Total Revenues of $15.4 Million Reported
for the Fourth Quarter
Vericel Corporation (NASDAQ:VCEL), a leading developer of
patient-specific expanded cellular therapies for the treatment of
severe diseases and conditions, today reported financial results
and business highlights for the fourth quarter and year
ended December 31, 2015.
Recent Business
HighlightsDuring and since the fourth quarter of 2015, the
company:
- Announced positive top-line results from the Phase 2b
ixCELL-DCM clinical trial of ixmyelocel-T in patients with heart
failure due to ischemic dilated cardiomyopathy;
- Received U.S. Food and Drug Administration (FDA) approval of
the Epicel® (cultured epidermal autografts) HDE supplement, which
revised the Epicel product label to include pediatric patients and
specify the probable survival benefit for adult and pediatric
patients treated with Epicel, and allows the company to sell Epicel
for profit on up to 360,400 grafts per year;
- Announced that the FDA has accepted for filing the BLA for
MACI™ (matrix applied characterized autologous cultured
chondrocytes), the company’s investigational third-generation
autologous cultured chondrocyte implant intended for the treatment
of symptomatic full-thickness cartilage defects of the knee in
adult patients;
- Announced a long-term supply agreement with Matricel GmbH for
the collagen membrane used in the production of MACI;
- Achieved 14% growth in total Carticel® (autologous cultured
chondrocytes) and Epicel net product revenues for 2015 over
pro-forma Carticel and Epicel revenues for 2014, and 5% growth in
total Carticel and Epicel net product revenues in the fourth
quarter versus the fourth quarter of 2014;
- Achieved 60% and 24% growth in Epicel net product revenues for
2015 and the fourth quarter, respectively, versus the same periods
in 2014; and
- Entered into a $10 million credit facility and $5 million term
loan agreement with Silicon Valley Bank.
“2015 was an extremely productive year during which we completed
our corporate transformation into a sustainable and growing
commercial enterprise, substantially increased revenues and gross
margins, and made significant progress on our clinical and
regulatory objectives that we expect will drive current and
long-term growth for the company,” said Nick Colangelo, president
and CEO of Vericel. “We believe that we have positioned the
company as one of the leading cell therapy and regenerative
medicine companies in the industry.” Financial
HighlightsTotal revenues for the fourth quarter and year
ended 2015 were generated primarily from net sales of Carticel
implants and surgical kits and Epicel, which were acquired on May
30, 2014 as part of the acquisition of Sanofi’s cell therapy and
regenerative medicine business.
Total net revenues for the quarter ended December 31, 2015 were
approximately $15.4 million and included approximately $11.3
million of net sales of Carticel implants and surgical kits and
approximately $4.1 million of net sales of Epicel. Total
Carticel and Epicel net product revenues in the fourth quarter
increased approximately 5% over the same period in 2014.
Total net revenues for the year ended December 31, 2015 were
approximately $51.2 million, including approximately $35.2 million
of net sales of Carticel implants and surgical kits and
approximately $15.2 million of net sales of Epicel. Total
Carticel and Epicel net product revenues for 2015 increased
approximately 14% over pro-forma Carticel and Epicel net product
revenues for 2014. Total revenues for the quarter and year
ended December 31, 2015 included approximately $0.1 million and
$0.7 million of sales, respectively, from our Marrow Donation
business which ceased operations in December, 2015.
Gross profit for the quarter and year ended December 31, 2015
was $8.2 million, or 53% of net product sales, and $24.7 million,
or 48% of net product sales, respectively, compared to $8.0
million, or 54% of net product sales, and $11.5 million, or 40% of
net product sales, for the quarter and year ended December 31,
2014, respectively.
