Vericel (VCEL) 10-Q 7 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 03, 2019
Document and Entity Information
Entity Registrant Name	Vericel Corp
Entity Central Index Key	0000887359
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding (in shares)		43,911,316

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Operating	$ 2,385	$ 0
Current assets:
Cash and cash equivalents	35,084	18,286
Short term investments	49,001	64,638
Accounts receivable (net of allowance for doubtful accounts of $669 and $514, respectively)	18,774	23,454
Inventory	4,063	3,558
Other current assets	2,679	2,847
Total current assets	109,601	112,783
Property and equipment, net	6,445	5,906
Right-of-use assets	25,183	0
Total assets	141,229	118,689
Current liabilities:
Accounts payable	6,201	7,108
Accrued expenses	4,179	6,930
Other liabilities	176	754
Total current liabilities	12,941	14,792
Operating	25,100	0
Other long-term liabilities	133	1,666
Total liabilities	38,174	16,458
COMMITMENTS AND CONTINGENCIES (Note 12)
Shareholders’ equity:
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 43,825 and 43,578, respectively	474,806	471,180
Other comprehensive gain (loss)	3	(39)
Warrants	104	104
Accumulated deficit	(371,858)	(369,014)
Total shareholders’ equity	103,055	102,231
Total liabilities and shareholders’ equity	$ 141,229	$ 118,689

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 669	$ 514
Common stock, authorized (in shares)	75,000,000	75,000,000
Common stock, issued (in shares)	43,825,000	43,578,000
Common stock, outstanding (in shares)	43,825,000	43,578,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Product sales, net	$ 22	$ 18,027
Gross profit	13,170	10,361
Research and development	3,008	3,729
Selling, general and administrative	13,520	10,954
Total operating expenses	16,528	14,683
Loss from operations	(3,358)	(4,322)
Other income (expense):
Increase in fair value of warrants	0	(2,907)
Interest income	480	0
Interest expense	(2)	(432)
Other income	36	2
Total other income (expense)	514	(3,337)
Net loss	$ (2,844)	$ (7,659)
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ (0.07)	$ (0.21)
Weighted average number of common shares outstanding (Basic and Diluted) (in shares)	43,725	36,140
Product
Product sales, net	$ 21,810	$ 18,027
Cost of product sales	$ 8,640	$ 7,666

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Warrants	Accumulated Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017		35,861
Beginning balance at Dec. 31, 2017	$ 22,540	$ 383,020	$ 397	$ 0	$ (360,877)
Increase (Decrease) in Shareholders' Equity
Net loss	(7,659)				(7,659)
Compensation expense related to stock options granted, net of forfeitures	1,348	$ 1,348
Stock option exercises (in shares)		253
Stock option exercises	851	$ 851
Shares issued under the Employee Stock Purchase Plan ( in shares )		28
Shares issued under the Employee Stock Purchase Plan	127	$ 127
Exercise of warrants resulting in the issuance of common stock (Note 11) (in shares)		360
Exercise of warrants resulting in the issuance of common stock	3,728	$ 3,728
Ending balance (in shares) at Mar. 31, 2018		36,502
Ending balance at Mar. 31, 2018	20,935	$ 389,074	397	0	(368,536)
Beginning balance (in shares) at Dec. 31, 2018		43,578
Beginning balance at Dec. 31, 2018	102,231	$ 471,180	104	(39)	(369,014)
Increase (Decrease) in Shareholders' Equity
Net loss	(2,844)				(2,844)
Compensation expense related to stock options granted, net of forfeitures	2,628	$ 2,628
Stock option exercises (in shares)		228
Stock option exercises	780	$ 780
Shares issued under the Employee Stock Purchase Plan ( in shares )		19
Shares issued under the Employee Stock Purchase Plan	218	$ 218
Trading Securities, Change in Unrealized Holding Gain (Loss)				(42)
Net change in unrealized loss on investments	42
Ending balance (in shares) at Mar. 31, 2019		43,825
Ending balance at Mar. 31, 2019	$ 103,055	$ 474,806	$ 104	$ 3	$ (371,858)

