Vericel (VCEL) 10-Q 10 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 04, 2017
Document and Entity Information
Entity Registrant Name	Vericel Corp
Entity Central Index Key	887,359
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		32,766,787
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash	$ 19,847	$ 22,978
Accounts receivable (net of allowance for doubtful accounts of $249 and $225, respectively)	12,127	17,093
Inventory	3,958	3,488
Other current assets	1,018	1,164
Total current assets	36,950	44,723
Property and equipment, net	3,638	3,875
Total assets	40,588	48,598
Current liabilities:
Accounts payable	6,335	6,535
Accrued expenses	6,030	4,523
Current portion of term loan credit agreement, net of deferred costs of $110	1,446	779
Warrant liabilities	650	757
Other	291	259
Total current liabilities	14,752	12,853
Revolving and term loan credit agreement, net of deferred costs of $265 and $293, respectively	1,632	1,687
Long term deferred rent	8,679	9,318
Other long term debt	21	32
Total liabilities	25,084	23,890
COMMITMENTS AND CONTINGENCIES (Note 13)
Shareholders’ equity:
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 32,724 and 31,595, respectively	368,683	329,720
Warrants	190	190
Accumulated deficit	353,369	343,591
Total shareholders’ equity	15,504	24,708
Total liabilities and shareholders’ equity	40,588	48,598
Series B-2
Shareholders’ equity:
Preferred stock	$ 0	$ 38,389

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts	$ 249	$ 225
Current portion of term loan credit agreement, deferred costs	110	110
Revolving and term loan credit agreement, deferred costs	$ 265	$ 293
Common Stock, authorized (in shares)	75,000	75,000
Common Stock, issued (in shares)	32,724	31,595
Common Stock, outstanding (in shares)	32,724	31,595
Series B-2
Convertible preferred stock, authorized (in shares)	39	39
Convertible preferred stock, reserved (in shares)	39	39
Convertible preferred stock, issued (in shares)	0	0
Convertible preferred stock, outstanding (in shares)	12	12

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Product sales, net	$ 9,361	$ 14,108
Cost of product sales	7,109	6,560
Gross profit	2,252	7,548
Research and development	3,467	3,536
Selling, general and administrative	8,408	6,004
Total operating expenses	11,875	9,540
Loss from operations	(9,623)	(1,992)
Other income (expense):
Decrease (increase) in fair value of warrants	107	(1,640)
Foreign currency translation loss	(1)	(10)
Interest income	1	5
Interest expense	(262)	(3)
Other expense	0	(10)
Total other income (expense)	(155)	(1,658)
Net loss	$ (9,778)	$ (3,650)
Net loss per share attributable to common shareholders (Basic and Diluted) (see note 11) (in dollars per share)	$ (0.31)	$ (0.24)
Weighted average number of common shares outstanding (Basic and Diluted) (in shares)	31,896	22,604

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities:
Net loss	$ (9,778)	$ (3,650)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	409	445
Stock compensation expense	502	488
Change in fair value of warrants	(107)	1,640
Inventory provision	(93)	(17)
Deferred rent expense	102	0
Foreign currency translation loss	1	10
Changes in operating assets and liabilities:
Inventory	(563)	(580)
Accounts receivable	4,966	1,250
Other current assets	146	(229)
Accounts payable	(300)	(1,976)
Accrued expenses	1,507	1,340
Other non-current assets and liabilities, net	(100)	(24)
Net cash used for operating activities	(3,122)	(1,269)
Investing activities:
Expenditures for property, plant and equipment	(70)	(13)
Other	0	93
Net cash (used in) provided by investing activities	(70)	80
Financing activities:
Net proceeds from issuance of common stock	71	258
Deferred financing costs	0	(97)
Payments on long-term debt	(10)	(9)
Net cash provided by financing activities	61	152
Net decrease in cash	(3,131)	(1,037)
Cash at beginning of period	22,978	14,581
Cash at end of period	19,847	13,544
Supplemental cash flow information (non-cash):
Additions to equipment in process included in accounts payable	102	706
Shares exchanged between common and preferred stock	38,389	0
Supplementary cash flows information:
Interest paid, net of interest capitalized	$ 221	$ 3

