Total Revenues of $10.8 Million Reported
for the First Quarter Conference Call Today at 4:30pm
Eastern Time
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
for the quarter ended March 31, 2015. Total revenues for the first
quarter were generated primarily from net sales of Carticel®
(autologous cultured chondrocytes) implants and surgical kits and
Epicel® (cultured epidermal autografts), which were acquired on May
30, 2014 as part of the acquisition of Sanofi's cell therapy and
regenerative medicine business.
Vericel reported a net loss for the quarter ended March 31, 2015
of $4.9 million, or $0.27 per share, compared to a net loss of $6.0
million, or $1.26 per share, for the same period in 2014.
Total revenues for the quarter ended March 31, 2015 were
approximately $10.8 million and included approximately $7.1 million
in net sales of Carticel implants and surgical kits and
approximately $3.6 million in net sales of Epicel. Total Carticel
and Epicel net product revenues in the first quarter increased
approximately 4% over the same period in 2014.
Gross profit for the quarter ended March 31, 2015 was $5.3
million, or 49% of total revenues, including sales by the company's
Marrow Donation LLC subsidiary.
Research and development expenses for the quarter ended March
31, 2015 were $4.4 million versus $3.3 million for the same period
a year ago. The increase in first-quarter research and development
expenses is primarily due to an increase in the number of patients
treated and followed in the Phase 2b ixCELL-DCM clinical trial, and
the addition of personnel and other expenses associated with
Epicel, Carticel and MACI™ (matrix-applied characterized autologous
cultured chondrocytes).
Selling, general and administrative expenses for the quarter
ended March 31, 2015 were $5.5 million compared to $1.4 million for
the same period a year ago. The increase in SG&A expenses is
primarily due to sales and marketing expenses associated with the
acquired commercial business and increased information technology,
legal, consulting and personnel costs related to integrating and
managing the acquired business in the United States.
Loss from operations for the quarter ended March 31, 2015 was
$4.6 million compared to $4.6 million for the same period a year
ago. Material non-cash items impacting the operating loss for the
quarter included $0.9 million of stock-based compensation expense
and $0.3 million in depreciation expense.
Other expense for the quarter ended March 31, 2015 was $0.3
million compared to $1.4 million for the same period a year
ago. The change in other expense for the quarter is primarily
due to a change in the fair value of warrants in the first quarter
of 2015 compared to the same period in 2014.
As of March 31, 2015, the company had $25.9 million in cash
compared to $30.3 million in cash at December 31,
2014.
Recent Business Highlights
During and since the first quarter of 2015, the company:
- Achieved 4% growth in total Carticel and Epicel net product
revenues in the first quarter versus the same period in 2014;
- Achieved gross margins of 49% of total net revenues for the
first quarter of 2015;
- Completed patient enrollment in the Phase 2b ixCELL-DCM
clinical trial of ixmyelocel-T for the treatment of advanced heart
failure due to ischemic dilated cardiomyopathy;
- Submitted pre-meeting materials to the U.S. Food and Drug
Administration (FDA) for discussions regarding U.S. registration
requirements for MACI, a Phase 3 product candidate for the
treatment of cartilage defects in the knee, and a pediatric label
change for Epicel;
- Reported three-year follow-up results from the SUMMIT extension
study of MACI at the 2015 Annual Meeting of the American
Association of Orthopedic Surgeons, which demonstrated that
patients treated with MACI versus microfracture continue to show a
statistically significant improvement from baseline in the
co-primary endpoint of knee injury and osteoarthritis outcome
(KOOS) pain and function scores at year 3, with higher responder
rates in the MACI group than in the microfracture group; and
- Appointed to its board of directors Dr. Steven Gilman, former
executive vice president and chief scientific officer of Cubist
Pharmaceuticals, Kevin F. McLaughlin, senior vice president and
chief financial officer of Acceleron Pharma, and Dr. Paul Wotton,
president and chief executive officer of Ocata Therapeutics.
