8-K
Vericel Corp (VCEL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 14, 2025
Vericel Corporation
(Exact name of registrant as specified in its charter)
| Michigan | 001-35280 | 94-3096597 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 64 Sidney Street | ||
| --- | --- | |
| Cambridge, MA | 02139 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (617) 588-5555
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, no par value | VCEL | NASDAQ |
Indicate by a check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§240.12b-2 of this chapter). Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
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In connection with its participation in the 43^rd^ Annual J.P. Morgan Healthcare Conference, on January 14, 2025, Vericel Corporation (the “Company”) issued a press release and updated its corporate presentation, both of which include estimates of operating and financial results as of and for the year ended December 31, 2024. The Company’s corporate presentation includes additional updates regarding its business.
Because the Company’s financial statements for the year ended December 31, 2024, have not been finalized or audited, these preliminary statements regarding the Company’s operating and financial results as of and for the year ended December 31, 2024, are subject to change and the Company’s actual results as of the end of this period may differ materially from this preliminary estimate. Accordingly, stockholders should not place undue reliance on this preliminary estimate. A copy of the Company’s January 14, 2025, press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).
| Item 7.01. | Regulation FD Disclosure. |
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The information set forth in Item 2.02 of this Report is incorporated into this Item 7.01 by reference.
The Company will participate in the 43^rd^ Annual J.P. Morgan Healthcare Conference in San Francisco, California, which is being held on Wednesday, January 15, 2024, at 7:30 a.m. Pacific Time, and has updated the corporate presentation that the Company intends to use at the conference. The Company may use this updated corporate presentation in meetings with investors from time to time as well. The Company’s updated corporate presentation includes disclosure regarding the Company’s estimated, preliminary and unaudited full-year revenue for fiscal year 2024, preliminary adjusted EBITDA and adjusted EBITDA margin for 2024, preliminary and unaudited 2024 gross margin percentage, preliminary and unaudited 2024 net income, its estimated cash, restricted cash and investments balance as of December 31, 2024, and additional financial and business updates.
A copy of the Company’s updated corporate presentation is attached hereto as Exhibit 99.2 and is hereby incorporated by reference.
The preliminary financial data included in this Current Report on Form 8-K has been prepared by, and is the responsibility of, the Company’s management. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled, nor applied agreed-upon procedures with respect to the preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in Item 2.02 and Item 7.01 of this Report shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits. |
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| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release, dated January 14, 2025, titled “Vericel Announces Preliminary 2024 Financial Results, 2025 Financial Guidance and Increased Mid-Term Profitability Targets” |
| 99.2 | Vericel Corporation Presentation, dated January 14, 2025 |
| 104 * | Cover Page Interactive Data File (embedded within the Inline XBRL) |
* Furnished herewith
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated January 14, 2025, titled “Vericel Announces Preliminary 2024 Financial Results, 2025 Financial Guidance and Increased Mid-Term Profitability<br> Targets” |
| 99.2 | Vericel Corporation Presentation, dated January 14, 2025 |
| 104 * | Cover Page Interactive Data File (embedded within the Inline XBRL) |
* Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Vericel Corporation | ||
|---|---|---|
| Date: January 14, 2025 | By: | /s/ Sean C. Flynn |
| Name: Sean C. Flynn | ||
| Title: Chief Legal Officer |
Exhibit 99.1
| Vericel Corporation<br><br> <br>64 Sidney Street<br><br> <br>Cambridge, MA 02139<br><br> <br>T 617<br> 588-5555 F 617 588-5554<br><br> <br>www.vcel.com |
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Vericel Announces Preliminary 2024 Financial Results, 2025 Financial Guidance and Increased Mid-Term Profitability Targets
Full-Year 2024 Total Revenue Growth of 20% and Adjusted EBITDA Growth of Approximately 55%
MACI Full-Year 2024 Revenue Growth of 20%, with Fourth Quarter Revenue of $68.2 to $68.7 Million
Highest Quarterly MACI Implants, Surgeons, and Biopsies Since Launch and Strong Early MACI Arthro Launch Indicators
Record Fourth Quarter Gross Margin of Approximately 77% and Adjusted EBITDA Margin of 39%
2025 Total Revenue Guidance of 20% to 23% Growth
Mid-Term Profitability Targets Increased to Gross Margin in the High-70% Range and Adjusted EBITDA Margin in the High-30% Range
CAMBRIDGE, Mass., January 14, 2025 (GLOBE NEWSWIRE) -- Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, today announced preliminary, unaudited financial results for the fourth quarter and year ended December 31, 2024, full-year 2025 financial guidance and updated mid-term profitability targets.
