Vericel Reports Fourth Quarter and Full-Year 2020 Financial Results

2/24/21

CAMBRIDGE, Mass., Feb. 24, 2021 (GLOBE NEWSWIRE) -- Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, today reported financial results and business highlights for the fourth quarter and year ended December 31, 2020, and provided full-year 2021 financial guidance.

Fourth Quarter 2020 Financial Highlights

  • Total net revenue increased 15% to $45.2 million, compared to $39.4 million in the fourth quarter of 2019
  • MACI® net revenue of $34.7 million, Epicel® net revenue of $9.6 million and NexoBrid® revenue of $1.0 million related to the U.S. Biomedical Advanced Research and Development Authority (BARDA) procurement for national response preparedness
  • Gross margin of 74%, compared to gross margin of 73% in the fourth quarter of 2019
  • Net income of $12.2 million, or $0.25 per share, compared to $9.5 million, or $0.20 per share, in the fourth quarter of 2019
  • Non-GAAP adjusted EBITDA of $16.0 million, or 35% of net revenue, compared to $12.8 million, or 33% of net revenue, in the fourth quarter of 2019
  • Operating cash flow of $11.3 million

Full-Year 2020 Financial Highlights

  • Total net revenue increased 5% to $124.2 million, compared to $117.9 million in 2019
  • MACI net revenue of $94.4 million, Epicel net revenue of $27.5 million and NexoBrid revenue of $2.2 million related to the BARDA procurement for national response preparedness
  • Gross margin of 68%, compared to gross margin of 68% in 2019
  • Net income of $2.9 million, or $0.06 per share, compared to a net loss of $9.7 million, or $0.22 per share, in 2019
  • Non-GAAP adjusted EBITDA of $18.6 million, or 15% of net revenue, compared to $21.2 million, or 18% of net revenue, in 2019
  • Operating cash flow of $17.6 million
  • As of December 31, 2020, the company had $100 million in cash and investments, compared to $79 million as of December 31, 2019, and no debt

Business Highlights and Updates

  • Record fourth-quarter and full-year total net revenue
  • Record quarterly gross margin, net income and operating cash flow
  • Record quarterly and full-year MACI implants and net revenue
  • Record fourth-quarter and full-year Epicel grafts and net revenue, and the second highest quarterly Epicel grafts and revenue in history
  • Received MACI biopsies from approximately 1,500 surgeons in 2020, an increase from approximately 1,400 surgeons in 2019
  • Record quarterly high in the number of surgeons taking MACI biopsies in the fourth quarter
  • Double-digit growth in MACI biopsies in the fourth quarter, achieving a record quarterly high and a record monthly high in December
  • Announced expansion of MACI coverage by UnitedHealthcare to include patella and multiple cartilage defects in the knee
  • Appointed Joe Mara as Chief Financial Officer

“We delivered a record fourth quarter across multiple financial and operational metrics and ended the year in a very strong financial position,” said Nick Colangelo, President and CEO of Vericel. “With revenue growth for both products in 2020, we demonstrated the resiliency of the Company’s growth profile and are on track for significant growth in the years ahead. Our guidance for 2021 reflects a return to MACI’s pre-COVID growth trajectory, continued momentum for Epicel, and significant adjusted EBITDA growth.”

2021 Financial Guidance

  • Total net revenue for 2021 expected to grow 30%-32% to approximately $161 million to $164 million
  • Gross margin expected to be 70% to 71%
  • Adjusted EBITDA margin expected to be 21% to 23%

Fourth Quarter 2020 Results
Total net revenue for the quarter ended December 31, 2020 increased 15% to $45.2 million, compared to $39.4 million in the fourth quarter of 2019. Total net product revenue for the quarter included $34.7 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $9.6 million of Epicel (cultured epidermal autografts) net revenue compared to $33.6 million of MACI net revenue and $5.8 million of Epicel net revenue, respectively, in the fourth quarter of 2019. Total net revenue for the quarter also included $1.0 million of revenue related to the procurement of NexoBrid (concentrate of proteolytic enzymes enriched in bromelain) by BARDA for emergency response preparedness.

Gross profit for the quarter ended December 31, 2020 was $33.6 million, or 74% of net revenue, compared to $28.8 million, or 73% of net revenue, for the fourth quarter of 2019.

Total operating expenses for the quarter ended December 31, 2020 were $21.4 million, compared to $19.6 million for the same period in 2019. The increase in operating expenses was primarily due to incremental employee expenses related to the MACI sales force expansion.

Net income for the quarter ended December 31, 2020 was $12.2 million, or $0.25 per share, compared to $9.5 million, or $0.20 per share, for the fourth quarter of 2019.

Non-GAAP adjusted EBITDA for the quarter ended December 31, 2020 was $16.0 million, or 35% of net revenue, compared to $12.8 million, or 33% of net revenue, in the fourth quarter of 2019. A table reconciling non-GAAP measures is included in this press release for reference.

Full-Year 2020 Results
Total net revenue for the year ended December 31, 2020 increased 5% to $124.2 million, compared to $117.9 million in 2019. Total net product revenue for the year included $94.4 million of MACI net revenue and $27.5 million of Epicel net revenue compared to $91.6 million of MACI net revenue and $26.2 million of Epicel net revenue, respectively, in 2019. Total net revenue in 2020 also included $2.2 million of revenue related to the procurement of NexoBrid by BARDA for emergency response preparedness.

Gross profit for the year ended December 31, 2020 was $84.2 million, or 68% of net revenue, compared to $80.3 million, or 68% of net revenue, in 2019.

Total operating expenses for the year ended December 31, 2020 were $81.9 million, compared to $91.5 million for the same period in 2019. Operating expenses in 2019 included the $17.5 million upfront license payment to MediWound Ltd. for North American rights to NexoBrid.

Net income for the year ended December 31, 2020 was $2.9 million, or $0.06 per share, compared to a net loss of $9.7 million, or $0.22 per share, in 2019.

Non-GAAP adjusted EBITDA for the year ended December 31, 2020 was $18.6 million, or 15% of net revenue, compared to $21.2 million, or 18% of net revenue, in 2019. A table reconciling non-GAAP measures is included in this press release for reference.

As of December 31, 2020, the company had $100 million in cash and investments, compared to $79 million as of December 31, 2019, and no debt.

About Vericel Corporation
Vericel is a leader in advanced therapies for the sports medicine and severe burn care markets. The company markets two cell therapy products in the United States. MACI (autologous cultured chondrocytes on porcine collagen membrane) is an autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. Epicel (cultured epidermal autografts) is a permanent skin replacement for the treatment of patients with deep dermal or full-thickness burns greater than or equal to 30% of total body surface area. The company also holds an exclusive license for North American rights to NexoBrid, a registration-stage biological orphan product for debridement of severe thermal burns. For more information, please visit the company’s website at www.vcel.com.

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