Thank you, operator, and good morning, everyone. Welcome to Vericel's First Quarter 2022 Conference Call to discuss our financial results and business highlights. Before we begin, let me remind you that on today's call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Please note that a copy of our financial results press release and a short presentation with highlights on today's call are available on our website. I am joined on this call by Vericel's President and Chief Executive Officer, Dominick 'Nick' Colangelo, and our Chief Financial Officer, Joe Mara. I'll now turn the call over to Nick.

Thank you, Eric, and good morning, everyone. I'll begin today's call by discussing financial and business highlights for the first quarter and our expectations for the rest of the year and then turn the call over to Joe for a more detailed review of our first quarter financial performance and guidance for 2022 before opening the call to Q&A. Overall, we're very pleased with our financial and operational performance to start the year across both our sports medicine and burn care franchises despite the continued impact of COVID-19, particularly in the first half of the quarter. The company remains on track to deliver another year of significant revenue growth, margin expansion, and operating cash flow. And as such, we're reaffirming our full-year financial guidance. We also continue to make significant progress on key regulatory and clinical programs for both franchises. Importantly, we remain on track for the planned midyear resubmission of the NexoBrid BLA. From a financial perspective, we generated total net revenue of approximately $36 million for the first quarter, which represents 7% total product revenue growth for MACI and Epicel compared to the first quarter of 2021. We also maintained our strong profitability profile as we generated positive adjusted EBITDA and operating cash flow for the seventh consecutive quarter. From a commercial perspective, MACI revenue of $26 million came in above our first quarter guidance, increasing 9% compared to the first quarter of 2021. Importantly, MACI significantly outperformed the overall cartilage repair procedure market, which we estimate based on market data, declined by double digits over the same period. In addition, we generated double-digit growth in surgeons taking MACI biopsies compared to the first quarter of 2021 and generated the second highest monthly biopsy volume in March since the launch of MACI. We expect that as the overall healthcare environment and MACI patient behavior trends continue to normalize over the remainder of the year, these strong MACI fundamentals will lead to a significant acceleration of growth during the second half of the year. And as such, we're reaffirming MACI revenue guidance for the full year. Epicel revenue of approximately $10 million was in line with our recent higher run rate and represents the sixth consecutive quarter of revenue greater than $9.5 million. The growth drivers for Epicel also remained very strong as we had over 20% growth in burn centers treating patients and taking Epicel biopsies compared to last year and a record monthly high for Epicel biopsies in March. From an operational perspective, as we announced this morning, we expanded our commercial leadership team with the appointment of Mike Gilligan as our Vice President of MACI National Sales. Mike, who reports to Roland DeAngelis, our Head of Commercial Operations, joins Vericel with more than 15 years of commercial experience in the med-tech and pharmaceutical industries. Prior to joining Vericel, Mike served as U.S. Vice President of Sales for Biologics and commercial initiatives at Smith & Nephew. Before that, Mike held sales leadership and marketing roles at Stryker after beginning his career at Pfizer. Mike brings extensive sales experience in the sports medicine field, outstanding leadership skills, and strong business acumen to our high-performing MACI team as we continue to focus on our key growth drivers of adding new surgeons, achieving deeper practice penetration, and increasing biopsy conversion rates. We're excited to have Mike join the Vericel team and I'm confident that he will play an integral role in bringing the benefits of MACI to even more surgeons and patients as we continue to drive strong growth for MACI in the years ahead. Turning to our pipeline. We have several exciting milestones ahead for the balance of the year. We remain on track for a midyear resubmission of the NexoBrid BLA, which would position the product for a potential commercial launch in the first half of 2023. Based on the strong leadership and track record of execution by our commercial and medical burn care teams, we're well positioned for a successful launch of this important product, which we believe upon approval has the potential to change the standard of care for eschar removal for patients with severe thermal burns. We also continue to advance important lifecycle management initiatives for MACI and remain on track for planned discussions with the FDA later this year to review both our MACI arthroscopic and ankle indication development programs, initiatives that we believe will support continued strong growth in the years ahead. Finally, we're pleased to have announced plans during the first quarter for a new state-of-the-art advanced cell therapy manufacturing and corporate headquarters facility. The new facility, which broke ground last month and is expected to begin commercial manufacturing in 2025, will significantly increase our manufacturing capacity and demonstrates our confidence in the continued growth trajectory of MACI and Epicel in the years ahead. In summary, the company had a strong start to the year. Our expectations for another year of significant growth for both MACI and Epicel remain on track, and we continue to make progress on important regulatory and clinical programs for both of our franchises. I'll now turn the call over to Joe to discuss our first quarter financial results.