Preliminary, Unaudited Full-Year 2024 Financial Results
| • | Total net revenue expected to be approximately $237 to $237.5 million, representing 20% growth |
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| • | MACI^®^ net revenue expected to be approximately $197.2 to $197.7 million, representing 20% growth |
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| • | Burn Care net revenue expected to be approximately $40 million, representing 22% growth, consisting of approximately $36.6 million of Epicel^®^ revenue and $3.3 million of NexoBrid^®^<br> revenue |
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| • | Gross margin expected to be approximately 72.5% |
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| • | Achieved Full-Year GAAP Net Income profitability |
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| • | Non-GAAP adjusted EBITDA margin expected to be approximately 22% |
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| • | As of December 31, 2024, the Company had approximately $167 million in cash, restricted cash and investments, and no debt, an increase of approximately $16 million for the quarter |
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Preliminary, Unaudited Fourth Quarter Financial Results
| • | Total net revenue expected to be approximately $75.2 million to $75.7 million |
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| • | MACI net revenue expected to be approximately $68.2 to $68.7 million, representing 20% to 21% growth versus the prior year and approximately 53% growth versus the prior quarter |
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| • | Burn Care net revenue expected to be approximately $7 million, consisting of approximately $6 million of Epicel revenue and $1 million of NexoBrid revenue |
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| • | Gross margin expected to be approximately 77% |
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| • | GAAP Net Income expected to be approximately $17.5 to $18.5 million |
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| • | Non-GAAP adjusted EBITDA margin expected to be approximately 39% |
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Key Business Highlights and Updates
| • | Highest number of MACI implants, implanting surgeons, surgeons taking biopsies and MACI biopsies in any quarter since launch in the fourth quarter |
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| • | More than 150 MACI Arthro trained surgeons through year-end |
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| • | NexoBrid hospital orders in the fourth quarter increased approximately 40% versus the prior quarter |
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| • | Completed construction of new corporate headquarters and manufacturing facility and remain on track to initiate commercial manufacturing in the new facility in 2026 |
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2025 Financial Guidance
| • | Total net revenue growth for 2025 expected to be 20% to 23% |
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| • | Gross margin expected to be 73% to 74% |
| --- | --- |
| • | Adjusted EBITDA margin expected to be 25% to 26% |
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Mid-Term Profitability Targets
| • | Gross margin is expected to increase to the high-70% range by 2029 |
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| • | Adjusted EBITDA margin expected to increase to the high-30% range by 2029 |
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“The Company executed extremely well in 2024, delivering high revenue growth across both franchises and very strong margin expansion and profitability,” said Nick Colangelo, President and CEO of Vericel. “We are entering 2025 with a great deal of momentum and expect another year of high revenue growth, increasing utilization of MACI Arthro and significant growth in profitability and cash generation as we continue to progress toward our mid-term financial targets.”
Vericel is scheduled to present at the 43^rd^ Annual J.P. Morgan Healthcare Conference at 10:30 a.m. ET (7:30 a.m. PT) on Wednesday, January 15, 2025. A webcast of the presentation will be available on the Investor Relations section of the Vericel Corporation website at: http://investors.vcel.com.
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About Vericel Corporation
Vericel is a leading provider of advanced therapies for the sports medicine and severe burn care markets. The Company combines innovations in biology with medical technologies, resulting in a highly differentiated portfolio of innovative cell therapies and specialty biologics that repair injuries and restore lives. Vericel markets three 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. Vericel also holds an exclusive license for North American rights to NexoBrid (anacaulase-bcdb), a biological orphan product containing proteolytic enzymes, which is indicated for eschar removal in adults and pediatric patients with deep partial-thickness and/or full-thickness burns. For more information, please visit www.vcel.com.
Epicel^®^ and MACI^®^ are registered trademarks of Vericel Corporation. NexoBrid^®^ is a registered trademark of MediWound Ltd. and is used under license to Vericel Corporation. © 2025 Vericel Corporation. All rights reserved.
