Vericel Corporation, a leading provider of advanced therapies for the sports medicine and severe burn care markets, has delivered another quarter of impressive financial results, showcasing its ability to drive consistent growth and profitability expansion.
Financials
Vericel reported total revenue of $103.943 million for the first six months of 2024, a 19.6% increase compared to the same period in 2023. This strong top-line performance was driven by robust growth across both of Vericel's core business segments - MACI and Burn Care.
MACI, Vericel's autologous chondrocyte implantation product for the repair of symptomatic cartilage defects, generated revenue of $84.316 million in the first half of 2024, up 19.6% year-over-year. The company's Burn Care franchise, which includes the Epicel permanent skin replacement and the recently launched NexoBrid eschar removal product, also delivered impressive results, with total Burn Care revenue increasing to $19.627 million.
Vericel's strong revenue growth translated into significant margin expansion and profitability improvement. Gross profit for the first six months of 2024 was $71.955 million, representing a gross margin of 69.2%, up from 64.9% in the prior year period. This drove a 27.4% increase in gross profit compared to the first half of 2023.
On the bottom line, Vericel reported a net loss of $8.544 million for the first six months of 2024, an improvement from the $12.515 million net loss in the same period last year. The company's adjusted EBITDA, a key profitability metric, grew 81.8% year-over-year to $2.951 million, demonstrating the strong operating leverage in Vericel's business model.
Business Overview
Vericel's financial performance was underpinned by continued strong execution across its core product portfolio. MACI revenue growth was driven by an expanding surgeon customer base and increased biopsy volumes, with the company noting that the last two quarters represented the highest biopsy volumes since launch. The Burn Care franchise also saw robust growth, with Epicel revenue increasing 12.2% year-over-year and the successful commercial launch of NexoBrid in the U.S. market.
Outlook
Looking ahead, Vericel has increased its full-year 2024 revenue guidance to $238 million to $242 million, representing growth of 20% to 23% over 2023. This guidance reflects the company's confidence in its ability to sustain its strong momentum across both business segments.
In the MACI segment, Vericel is focused on driving further adoption of its flagship product through the upcoming launch of its arthroscopic delivery system, which is expected to expand the addressable market by enabling treatment of a larger patient population. The company is also advancing the development of a MACI Ankle program, which could represent a significant long-term growth opportunity.
Vericel's Burn Care franchise is also poised for continued growth, with the successful commercial launch of NexoBrid and the ongoing expansion of Epicel's reach and utilization. The company has made significant progress in onboarding burn centers for NexoBrid, with over 60 centers having completed the necessary approval processes by the end of the first quarter.
Liquidity
From a financial position standpoint, Vericel remains well-capitalized, with $148 million in cash, restricted cash, and investments as of June 30, 2024, and no debt. The company's strong balance sheet and cash flow generation, with $25.737 million in operating cash flow in the first half of 2024, provide ample resources to fund its growth initiatives and strategic priorities.
Conclusion
Overall, Vericel's consistent execution, diversified product portfolio, and robust financial performance position the company well to continue delivering value to shareholders. The company's focus on innovation, market expansion, and operational excellence should enable it to capitalize on the significant opportunities in the sports medicine and severe burn care markets.