Thanks, Nick, and good morning, everyone. Starting with the income statement. Total net revenue for the quarter was $36.1 million and was comprised of $26 million of MACI revenue and $9.9 million of Epicel revenue and $0.2 million of revenue related to the procurement of NexoBrid by BARDA for emergency response preparedness. We expect a similar amount of BARDA-related revenue in the second quarter, which represents the final order for BARDA's initial procurement. Gross profit for the quarter was $23.5 million or 65% of net revenue, similar to the gross margin of 66% for the first quarter of 2021. Total operating expenses for the quarter were $30.7 million compared to $26.3 million for the same period in 2021. The increase in operating expenses was primarily due to higher noncash stock compensation expense. Net loss for the quarter was $7.1 million or $0.15 per share compared to a net loss of $3.3 million or $0.07 per share for the first quarter of 2021. Non-GAAP adjusted EBITDA for the quarter was $3.2 million or 9% of net revenue. Importantly, this is now the seventh consecutive quarter that we have generated positive adjusted EBITDA. Finally, we generated approximately $3.5 million of operating cash flow in the quarter and we ended Q1 with approximately $130 million in cash, restricted cash, and investments and no debt. Turning to our financial guidance. We are maintaining our full-year financial guidance for 2022 for revenue, gross margin, operating expenses, and adjusted EBITDA margin. We expect total revenue of $178 million to $189 million, gross margin of approximately 70%, and full year operating expenses to be in the range of $134 million to $137 million. We expect non-GAAP adjusted EBITDA margin for the full year to be approximately 21%, which would represent approximately $40 million in adjusted EBITDA in 2022. For MACI, we continue to anticipate full year revenue of $132 million to $141 million. In terms of MACI quarterly trends and the seasonality of our revenue, we expect approximately 20% of MACI's full year revenue in the second quarter, which would imply sequential growth from Q1 to Q2 this year and continued year-over-year growth despite a more difficult comparison versus Q2 2021 as our volumes increased significantly last year in Q2 coming out of the winter COVID-related surge. And for Epicel, we anticipate that Q2 revenues will remain in line with recent run rates of approximately $10 million per quarter. This now concludes our prepared remarks. We will open the call to your questions.

I have a couple of questions. I would like to discuss the backlog you had at the beginning of the year, which I believe was around $10 million. Could you provide insight into what you estimate you recaptured in the first quarter, how that influenced your results, and what you expect to be left for the rest of the year?

Thanks for the question. This is Joe. On the backlog, I would say, just as a reminder, at the start of the year we certainly had continued COVID impacts. We started the year, really the first half of the quarter in particular with the Omicron variants, etc. So, I would say kind of from our perspective, the backlog hasn't meaningfully changed in the first quarter. We did come in a bit ahead of expectations in Q1, but I wouldn't really point to the backlog. And again, from a full-year perspective in H1, H2, etc., kind of remains on track.

Okay. And if I'm doing the math right, and I think about the guidance for MACI for the year and that comment on 20% roughly, correct me if I'm wrong, Joe, but it implies about $27 million in change for MACI in the second quarter. And so help me understand kind of you beat by $2 million or so this quarter on MACI. Guidance is unchanged. You're implying, I think, a couple of million below what consensus is for second quarter on MACI. And to help us understand kind of what you're seeing or how you're thinking about guidance for the rest of the year, particularly in the back half of the year as we move into the back half.