Preliminary and Unaudited Nature of Reported Results
Our revenue expectations for the fourth quarter and full-year ended 2024, as well as our estimates concerning gross margin, net income, adjusted EBITDA, cash, restricted cash and investments are preliminary, unaudited and are subject to change based on the completion of ongoing internal control, review, and audit procedures. As a result, these amounts may differ materially from the amounts that will be reflected in the Company’s consolidated financial statements for the year ended December 31, 2024. Accordingly, you should not place undue reliance on this preliminary estimate.
GAAP v. Non‑GAAP Measures
Vericel’s reported earnings are prepared in accordance with generally accepted accounting principles in the United States, or GAAP, and represent earnings as reported to the Securities and Exchange Commission. Vericel has provided in this release certain financial information that has not been prepared in accordance with GAAP. Vericel’s management believes that the non-GAAP adjusted EBITDA described in this release, which includes adjustments for specific items that are generally not indicative of our core operations, provides additional information that is useful to investors in understanding Vericel’s underlying performance, business and performance trends, and helps facilitate period-to-period comparisons and comparisons of its financial measures with other companies in Vericel’s industry. However, the non-GAAP financial measures that Vericel uses may differ from measures that other companies may use. Non-GAAP financial measures are not required to be uniformly applied, are not audited and should not be considered in isolation or as substitutes for results prepared in accordance with GAAP.
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Forward-Looking Statements
Vericel cautions you that all statements other than statements of historical fact included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe that we have a reasonable basis for the forward-looking statements contained herein, they are based on current expectations about future events affecting us and are subject to risks, assumptions, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Our actual results may differ materially from those expressed or implied by the forward-looking statements in this press release. These statements are often, but are not always, made through the use of words or phrases such as “anticipates,” “intends,” “estimates,” “plans,” “expects,” “continues,” “believe,” “guidance,” “outlook,” “target,” “future,” “potential,” “goals” and similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions.
Among the factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, the inherent uncertainties associated with our expectations concerning expected revenue results for the fourth quarter and full-year ended 2024, gross margin, net income, adjusted EBITDA, and estimates of our cash, restricted cash and investments as of December 31, 2024. Vericel’s revenue expectations for the fourth quarter and full-year ended 2024, as well as its estimates concerning gross margin, net income, adjusted EBITDA, and cash, restricted cash and investments are preliminary, unaudited and are subject to change during ongoing internal control, review and audit procedures. Additional factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, uncertainties associated with our expectations regarding future revenue, growth in revenue, market penetration for MACI, MACI Arthro, Epicel, and NexoBrid, growth in profit, gross margins and operating margins, the ability to continue to scale our manufacturing operations to meet the demand for our cell therapy products, including the timely qualification of a new manufacturing facility in Burlington, Massachusetts, the ability to sustain profitability, contributions to adjusted EBITDA, the expected target surgeon audience, potential fluctuations in sales and volumes and our results of operations over the course of the year, timing and conduct of clinical trial and product development activities, timing and likelihood of the FDA’s potential approval of the use of MACI to treat cartilage defects in the ankle, the estimate of the commercial growth potential of our products and product candidates, competitive developments, changes in third-party coverage and reimbursement, surgeon adoption of MACI Arthro, physician and burn center adoption of NexoBrid, labor strikes, changes in surgeon and hospital treatment prioritizations caused by the temporary shortage of essential medical supplies, supply chain disruptions or other events or factors that might affect our ability to manufacture MACI or Epicel or affect MediWound’s ability to manufacture and supply sufficient quantities of NexoBrid to meet customer demand, including but not limited to, damage or disruption caused by natural disasters and the ongoing military conflicts in the Middle East region involving Israel, negative impacts on the global economy and capital markets resulting from the conflict in Ukraine and the Middle East conflicts, changes in trade policies and regulations, including the potential for increases or changes in duties, current and potentially new tariffs or quotas, lingering effects of adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, possible changes in governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued inflationary pressures and the impact of the recent elections in the United States, global geopolitical tensions and potential future impacts on our business or the economy generally stemming from a public health emergency.
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These and other significant factors are discussed in greater detail in Vericel’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC) on February 29, 2024, Vericel’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed with the SEC on November 7, 2024, and in other filings with the SEC. These forward-looking statements reflect our views as of the date hereof and Vericel does not assume and specifically disclaims any obligation to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this press release except as required by law.
