On February 23, 2023 Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, reported financial results and business highlights for the fourth quarter and year ended December 31, 2022, and provided full-year 2023 financial guidance (Press release, Vericel, FEB 23, 2023, View Source [SID1234627635]).
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Fourth Quarter 2022 Financial Highlights
•Total net revenue of $52.7 million
•MACI net revenue of $46.3 million, and Epicel net revenue of $6.3 million
•Gross margin of 73%
•Net income of $5.9 million, or $0.12 per diluted share
•Non-GAAP adjusted EBITDA of $14.9 million, or adjusted EBITDA margin of 28%
•Operating cash flow of $7.0 million
•As of December 31, 2022, the Company had approximately $140 million in cash and investments, and no debt
Full-Year 2022 Financial Highlights
•Total net revenue of $164.4 million
•MACI net revenue of $132 million, Epicel net revenue of $31.7 million, and NexoBrid revenue of $0.7 million
•Gross margin of 67%
•Net loss of $16.7 million, or $0.35 per diluted share
•Non-GAAP adjusted EBITDA of $24.2 million, or adjusted EBITDA margin of 15%
•Operating cash flow of $17.7 million
Business Highlights and Updates
•Record quarterly total revenue of $52.7 million
•Fourth-quarter MACI revenue growth of 24% compared to the prior year and approximately 50% sequential growth versus the prior quarter, representing the highest quarterly revenue since the launch of MACI
•Fourth-quarter net income growth of 31% compared to the prior year
•10th straight quarter of positive adjusted EBITDA and operating cash flow
•Announced FDA approval of NexoBrid (anacaulase-bcbd) for the removal of eschar in adults with deep partial-thickness and/or full-thickness thermal burns, with U.S. commercial availability expected in the second quarter of 2023
•Announced that the Company is planning to initiate a human factors validation study in 2023 to support expanding the MACI label to include arthroscopic administration of MACI for the treatment of cartilage defects of the knee and now anticipates an accelerated commercial launch of arthroscopic MACI in 2024
•Announced that the Company will hold a pre-IND meeting with the FDA during the first half of 2023 regarding the clinical development program for MACI for the treatment of cartilage injuries in the ankle
"The Company delivered strong financial and business results to end the year as we generated record quarterly MACI and total revenue and another quarter of profitability," said Nick Colangelo, President and CEO of Vericel. "We also achieved significant development milestones for the Company with the approval of NexoBrid and an accelerated regulatory pathway for the MACI arthroscopic delivery program. Based on our current portfolio and anticipated new product launches, we believe that the Company is well-positioned to continue to deliver strong revenue and profit growth over the long term."
2023 Financial Guidance
•Total net revenue for 2023 expected to be in the range of $180 to $188 million
◦MACI revenue expected to be in the range of $152 to $156 million
◦Total Burn Care revenue, which includes Epicel and NexoBrid, expected to be in the range of $28 to $32 million
•Gross margin expected to be in the high-60% range
•Adjusted EBITDA margin expected to be in the mid-teens % range
Fourth Quarter 2022 Results
Total net revenue for the quarter ended December 31, 2022 increased 11% to $52.7 million, compared to $47.6 million in the fourth quarter of 2021. Total net product revenue for the quarter included $46.3 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $6.3 million of Epicel (cultured epidermal autografts) net revenue, compared to $37.3 million of MACI net revenue and $9.7 million of Epicel net revenue, respectively, in the fourth quarter of 2021.
Gross profit for the quarter ended December 31, 2022 was $38.2 million, or 73% of net revenue, compared to $34.0 million, or 72% of net revenue, for the fourth quarter of 2021.
Total operating expenses for the quarter ended December 31, 2022 were $32.2 million, compared to $29.9 million for the same period in 2021. The increase in operating expenses was primarily due to an increase in headcount and higher sales and marketing expenses.
Net income for the quarter ended December 31, 2022 was $5.9 million, or $0.12 per diluted share, compared to net income of $4.5 million, or $0.09 per diluted share, for the fourth quarter of 2021.
Non-GAAP adjusted EBITDA for the quarter ended December 31, 2022 was $14.9 million, or 28% of net revenue, compared to $12.8 million, or 27% of net revenue, for the fourth quarter of 2021. A table reconciling non-GAAP measures is included in this press release for reference.
As of December 31, 2022, the Company had approximately $140 million in cash and investments, and no debt.
Full-Year 2022 Results
Total net revenue for the year ended December 31, 2022 was $164.4 million, compared to $156.2 million in 2021. Total net product revenue for the year included $132.0 million of MACI net revenue and $31.7 million of Epicel net revenue, compared to $111.6 million of MACI net revenue and $41.5 million of Epicel net revenue, respectively, in 2021. Total net revenue in 2022 also included $0.7 million of revenue related to the procurement of NexoBrid by the U.S. Biomedical Advanced Research and Development Authority (BARDA) for emergency response preparedness, compared to $3.1 million of revenue in 2021.
Gross profit for the year ended December 31, 2022 was $109.8 million, or 67% of net revenue, compared to $106.0 million, or 68% of net revenue, in 2021.
Total operating expenses for the year ended December 31, 2022 were $126.8 million, compared to $113.9 million in 2021. The increase in operating expenses was primarily due to an increase in headcount, higher sales and marketing expenses and a $2.9 million increase in non-cash stock-based compensation expense.
Net loss for the year ended December 31, 2022 was $16.7 million, or $0.35 per diluted share, compared to net income of $7.5 million, or $0.16 per diluted share, in 2021.
Non-GAAP adjusted EBITDA for the year ended December 31, 2022 was $24.2 million, or 15% of net revenue, compared to $29.5 million, or 19% of net revenue, in 2021. A table reconciling non-GAAP measures is included in this press release for reference.
Conference Call Information
Today’s conference call will be available live at 8:30am Eastern Time and can be accessed through the Investor Relations section of the Vericel website at View Source
presentations. A slide presentation with highlights from today’s conference call will be available on the webcast and in the Investor Relations section of the Vericel website. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software, if necessary. To participate by telephone, please register here to receive dial-in details and your personal passcode. A replay of the webcast will be available on the Vericel website until February 23, 2024.