ORGANIZATION

ORGANIZATION	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION	Organization Vericel Corporation, a Michigan corporation (the Company, Vericel, we, us or our), was incorporated in March 1989 and began employee-based operations in 1991. On May 30, 2014, Vericel completed the acquisition of certain assets and assumed certain liabilities of Sanofi, a French société anonyme (Sanofi), including all of the outstanding equity interests of Genzyme Biosurgery ApS (Genzyme Denmark or the Danish subsidiary) (now known as Vericel Denmark ApS), a wholly-owned subsidiary of Sanofi, and over 250 patent applications of Sanofi and certain of its subsidiaries for purposes of acquiring the portion of the cell therapy and regenerative medicine business (the CTRM Business), which researches, develops, manufactures, markets and sells the Carticel ® , MACI ® , and Epicel ® products. The Company is a fully integrated, commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of innovative therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. Vericel has marketed products and developmental stage product candidates, and the Company’s goal is to become the leader in cell therapy and regenerative medicine by developing, manufacturing and marketing best-in-class therapies for patients with significant unmet medical needs. The Company operates its business primarily in the U.S. in one reportable segment — the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases. The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2017 , the Company has an accumulated deficit of $353.4 million and had a net loss of $9.8 million during the quarter ended March 31, 2017 . The Company had cash of $19.8 million as of March 31, 2017 . The Company expects that existing cash together with its term loan and revolving line of credit agreement with Silicon Valley Bank (SVB) and MidCap Financial Services (MidCap) (the SVB-MidCap facility), will be sufficient to support the Company's current operations through at least May 2018. In connection with the SVB-MidCap facility, the Company must remain in compliance with minimum monthly net revenue covenants (determined in accordance with GAAP), measured on a trailing twelve month basis. SVB and MidCap also have the ability to call debt based on material adverse change clauses which are subjectively determinable and result in a subjective acceleration clause. If the Company's cash requirements exceed its current expectations, or if it is not in compliance with the monthly net revenue covenants or the subjective acceleration clauses are triggered under the SVB-MidCap facility, then SVB may call the debt resulting in the Company immediately needing additional funds. As of March 31, 2017, the Company was not in compliance with the minimum revenue covenant. On May 9, 2017, the Company entered into an amendment to the SVB-MidCap Facility to enable compliance with the net revenue covenants. See additional discussion in note7 regarding the amendment and change in covenants. The Company may seek additional funding through debt or equity financings including the at-the-market sales agreement in place with Cowen. However, the Company may not be able to obtain financing on acceptable terms or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's shareholders. If the Company needs additional funds and is unable to obtain funding on a timely basis, the Company may need to significantly curtail its operations including its research and development programs in an effort to provide sufficient funds to continue its operations, which could adversely affect its business prospects.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
BASIS OF PRESENTATION
BASIS OF PRESENTATION	Basis of Presentation The condensed consolidated financial statements included herein have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to make estimates, judgments, and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary to state fairly the financial position and results of operations as of and for the periods indicated. The results of operations for the three months ended March 31, 2017 , are not necessarily indicative of the results to be expected for the full year or for any other period. The March 31, 2017 condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 , as filed with the SEC on March 13, 2017 (Annual Report).

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance requiring entities to apply a new model for recognizing revenue from contracts with customers and the reporting of principal versus agent considerations. The guidance will supersede the current revenue recognition guidance and require entities to evaluate their revenue recognition arrangements using a five step model to determine when a customer obtains control of a transferred good or service. The guidance is currently effective for annual reporting periods beginning after December 15, 2017 and may be adopted using a full or modified retrospective application. The Company is currently in the process of evaluating its revenue arrangements under the issued guidance and has not yet determined the impact to its consolidated financial statements. Accounting for Leases The FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the assets and liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within 2018. The Company is currently reviewing the potential impact of adopting the new guidance. Share-based Payment Accounting The FASB issued guidance to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard was effective for the Company on January 1, 2017 and was implemented for the period ended March 31, 2017 and did not have an impact on the Company's consolidated financial statements.

SELECTED BALANCE SHEET COMPONEN

SELECTED BALANCE SHEET COMPONENTS	3 Months Ended
	Mar. 31, 2017
Balance Sheet Related Disclosures [Abstract]
SELECTED BALANCE SHEET COMPONENTS	Selected Balance Sheet Components Inventory as of March 31, 2017 and December 31, 2016 : (In thousands) March 31, 2017 December 31, 2016 Raw materials $ 3,711 $ 3,214 Work-in-process 225 257 Finished goods 22 17 Inventory $ 3,958 $ 3,488 Property and equipment, net as of March 31, 2017 and December 31, 2016 : (In thousands) March 31, 2017 December 31, 2016 Machinery and equipment $ 3,150 $ 3,150 Furniture, fixtures and office equipment 931 931 Computer equipment and software 3,266 3,147 Leasehold improvements 3,332 3,332 Construction in process 461 408 Total property and equipment, gross 11,140 10,968 Less: Accumulated depreciation (7,502 ) (7,093 ) $ 3,638 $ 3,875 Depreciation expense for the three months ended March 31, 2017 and 2016 was $0.4 million and $0.4 million , respectively. Accrued expenses as of March 31, 2017 and December 31, 2016 : (In thousands) March 31, 2017 December 31, 2016 Bonus related compensation $ 3,061 $ 2,433 Employee related accruals 1,967 1,668 Clinical trial related accruals 605 422 Other 397 — $ 6,030 $ 4,523

