution of MACI Arthro to the first quarter numbers? - Management noted that while it is difficult to quantify the exact contribution from MACI Arthro in Q1, they expect a more significant impact in the second half of the year [36][37] Question: How are you prioritizing MACI Arthro training among surgeon groups? - Management explained that training occurs through industry events and individual sessions, focusing first on existing MACI users before targeting new surgeons [92][93] Question: How has the recent trade war impacted your view on MACI internationally? - Management stated that they are evaluating the potential for MACI outside the U.S. and will consider trade impacts before making decisions [90][91]