Research and development expenses for the quarter and year ended
December 31, 2015 were $7.4 million and $18.9 million,
respectively, versus $5.8 million and $21.3 million for the same
periods in 2014. The increase in research and development
expenses in the fourth quarter is primarily due to additional
research, development and regulatory costs incurred for the
Biologics License Application (BLA) for MACI and Humanitarian
Device Exemption (HDE) supplement submitted in December 2015 to
revise the labeled indications for use of Epicel, which included
$2.2 million in regulatory consulting expenses and a Prescription
Drug User Fee Act (PDUFA) filing fee of $2.4 million paid in the
fourth quarter of 2015.
The decrease in full-year research and development expenses is
primarily due to a reduction in expenses associated with the
ixCELL-DCM clinical trial, which completed enrollment in January
2015, and other clinical trial expenses, and a $3.2 million payment
in 2014 to the former shareholders of Verigen pursuant to a
settlement agreement that eliminated all future milestone payments
related to the development and commercialization of MACI in the
United States.
Selling, general and administrative expenses for the quarter and
year ended December 31, 2015 were $5.7 million and $22.5 million,
respectively, compared to $4.5 million and $13.8 million for the
same periods in 2014. The increase in SG&A expenses is
primarily due to Vericel being a commercial business for all of
2015 compared to only seven months in 2014, as well as an increase
in sales and marketing expenses associated with Carticel and Epicel
and strategic planning activities for MACI.
Loss from operations for the quarter and year ended December 31,
2015 was $5.0 million and $16.7 million, respectively, compared to
$2.3 million and $23.5 million for the same periods a year
ago. The operating loss for the quarter ended December 31,
2015 included $2.2 million for MACI BLA and Epicel HDE supplement
regulatory consulting expenses and a $2.4 million PDUFA filing fee
for MACI. Excluding these one-time expenses, the company
would have had an adjusted operating loss of $0.4 million in the
fourth quarter. Material non-cash items impacting the
operating loss for the quarter and year included $0.6 million and
$2.7 million, respectively, of stock-based compensation expense and
$0.4 million and $1.6 million, respectively, in depreciation and
amortization expense.
Other income (expense) for the quarter and year ended December
31, 2015 was less than $0.1 million and $0.3 million, respectively,
compared to less than ($0.1) million and $3.6 million for the same
periods in 2014. The change in other income for the quarter
is primarily due to a decrease in the fair value of warrants in the
fourth quarter of 2015 compared to the same period in 2014.
The decrease in other income for the full year 2015 is
primarily due to a bargain purchase gain of $3.5 million recognized
in 2014 and a decrease in the fair value of warrants in 2015
compared to 2014.
Vericel reported a net loss for the quarter and year ended
December 31, 2015 of $4.9 million, or $0.28 per share, and $16.3
million, or $0.97 per share, respectively, compared to a net loss
of $2.4 million, or $0.17 per share, and $19.9 million, or $2.23
per share, for the same periods in 2014.
As of December 31, 2015, the company had $14.6 million in cash
and cash equivalents compared to $30.3 million in cash and cash
equivalents at December 31, 2014.
Conference Call InformationToday's conference
call will be available live at 8:00am Eastern time in the Investors
section of the Vericel website at
http://investors.vcel.com/events.cfm. 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 in the live call by telephone, please call (877)
312-5881 and reference Vericel Corporation's fourth-quarter 2015
investor conference call. If calling from outside the U.S.,
please use the international phone number (253) 237-1173.
If you are unable to participate in the live call, the webcast
will be available at
http://investors.vcel.com/events.cfm until March 14,
2017. A replay of the call will also be available until 11:59
pm (EDT) on March 18, 2016 by calling (855) 859-2056, or from
outside the U.S. (404) 537-3406. The conference ID is
55599059.