STOCK PURCHASE WARRANTS

STOCK PURCHASE WARRANTS	3 Months Ended
	Mar. 31, 2017
Warrants and Rights Note Disclosure [Abstract]
STOCK PURCHASE WARRANTS	Stock Purchase Warrants The Company has historically issued warrants to purchase shares of the Company’s common stock in connection with certain of its common stock offerings and in September 2016 the Company issued warrants in connection with the updated debt agreement (September 2016 Warrants) discussed in note 7. The warrants issued in August 2013 (August 2013 Warrants) include anti-dilution price protection provisions that could require cash settlement of the warrants and accordingly requiring the warrants to be recorded as liabilities of the Company at the estimated fair value at the date of issuance, with changes in estimated fair value recorded as income or expense (non-cash) in the Company’s statement of operations in each subsequent period. The September 2016 Warrants meet the requirements for equity classification. The following table describes the outstanding warrants: August 2013 September 2016 Warrants Exercise price $4.80 $2.48 Expiration date August 16, 2018 September 9, 2022 Total shares issuable on exercise 724,950 117,074 On September 9, 2016, the Company issued 117,074 warrants to two holders in conjunction with the loan agreement described in note 7. The initial valuation of the September 2016 Warrants was recorded as debt issuance costs and is being amortized over the remaining life of the loan agreement to interest expense. The September 2016 Warrants are treated as equity instruments recorded at fair value with no subsequent remeasurement. Pursuant to the warrants, the holders may exercise their warrants for an aggregate of 117,074 shares of the Company’s common stock. The fair value of the warrants described in the table above is measured using the Black-Scholes valuation model. Inherent in the Black-Scholes valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero . See further detail in note 9 of the condensed consolidated financial statements. The assumptions used by the Company are summarized in the following tables: August 2013 Warrants March 31, 2017 December 31, 2016 Closing stock price $ 2.80 $ 3.00 Expected dividend rate — % — % Expected stock price volatility 104.1 % 97.9 % Risk-free interest rate 1.0 % 1.0 % Expected life (years) 1.38 1.62 September 2016 Warrants September 9, 2016 Closing stock price $ 2.20 Expected dividend rate — % Expected stock price volatility 89.8 % Risk-free interest rate 1.4 % Expected life (years) 6.00

DEBT

DEBT	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
DEBT	Debt On March 8, 2016, the Company entered into a $15.0 million debt financing with SVB which on September 9, 2016, was replaced by an expanded term loan and revolving line of credit agreement with SVB and MidCap, which together provide access to up to $20 million . The updated debt financing consists of a $4.0 million term loan which was drawn at the closing, a $4.0 million term loan which was drawn upon in November 2016, a $2.0 million term loan available upon the FDA's approval of the MACI BLA which is no longer available as it was not drawn on upon by April 12, 2017 and up to $10.0 million of a revolving line of credit. The term loans are interest only (indexed to Wall Street Journal (WSJ) Prime plus 5.00% ) until September 1, 2017 followed by 36 equal monthly payments of principal plus interest maturing September 9, 2020. The revolving credit is limited to a borrowing base calculated using eligible accounts receivable and maturing September 9, 2020 with an interest rate indexed to WSJ Prime plus 1.25% . The Company is subject to various financial and nonfinancial covenants including but not limited to monthly minimum net revenue covenants (determined in accordance with GAAP), measured on a trailing twelve month basis . SVB and MidCap have the ability to call debt based on material adverse change clauses which are subjectively determinable and result in a subjective acceleration clause. SVB and MidCap have a shared first priority perfected security interest in all assets of the Company other than intellectual property. As of March 31, 2017 , there was an outstanding balance of $8.0 million under the term loan and $2.5 million under the revolving line of credit. The weighted average interest rate on the outstanding term and revolving credit loans as of March 31, 2017 was 7.8% . As of March 31, 2017, the Company was not in compliance with the minimum revenue covenant. On May 9, 2017, the Company entered into an amendment to the SVB-MidCap Facility to enable compliance with the monthly net revenue requirement covenants, measured on a trailing twelve month basis as of March 31, 2017 . The amendment decreased the 12 month trailing minimum revenue covenant as of March 31, 2017 and revised the December 31, 2017 minimum revenue covenant to $51.7 million . The amount of eligible account receivables used to calculate the availability under the revolving line of credit was reduced. As of March 31, 2017 , there was $0.3 million remaining capacity under the revolving line of credit.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	Stock-based Compensation Stock Option and Equity Incentive Plans The Company can issue nonqualified and incentive stock options as well as other equity awards pursuant to its Second Amended and Restated 2009 Omnibus Incentive Plan (Option Plan). Such awards pursuant to the Option Plan may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants. During the three months ended March 31, 2017 , the Company granted 892,390 service-based options to purchase common stock. The options were granted with exercise prices equal to the fair market value of the Company’s stock at the grant date, and other than those granted to non-employee directors, vest over four years , under a graded-vesting methodology, following the date of grant, and expire after ten years . The Company issues new shares upon the exercise of stock options. The weighted average grant-date fair value of service-based options granted under the Option Plan during the three month periods ended March 31, 2017 and 2016 was $2.00 and $2.19 , respectively. The net compensation expense recorded for the service-based stock options related to employees and directors was $0.5 million and $0.5 million for the three months ended March 31, 2017 and 2016 , respectively. The compensation cost includes forfeiture adjustments. The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table. Three Months Ended March 31, Service-Based Stock Options 2017 2016 Expected dividend rate — % — % Expected stock price volatility 81.3 – 88.2% 78.7 – 85.5% Risk-free interest rate 2 – 2.3% 1.3 – 1.8% Expected life (years) 6.1 – 6.3 6.1 – 6.3 The following table summarizes the activity for service-based stock options for the indicated periods: Service-Based Stock Options Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2016 3,355,692 $ 4.66 8.2 $ 610 Granted 892,390 $ 2.83 Exercised 390 $ 2.11 $ — Expired 5,274 $ 3.03 Forfeited 75,828 $ 3.46 Outstanding at March 31, 2017 4,166,590 $ 4.29 8.3 $ 484 Exercisable at March 31, 2017 1,548,762 $ 6.51 7.3 $ 107 As of March 31, 2017 there was approximately $3.5 million of total unrecognized compensation cost related to non-vested service-based stock options granted under the Option Plan. That cost is expected to be recognized over a weighted-average period of 3.2 years. The total fair value of options vested during the three months ended March 31, 2017 and 2016 was $0.5 million and $0.5 million , respectively. Employee Stock Purchase Plan Employees are able to purchase stock under the Vericel Corporation Employee Stock Purchase Plan (ESPP), which was implemented effective October 1, 2015. Participation in this plan is available to substantially all employees. Compensation expense is recorded based on the fair market value of the purchase options at the grant date, which corresponds to the first day of each purchase period and is amortized over the purchase period. On April 3, 2017, employees purchased 43,141 shares resulting in proceeds from the sale of common stock of $0.1 million under the ESPP. The total share-based compensation expense for the ESPP for the three months ended March 31, 2017 was less than $0.1 million .