Yes, I'll start and Nick can chime in as well if he likes. So, first off, I think you're right. So, what we're seeing and really at the midpoint, it is about $27 million for the second quarter, just to think a little bit about the quarters in each half of the year in MACI, which plays into the guidance question. Again, back to your first question, Q1 was strong and was a bit ahead of where we anticipated, a little bit over $1 million and change over the midpoint of our guidance. So, that did come in a bit higher than anticipated. But I would start by saying our view of the full year and our view of the first half has not changed. If you add that kind of 19% that we ended up at in Q1 as a percentage of revenue at that 20%, you get to just under 40% for the first half of the year, about 39% based on that 20% comment. And again, for Q2, just to reiterate, as you think about Q2, a Q1 came in a bit ahead of expectations, and last year, we did have some strong pull-through, particularly coming out of the winter surge in the early part of Q2, which impacts the year-over-year comparison. So, if you look at kind of the balance of the year, similar to what we talked about last quarter where we expect kind of the majority of the MACI revenue in the second half, you will certainly see an acceleration on a kind of year-over-year basis. But some of that is just due to the comps as we continue to be impacted by COVID as you're looking at quarters or even halves of the year. I think it actually is helpful even though it's a couple of years back if you look at the H1 growth in our guidance versus H2 over 2019, which really still remains kind of the cleanest comp without all the noise from kind of COVID quarter-to-quarter or half by half. And what you see there is in the first half, if you kind of do the math, we're roughly 45% ahead of 2019; whereas in the second half, it's more like 55%. So, it is a bit of a step-up when you look at 2019, but we are assuming there are some improvements in the market, kind of procedures, kind of the healthcare system, etc. So, I think at this point in the year, we're certainly pleased where Q1 is, but I would say from a guidance perspective, it is still relatively early in the year. We have seen some COVID impacts and we also want to keep an eye on kind of what's happening in the broader healthcare system and the market.

Congratulations on a successful quarter despite the ongoing challenges. I want to follow up on Ryan's question. As we look ahead to Q2, are you still factoring in some COVID impact? I understand the year-over-year comparison, but considering the backlog you have, why wouldn’t Q2 be even slightly stronger? It seems like momentum picked up in March and April. Could you share your insights on the trends you observed? Is it more related to the refill of the referral funnel? What do you see as the key limitation as we approach Q2, especially with the hope that there isn’t another significant COVID surge?

Danielle, this is Nick. I'll start and then Joe can add comments as well. But certainly, through the first quarter, everybody is aware that the first half was impacted by Omicron and we did see sequential improvement, whether it was biopsies or implants throughout the quarter. And obviously, we mentioned that we had the second highest biopsies since the launch of MACI in March. So, clearly, we saw improvements as we move through the quarter. As we move into the second quarter, we expect those improvements to continue. But at the end of the day, I think everything you read and that we see and as we commented on the market was still double digits below where it was the prior year. So, we're still outperforming the market and we expect that to continue not just the second quarter, but for the remainder of the year. I think to your point and as Joe alluded to, trying to do quarterly comparisons year-over-year when you have the kind of disruption that you see throughout COVID, you can look back to our Q3 earnings presentation where we showed there was this very strong recovery from the sort of 2020 winter wave that occurred in the Q2. So, I think revenues were up for MACI 76% in the second quarter. So, you just have those dynamics where quarter-over-quarter comparisons aren't necessarily the way to look at it. I think as Joe alluded to, we're right on track with what we've said historically around sort of 40% or so revenue in the first half of the year, 60% in the second half. And so it's tracking where we expect it to.

Okay. That's helpful. And I guess as we look at MACI and how to think about the rest of the year, just anything from the referral funnel, what you're seeing from a conversion rate perspective, that has been one of the things that has been suppressed during COVID. How is that trending as we look ahead to Q2 and into the back half of the year?

Yes. So, as you mentioned, and we've highlighted it really is when you look at last year and we had 30% biopsy growth and revenues were up sort of 18%, the difference there is how the biopsies are converting. And so that's one of the things that we expect to continue to see improvement on throughout the year. I'd say, as Joe mentioned, you're coming out of the first quarter where there was a fair amount of disruption. So, you wouldn't expect necessarily to see that improve, but that's something we believe in the first quarter, but we expect as we move through the year that that will normalize as we've talked about before.