Investor Contact:
Eric Burns
ir@vcel.com
+1 (734) 418-4411
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Exhibit 99.2
Advanced Therapies for the Sports Medicine & Severe Burn Care Markets 43Rd Annual J.P. Morgan Healthcare Conference January 15, 2025
Forward-Looking Statements 2 Vericel cautions you that all statements other than statements of historical fact included in this presentation that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe that we have a reasonable basis for the forward-looking statements contained herein, they are based on current expectations about future events affecting us and are subject to risks, assumptions, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Our actual results may differ materially from those expressed or implied by the forward-looking statements in this presentation. These statements are often, but are not always, made through the use of words or phrases such as “anticipates,” “intends,” “estimates,” “plans,” “expects,” “continues,” “believe,” “guidance,” “outlook,” “target,” “future,” “potential,” “goals” and similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. Among the factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, the inherent uncertainties associated with our expectations concerning revenue results for the fourth quarter and full-year ended 2024, gross margin, net income, adjusted EBITDA, and estimates of our cash, restricted cash and investments as of December 31, 2024. Vericel’s revenue expectations for the fourth quarter and full-year ended 2024, as well as its estimates concerning gross margin, net income, adjusted EBITDA, and cash, restricted cash and investments are preliminary, unaudited and are subject to change during ongoing internal control, review and audit procedures. Additional factors that that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, uncertainties associated with our expectations regarding future revenue, growth in revenue, market penetration for MACI®, MACI Arthro™, Epicel®, and NexoBrid®, growth in profit, gross margins and operating margins, the ability to continue to scale our manufacturing operations to meet the demand for our cell therapy products, including the timely completion and qualification of a new manufacturing facility in Burlington, Massachusetts, the ability to sustain profitability, contributions to adjusted EBITDA, the expected target surgeon audience, potential fluctuations in sales and volumes and our results of operations over the course of the year, timing and conduct of clinical trial and product development activities, timing and likelihood of the FDA’s potential approval of the use of MACI to treat cartilage defects in the ankle, the estimate of the commercial growth potential of our products and product candidates, competitive developments, changes in third-party coverage and reimbursement, surgeon adoption of MACI Arthro, physician and burn center adoption of NexoBrid, labor strikes, changes in surgeon and hospital treatment prioritizations caused by the temporary shortage of essential medical supplies, supply chain disruptions or other events or factors that might affect our ability to manufacture MACI or Epicel or affect MediWound’s ability to manufacture and supply sufficient quantities of NexoBrid to meet customer demand, including but not limited to, damage or disruption caused by natural disasters and the ongoing military conflicts in the Middle East region involving Israel, negative impacts on the global economy and capital markets resulting from the conflict in Ukraine and the Middle East conflicts, changes in trade policies and regulations, including the potential for increases or changes in duties, current and potentially new tariffs or quotas, lingering effects of adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, possible changes in governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued inflationary pressures and the impact of the recent elections in the United States, global geopolitical tensions and potential future impacts on our business or the economy generally stemming from a public health emergency. These and other significant factors are discussed in greater detail in Vericel’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC) on February 29, 2024, Vericel’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed with the SEC on November 7, 2024, and in other filings with the SEC. These forward-looking statements reflect our views as of the date hereof and Vericel does not assume and specifically disclaims any obligation to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this presentation except as required by law.
3 Vericel is a Leader in Advanced Therapies in Sports Medicine and Burn Care, Combining Innovations in Biology with Medical Technologies Our Vision Every patient benefits from therapies as unique as they are Our Mission We provide precision therapies that repair injuries and restore lives SPORTS MEDICINE SEVERE BURNS Portfolio of Innovative Cell Therapies and Specialty Biologics with Significant Barriers to Entry
High revenue growth profile Sustained positive adjusted EBITDA and Operating Cash Flow GAAP Net Income positive in 2024 ~$167M in Cash & Investments 4 Vericel is Well-Positioned to Deliver Sustained Long-Term Growth On track to submit MACI Ankle™ IND in H1 2025; initiate clinical study in H2 2025 New manufacturing facility provides flexibility for potential MACI OUS expansion Market leader in knee cartilage repair 20% growth in 2023 and 2024 MACI Arthro™ launched in Q3 2024 Continued strong growth in MACI surgeons and biopsies Launched in the U.S. in Q4 2023; Pediatric indication in Q3 2024 Potentially life-saving product with large market opportunity 2024 financial metrics are based on preliminary, unaudited 2024 financial results and are subject to change.