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	Fair Value Measurements The Company’s fair value measurements are classified and disclosed in one of the following three categories: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and • Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis: March 31, 2017 December 31, 2016 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Liabilities: Warrant liabilities $ 650 $ — $ 650 $ — $ 757 $ — $ 757 $ — The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities: Warrant Liabilities (In thousands) Balance at December 31, 2016 $ 757 Decrease in fair value (107 ) Balance at March 31, 2017 $ 650

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2017
Stockholders' Equity Note [Abstract]
SHAREHOLDERS' EQUITY	Shareholders' Equity At-the-Market Sales Agreement On October 10, 2016, we entered into our at-the-market sales agreement with Cowen (ATM Agreement), pursuant to which we may sell shares of our common stock through Cowen and Company, LLC (Cowen), as sales agent, in registered transactions from our shelf registration statement filed in June 2015, for aggregate proceeds of up to $25.0 million . Shares of common stock sold under the ATM are to be sold at market prices. We will pay up to 3% of the gross proceeds to Cowen as a commission. 357,856 shares of common stock have been sold to date under the ATM Agreement for net proceeds of $0.8 million and as of March 31, 2017 had remaining capacity of approximately $24.2 million .

PREFERRED STOCK

PREFERRED STOCK	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
PREFERRED STOCK	Preferred Stock Series B Convertible Preferred Stock On February 10, 2017, the Company sent notice to Eastern Capital Limited (Eastern), an existing holder of shares of the Company’s Series B-1 Non-Voting Convertible Preferred Stock or Series B-2 Voting Convertible Preferred Stock (Preferred Stock), informing Eastern of the Company's election to convert all 12,308 of the outstanding shares of Preferred Stock held by Eastern, plus 9,570 shares of Preferred Stock in accumulated but undeclared dividends thereon, into 1,093,892 shares of the Company's common stock pursuant to the terms of the Amended and Restated Certificate of Designations, Preferences and Rights of Series B-1 Non-Voting Preferred Stock and Series B-2 Voting Preferred Stock of the Company (Mandatory Conversion). After the Mandatory Conversion on March 9, 2017, no shares of Preferred Stock of the Company remain outstanding as of March 31, 2017 .

