Vericel Corp Q3 FY2024 earnings call

• The company achieved record third-quarter revenue of approximately $58 million, a 27% growth, exceeding guidance. - Key regulatory milestones include FDA approval of MACI Arthro and the pediatric indication for NexoBrid. - MACI had record third-quarter biopsies and surgeon engagement, with robust growth in biopsy surgeons and biopsies per surgeon. - Burn Care saw Epicel revenue at a record high, with NexoBrid adoption progressing, including over 70 burn centers completing P&T committee submissions. - The company achieved significant margin expansion, with gross profit at $41.7 million (72% of net revenue) and adjusted EBITDA up 84% to $10 million for the quarter.

MACI: Third-quarter revenue was $44.7 million, a 19% increase year-over-year, and remains on track for approximately 20% growth for the full year. Burn Care: Third-quarter revenue was $13.2 million, a 66% increase year-over-year. Epicel revenue reached a record $12.2 million in the third quarter, driven by increased graft volume. NexoBrid revenue was $1.1 million for the quarter, with continued growth in ordering centers.

• Full-year total company revenue guidance maintained at $238 million to $242 million (20%-23% growth), implying Q4 revenue of $76 million to $80 million. - Gross margin guidance increased to 72% and adjusted EBITDA margin guidance to 22% for the full year, up from prior guidance. - Expect continued strong growth in 2025, with MACI and Burn Care driving growth, and MACI Arthro potentially bolstering MACI's growth trajectory.

• Regulatory uncertainties related to product approvals and market entry. - Potential slow adoption of NexoBrid or MACI Arthro impacting growth. - Operational risks such as supply chain issues or IV shortages potentially affecting procedures.

Q: Ryan Zimmerman from BTIG asked about NexoBrid's growth drivers and MACI Arthro's impact.

A: Joe Mara mentioned no specific 2025 guidance yet but expects strong growth, with MACI's leading indicators strong and MACI Arthro having modest contribution initially.

Q: Richard Newitter from Truist Securities inquired about MACI Arthro's outlook and P&L considerations.

A: Nick Colangelo discussed MACI Arthro's initial cases and leading indicators, while Joe Mara noted P&L considerations like depreciation from the new facility and expected continued profitability growth.

Q: Mike Kratky from Leerink Partners asked about MACI Arthro's impact on Q4 and Burn Care.

A: Nick Colangelo said early MACI Arthro cases are incremental, and Joe Mara mentioned MACI set for ~20% full-year growth with Burn Care's Epicel hard to predict but trending.

Q: Josh Jennings from TD Cowen asked about MACI Biopsy Bank and pricing.

A: Nick Colangelo discussed pent-up demand and MACI pricing, with plans to refresh salesforce sizing.

Q: Caitlin Cronin from Canaccord asked about MACI penetration and Epicel reengagement.

A: Nick Colangelo talked about MACI penetration dynamics and Epicel reengagement with burn centers.

Q: Jeffrey Cohen from Ladenburg Thalmann & Co. asked about MACI Arthro training and ankle development.

A: Nick Colangelo discussed online training for MACI Arthro and similar pathways for ankle.

Q: Unidentified Analyst from HCW asked about Arthro's operating margin synergies.

A: Joe Mara said Arthro has minimal impact on operating margin but supports top-line growth.

Q: Ryan Zimmerman from BTIG followed up on Q4 guidance and IV shortages.

A: Nick Colangelo said no impact from IV shortages on MACI procedures to date.