Press Release: Vericel Provides Business and Financial Updates
9:00 am ET April 2, 2020 (Dow Jones) Print
Vericel Provides Business and Financial Updates
First Quarter Preliminary Unaudited Product Revenues Increased Approximately 21% Over First Quarter 2019
Full Year 2020 Financial Guidance Withdrawn Due to Uncertainty Regarding Impact of COVID-19
CAMBRIDGE, Mass., April 02, 2020 (GLOBE NEWSWIRE) -- Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, today announced preliminary unaudited product revenue growth for the quarter ended March 31, 2020, and provided business and financial updates related to the COVID-19 pandemic.
Over the past several weeks, Vericel has implemented several measures to safeguard the health and well-being of its employees, their families, and healthcare providers, while continuing to supply its autologous cell therapy products MACI(R) (autologous cultured chondrocytes on porcine collagen membrane) and Epicel(R) (cultured epidermal autografts) to patients with knee cartilage and severe burn injuries. At this time, all Vericel employees not directly involved in the production and delivery of MACI or Epicel are working from home. For production-related teams, the Company has implemented additional measures to protect the health and safety of its workforce. Vericel representatives will also continue to provide field-based support for surgical cases, as needed, in compliance with applicable government mandated business activity restrictions and facility access rules.
"First and foremost, our thoughts are with those affected by the virus and we are especially thankful to all healthcare workers for their critical efforts to support patients during this challenging time," said Nick Colangelo, President and Chief Executive Officer of Vericel. "While our MACI business has been impacted by the restrictions on elective surgical procedures, the fundamentals of our business remain strong. Prior to cancellations that occurred in the last two weeks of the quarter, MACI was on track to exceed revenue growth guidance and we believe that most patients will reschedule cases to the extent possible following this crisis. In addition, we believe that Epicel may be less directly impacted by the pandemic given the critical nature of severe burn injuries. We are implementing a number of initiatives to maintain our near-term and future growth opportunities while supporting patients and reducing non-essential discretionary spending. Given the strength of our financial position and the underlying fundamentals of our business, we believe that the Company is well-positioned to maintain its leadership position in the sports medicine and severe burn care markets."
Preliminary Unaudited First Quarter Results and 2020 Financial Guidance
Preliminary unaudited total revenues for the quarter ended March 31, 2020 increased approximately 21% compared to the first quarter of 2019, with MACI revenue increasing approximately 21% and Epicel revenue increasing approximately 22%. As a result of various national, state and local restrictions on elective surgical procedures related to the COVID-19 pandemic, beginning in the middle of March there was a significant increase in cancellations of scheduled MACI procedures as well as a slowdown in new MACI orders. The number of MACI procedures scheduled to occur in the first quarter that were cancelled between March 15, 2020 and the end of the quarter reduced the volume of MACI implants for the quarter by approximately 9%.
Due to the significant uncertainty regarding the duration and impact of restrictions on elective procedures related to the COVID-19 pandemic, and the fact that the U.S. Biomedical Advanced Research and Development Authority (BARDA) may adjust the emergency stockpile delivery plan for NexoBrid(R) due to shifting priorities related to the pandemic, the Company is withdrawing its previously announced 2020 financial guidance, which was issued on February 25, 2020. At this time, the Company cannot predict the extent or duration of the impact of the COVID-19 outbreak on its financial and operating results. The Company plans to provide additional information, to the extent practicable, during its first quarter earnings call in May.
Financial Position and Business Continuity
The Company started the year in a strong position across multiple dimensions and is taking prudent measures to ensure a rapid return to normal operations when conditions allow. As of March 31, 2020, the Company had approximately $83 million in cash and investments and carries no debt. Moreover, appropriate expense reduction measures have been implemented.
The Company continues to manufacture MACI and Epicel and maintains a significant safety stock of all key raw materials. At this time there is no indication that supply chain interruptions will impact the Company's ongoing manufacturing operations. The Company also continues to plan for a mid-2020 submission of the NexoBrid Biologics License Application to the FDA. To drive current and future demand, the Company's 71 MACI and 10 Epicel sales representatives and clinical support specialists are adapting their practices to support physician education initiatives using virtual tools in regions where executive orders or hospital restrictions preclude their physical presence.