NET LOSS PER COMMON SHARE

NET LOSS PER COMMON SHARE	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
NET LOSS PER COMMON SHARE	Net Loss Per Common Share Basic earnings (loss) per share is calculated using the two-class method, which is an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B preferred stock. The Series B preferred stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. The dividends on the Series B preferred stock were treated as a reduction of earnings attributable to common shareholders. The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Three months ended March 31, (Amounts in thousands except per share amounts) 2017 2016 Numerator: Net loss $ (9,778 ) $ (3,650 ) Dividends accumulated on convertible preferred stock — (1,804 ) Net loss attributable to common shareholders $ (9,778 ) $ (5,454 ) Denominator: Denominator for basic and diluted EPS: Weighted-average common shares outstanding 31,896 22,604 Net loss per share attributable to common shareholders (basic and diluted) $ (0.31 ) $ (0.24 ) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. The aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from the computations of diluted net loss per common share at March 31, 2017 and 2016 were 5.0 million and 6.2 million , respectively.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2017
Risks and Uncertainties [Abstract]
Revenue	Revenue Revenue Recognition and Net Product Sales Total revenues are comprised of product sales of Carticel, Epicel, MACI, bone marrow and surgical kits. Revenue is recognized when persuasive evidence of an arrangement exists, the goods are shipped or delivered, depending on shipping terms, title and risk of loss pass to the customer and collectability is reasonably assured. Shipping and handling costs are included as a component of revenue. On June 30, 2016, the Company reduced the scope of the agreement with its exclusive distributor by terminating their services with respect to a significant portion of its Carticel sales. Prior to June 30, 2016, the distributor purchased and took title to Carticel upon shipment of the product and assumed credit and collection risk. The distributor worked with the payers on behalf of patients and surgeons to ensure medical coverage and to obtain reimbursement for Carticel implantation procedures. The Company retained all responsibility for shipment of the product to the surgical suite. In addition, revenue for Carticel was recorded net of a provision for rebates and cash discounts. These rebates and cash discounts were established by the Company at the time of sale, based on historical experience adjusted to reflect known changes in the factors that impact such reserves. For instance, the distributor of Carticel was entitled to chargeback incentives for services that are provided for based on the selling price to the end customer, under specific contractual arrangements. Cash discounts could also be granted for prompt payment. Effective as of July 1, 2016, the Company transitioned to a direct sales model whereby the Company retains credit and collection risk from the end customer. The Company currently utilizes Dohmen Life Science Services, LLC (DLSS) to provide patient support services and reimbursement services, but this provider does not purchase and take title to Carticel or MACI. The Company - also utilizes Vital Care, Inc. to provide data reporting services and to purchase, bill and collect from certain payers for Carticel and MACI. The Company recognizes product revenues from sales of Carticel and MACI upon delivery to patients as long as (i) there is persuasive evidence that an arrangement exists between ourselves and the customer, (ii) collectability is reasonably assured and (iii) the price is fixed or determinable. Prior authorization or confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of product to a patient. The Company's net product revenues are calculated by estimating expected payments for insurance, hospital or patient payments at the time it recognizes the gross revenue. The estimates are updated prospectively as new information becomes available. In April 2017, the Company received notification from one of our services providers, Vital Care, Inc., of a contractual dispute between Vital Care, Inc. and the third-party payer related to certain of its insurance reimbursement claims associated with Carticel and MACI surgeries performed in 2016 and the first quarter of 2017. Vital Care, Inc. is attempting to resolve this matter with the payer, which may include appealing or resubmitting the claims. While the Company believes reimbursement will be obtained, the ultimate amount of reimbursement may be lower than initially estimated. During the three months ended March 31, 2017 , the Company recorded a change in estimate for revenue reserves of $2.1 million related to 2016 sales and $0.7 million related to 2017 sales to reflect the lower reimbursement that would be obtained if the claims are ultimately required to be treated as out-of-network. In addition, the contractual dispute could impact amounts previously collected and certain amounts may need to be repaid while the matter is being resolved; therefore our liquidity may be negatively impacted. As a result of the continuing evaluation and assessment of these expected payments, our estimates for expected payments could change. Concentration of Credit Risk Revenue from one customer, the distributor in the U.S., represented approximately 63% of total revenue during the three months ended March 31, 2016. The next largest customer represented 16% and 13% total revenue during the three months ended March 31, 2017 and 2016, respectively. No other customer accounted for more than 10% of revenue or accounts receivable in 2017 or as of December 31, 2016.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Commitments and Contingencies The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. In March 2016, the Company amended its current lease in Cambridge to, among other provisions, extend the terms until February 2022. Under the amendment, the landlord will contribute approximately $2.0 million toward the cost of tenant improvements. The contribution toward the cost of tenant improvements is recorded as deferred rent on the Company's consolidated balance sheet and is amortized to our consolidated statement of operations as reductions to rent expense over the lease term. As of March 31, 2017 , the Company has recorded a tenant improvement of $0.9 million . In addition to the property leases, the Company also leases an offsite warehouse, various vehicles and computer equipment. The Company's purchase commitments consists of minimum purchase amounts of material in manufacturing in addition to fees payable under the DLSS contract which provides a patient support services program for Carticel and MACI. As of March 31, 2017 , future minimum payments related to leases and other contractual obligations are as follows: (In thousands) Total 2017 2018 2019 2020 2021 More than 5 Years Operating leases $ 22,766 $ 3,979 $ 4,700 $ 4,357 $ 4,423 $ 4,546 $ 761 Purchase commitments 7,170 1,668 2,268 1,434 600 600 600 Capital leases 64 32 32 — — — — Total $ 30,000 $ 5,679 $ 7,000 $ 5,791 $ 5,023 $ 5,146 $ 1,361 Rent expense for the three months ended March 31, 2017 and 2016 was $1.3 million and $1.2 million , respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Subsequent Events On May 10, 2017, the Company announced that it has entered into a License Agreement (License Agreement) with Innovative Cellular Therapeutics Co. Ltd, (ICT), a leading cell therapy company and developer of CAR-T cell therapy for cancer treatment, for the development and distribution of the Vericel product portfolio in Greater China, South Korea, Singapore, and other countries in Asia. ICT will acquire an exclusive license to certain patent rights, know-how and intellectual property relating to Carticel, MACI, Ixmyelocel-T, and Epicel as well as enter into a warrant purchase agreement. As part of the license and warrant purchase agreements, the Company will receive an upfront payment of $6.0 million , less any applicable taxes, within 60 days of the effective date of the License Agreement. The initiation of the technology transfer, the license grants in the License Agreement and the warrant purchase are contingent upon Vericel’s receipt of the upfront payment. Vericel is eligible to receive approximately $8.0 million in development and commercial milestones. ICT has also agreed to pay tiered royalties to Vericel equal to a percentage of net sales of each Licensed Product in the low double digits for the commercial life of the applicable Licensed Product. ICT will be responsible for funding the development of the programs and manufacturing of the products for commercialization in China and the rest of the territory. As partial consideration for an amount included in the upfront payment Vericel will issue to ICT a warrant, exercisable for the number of shares of Vericel’s Common Stock equal to $5.0 million less the withholding tax payable thereon divided by $ 2.55 , with a strike price of $0.01 per share. The funding transfer is subject to approval by the State Administration of Foreign Exchange of the People's Republic of China and is expected to be effectuated in the third quarter of 2017.

RECENT ACCOUNTING PRONOUNCEME20

RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance requiring entities to apply a new model for recognizing revenue from contracts with customers and the reporting of principal versus agent considerations. The guidance will supersede the current revenue recognition guidance and require entities to evaluate their revenue recognition arrangements using a five step model to determine when a customer obtains control of a transferred good or service. The guidance is currently effective for annual reporting periods beginning after December 15, 2017 and may be adopted using a full or modified retrospective application. The Company is currently in the process of evaluating its revenue arrangements under the issued guidance and has not yet determined the impact to its consolidated financial statements. Accounting for Leases The FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the assets and liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within 2018. The Company is currently reviewing the potential impact of adopting the new guidance. Share-based Payment Accounting The FASB issued guidance to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard was effective for the Company on January 1, 2017 and was implemented for the period ended March 31, 2017 and did not have an impact on the Company's consolidated financial statements.