Large Underpenetrated Markets with Total Addressable Market Opportunity Expanding to Over $4.5 Billion in the Years Ahead $3 Billion + $1Billion $4 Billion Core TAM Expanded TAM NexoBrid launched in 2023 MACI Arthro launched in 2024; targets largest segment of current MACI addressable market Anticipate initiating MACI Ankle study in 2025 $4.5+ Billion TAM $3.5+ Billion TAM $600 Million 5 $600 Million
Total Revenue Growth of 20% to $237 to $237.5M MACI Revenue Growth of 20% to $197.2 to $197.7M Gross Margin Expansion to ~72.5% Adjusted EBITDA Margin of ~22%, Representing ~55% Full-Year Growth Full-Year GAAP Profitability Achieved FDA Approval and Launch of MACI Arthro Construction of new Corporate Headquarters and Manufacturing Facility Completed Total Company Revenue Growth of 20% to 23% First Full Year of MACI Arthro, Enabling Greater Penetration in Largest Segment of MACI’s $3B TAM Maintain a Second High-Growth Franchise for Vericel Burn Care with Continued NexoBrid Uptake Continued Gross Margin and Adjusted EBITDA Margin Expansion, with Inflection in Cash Generation Expect to Initiate MACI Ankle Clinical Study in 2025 On Track to Initiate Commercial Manufacturing in the New Facility in 2026 Outstanding Results Across the Company in 2024 6 Continued Momentum 2024 Achievements 2025 Value Drivers With Expectations for Further Revenue and Profit Growth in 2025 2024 financial metrics are based on preliminary, unaudited 2024 financial results and are subject to change.
Current Portfolio Plus New Product Launches Expected to Drive Durable High Revenue Growth Profile 7 ~20% CAGR Since Launch of MACI + + 20% CAGR Since MACI Launch OUS MACI +20% +20% Continued High Revenue Growth Longer-Term Potential to Add OUS MACI in Late 2020’s & MACI Ankle in ~2030+ + + + +20-23% 2024 financial metrics are based on preliminary, unaudited 2024 financial results and are subject to change.
Driving High Revenue Growth and a Top-Tier Profitability Profile Mid-Term Profitability Targets Increased to High-70% Gross Margin and High-30% Adjusted EBITDA 8 Adjusted EBITDA Margin % Gross Margin % 2024 financial metrics are based on preliminary, unaudited 2024 financial results and are subject to change. 20% Top Line Growth in 2024 Expect Continued High Revenue Growth in 2025 and Beyond ~55% Adjusted EBITDA Growth and GAAP Net Income Positive in 2024 Expect Cash Generation to Inflect in 2025 and Beyond
> > > > > > > > TIME 9 Knee Cartilage Injuries Represent a Significant Unmet Medical Need Cartilage defects are found in ~60% of knee arthroscopies1 Damage caused by acute or repetitive trauma or degenerative conditions Cartilage has limited capacity for intrinsic healing and repair Untreated cartilage defects may lead to debilitating joint pain, dysfunction, and osteoarthritis Defects can expand and new high-grade lesions can form over time > > > > > > > > TIME 1 Widuchowski W, et al. Articular cartilage defects: study of 25,124 knee arthroscopies. Knee. Jun 2007. 2 Data collected from a 2019 Harris Poll survey of 1,002 U.S. adults with knee pain 3 or more days a week that had lasted 2 months or more. Harris Poll found that 77% of knee pain sufferers can no longer participate in at least one activity they previously enjoyed because of knee pain2 Impact of Knee Pain
