Vericel Corporation Q2 FY2025 earnings call

• MACI: Strong second quarter revenue growth, with MACI Arthro surgeon training outpacing initial expectations (600 surgeons trained by end of July). Treatment of small femoral condyle defects increased 40% y/y. Plan to expand MACI sales force from 76 to ~100 territories.
• Burn Care: Epicel biopsies rebounded, with highest quarterly biopsies since 2023 and strong start to Q3. NexoBrid had strong momentum with high orders in July.
• Long-term Initiatives: FDA clearance of IND for Phase III MACI ankle clinical study, on track to initiate in H2 2025; on track to initiate commercial manufacturing for MACI in new facility next year.

MACI: Generated record second quarter revenue of nearly $54 million, representing 21% growth versus the prior year and 15% sequential growth versus the prior quarter. MACI's performance was driven by expanding the surgeon base and growth in biopsies with the launch of MACI Arthro. Burn Care: Epicel performance rebounded in the second quarter with substantial increase in biopsies, grafts, and revenue; biopsies in Q2 were highest since 2023. NexoBrid had a strong close to the quarter with highest number of ordering centers and hospital units ordered in any month since launch.

• MACI: Maintaining revenue guidance, expects full year growth in low 20% range, Q3 revenue in low 20% range (~$54M - $55M).
• Burn Care: Updating second half quarterly revenue guidance to ~$10M per quarter, more in line with recent run rates. Reaffirmed profitability guidance of gross margin 74% and adjusted EBITDA margin 26% for full year 2025.
• Other: Not assuming additional NexoBrid revenue from BARDA RFP process, but potential for incremental revenue in Q4.

• Uncertainties in accurately predicting Epicel quarterly revenue due to unpredictable patient health dynamics.
• Timing of implant conversion relative to biopsy growth for MACI.
• Uncertainty around BARDA RFP negotiations and potential revenue from BARDA procurement.

Q: Ryan Zimmerman from BTIG asked about MACI guidance not being met and conversion rates.

A: Joseph Anthony Mara said Q2 was in line with expectations, underlying indicators strong, biopsy and implant growth accelerating. Nick Colangelo mentioned no difference in conversion rates for Arthro vs traditional MACI.

Q: Richard Newitter from Truist Securities asked about MACI conversion timelines.

A: Nick Colangelo said no difference in conversion rates from traditional MACI, biopsy growth will lead to implant growth as expected. Joseph Anthony Mara added it's new territory but trends are in line.

Q: Samuil-Hrabar Gatev from Leerink Partners asked about MACI Arthro surgeons.

A: Dominick Colangelo said ~1/3 of trained surgeons are from existing MACI customers, 1/3 from prior non-users, and 1/3 from new arthro-only surgeons.

Q: Caitlin Cronin from Canaccord Genuity asked about Arthro biopsies and sales force expansion.

A: Dominick Colangelo said 100+ biopsies from arthro-only segment, sales force expansion with 100 territories, reps to be hired and in place by early 2026.

Q: Mason Carrico from Stephens asked about MACI pricing and international expansion.

A: Dominick Colangelo said confident in sustaining pricing with high approval rates, international expansion planned with Europe prioritized, road map by end of 2025.

Q: Swayampakula Ramakanth from H.C. Wainwright asked about Burn Care outperforming guidance and BARDA RFP.

A: Joseph Anthony Mara said potential for Burn Care to outperform with strong Q3 start, Nick Colangelo discussed BARDA RFP details and timing.