Congratulations on a solid start to the new year. Maybe just one more for me on MACI, then we can maybe change gears to the burn franchise. But I just want to make sure that I'm level set correctly here. When you originally established guidance, you talked about to get to the high end of the range for this year, you basically assumed modest disruption from COVID in the first quarter. I just want to make sure that kind of the underlying assumptions there to get to both the high and the low end of the range are essentially the same or if they've changed in any manner, kind of what your thinking is now as we're a little bit further into the year, and we've clearly seen some new variabilities and other things kind of resolve themselves. So, I just wanted to make sure I understood the underlying assumptions to the high and the low end of that range, then I've got a quick follow-up.

Yes. I mean I would say kind of broadly speaking, I don't think really anything has changed. Obviously, we came in a bit ahead on the Q1 side relative to expectations. But as we talked about kind of mix of the year as well as the full year, nothing has really fundamentally changed as we kind of think about that range of scenarios on MACI.

Perfect. And then if we could switch gears to Epicel, I was really impressed with the growth there and the increase in biopsies. Could you just maybe speak to, not only what's helping you drive into these additional accounts? There aren't that many Level 1 burn centers here in the U.S. So, I'm just kind of curious what's helping accelerate broader adoption and what looks back of the envelope math here at first half, which looks like greater utilization within those existing accounts. Maybe it's more graphs per patient? Just trying to get a better understanding of what's supporting that $10 million run rate.

Yes. Thanks, Chris. It's Nick. Just taking a step back at a higher level on Epicel, as you mentioned, there's about 140 accredited burn centers in the U.S. And as we've kind of consistently talked about in any particular kind of 2- or 3-year period, we may be getting biopsies or graftings from probably half of those centers, 70 or 80, and that's because not all centers are the same and really critical patients are often at those centers. And in any particular year, it's probably more like 40 to 50 burn centers treating patients. So, that's just kind of sort of market background. We had a very strong year last year, right, where we kind of had a new level of performance, which continued into the first quarter and very much aligned with the commentary Joe gave on the last call that we would expect kind of similar run rates in the first couple of quarters and then a step-up as the growth drivers sort of continue to take hold. And the growth drivers we've talked about was, especially last year, we saw a significant increase in the average number of grafts per patient. We think that's kind of stepped up to sort of where we would expect it to continue in that going forward into this year, the growth drivers are really going to be around sort of increasing the number of centers, which we've seen in the first quarter, and then increasing the number of biopsies, which again will give you deeper penetration into those centers. So, those are the exact growth drivers that we pointed to in the back half of last year and that's what we're seeing to start the year. And that goes back to the other factor that we mentioned around the sales' leadership and the execution of the commercial sales and medical teams and that sort of responsible for increasing the number of centers that are using Epicel compared to historical.

So, two, I know, again, I guess both Ryan and Danielle asked. Kind of I wanted to get a sense of conversion rates and what you've found throughout the first quarter, maybe any commentary for April as well on how they're holding and how they look versus your expectations?

Yes. I'll reiterate what I mentioned earlier regarding conversion rates. We have patients with biopsies taken, as you know, cartilage injuries do not heal on their own. Therefore, we anticipate that these patients will eventually seek treatment. In the first quarter, which was impacted by the Omicron variant, we do not expect to see any improvement or significant changes in those conversion rates. However, as the year progresses and the healthcare system continues to move towards normalcy, we expect those conversion rates to start trending back towards historical norms.

Okay. Got it. And then, I guess, secondly for us, could you talk a little bit about the arthroscopic delivery and also the ankle franchise as well with the FDA as far as what you'd expect to discuss? And what kind of timing could we anticipate for development in the commercial side?

Yes. So, it remains very much in line with what we talked about at the end of last year. Obviously, the first step is to meet with the FDA and share our perspective on clinical development programs for both programs, and that's what we would expect to do in the second half of this year. There's always prep work to request meetings and get prepared to go meet with the FDA. And so our teams here are continuing to make great progress on that front. And so we remain on the schedule that we articulated earlier that we plan to meet with the FDA in the second half of the year and then would provide an update to investors and analysts based on the outcome of those discussions. From a commercial perspective, we characterized the arthroscopic delivery of MACI as sort of a mid to early second half of the decade, 2025 plus. And so that hasn't changed at this point. And that the MACI ankle program would require more of a MACI knee summit study kind of study-clinical study, and therefore, you'd be looking at sort of the back half of the decade for potential MACI ankle indication. So, everything is sort of on track and in line with what we have discussed previously.