Large Addressable Knee Cartilage Repair Market for MACI 1 Health Advances LLC MACI market assessment report (2018), Vericel data, LexisNexis, Medtech Insight, NY SASD, SmartTRAK, LSI, PSPS, McCormick, Frank et al. Arthroscopy, (2014) 30(2): 222-6, Montgomery, et al. Knee Surg Sports Traumatol Arthrosc (2014) 22: 2070. 2 Health Advances LLC MACI market assessment report (2018). 3 Assumes MACI ASP of ~$50,000+. 4 2024 financial metrics are based on preliminary, unaudited 2024 financial results and are subject to change. 10 Estimated Annual Addressable Patient Population (U.S.) ~315,0002 Patients Consistent With Label ~125,0002 Patients MD’s Consider Clinically Appropriate For MACI ~750,0001 Cartilage Repair Procedures ~60,0002 Patients With Larger Lesions $3 Billion Addressable Market in the U.S.3 Annual Cartilage Repair Revenue Mid teens % biopsy penetration Mid single-digit % implant penetration
MACI is the Leading Restorative Cartilage Repair Product on the Market 11 BIOPSY TAKEN CHONDROCYTES EXTRACTED, EXPANDED, & LOADED MACI DELIVERED DEFECT DEBRIDED TEMPLATE CREATED MACI IMPLANTED
MACI Product Attributes Driving Strong Growth Since Launch 12 Broad Label with Strong Clinical Data Shorter Rehab Protocols Strong Reimbursement Profile 1 The American Journal of Sports Medicine. 2018;46(6):1343-1351. Simpler, Less Invasive Procedure
MACI Growth Opportunities 13 Innovation that Supports Premium Pricing Deeper Practice Penetration as Surgeons Gain MACI Experience Broader Surgeon Adoption as MACI Becomes Standard of Care Core MACI Growth Drivers MACI Arthro Can Amplify Drivers MACI has Generated Sustained High Growth Since Launch; MACI Arthro Expected to Drive Increased Utilization
MACI Arthro is the First Restorative Biologic Cartilage Repair Product Approved for Arthroscopic Administration 14
Target Surgeons MACI Arthro Enables Additional Surgeon Growth 15 Surgeons Primarily Treating Patella Defects Surgeons Treating Small Condyle Defects Remaining Open MACI Targets New Arthro-Only Targets Current Users Potential New Surgeons MACI Arthro Expected to Drive Incremental Volume Across all Surgeon Segments Pre MACI Arthro Targets Post MACI Arthro Targets ~50% Penetration 5,000 Targets 7,000 Targets Expect 50%+ Penetration MACI Surgeon Segments 1Based on Health Advances, LLC MACI market assessment report (2018).
MACI Arthro Addresses the Largest Segment of the Overall MACI TAM Where There is Significant Potential to Increase Penetration 16 Patella Smaller Non-Patella Defects <4cm2 Larger Defects Non-Patella 4cm2+ ~$0.5B ~$0.5B MACI Volume Patella TAM MACI Volume 4 cm2+ TAM MACI Volume 2-4cm2 CondyleTAM ~$1B Current MACI Growth Segments Pre MACI Arthro Launch MACI Arthro Provides Opportunity to Significantly Increase MACI Usage MACI Arthro Target Segments ~ 10K Patients ~ 10K Patients ~ 20K Patients Current penetration = greater than 10% MACI Arthro growth potential Current penetration = low single-digit % MACI Volume Other ≤4cm2 TAM ~$1B Patella Larger Defects Condyle Other Smaller Defects1 Core growth potential Core growth potential MACI Arthro growth potential ~ 20K Patients 1 1-2cm2 Trochlea, Tibia and Condyle defects.
17 Significant Ankle Cartilage Repair Opportunity MACI Ankle Annual TAM Estimate (U.S.) ~66,0002 Patients MD’s Consider Clinically Appropriate For MACI ~165,0001 Ankle Resurfacing Procedures ~18,0002 Larger Lesions Current Treatment Breakdown2 MACI Ankle represents a $1 billion3 market opportunity, increasing the total MACI addressable market to $4 billion ~18,0002 Larger Lesions 1 SmartTrak Cartilage Repair Procedures; resurfacing includes microfracture, OATs, OCA, etc. and does not include chondroplasty/debridement only. 2 Cello Health MACI Ankle quantitative market research survey (2021). 3 Assumes MACI ASP of $50,000+.
