Vericel (US:VCEL)2025-05-08 13:32Financial Data and Key Metrics Changes - The company achieved record total net revenue of $52.6 million for the first quarter, with MACI revenue of $46.3 million, Epicel revenue of $5 million, and NexoBrid revenue of $1.3 million [13] - MACI revenue grew by 15% year-over-year, which adjusts to approximately 17% growth when accounting for one fewer selling day in the quarter [14] - NexoBrid revenue increased by 207% year-over-year and 31% sequentially [14] - 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% of net revenue [16] Business Line Data and Key Metrics Changes - MACI had a strong quarter with record revenue exceeding $46 million, driven by strong underlying fundamentals and a growing surgeon customer base [6][5] - NexoBrid's revenue growth was significant, with over 200% increase compared to the previous year, indicating strong market penetration [10] - Epicel revenue was lower than anticipated due to a high percentage of canceled cases, but there was a strong start to the second quarter with graft volumes exceeding the first quarter [11][12] Market Data and Key Metrics Changes - The company expects total revenue growth of 22% to 25% for the second quarter, with MACI revenue projected to be approximately $54 million [18] - The addressable market for MACI is estimated at 60,000 patients annually, with significant opportunities in femoral condyle and trochlear defects [26][20] Company Strategy and Development Direction - The company is advancing the MACI Ankle Development Program and plans to initiate a Phase III clinical study in the second half of the year, which represents a substantial long-term growth driver [20] - The company plans to expand its MACI sales force in the second half of the year to support growth driven by MACI Arthro [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong second quarter performance based on positive trends observed in the first quarter, reaffirming full-year revenue guidance of 20% to 23% growth [5][17] - The company anticipates minimal impact from tariffs due to its domestic manufacturing and significant safety stock of materials [17] Other Important Information - The company generated $6.6 million in operating cash flow and ended the quarter with approximately $162 million in cash and no debt [16] - Management raised profitability guidance for the year, expecting gross margins to reach 75% and adjusted EBITDA margins to reach 26% [18] 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, which represent a significant portion of the addressable market, and there is potential for treating trochlear defects as well [26][27] Question: How do you see seasonality and pacing for MACI in the second half of the year? - Management noted that while MACI typically follows a prescriptive pattern, strong leading indicators suggest potential for stronger growth in the second half of the year [32][33] Question: What is the contribution of MACI Arthro to first quarter numbers? - Management acknowledged that while there was some incremental impact from MACI Arthro, the full effect is expected to be seen in the second half of the year [38][40] Question: How have recent trade war headlines impacted international views on MACI? - Management stated that they are evaluating potential for MACI outside the U.S. but will consider tariffs and trade impacts before making decisions [92] Question: Can you provide insights on conversion rates for MACI Arthro procedures? - Management indicated that it is early to assess conversion rates, but they expect higher rates over time due to the less invasive nature of the procedure [57][66] Question: What are the dynamics of cross-selling opportunities between Epicel and NexoBrid? - Management confirmed that they are seeing biopsies from previously dormant accounts and expect this trend to continue as they cross-sell products [61] Question: Can you elaborate on the sales force expansion plans? - Management indicated that while the expansion is not full-scale this year, they are preparing to add resources to support expected growth [80][81]