Okay. Perfect. And then 2 quick ones for Joe, if I may. Was that an OpEx guide on the range for 2022?

Yes, correct. That's consistent with where we started the year. So, that has not changed.

Okay. And then secondly, any commentary on the cadence of margins throughout the year. It looked like you were typically always fairly sequential. Is that a good assessment?

Yes. I mean, I think, broadly speaking, I mean we talk more kind of on a full-year basis, but you do tend to see kind of later in the year, particularly with the higher MACI quarter, kind of higher margins at that point in the year. So, in general, I think that kind of holds up.

First one for . When we are thinking about the cartilage repair market more broadly, one, kind of how did that progress through the quarter? Maybe any better in April versus what we saw in 1Q? And then what needs to happen to see that market get to a more normalized level?

Yes, Sam, thanks for the question. So, when we make commentaries or comment on sort of the market dynamics, as we've talked about before, we're able to purchase LexisNexis market view data, and we can kind of look at procedural codes that form the basis of our addressable market, so osteochondral allografts, microfracture, chondroplasty, MACI, and that's kind of the market basket. And obviously, it was significantly impacted in January and February. Now, the data lags, right? So the March data probably comes in this week. So, we estimate based on the trends in January and February and a presumed improvement in March, but we don't have April data yet and we won't for a while comment on sort of where the market is right now. So, I do think that's a very important backdrop to repeat what I said on the last call, MACI outperformed the market pre-COVID, during COVID, and we expect it will post-COVID. And what you need to see to kind of for the market broadly to get back is just sort of normalization of patient flow and activity. And we saw that as COVID waves sort of abated last year. Q2, from a market perspective, was starting to approach pre-COVID levels, and then you had the Delta and Omicron variants, and you saw significant declines in market activity again. So, I think almost- it's probably not really any different than other markets that you see in the industry where patient volumes are not quite back to pre-COVID levels yet, probably double-digit, 10% down, maybe starting to close that gap. And I just think as the healthcare environment starts to normalize, you'll see that market activity return. Yes. Obviously, Agili-C was approved recently and Bioventus exercised their option to acquire the company and kind of has laid out its plans for launching Agili-C, sort of soft launch this year and then a more fulsome launch next year, according to their commentary. So, that's a product that we've talked to you and others about for a number of years. And from our perspective, that's kind of a different segment of the cartilage repair market, right, typically, and I think the company has commented on this, for instance, the JPMorgan presentation that typically sort of intended for older patients, osteoarthritic really is a bridge to partial or full knee replacements. That's very much in line with how our KOLs have thought about that product, not as a MACI competitor, but kind of addressing a part of the market where there really are no other alternatives for those patients. So, sort of nothing different from our perspective on that product. And in terms of the competitive marketplace for reps and so on, I think we continue to attract and retain really top talent across our commercial organization. I think that's evidenced by our announcement this morning of Mike Gilligan joining as our National Sales Director from Smith & Nephew. I think everybody is pretty aware of MACI's place in the market and the enthusiasm around the product, and that allows us to kind of retain and attract great talent.

Most of our questions have been answered. I just want to follow-up regarding the MACI biopsy dynamics. Could you guys give us more color on the average number of biopsies per surgeon taking during the quarter and getting into the second quarter?

Yes. I think probably the best way to address that is to take a step back and say, coming into the year, we expected to see double-digit growth in biopsy and surgeons. And we commented and we saw that in the first quarter. We're a little hard, given the disruption. Obviously, procedures were down across the board in the first quarter in January and February, I should say. And then obviously, we had a strong recovery in March. So, biopsies continue to grow in the quarter, just not at the rate we would have expected. But again, we saw a big bounce back in March. We expect that to continue in Q2 and then throughout the rest of the year.

Okay. Well, thank you, operator, and thanks to all of you for your questions. Just in summary, overall, the company executed well in the first quarter and remains on track to deliver another year of strong financial and operational results. Given the significant market opportunities for our products and strong growth profile, we believe the company is very well positioned for sustained long-term growth in the years ahead. So, thanks again, and have a great day.

This concludes today's conference call. Thank you for participating. You may disconnect now.