Vericel Releases Q1 2024 Financial Results and Increases 2024 Guidance

Vericel Corporation, a prominent player in advanced sports medicine and severe burn care therapies, has released its financial results for the first quarter ending March 31, 2024. The company reported a substantial increase in total revenue and other key financial metrics, signaling a robust start to the fiscal year.

For the first quarter, Vericel's total net revenue jumped 25%, totaling $51.3 million compared to $41.0 million in the same quarter the previous year. This growth was primarily driven by significant gains in the company's core product lines. MACI, an autologous cultured chondrocyte product, saw its revenue rise by 18% to $40.2 million. Meanwhile, the burn care segment experienced a notable 63% increase in revenue, reaching $11.1 million. This segment includes $10.7 million from Epicel, a cultured epidermal autograft, and $0.4 million from NexoBrid, an eschar removal product for burn treatment.

Vericel's gross margin for the quarter improved significantly to 69%, compared to 65% in the first quarter of 2023. The company's net loss decreased to $3.9 million, or $0.08 per diluted share, from $7.5 million, or $0.16 per diluted share, in the same period last year. Additionally, the non-GAAP adjusted EBITDA surged by 325% to $7.2 million, representing an adjusted EBITDA margin of 14%. Operating cash flow was also strong at $7.2 million.

As of March 31, 2024, Vericel held about $148 million in cash, restricted cash, and investments, with no debt. These solid financials are bolstered by the company's business highlights, which include record first-quarter revenues for both MACI and the overall company. The gross margin also saw a notable improvement, climbing more than 400 basis points. MACI biopsies and the number of surgeons performing these procedures were among the highest since the product's launch. The launch of NexoBrid is progressing well, with more than 60 Pharmacy and Therapeutics (P&T) committee submissions, around 40 burn centers obtaining approval, and over 30 centers placing initial orders.

Nick Colangelo, President and CEO of Vericel, expressed optimism about the company's future, citing strong revenue growth and significant margin expansion. Colangelo highlighted the contributions from new product launches and the core portfolio's strength as key drivers for sustained high revenue and profit growth moving forward.

Vericel has also adjusted its full-year 2024 revenue guidance upward, now expecting total net revenue to range between $238 million and $242 million, compared to the previous guidance of $237 million to $241 million. The company maintains its profitability guidance, with a gross margin of approximately 70% and an adjusted EBITDA margin of about 20%.

Looking at the detailed financials, Vericel reported a gross profit of $35.4 million for the first quarter, up from $26.5 million in the same period last year. Total operating expenses increased to $40.8 million from $34.7 million, mainly due to development activities for MACI arthroscopic instruments, increased headcount, employee-related expenses, and lease expenses associated with a new facility under construction.

Vericel's net loss for the quarter was $3.9 million, significantly down from $7.5 million in the first quarter of 2023. The non-GAAP adjusted EBITDA was $7.2 million, up from $1.7 million in the same period last year, reflecting improved operational efficiencies and profitability.

In summary, Vericel Corporation has commenced 2024 with a strong financial performance, marked by significant revenue growth, improved margins, and a robust cash position. The company is well-poised for continued growth, bolstered by its innovative product portfolio and strategic market positioning in sports medicine and severe burn care.