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (2,844)	$ (7,659)
Other comprehensive loss:
Unrealized gain on investments	42	0
Comprehensive loss	$ (2,802)	$ (7,659)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities:
Net loss	$ (2,844)	$ (7,659)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization expense	324	427
Stock compensation expense	2,628	1,342
Change in fair value of warrants	0	2,907
Gain on sale of fixed assets	0	22
Foreign currency translation loss	6	44
Amortization of premiums and discounts on marketable securities	(215)	0
Amortization of right-of-use assets	387	0
Change in operating assets and liabilities:
Inventory	(505)	(112)
Accounts receivable	4,680	5,108
Prepaid and other current assets	168	223
Accounts payable	(1,368)	(229)
Accrued expenses	(2,751)	(1,566)
Operating lease liabilities	(310)	0
Other assets and liabilities, net	(46)	(102)
Net cash provided by operating activities	154	405
Investing activities:
Purchases of short term investments	(10,686)	0
Maturities of short term investments	26,580	0
Expenditures for property, plant and equipment	(232)	(184)
Net cash provided by (used in) investing activities	15,662	(184)
Financing activities:
Net proceeds from common stock issuance due to stock option exercises	998	985
Proceeds from exercise of warrants	0	1,727
Other	(16)	(18)
Net cash provided by financing activities	982	2,694
Net increase in cash and cash equivalents	16,798	2,915
Cash and cash equivalents at beginning of period	18,286	26,862
Cash and cash equivalents at end of period	$ 35,084	$ 29,777

Organization

Organization	3 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Vericel Corporation, a Michigan corporation (together with its consolidated subsidiaries referred to herein as 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 a portfolio of patents and patent applications of Sanofi and certain of its subsidiaries for purposes of acquiring the portion of the cell therapy and regenerative medicine business related to the MACI ® , Epicel ® and Carticel ® products. The Company is a fully integrated, commercial-stage biopharmaceutical company and currently markets MACI and Epicel in the U.S. The Company is a leader in advanced cell therapies for the sports medicine and severe burn care markets. MACI (autologous cultured chondrocytes on porcine collagen membrane) is an autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. At the end of the second quarter of 2017, the Company removed Carticel (autologous cultured chondrocytes), an earlier generation autologous chrondocyte implant (ACI) product, from the market. The Company also markets Epicel (cultured epidermal autografts), a permanent skin replacement Humanitarian Use Device (HUD) for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of total body surface area (TBSA). The Company operates its business primarily in the U.S. in one reportable segment — the research, product development, manufacture and distribution of advanced cellular therapies for use in the treatment of specific diseases. The accompanying condensed 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, 2019 , the Company has an accumulated deficit of $371.9 million and had a net loss of $2.8 million during the quarter ended March 31, 2019 . The Company had cash and cash equivalents of $35.1 million , and short term investments of $49.0 million as of March 31, 2019 . The Company expects that existing cash, cash equivalents and short term investments will be sufficient to support the Company's current operations through at least May 2020. The Company may seek additional funding through debt or equity financings. 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.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Basis of Presentation [Abstract]
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, 2019 , are not necessarily indicative of the results to be expected for the full year or for any other period. The March 31, 2019 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, 2018 , as filed with the SEC on February 26, 2019 (Annual Report). Consolidated Statement of Cash Flows The following table presents certain supplementary cash flows information for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, (In thousands) 2019 2018 Supplementary Cash Flows information: Warrants exercised for common stock $ — $ 2,000 Interest paid (net of interest capitalized) 2 357 Additions to equipment in process included in accounts payable 455 401 Right-of-use asset recognized 185 —