About Vericel CorporationVericel Corporation is
a leader in developing patient-specific expanded cellular therapies
for use in the treatment of patients with severe diseases and
conditions. The company markets two autologous cell therapy
products in the U.S.: Carticel® (autologous cultured chondrocytes),
an autologous chondrocyte implant for the treatment of cartilage
defects in the knee, and Epicel® (cultured epidermal autografts), a
permanent skin replacement for the treatment of patients with
deep-dermal or full-thickness burns comprising greater than or
equal to 30% of total body surface area. Vericel is also
developing MACI™, a third-generation autologous chondrocyte implant
for the treatment of cartilage defects in the knee, and
ixmyelocel-T, a patient-specific multicellular therapy for the
treatment of advanced heart failure due to ischemic dilated
cardiomyopathy. For more information, please visit the
company’s website at www.vcel.com.
Epicel® and Carticel® are registered trademarks and MACI™ is a
trademark of Vericel Corporation. ©2016 Vericel
Corporation. All rights reserved.
GAAP v. Non-GAAP Measures
Vericel’s reported earnings are prepared in accordance with GAAP
and represent earnings as reported to the Securities and Exchange
Commission. Vericel’s management believes that adjusted operating
loss or profit described in the release, or operating profit
adjusted 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. However, 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.
This document contains forward-looking statements, including,
without limitation, statements concerning anticipated progress,
objectives and expectations regarding the commercial potential of
our products and growth in revenues, intended product development,
clinical activity timing, integration of the acquired business, and
objectives and expectations regarding our company described herein,
all of which involve certain risks and uncertainties. These
statements are often, but are not always, made through the use of
words or phrases such as "anticipates," "intends," "estimates,"
"plans," "expects," "we believe," "we intend," and similar words or
phrases, or future or conditional verbs such as "will," "would,"
"should," "potential," "could," "may," or similar expressions.
Actual results may differ significantly from the expectations
contained in the forward-looking statements. Among the factors that
may result in differences are the inherent uncertainties associated
with competitive developments, clinical trial and product
development activities, regulatory approval requirements, the
availability and allocation of resources among different potential
uses, estimating the commercial potential of our products and
product candidates and growth in revenues, market demand for our
products, financial projections, opportunities for growth and our
ability to supply or meet customer demand for our products or to
generate a return on Epicel. 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, 2014, filed with the
Securities and Exchange Commission ("SEC") on March 25, 2015,
Quarterly Reports on Form 10-Q and other filings with the SEC.
These forward-looking statements reflect management's current views
and Vericel does not undertake 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 release
except as required by law.
CONTACT: Chad RubinThe Trout
Groupcrubin@troutgroup.com(646) 378-2947orLee SternThe Trout
Grouplstern@troutgroup.com(646) 378-2922
VERICEL CORPORATION |
CONSOLIDATED BALANCE SHEETS |
(amounts in thousands) |
|
|
|
December 31, |
|
|
2015 |
|
2014 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
14,581 |
|
|
$ |
30,343 |
|
Accounts receivable (net of
