OREANDA-NEWS. 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 first quarter ended March 31, 2016.

Total net revenues for the quarter ended March 31, 2016 were approximately $14.1 million and included approximately $8.8 million of Carticel net revenues and approximately $5.3 million of Epicel net revenues.  Total Carticel and Epicel net revenues increased 31% over the first quarter of 2015, with Carticel revenues increasing 24% and Epicel revenues increasing 46%, respectively, compared to the same period in 2015.

Gross profit for the quarter ended March 31, 2016 was $7.5 million, or 54% of net revenues, compared to $5.3 million, or 49% of net product revenues, for the first quarter of 2015.

Research and development expenses for the quarter ended March 31, 2016 were $3.5 million, compared to $4.4 million in the first quarter of 2015.  The decrease in research and development expenses in the first quarter is primarily due to a reduction in clinical trial expenses.

Selling, general and administrative expenses for the quarter ended March 31, 2016 were $6.0 million compared to $5.5 million for the same period in 2015.  The increase in SG&A expenses is primarily due to an increase in shared facility fees.

Loss from operations for the quarter ended March 31, 2016 was $2.0 million, compared to $4.6 million for the first quarter of 2015.  Material non-cash items impacting the operating loss for the quarter included $0.5 million of stock-based compensation expense and $0.4 million in depreciation and amortization expense.

Other expense for the quarter ended March 31, 2016 was $1.7 million compared to less than $0.3 million for the same period in 2015.  The change in other expense for the quarter is primarily due to the change in the fair value of warrants in the first quarter of 2016 compared to the same period in 2015.

Vericel reported an adjusted net loss for the quarter ended March 31, 2016 of $2.0 million dollars, or $0.08 per share, compared to an adjusted net loss of $4.5 million, or $0.19 per share, for the same period in 2015.  The adjusted net loss excludes the non-cash change in the fair value of warrants and the non-cash accumulated dividend on the Series B convertible preferred stock.  The adjusted earnings per share includes common shares reserved as treasury shares received in exchange for the Series A non-voting convertible preferred stock.  Vericel’s GAAP net loss for the quarter ended March 31, 2016 was $3.7 million, or $0.24 per share, compared to a net loss of $4.9 million, or $0.27 per share, for the same period in 2015.

As of March 31, 2016, the company had $13.5 million in cash and cash equivalents compared to $14.6 million in cash and cash equivalents at December 31, 2015.

Recent Business Highlights
During and since the first quarter of 2016, the company:

  • Achieved 31% growth in total Carticel and Epicel net revenues in the first quarter, including 24% and 46% growth in Carticel and Epicel net revenues, respectively, versus the same period in 2015;
  • Achieved gross margins of 54% of total net revenues in the first quarter versus 49% in the same period in 2015;
  • Received U.S. Food and Drug Administration (FDA) approval of the Epicel Humanitarian Device Exemption (HDE) supplement, which revised the Epicel label to include pediatric patients and specify the probable benefit, mainly related to survival, for adult and pediatric patients, and allows the company to sell Epicel for profit on up to 360,400 grafts per year;
  • Submitted  a Biologics License Application for MACI for the treatment of cartilage defects of the knee, which was accepted for review by the FDA with a PDUFA goal date of January 3, 2017;
  • Announced results from the company's Phase 2b ixCELL-DCM clinical study of ixmyelocel-T in patients with advanced heart failure due to ischemic dilated cardiomyopathy, which were presented at the American College of Cardiology's (ACC) 65th Annual Scientific Session and published in The Lancet; 
  • Entered into a $10 million credit facility and $5 million term loan agreement with Silicon Valley Bank to access low-cost, non-dilutive capital for the company; and
  • Executed a service agreement with Dohmen Life Science Services, LLC for clinical- and patient-support services for Carticel and MACI, if approved.

“We had a very strong first quarter and made tremendous progress across all facets of our business,” said Nick Colangelo, president and CEO of Vericel.  “Our strong revenue growth and margin expansion reflect the success of our commercial team’s sales and marketing initiatives, and our clinical and regulatory team made substantial progress on our key clinical and regulatory priorities.  We believe that these results position the company for strong growth moving forward.”

Conference Call Information
Today'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 first-quarter 2016 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 May 10, 2017.  A replay of the call will also be available until 11:59 pm (EDT) on May 14, 2016 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406.  The conference ID is 93070867.