Vericel Corp. (VCEL)

[umiak]

The low hanging fruit for MACI is 11,000 patients. In 2016 VCEL serviced 1100 patients with Carticel, the product MACI replaces. VCEL charges $44k for their product per the last investor call. This is considered incentive pricing, especially when one considers reduced surgery/recovery time for patient.

This is MACI's launch year(USA), it has been a long time coming as it replaces the uncivilized with questionable value microfracture as first-line treatment. With 10 fold growth before them there is plenty of work, but imo this designation will help Vericel reach the higher growing fruit. In the long term other damaged joint locations(shoulder) can gain approval, maybe even off label surgeries.

VCELs other product, Epicel, has an addressable market of $120MM. There is nothing like Epicel for repairing severely burned skin, NOTHING. Epicel can be used for patients with burns comprising 30% or greater of body.
The presentation says 1500 patients per year fit in this category. The $120MM refers to 600 patients with >40% burn area.

***I find it hard to believe someone with severe burns affecting for example the face but less than 30% would be denied Epicel. We might consider, now that Epicel exists in the marketplace, it will move into mainstream burn care for the 40,000 patients that require hospital care. Epicel is a more humane procedure and the end result is much smoother.

VCEL has a heart tissue repair product that has a wonderful pllb trail. There is a sticky that explains it. No idea how to value it.

The basic framework above, 11,000 @ $44k and $120M from the 600 patients, comes to $600MM gross. 1/3 is extremely achievable and if doubled as a market cap today that would equate to $12pps. Perhaps you think is safer to use 1/4? Just kidding.

My point is that these are real, approved products that already have some revenue history. They are "new world" products and as the company shows continued growth I expect that the market will apply a deserving market cap.