Full Press Release Details
Provides Business and Financial Updates
Preliminary Unaudited Product Revenues Increased Approximately 21% Over First Quarter 2019
Financial Guidance Withdrawn Due to Uncertainty Regarding Impact of COVID-19
CAMBRIDGE, Mass., April 2, 2020 (GLOBE NEWSWIRE) - Vericel
Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, today announced
preliminary unaudited product revenue growth for the quarter ended March 31, 2020, and provided business and financial updates
related to the COVID-19 pandemic.
Over the past several weeks, Vericel has implemented several
measures to safeguard the health and well-being of its employees, their families, and healthcare providers, while continuing to
supply its autologous cell therapy products MACI (autologous cultured chondrocytes on porcine collagen membrane)
and Epicel (cultured epidermal autografts) to patients with knee cartilage and severe burn injuries. At this time,
all Vericel employees not directly involved in the production and delivery of MACI or Epicel are working from home. For production-related
teams, the Company has implemented additional measures to protect the health and safety of its workforce. Vericel representatives
will also continue to provide field-based support for surgical cases, as needed, in compliance with applicable government mandated
business activity restrictions and facility access rules.
"First and foremost, our
thoughts are with those affected by the virus and we are especially thankful to all healthcare workers for their critical
efforts to support patients during this challenging time," said Nick Colangelo, President and Chief Executive Officer
of Vericel. "While our MACI business has been impacted by the restrictions on elective surgical procedures, the
fundamentals of our business remain strong. Prior to cancellations that occurred in the last two weeks of the quarter, MACI
was on track to exceed revenue growth guidance and we believe that most patients will reschedule cases to the extent possible
following this crisis. In addition, we believe that Epicel may be less directly impacted by the pandemic given the critical
nature of severe burn injuries. We are implementing a number of initiatives to maintain our near-term and future growth
opportunities while supporting patients and reducing non-essential discretionary spending. Given the strength of our
financial position and the underlying fundamentals of our business, we believe that the Company is well-positioned to
maintain its leadership position in the sports medicine and severe burn care markets."
Preliminary Unaudited First Quarter Results and 2020 Financial
Preliminary unaudited total revenues for the quarter ended March
31, 2020 increased approximately 21% compared to the first quarter of 2019, with MACI revenue increasing approximately 21% and
Epicel revenue increasing approximately 22%. As a result of various national, state and local restrictions on elective surgical
procedures related to the COVID-19 pandemic, beginning in the middle of March there was a significant increase in cancellations
of scheduled MACI procedures as well as a slowdown in new MACI orders. The number of MACI procedures scheduled to occur in the
first quarter that were cancelled between March 15, 2020 and the end of the quarter reduced the volume of MACI implants for the
quarter by approximately 9%.
Due to the significant uncertainty regarding the duration and
impact of restrictions on elective procedures related to the COVID-19 pandemic, and the fact that the U.S. Biomedical Advanced
Research and Development Authority (BARDA) may adjust the emergency stockpile delivery plan for NexoBrid due to
shifting priorities related to the pandemic, the Company is withdrawing its previously announced 2020 financial guidance, which
was issued on February 25, 2020. At this time, the Company cannot predict the extent or duration of the impact of the COVID-19
outbreak on its financial and operating results. The Company plans to provide additional information, to the extent practicable,
during its first quarter earnings call in May.
Financial Position and Business Continuity
The Company started the year in a strong position across multiple
dimensions and is taking prudent measures to ensure a rapid return to normal operations when conditions allow. As of March 31,
2020, the Company had approximately $83 million in cash and investments and carries no debt. Moreover, appropriate expense reduction
measures have been implemented.
The Company continues to manufacture MACI and Epicel and maintains
a significant safety stock of all key raw materials. At this time there is no indication that supply chain interruptions will impact
the Company's ongoing manufacturing operations. The Company also continues to plan for a mid-2020 submission of the NexoBrid
Biologics License Application to the FDA. To drive current and future demand, the Company's 71 MACI and 10 Epicel sales representatives
and clinical support specialists are adapting their practices to support physician education initiatives using virtual tools in
regions where executive orders or hospital restrictions preclude their physical presence.
About Vericel Corporation
Vericel is a leader in advanced therapies for the sports medicine
and severe burn care markets. The company markets two cell therapy 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. The company also holds an exclusive license for North American commercial
rights to NexoBrid , a registration-stage biological orphan product for debridement of severe thermal burns. For
more information, please visit the company's website at 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
Preliminary and Unaudited Nature of Reported Results
Our revenue expectations for the first quarter, as well as our
estimates concerning cash and investments are preliminary, unaudited and are subject to adjustment in the course of our ongoing
internal control and review procedures.
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, we caution you that 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.
factors that may result in differences are the inherent uncertainties associated with our expectations concerning expected revenue
results for the first quarter of 2020 and estimates of our cash and investments as of March 31, 2020. Vericel's revenue
expectations for the first quarter, as well as its estimates concerning cash and investments are preliminary, unaudited and are
subject to adjustment in the course of our ongoing internal review. Our internal control procedures over financial reporting have
not yet been completed and therefore, the growth in revenue and cash and investments as described herein have not been evaluated
under our internal control framework. 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 growth in revenues for MACI and
Epicel, the expected target surgeon audience, the estimate of the commercial growth potential of our products and product candidates,
availability of funding from the Biomedical Research and Development Authority ("BARDA") under its agreement with
MediWound Ltd. for use in connection with NexoBrid development activities, potential fluctuations in sales and volumes and our
results of operations over the course of the year, competitive developments, timing and conduct of clinical trial and product
development activities, timing or likelihood of regulatory submissions or approvals, market demand for our products, changes in
third party coverage and reimbursement, our ability to maintain and expand our network of direct sales employees, our ability
to supply or meet customer demand for our products, and the impact of the COVID-19 pandemic on our business or the economy generally.
With respect to COVID-19, we are
currently unable to reasonably estimate the specific extent, or duration, of the impact of the COVID-19 outbreak on our business,
financial and operating results. We are also unable to predict how the outbreak will affect the availability of physicians and/or
their treatment prioritizations or the impact of the outbreak on the overall healthcare infrastructure. In addition to impacts
on procedure and surgery volumes, we are experiencing and may experience other disruptions as a result of the COVID-19 outbreak.
For example, enrollment in our clinical trials may be adversely affected. In addition, patients who have cancelled or postponed