SELECTED BALANCE SHEET COMPON21

SELECTED BALANCE SHEET COMPONENTS (Tables)	3 Months Ended
	Mar. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Schedule of inventory	Inventory as of March 31, 2017 and December 31, 2016 : (In thousands) March 31, 2017 December 31, 2016 Raw materials $ 3,711 $ 3,214 Work-in-process 225 257 Finished goods 22 17 Inventory $ 3,958 $ 3,488
Schedule of property and equipment, net	Property and equipment, net as of March 31, 2017 and December 31, 2016 : (In thousands) March 31, 2017 December 31, 2016 Machinery and equipment $ 3,150 $ 3,150 Furniture, fixtures and office equipment 931 931 Computer equipment and software 3,266 3,147 Leasehold improvements 3,332 3,332 Construction in process 461 408 Total property and equipment, gross 11,140 10,968 Less: Accumulated depreciation (7,502 ) (7,093 ) $ 3,638 $ 3,875
Schedule of accounts payable and accrued expenses	Accrued expenses as of March 31, 2017 and December 31, 2016 : (In thousands) March 31, 2017 December 31, 2016 Bonus related compensation $ 3,061 $ 2,433 Employee related accruals 1,967 1,668 Clinical trial related accruals 605 422 Other 397 — $ 6,030 $ 4,523

STOCK PURCHASE WARRANTS (Tables

STOCK PURCHASE WARRANTS (Tables)	3 Months Ended
	Mar. 31, 2017
Warrants and Rights Note Disclosure [Abstract]
Schedule of warrants outstanding	The following table describes the outstanding warrants: August 2013 September 2016 Warrants Exercise price $4.80 $2.48 Expiration date August 16, 2018 September 9, 2022 Total shares issuable on exercise 724,950 117,074
Schedule of assumptions used in calculating estimated fair value of warrants	The assumptions used by the Company are summarized in the following tables: August 2013 Warrants March 31, 2017 December 31, 2016 Closing stock price $ 2.80 $ 3.00 Expected dividend rate — % — % Expected stock price volatility 104.1 % 97.9 % Risk-free interest rate 1.0 % 1.0 % Expected life (years) 1.38 1.62 September 2016 Warrants September 9, 2016 Closing stock price $ 2.20 Expected dividend rate — % Expected stock price volatility 89.8 % Risk-free interest rate 1.4 % Expected life (years) 6.00

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of weighted average assumptions used to estimate fair value of each service-based stock option grant	The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table. Three Months Ended March 31, Service-Based Stock Options 2017 2016 Expected dividend rate — % — % Expected stock price volatility 81.3 – 88.2% 78.7 – 85.5% Risk-free interest rate 2 – 2.3% 1.3 – 1.8% Expected life (years) 6.1 – 6.3 6.1 – 6.3
Summary of activity for service-based stock options	The following table summarizes the activity for service-based stock options for the indicated periods: Service-Based Stock Options Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2016 3,355,692 $ 4.66 8.2 $ 610 Granted 892,390 $ 2.83 Exercised 390 $ 2.11 $ — Expired 5,274 $ 3.03 Forfeited 75,828 $ 3.46 Outstanding at March 31, 2017 4,166,590 $ 4.29 8.3 $ 484 Exercisable at March 31, 2017 1,548,762 $ 6.51 7.3 $ 107

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Summary of valuation of the Company's investments and financial instruments that are measured at fair value on a recurring basis	The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis: March 31, 2017 December 31, 2016 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Liabilities: Warrant liabilities $ 650 $ — $ 650 $ — $ 757 $ — $ 757 $ —
Summary of change in estimated fair value of warrant liabilities	The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities: Warrant Liabilities (In thousands) Balance at December 31, 2016 $ 757 Decrease in fair value (107 ) Balance at March 31, 2017 $ 650

NET LOSS PER COMMON SHARE (Tabl

NET LOSS PER COMMON SHARE (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule of net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method	The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Three months ended March 31, (Amounts in thousands except per share amounts) 2017 2016 Numerator: Net loss $ (9,778 ) $ (3,650 ) Dividends accumulated on convertible preferred stock — (1,804 ) Net loss attributable to common shareholders $ (9,778 ) $ (5,454 ) Denominator: Denominator for basic and diluted EPS: Weighted-average common shares outstanding 31,896 22,604 Net loss per share attributable to common shareholders (basic and diluted) $ (0.31 ) $ (0.24 )

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum payments related to leases	As of March 31, 2017 , future minimum payments related to leases and other contractual obligations are as follows: (In thousands) Total 2017 2018 2019 2020 2021 More than 5 Years Operating leases $ 22,766 $ 3,979 $ 4,700 $ 4,357 $ 4,423 $ 4,546 $ 761 Purchase commitments 7,170 1,668 2,268 1,434 600 600 600 Capital leases 64 32 32 — — — — Total $ 30,000 $ 5,679 $ 7,000 $ 5,791 $ 5,023 $ 5,146 $ 1,361

ORGANIZATION (Details)