"We are encouraged by the revenue trends and gross margin
improvements that we have achieved for Carticel and Epicel since we
acquired these products," said Nick Colangelo, Vericel's president
and chief executive officer. "We are confident that with our
new talented sales professionals and the implementation of new
marketing programs, we can continue to increase utilization of our
products and grow revenues while simultaneously improving gross
margins and driving the company to operating profitability. At
the same time, we are continuing to advance our pipeline with the
completion of patient enrollment in the Phase 2b ixCELL-DCM
clinical study of ixmyelocel-T and our ongoing discussions with the
FDA to determine the regulatory requirements to bring MACI to the
market in the U.S. and obtain a pediatric label change for
Epicel."
Conference Call Information
Today's conference call will be available live at 4:30pm 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 first-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 during the live call, the
webcast will be available at http://investors.vcel.com/events.cfm
until May 14, 2016. A replay of the call will also be
available until 11:59 pm (EDT) on May 18, 2015 by calling (855)
859-2056, or from outside the U.S. (404) 537-3406. The
conference ID is 38518920.
About Vericel Corporation
Vericel Corporation (formerly Aastrom Biosciences, Inc.) 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.
This document contains forward-looking statements, including,
without limitation, statements concerning anticipated progress,
objectives and expectations regarding the commercial potential of
our products, and revenue trends and gross margin improvements,
intended product development, clinical activity timing and
regulatory pathway, 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," "can continue," "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, integration
of the acquired business, 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 and improvement in costs, market demand for our
products, and our ability to supply or meet customer demand for our
products. 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.
VERICEL
CORPORATION |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(Unaudited, amounts in
thousands) |
|
|
|
|
March 31, |
December 31, |
|
2015 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash |
$ 25,903 |
$ 30,343 |
Accounts receivable |
9,166 |
8,191 |
Inventory |
2,005 |
1,920 |
Other current assets |
845 |
1,036 |
Total current assets |
37,919 |
41,490 |
Property and equipment, net |
3,446 |
2,892 |
Intangible assets |
3,127 |
3,197 |
Total assets |
$ 44,492 |
$ 47,579 |
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 6,726 |
$ 5,824 |
Accrued expenses |
4,320 |
4,714 |
Warrant liabilities |
1,398 |
1,081 |
Other |
180 |
210 |
Total current liabilities |
12,624 |
11,829 |
Long term debt |
100 |
109 |
Other long-term liabilities |
66 |
— |
Total liabilities |
12,790 |
11,938 |
COMMITMENTS AND CONTINGENCIES |
|
|
Shareholders' equity: |
|
|
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 — 23,786 |
305,931 |
305,008 |
Other comprehensive loss |
(71) |
(71) |
Accumulated deficit |
(312,547) |
(307,685) |
Total shareholders' equity |
31,702 |
35,641 |
Total liabilities and shareholders'
equity |
$ 44,492 |
$ 47,579 |
|
|
VERICEL
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(Unaudited, amounts in
thousands except per share amounts) |
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Revenues: |
|
|
Product sales |
$ 10,849 |
$ — |
Total revenues |
10,849 |
— |
Costs and expenses: |
|
|
Cost of product sales |
5,568 |
— |
Gross profit |
5,281 |
— |
Research and development |
4,377 |
3,271 |
Selling, general and administrative |
5,476 |
1,374 |
Total operating expenses |
9,853 |
4,645 |
Loss from operations |
(4,572) |
(4,645) |
Other income (expense): |
|
|
Increase in fair value of warrants |
(317) |
(1,352) |
Foreign currency translation gain |
16 |
— |
Interest income |
13 |
4 |
Interest expense |
(2) |
(2) |
Total other income (expense) |
(290) |
(1,350) |
Net loss |
$ (4,862) |
$ (5,995) |
|
|
|
Net loss per share attributable to common
shareholders (Basic and Diluted) |
$ (0.27) |
$ (1.26) |
Weighted average number of common shares
outstanding (Basic and Diluted) |
23,786 |
5,868 |
CONTACT: Chad Rubin
The Trout Group
crubin@troutgroup.com
(646) 378-2947
or
Lee Stern
The Trout Group
lstern@troutgroup.com
(646) 378-2922
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