allowance for doubtful accounts of $68 and $40, respectively) |
|
10,919 |
|
|
8,191 |
|
Inventory |
|
1,379 |
|
|
1,920 |
|
Other current assets |
|
464 |
|
|
1,036 |
|
Total current assets |
|
27,343 |
|
|
41,490 |
|
Property and equipment,
net |
|
4,049 |
|
|
2,892 |
|
Intangible assets |
|
2,917 |
|
|
3,197 |
|
Total assets |
|
$ |
34,309 |
|
|
$ |
47,579 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
7,588 |
|
|
$ |
5,824 |
|
Accrued expenses |
|
3,603 |
|
|
4,714 |
|
Warrant liabilities |
|
757 |
|
|
1,081 |
|
Other |
|
160 |
|
|
210 |
|
Total current liabilities |
|
12,108 |
|
|
11,829 |
|
Long term debt |
|
71 |
|
|
109 |
|
Total liabilities |
|
12,179 |
|
|
11,938 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Series A non-voting convertible
preferred stock, no par value: shares authorized and reserved — 1;
shares issued and outstanding — 1 |
|
3,150 |
|
|
— |
|
Series B-2 voting convertible
preferred stock, no par value: shares authorized and
reserved — 39, shares issued and outstanding — 12 |
|
38,389 |
|
|
38,389 |
|
Common stock, no par value; shares
authorized — 75,000; shares issued and outstanding — 23,789
and 23,786, respectively |
|
307,766 |
|
|
305,008 |
|
Treasury stock — 1,250 shares |
|
(3,150 |
) |
|
— |
|
Other comprehensive loss |
|
— |
|
|
(71 |
) |
Accumulated deficit |
|
(324,025 |
) |
|
(307,685 |
) |
Total shareholders’ equity |
|
22,130 |
|
|
35,641 |
|
Total liabilities and shareholders’
equity |
|
$ |
34,309 |
|
|
$ |
47,579 |
|
VERICEL CORPORATION |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(amounts in thousands except per share
amounts) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Revenues: |
|
|
|
|
|
|
|
Product sales |
$ |
15,420 |
|
|
$ |
14,706 |
|
|
$ |
51,168 |
|
|
$ |
28,796 |
|
Total revenues |
15,420 |
|
|
14,706 |
|
|
51,168 |
|
|
28,796 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of product sales |
7,229 |
|
|
6,752 |
|
|
26,470 |
|
|
17,293 |
|
Gross profit |
8,191 |
|
|
7,954 |
|
|
24,698 |
|
|
11,503 |
|
Research and development |
7,404 |
|
|
5,794 |
|
|
18,890 |
|
|
21,263 |
|
Selling, general and
administrative |
5,744 |
|
|
4,506 |
|
|
22,479 |
|
|
13,774 |
|
Total operating expenses |
13,148 |
|
|
10,300 |
|
|
41,369 |
|
|
35,037 |
|
Loss from
operations |
(4,957 |
) |
|
(2,346 |
) |
|
(16,671 |
) |
|
(23,534 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
Decrease (increase) in fair value
of warrants |
68 |
|
|
127 |
|
|
324 |
|
|
(27 |
) |
Bargain purchase gain |
— |
|
|
— |
|
|
— |
|
|
3,473 |
|
Foreign currency translation gain
(loss) |
(72 |
) |
|
(2 |
) |
|
(67 |
) |
|
152 |
|
Interest income |
7 |
|
|
15 |
|
|
36 |
|
|
24 |
|
Other income (expense) |
47 |
|
|
(162 |
) |
|
47 |
|
|
(2 |
) |
Interest expense |
(3 |
) |
|
(2 |
) |
|
(9 |
) |
|
(6 |
) |
Total other income (expense) |
47 |
|
|
(24 |
) |
|
331 |
|
|
3,614 |
|
Net loss |
$ |
(4,910 |
) |
|
$ |
(2,370 |
) |
|
$ |
(16,340 |
) |
|
$ |
(19,920 |
) |
|
|
|
|
|
|
|
|
Net loss per share
attributable to common shareholders (Basic and Diluted) |
$ |
(0.28 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.97 |
) |
|
$ |
(2.23 |
) |
Weighted average number of
common shares outstanding (Basic and Diluted) |
23,681 |
|
|
23,786 |
|
|
23,760 |
|
|
11,642 |
|
RECONCILIATION OF REPORTED LOSS FROM OPERATIONS
(GAAP) TO ADJUSTED OPERATING |
PROFIT (NON-GAAP MEASURE) -
UNAUDITED |
|
|
Three Months Ended December 31, |
(In
thousands) |
2015 |
Loss from operations |
$ |
(4,957 |
) |
BLA and HDE regulatory consulting
expenses |
2,162 |
|
PDUFA filing fee |
2,374 |
|
Adjusted operating loss
(non-GAAP) |
$ |
(421 |
) |
Vericel (NASDAQ:VCEL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Vericel (NASDAQ:VCEL)
Historical Stock Chart
From Jul 2023 to Jul 2024