ORGANIZATION (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)segment	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	May 30, 2014patent
Organization
Number of reportable segments | segment	1
Accumulated deficit	$ 353,369		$ 343,591
Net loss	9,778	$ 3,650
Cash	$ 19,847	$ 13,544	$ 22,978	$ 14,581
CTRM Business
Organization
Number of patents and patents applications acquired | patent					250

SELECTED BALANCE SHEET COMPON28

SELECTED BALANCE SHEET COMPONENTS - INVENTORY (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory:
Raw materials	$ 3,711	$ 3,214
Work-in-process	225	257
Finished goods	22	17
Inventory	$ 3,958	$ 3,488

SELECTED BALANCE SHEET COMPON29

SELECTED BALANCE SHEET COMPONENTS - PROPERTY PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property and equipment, net:
Total property and equipment, gross	$ 11,140		$ 10,968
Less: Accumulated depreciation	(7,502)		(7,093)
Total, net	3,638		3,875
Depreciation and amortization	400	$ 400
Machinery and equipment
Property and equipment, net:
Total property and equipment, gross	3,150		3,150
Furniture, fixtures and office equipment
Property and equipment, net:
Total property and equipment, gross	931		931
Computer equipment and software
Property and equipment, net:
Total property and equipment, gross	3,266		3,147
Leasehold improvements
Property and equipment, net:
Total property and equipment, gross	3,332		3,332
Construction in process
Property and equipment, net:
Total property and equipment, gross	$ 461		$ 408

SELECTED BALANCE SHEET COMPON30

SELECTED BALANCE SHEET COMPONENTS - ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts payable and accrued expenses:
Bonus related compensation	$ 3,061	$ 2,433
Employee related accruals	1,967	1,668
Clinical trial related accruals	605	422
Other	397	0
Total	$ 6,030	$ 4,523

STOCK PURCHASE WARRANTS (Detail

STOCK PURCHASE WARRANTS (Details)	Sep. 09, 2016holder$ / sharesshares	Mar. 31, 2017$ / sharesshares	Dec. 31, 2016$ / shares
August 2013 Warrants
Stock Purchase Warrants
Exercise price per share (in dollars per share)		$ 4.80
Total shares issuable on exercise (in shares) | shares		724,950
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)		$ 2.8	$ 3
Expected dividend rate		0.00%	0.00%
Expected stock price volatility		104.10%	97.90%
Risk-free interest rate		1.00%	1.00%
Expected life		1 year 4 months 17 days	1 year 7 months 12 days
September 2016 Warrants
Stock Purchase Warrants
Exercise price per share (in dollars per share)		$ 2.48
Total shares issuable on exercise (in shares) | shares		117,074
Warrants issued (in shares) | shares	117,074
Number of warrant holders | holder	2
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)	$ 2.20
Expected dividend rate	0.00%
Expected stock price volatility	89.80%
Risk-free interest rate	1.40%
Expected life	6 years

DEBT (Details)

DEBT (Details) - Silicon Valley Bank	Mar. 08, 2016USD ($)installment	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Sep. 09, 2016USD ($)
Debt Instrument [Line Items]
Weighted average interest rate		7.80%
Revolving Credit Facility | December 31, 2017
Debt Instrument [Line Items]
Minimum revenue covenant			$ 51,700,000
Debt Financing Agreement
Debt Instrument [Line Items]
Debt instrument, face amount	$ 15,000,000
Maximum borrowing capacity (up to)				$ 20,000,000
Debt Financing Agreement | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000
Line of credit, current		$ 2,500,000
Remaining borrowing capacity		300,000
Term Loan
Debt Instrument [Line Items]
Short-term bank loans and notes payable		$ 8,000,000
Term Loan | Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate	5.00%
Number of installments | installment	36
Term Loan | Prime Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.25%
Term Loan | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Debt instrument, face amount	$ 4,000,000
Term Loan | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Debt instrument, face amount	4,000,000
Term Loan | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Debt instrument, face amount	$ 2,000,000

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 03, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Subsequent Event
Aggregate Intrinsic Value
Stock issued during period, employee stock purchase plans (in shares)	43,141
Service-Based Stock Options
Stock-Based Compensation
Vesting period		4 years
Expiration period		10 years
Grant date fair value (in dollars per share)		$ 2	$ 2.19
Stock-based compensation expense		$ 500	$ 500
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected dividend rate		0.00%	0.00%
Options
Outstanding at the beginning of the period (in shares)		3,355,692
Granted (in shares)		892,390
Exercised (in shares)		390
Expired (in shares)		5,274
Forfeited (in shares)		75,828
Outstanding at the end of the period (in shares)		4,166,590		3,355,692
Exercisable at the end of the period (in shares)		1,548,762
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)		$ 4.66
Granted (in dollars per share)		2.83
Exercised (in dollars per share)		2.11
Expired (in dollars per share)		3.03
Forfeited (in dollars per share)		3.46
Outstanding at the end of the period (in dollars per share)		4.29		$ 4.66
Exercisable at the end of the period (in dollars per share)		$ 6.51
Weighted Average Remaining Contractual Term
Outstanding		8 years 3 months 18 days		8 years 2 months 12 days
Exercisable at the end of the period		7 years 3 months 18 days
Aggregate Intrinsic Value
Outstanding		$ 484		$ 610
Exercised		0
Exercisable at end of period		107
Total unrecognized compensation cost		$ 3,500
Weighted average period over which unrecognized compensation is expected to be recognized		3 years 2 months 15 days
Total fair value of options vested		$ 500	$ 500
Service-Based Stock Options | Minimum
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected stock price volatility		81.30%	78.70%
Risk-free interest rate		2.00%	1.30%
Expected life		6 years 1 month 5 days	6 years 1 month 5 days
Service-Based Stock Options | Maximum
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected stock price volatility		88.20%	85.50%
Risk-free interest rate		2.30%	1.80%
Expected life		6 years 3 months 18 days	6 years 3 months 18 days
Employee Stock
Stock-Based Compensation
Stock-based compensation expense		$ 100
Employee Stock | Subsequent Event
Aggregate Intrinsic Value
Stock issued during period, employee stock purchase plans	$ 100