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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. The leasing Accounting Standard Update 2016-02, became effective for the Company on January 1, 2019, and was adopted using the modified retrospective method. See note 7 for further discussion. Measuring Credit Losses on Financial Instruments The FASB issued updated guidance on measuring credit losses on financial instruments. The guidance removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Prior to the updated guidance, credit losses are recognized when it is probable that the loss has been incurred. The revised guidance removes all recognition thresholds and requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that a company expected to collect over the instrument’s contractual life. The guidance is effective for annual reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact to its consolidated financial statements.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Revenue	Revenue Revenue Recognition and Net Product Sales The Company recognizes product revenue from sales of MACI kits, MACI implants and Epicel grafts following the five step model in Accounting Standards Codification 606 Revenue Recognition (ASC 606). MACI Kits MACI kits are sold directly to hospitals based on contracted rates in the approved contract or sales order. The Company recognizes MACI kit revenue upon delivery of the biopsy kit at which time the customer (the doctor) is in control of the kit. The kit provides the doctor the ability to biopsy a sampling of cells to provide to the Company that can be used later to manufacture the implant. The ordering of the kit does not obligate the Company to manufacture an implant nor does the receipt of the cell tissue. The customer’s order of an implant is separate from the process of ordering the kit. Therefore, the sale of the kit and any subsequent sale of an implant are distinct contracts and are accounted for separately. MACI Implants The Company recognizes product revenues from sales of MACI implants upon delivery at which time the customer is in control of the implant and the claim is billable. 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. Depending upon the type of contract and payer for the MACI implant, the Company's net product revenues are based on contracted rates or estimated based on expected payments from the insurance provider, hospital or patient. The estimates of such payment amounts vary by customer and payer and are based on either contracted rates, publicly available rates or past payer precedents. Changes in estimates are recorded through revenue in the period such change occurs. Net product revenues from sales to distributors may include a prompt pay discount. On July 25, 2018 and August 10, 2018, the Company entered into amendments to its distribution agreement with Orsini Pharmaceutical Services, Inc. (Orsini). The amendments modified certain payment terms for surgeries after June 15, 2018. In addition, under the revised agreement, the parties agreed to limit Orsini's right to serve as the Company's exclusive distributor for MACI to a specified set of payers as the Company moved to a limited expanded network of distributors. The agreement with Orsini includes a provision whereby the Company retains the credit and collection risk from the end customer on implants after June 15, 2018. Orsini performs the collection activities. The net product revenues for these cases are based on expected payments from the insurance provider, hospital or patient. The estimates of such payment amounts vary by customer and payer and are based on either contracted rates, publicly available rates or past payer precedents. Changes in estimates are recorded through revenue in the period in which such change occurs. On April 18, 2019, the Company entered into an amendment with Orsini that extended the term of the agreement until May 2022, modified the per case dispensing fee, and eliminated Orsini’s exclusivity for all payers. On July 26, 2018, the Company entered into a Dispensing Agreement (Dispensing Agreement) with AllCare Plus Pharmacy, Inc. (AllCare). Pursuant to the Dispensing Agreement, the Company appoints AllCare as a non-exclusive specialty pharmacy provider of MACI. The Company pays AllCare a fee for each patient to whom MACI is dispensed. Under the Dispensing Agreement, the Company retains the credit and collection risk from the end customer on all implants. Depending upon the type of contract and payer for the MACI implant, the Company's net product revenues are based on contracted rates or estimated based on expected payments from the insurance provider, hospital or patient. The estimates of such payment amounts vary by customer and payer and are based on either contracted rates, publicly available rates or past payer precedents. Changes in estimates are recorded through revenue in the period such change occurs. On May 1, 2019, the Company entered into an amendment with AllCare that extended the term of the Dispensing Agreement until May 2022 and modified the per case dispensing fee. Epicel The Company sells Epicel directly to hospitals based on contracted rates stated in the approved contract or purchase order. Similar to MACI, there is no obligation to manufacture skin grafts upon receipt of a skin biopsy, and Vericel has no contractual right to receive payment until the product is delivered to the hospital. The Company recognizes product revenues from sales of Epicel upon delivery to the hospital at which time the customer is in control of the skin grafts and the claim is billable to the hospital. Revenue by Product and Customer The following table and description below reflect the products from which the Company generated its revenue: Three Months Ended March 31, Revenue by product (in thousands) 2019 2018 MACI implants and kits Implants based on contracted rate sold through a specialty pharmacy (a) 9,787 7,792 Implants subject to third party reimbursement sold through a specialty pharmacy (b) 2,743 1,008 Implants sold direct based on contracted rates (c) 3,226 2,674 Implants sold direct subject to third party reimbursement (d) 322 283 Biopsy kits - direct bill 542 436 Change in estimates related to prior periods (37 ) (138 ) Epicel Direct bill (hospital) 5,227 5,972 Total revenue 21,810 18,027 (a) Represents implants sold through Orsini or AllCare in which such specialty pharmacy has entered into a direct contract with the underlying insurance provider. The amount of reimbursement is known at the time of sale supported by the pharmacy's direct contract. (b) Represents implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history. (c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. (d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third party reimbursement from an underlying insurance provider. Concentration of Credit Risk On May 15, 2017, the Company entered into a distribution agreement with Orsini Pharmaceutical Services, Inc. as a specialty pharmacy distributor of MACI and has engaged a third party services provider to provide the patient support program to manage patient cases for MACI. The Company’s receivables risk and credit risk became more concentrated from June 30, 2017 through June 15, 2018 due to the shift to Orsini. Beginning June 16, 2018, the concentration of risk decreased because the Company retains the credit and collection risk from the end customer on implants after June 15, 2018. The Company sells Epicel directly to hospitals and not through a distributor. The Company includes concentration percentages for both revenue and accounts receivable for any customers which represent 10% or more of total revenue. The Company's concentration percentages were comprised of the following for MACI and Epicel: Revenue Concentration Accounts Receivable Concentration Three Months Ended March 31, March 31, December 31, 2019 2018 2019 2018 MACI 11 % 43 % 9 % 2 % Epicel 38 % 14 % 2 % 4 %