18 18 Burn Injury Size and Depth Determine Treatment Pathway Full thickness burn injuries of any size & partial thickness burn injuries >10% total body surface area (TBSA) are most often transferred to specialized burn centers Full thickness & deep partial-thickness burns require eschar removal and grafting to achieve wound closure INITIAL ASSESSMENT ESCHAR REMOVAL EVALUATION TREATMENT/HEALING TREATMENT PATHWAY Epidermis Dermis Subcutaneous fat Muscle Bone Superficial (1st Degree) Superficial Partial-Thickness (2nd Degree) Deep Partial-Thickness (2nd Degree) Full Thickness (3rd Degree) Fourth Degree
Burn Care Franchise Addressable Market Opportunity 19 $300 Million Addressable Market in the U.S.4 Estimated U.S. Burn Patients1 500,000 Annual Burns (U.S.) 1,500 Epicel-Indicated (>30% TBSA) Patients 600 Surviving>40% TBSA Patients $300 Million Addressable Market in the U.S.2,3 40,000Hospitalized Patients 1 2017 National Burn Repository Report Version 13. 2 ~90% of hospitalized patients with thermal burns; ~90% of eligible patients require eschar removal (management estimate). 3 Assumes NexoBrid average price of ~$9,000 per patient. 4 Assumes 600 patients x 120 grafts per patient x ~$4,000+ per graft. NexoBrid commercialization significantly expands the total addressable market and establishes second high growth franchise for Vericel $600 Million Addressable Market in the U.S.
NexoBridOrphan biologic product indicated for eschar removal in adults and pediatric patients with severe burns 20 Significant Advancement in Burn Treatment Paradigm Concentrated mixture of proteolytic enzymes Non-surgical topical agent that may be applied at the patient’s bedside Selectively degrades eschar in four hours while preserving viable tissue 1 NexoBrid Label. Cambridge, MA. Vericel Corporation; 2022. 2 Krieger Y, Bogdanov-Berezovsky A, Gurfinkel R, et al. Efficacy of enzymatic debridement of deeply burned hands. Burns. 2012;38:108-112. 3 Palao R, Aguilera-Saez J, Collado JM, et al. Use of a selective enzymatic debridement agent (NexoBrid) for wound management: Learning curve. World J Dermatol. 2017;6(2):32-41.
Epicel 21 Comparison of Epicel Patient Database to National Burn Repository1 Data Demonstrates Lower Mortality Rate Twenty-five Years’ Experience and Beyond with Cultured Epidermal Autografts (CEA) for Coverage of Large Burn Wounds in Adult and Pediatric Patients, 1989-2015; Hickerson, Journal of Burn Care & Research, iry061, https://doi.org/10.1093/jbcr/iry061. 1 American Burn Association, National Burn Repository 2016, Version 12. Only FDA-approved permanent skin replacement for adult and pediatric patients with full-thickness burns ≥ 30% of total body surface area Important treatment option for severe burn patients where little skin is available for autografts
Burn Care Growth Opportunities 22 Activating additional Epicel users through cross-selling efforts with NexoBrid
Vericel Remains Focused on Potential Strategic Transactions to Maximize Long-Term Value Business development activities focused on opportunities having a strategic fit with current franchises or advanced cell therapy platform 23 Sports Medicine Franchise Severe Burn Care Franchise ADVANCED CELL THERAPY DEVELOPMENT & MANUFACTURING PLATFORM New Advanced Cell Therapy Vertical(s)
MACI Arthro Approved and Launched NexoBrid Pediatric Label Expansion Approved 1st Profitable Quarter Acquisition of North American commercial rights to NexoBrid Building on a Legacy of Growth with Near-Term and Long-Term Opportunities MACI Approved Epicel Pediatric Label Expansion Approved MACI Launched in U.S. 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030+ 24 New Corporate HQ and Manufacturing Facility Complete Acquisition of Sanofi’s Cell Therapy and Regenerative Medicine Business NexoBrid Approved in U.S. NexoBrid Launched in U.S. Target Launch Potential for MACI OUS Expansion Commercial Manufacturing at New Facility Commences
Growth Strategy Leverages Near-Term & Long-Term Opportunities Strong Financial Profile High revenue growth profile with 20% CAGR since 2017 Sustained positive adjusted EBITDA and operating cash flow $167 Million in cash and investments High-Growth Sports Medicine Franchise Market leader in knee cartilage repair 20% growth in 2023 & 2024 MACI Arthro launched in Q3 2024 25 Second High-Growth Franchise in Burn Care NexoBrid launched in the U.S. in Q4 2023 NexoBrid Pediatric indication approved in Q3 2024 Expanding Core Portfolio On track to submit MACI Ankle IND in H1 2025, expect to initiate clinical study in H2 2025 New facility provides flexibility to potentially commercialize MACI outside the US 2024 financial metrics are based on preliminary, unaudited 2024 financial results and are subject to change.