FAIR VALUE MEASUREMENTS - RECUR

FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Liabilities that are measured at fair value on a recurring basis
Warrants	$ 190
Change in the estimated fair value of warrant liabilities
Balance at December 31, 2016	190
Decrease in fair value	(107)	$ 1,640
Balance at March 31, 2017	190
Warrants
Liabilities that are measured at fair value on a recurring basis
Warrants	757
Change in the estimated fair value of warrant liabilities
Balance at December 31, 2016	757
Decrease in fair value	(107)
Balance at March 31, 2017	650
Warrants | Recurring
Liabilities that are measured at fair value on a recurring basis
Warrants	757
Change in the estimated fair value of warrant liabilities
Balance at December 31, 2016	757
Balance at March 31, 2017	650
Warrants | Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Warrants	757
Change in the estimated fair value of warrant liabilities
Balance at December 31, 2016	757
Balance at March 31, 2017	650
Warrants | Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Warrants	0
Change in the estimated fair value of warrant liabilities
Balance at December 31, 2016	0
Balance at March 31, 2017	$ 0

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) - Cowen - USD ($)	Oct. 10, 2016	Dec. 31, 2016	Mar. 31, 2017
Class of Stock [Line Items]
At-the-market sales agreement, maximum aggregate proceeds	$ 25,000,000
At-the-market sales agreement, proceeds from issuance of common stock		$ 800,000
Amount of net capacity remaining on the at-the-market sales agreement			$ 24,200,000
Common Class A
Class of Stock [Line Items]
At-the-market sales agreement, shares issued (in shares)		357,856
Maximum
Class of Stock [Line Items]
Percentage of gross proceeds payable as commission	3.00%

PREFERRED STOCK (Details)

PREFERRED STOCK (Details) - shares	Mar. 09, 2017	Feb. 10, 2017	Mar. 10, 2017
Convertible Preferred Stock
Conversion of stock, issued (in shares)	0
Preferred Class A And Class B
Convertible Preferred Stock
Conversion of stock, converted (in shares)		12,308
Accumulated undeclared dividends (in shares)			9,570
Common Class A
Convertible Preferred Stock
Conversion of stock, issued (in shares)		1,093,892

NET LOSS PER COMMON SHARE (Deta

NET LOSS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Numerator:
Net loss	$ (9,778)	$ (3,650)
Dividends accumulated on convertible preferred stock	0	(1,804)
Net loss attributable to common shareholders	$ (9,778)	$ (5,454)
Denominator:
Weighted-average common shares outstanding	31,896	22,604
Net loss per share attributable to common shareholders (basic and diluted)	$ (0.31)	$ (0.24)
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from computations of diluted net loss per common share (in shares)	5,000	6,200

Revenue (Details)

Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue | Customer concentration
CONCENTRATION
Concentration risk	16.00%	13.00%
Revenue | Customer concentration | One distributor in the U.S
CONCENTRATION
Concentration risk		63.00%
Allowance for Receivable from Insurance Provider | Valuation Allowances And Reserves Period, Related To 2016
CONCENTRATION
Revenue reserves, deductions	$ 2.1
Allowance for Receivable from Insurance Provider | Valuation Allowances And Reserves Period, Related To 2017
CONCENTRATION
Revenue reserves, deductions	$ 0.7

COMMITMENTS AND CONTINGENCIES39

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Incentive from Lessor	$ 2,000
Deferred rent credit	900
Operating leases
Total	22,766
2,017	3,979
2,018	4,700
2,019	4,357
2,020	4,423
2,021	4,546
More than 5 Years	761
Purchase commitments
Total	7,170
2,017	1,668
2,018	2,268
2,019	1,434
2,020	600
2,021	600
More than 5 Years	600
Capital leases
Total	64
2,017	32
2,018	32
2,019	0
2,020	0
2,021	0
More than 5 Years	0
Total
Total	30,000
2,017	5,679
2,018	7,000
2,019	5,791
2,020	5,023
2,021	5,146
More than 5 Years	1,361
Rent expense	$ 1,300	$ 1,200

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Innovative Cellular Therapeutics - Subsequent Event	May 10, 2017USD ($)$ / sharesshares
Subsequent Event [Line Items]
License agreement, initial payment	$ 6,000,000
License agreement, days within effective date of agreement initial payment due	60 days
License agreement, contingent consideration, liability	$ 5,000,000
License agreement, contingent consideration, asset	$ 8,000,000
Common Stock
Subsequent Event [Line Items]
Warrants issued (in shares) | shares	2.55
Exercise price per share (in dollars per share) | $ / shares	$ 0.01