Selected Balance Sheet Componen

Selected Balance Sheet Components	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Selected Balance Sheet Components	Selected Balance Sheet Components Inventory as of March 31, 2019 and December 31, 2018 : (In thousands) March 31, 2019 December 31, 2018 Raw materials $ 3,324 $ 2,872 Work-in-process 687 638 Finished goods 52 48 Inventory $ 4,063 $ 3,558 Property and equipment, net as of March 31, 2019 and December 31, 2018 : (In thousands) March 31, 2019 December 31, 2018 Machinery and equipment $ 2,200 $ 1,536 Furniture, fixtures and office equipment 775 775 Computer equipment and software 3,829 3,712 Leasehold improvements 4,631 4,587 Construction in process 2,664 2,801 Financing right-of-use lease 175 — Total property and equipment, gross 14,274 13,411 Less: Accumulated depreciation (7,829 ) (7,505 ) $ 6,445 $ 5,906 Depreciation expense for the three months ended March 31, 2019 was $0.3 million and $0.4 million for the same period in 2018. Accrued expenses as of March 31, 2019 and December 31, 2018 : (In thousands) March 31, 2019 December 31, 2018 Bonus related compensation $ 798 $ 5,161 Employee related accruals 2,782 1,559 Other accrued expenses 599 210 $ 4,179 $ 6,930

Stock Purchase Warrants

Stock Purchase Warrants	3 Months Ended
	Mar. 31, 2019
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 December 2017 the Company issued warrants in connection with a previous loan agreement. The following table describes the outstanding warrants classified in equity as of March 31, 2019 : December 2017 Warrants Exercise price $4.27 Expiration date December 6, 2023 Total shares issuable on exercise 26,951 The fair value of the warrants described in the table above were initially 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 .

Leases (Notes)

Leases (Notes)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	Leases The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also leases offsite warehouse space, vehicles and computer equipment. The Company adopted the new leasing standards using the modified retrospective transition approach, as of January 1, 2019, with no restatement of prior periods or cumulative adjustment to retained earnings. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. Certain of the Company’s lease agreements include lease payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under previous lease guidance, were recognized as right to use assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet and for the three months ended March 31, 2019 , lease expense of less than $0.1 million was recorded related to short-term leases. Adoption of ASU 2016-02 resulted in the recording of additional net lease assets and lease liabilities of approximately $ 25.6 million and $27.8 million , respectively, as of January 1, 2019. There was an immaterial impact on the Company's consolidated net earnings and cash flows upon adoption. The contribution toward the cost of tenant improvements is recorded as a reduction of the operating lease assets and reclassed from deferred rent to lease operating assets. For the three months ended March 31, 2019, the Company recognized $1.3 million and less than $0.1 million of operating and financing lease expense, respectively. During the three months ended March 31, 2018, the Company recognized $1.4 million in lease expense under the prior leasing guidance. The Company's leases contain non-lease components and activities that do not transfer a good or service to the Company which were not considered to be components of the contract and therefore were not included in the net lease assets or lease liabilities. Total leased assets and liabilities as reassessed under the updated guidance and classified on the balance sheet, as of March 31, 2019 are as follows: (In thousands) Classification March 31, 2019 Assets Operating Right-of-use assets $ 25,183 Finance Property and equipment, net 175 $ 25,358 Liabilities Current Operating Current portion of operating lease liabilities 2,385 Finance Other liabilities 33 $ 2,418 Non-current Operating Operating lease liabilities 25,100 Finance Other long-term liabilities 133 $ 25,233 An explicit rate is not provided for some of the Company's leases, therefore the Company uses a mix of incremental borrowing rate based on the information available at commencement date, as well as implicit and explicit rates in determining the present value of lease payments. Maturity of lease liabilities as of March 31, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 3,661 $ 21 $ 3,682 2020 4,799 41 4,840 2021 4,805 41 4,846 2022 4,929 41 4,970 2023 4,901 41 4,942 2024 4,968 — 4,968 Thereafter 11,269 — 11,269 Total lease payments 39,332 185 39,517 Less: Interest (11,847 ) (19 ) (11,866 ) Present value of lease liabilities $ 27,485 $ 166 $ 27,651 The Company has options to renew lease terms for facilities and other assets. The exercise of lease renewal options is generally at the Company's sole discretion. The Company evaluates renewal and termination options at the lease commencement date to determine if it is reasonably certain to exercise the option on the basis of economic factors. For certain leases, the Company's exercise of the renewal option was determined to be probable and it was accordingly included in the lease term and related calculations. Lease terms and discount rates as of March 31, 2019 are as follows: March 31, 2019 Weighted average remaining lease term (years) Operating leases 7.54 Finance leases 4.25 Weighted average discount rate Operating leases 9.56 % Finance leases 5.00 % Future minimum payments related to operating and capital leases, as reflected under the prior guidance, disclosed in note 16 in our Form 10-K for the fiscal year ended December 31, 2018 , are as follows with no changes from prior disclosure: (In thousands) Total 2018 2019 2020 2021 2022 More than 5 years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Capital leases 205 41 41 41 41 41 — Total $ 15,591 $ 4,920 $ 4,760 $ 4,795 $ 1,007 $ 109 $ —
Leases	Leases The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also leases offsite warehouse space, vehicles and computer equipment. The Company adopted the new leasing standards using the modified retrospective transition approach, as of January 1, 2019, with no restatement of prior periods or cumulative adjustment to retained earnings. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. Certain of the Company’s lease agreements include lease payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under previous lease guidance, were recognized as right to use assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet and for the three months ended March 31, 2019 , lease expense of less than $0.1 million was recorded related to short-term leases. Adoption of ASU 2016-02 resulted in the recording of additional net lease assets and lease liabilities of approximately $ 25.6 million and $27.8 million , respectively, as of January 1, 2019. There was an immaterial impact on the Company's consolidated net earnings and cash flows upon adoption. The contribution toward the cost of tenant improvements is recorded as a reduction of the operating lease assets and reclassed from deferred rent to lease operating assets. For the three months ended March 31, 2019, the Company recognized $1.3 million and less than $0.1 million of operating and financing lease expense, respectively. During the three months ended March 31, 2018, the Company recognized $1.4 million in lease expense under the prior leasing guidance. The Company's leases contain non-lease components and activities that do not transfer a good or service to the Company which were not considered to be components of the contract and therefore were not included in the net lease assets or lease liabilities. Total leased assets and liabilities as reassessed under the updated guidance and classified on the balance sheet, as of March 31, 2019 are as follows: (In thousands) Classification March 31, 2019 Assets Operating Right-of-use assets $ 25,183 Finance Property and equipment, net 175 $ 25,358 Liabilities Current Operating Current portion of operating lease liabilities 2,385 Finance Other liabilities 33 $ 2,418 Non-current Operating Operating lease liabilities 25,100 Finance Other long-term liabilities 133 $ 25,233 An explicit rate is not provided for some of the Company's leases, therefore the Company uses a mix of incremental borrowing rate based on the information available at commencement date, as well as implicit and explicit rates in determining the present value of lease payments. Maturity of lease liabilities as of March 31, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 3,661 $ 21 $ 3,682 2020 4,799 41 4,840 2021 4,805 41 4,846 2022 4,929 41 4,970 2023 4,901 41 4,942 2024 4,968 — 4,968 Thereafter 11,269 — 11,269 Total lease payments 39,332 185 39,517 Less: Interest (11,847 ) (19 ) (11,866 ) Present value of lease liabilities $ 27,485 $ 166 $ 27,651 The Company has options to renew lease terms for facilities and other assets. The exercise of lease renewal options is generally at the Company's sole discretion. The Company evaluates renewal and termination options at the lease commencement date to determine if it is reasonably certain to exercise the option on the basis of economic factors. For certain leases, the Company's exercise of the renewal option was determined to be probable and it was accordingly included in the lease term and related calculations. Lease terms and discount rates as of March 31, 2019 are as follows: March 31, 2019 Weighted average remaining lease term (years) Operating leases 7.54 Finance leases 4.25 Weighted average discount rate Operating leases 9.56 % Finance leases 5.00 % Future minimum payments related to operating and capital leases, as reflected under the prior guidance, disclosed in note 16 in our Form 10-K for the fiscal year ended December 31, 2018 , are as follows with no changes from prior disclosure: (In thousands) Total 2018 2019 2020 2021 2022 More than 5 years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Capital leases 205 41 41 41 41 41 — Total $ 15,591 $ 4,920 $ 4,760 $ 4,795 $ 1,007 $ 109 $ —

Stock-based Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation	Stock-based Compensation Stock Option, Restricted Stock Units and Equity Incentive Plans The Company has historically had various stock incentive plans and agreements that provide for the issuance of nonqualified and incentive stock options as well as other equity awards. Such awards may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants. Options and restricted stock units granted to employees and non-employees under these plans expire no later than ten years from the date of grant and generally become exercisable over a four year period, under a graded-vesting methodology for stock options and annually on the anniversary grant date for restricted stock units, following the date of grant. The Company generally issues new shares upon the exercise of stock options or vesting of restricted stock units. For certain non-employee consultants, stock option awards continue to vest post-termination. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The options were valued as of the adoption date July 1, 2018. The 2017 Omnibus Incentive Plan (2017 Plan) provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the 2017 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2017 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan and the 2009 Second Amended and Restated Omnibus Incentive Plan (Prior Plans), and no new awards have been granted under the Prior Plans. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the 2017 Plan. As of March 31, 2019 , there were 1,304,357 shares available for future grant under the 2017 Plan. Employee Stock Purchase Plan Employees are able to purchase stock under the Vericel Corporation Employee Stock Purchase Plan (ESPP). The ESPP allows for the issuance of an aggregate of 1,000,000 shares of common stock of which 540,248 have been granted since the inception of the plan in 2015. Participation in this plan is available to substantially all employees. The ESPP is a compensatory plan accounted for under the expense recognition provisions of the share-based payment accounting standards. 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 1, 2019, employees purchased 14,228 shares resulting in proceeds from the sale of common stock of $0.2 million under the ESPP. Service-Based Stock Options During the three months ended March 31, 2019 , the Company granted 1,486,010 service-based options to purchase common stock. The options have an exercise price equal to the fair market value per share of common stock on the grant date, generally vest over four years (other than non-employee director options which vest over one year) and have a term of 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 2017 Plan for the three month periods ended March 31, 2019 and 2018 was $12.82 and $6.63 , respectively. Restricted Stock Units During the three months ended March 31, 2019 , the Company granted 176,422 service-based restricted stock units. The restricted stock units vest annually over four years in equal installments commencing on the first anniversary of the grant date and have a term of ten years . The Company issues new shares upon the vesting of restricted stock units. Restricted stock awards are recorded at fair value at the date of grant, which is based on the closing share price on the grant date. Compensation expense is recorded for restricted stock units that are expected to vest based on their fair value at grant date, and is amortized over the expected vesting period. The weighted average grant-date fair value of restricted stock units awarded for the three month periods ended March 31, 2019 was $17.77 . The aggregate fair value of restricted stock units as of March 31, 2019 was $3.1 million. No restricted stock units were granted in 2018. Stock Compensation Expense Non-cash stock-based compensation expense (employee stock purchase plan, service-based stock options and restricted stock units) included in cost of goods sold, research and development expenses and selling, general and administrative expenses is summarized in the following table: Three Months Ended March 31, (In thousands) 2019 2018 Cost of goods sold $ 260 $ 142 Research and development 525 475 Selling, general and administrative 1,843 725 Total non-cash stock-based compensation expense $ 2,628 $ 1,342 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 2019 2018 Expected dividend rate — % — % Expected stock price volatility 84.5-85.5% 82.3-84.4% Risk-free interest rate 2.4 – 2.7% 2.4-2.8% Expected life (years) 6.1-6.3 6.1-6.3

Cash Equivalents and Investment

Cash Equivalents and Investments	3 Months Ended
	Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Cash Equivalents and Investments	Cash Equivalents and Investments Marketable debt securities are classified as available-for-sale and carried at fair value in the accompanying consolidated balance sheets on a trade date basis. The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of March 31, 2019 and December 31, 2018: March 31, 2019 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 21,947 $ — $ (2 ) $ 21,945 Repurchase agreements 5,000 — — 5,000 Commercial paper 19,505 — — 19,505 Corporate notes 15,332 2 — 15,334 U.S. government securities 3,498 — — 3,498 U.S. asset-backed securities 10,661 3 — 10,664 $ 75,943 $ 5 $ (2 ) $ 75,946 Classified as: Cash equivalents $ 26,945 Short-term investments 49,001 $ 75,946 December 31, 2018 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 5,838 $ — $ — $ 5,838 Repurchase agreements 5,000 — — 5,000 Commercial paper 30,710 — — 30,710 Corporate notes 13,168 — (24 ) 13,144 U.S. government securities 10,167 — (1 ) 10,166 U.S. asset-backed securities 10,632 — (14 ) 10,618 $ 75,515 $ — $ (39 ) $ 75,476 Classified as: Cash equivalents $ 10,838 Short-term investments 64,638 $ 75,476 At March 31, 2019 and December 31, 2018, the Company invested $5.0 million in overnight repurchase agreement securities classified as cash equivalents on the balance sheet. There were no marketable securities that the Company considers to be other-than-temporarily impaired as of March 31, 2019 . The Company's investment strategy is to buy short-duration marketable securities with a high credit rating. As of March 31, 2019 , all marketable securities held by the Company had remaining contractual maturities of one year or less. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is “other than temporary,” including the Company's intention to sell and, if so, mark the investment to market through a charge to our consolidated statements of operations. There have been no impairments of the Company’s assets measured and carried at fair value during the three months ended March 31, 2019 .

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2019
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). There was no movement between level 1 and level 2 or between level 2 and level 3. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The commercial paper, corporate notes, government securities and asset-backed securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis: March 31, 2019 December 31, 2018 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 21,945 $ 21,945 $ — $ — $ 5,838 $ 5,838 $ — $ — Repurchase agreements 5,000 — 5,000 — 5,000 — 5,000 — Commercial paper 19,505 — 19,505 — 30,710 — 30,710 — Corporate notes 15,334 — 15,334 — 13,144 — 13,144 — U.S. government securities 3,498 — 3,498 — 10,166 — 10,166 — U.S. asset-backed securities 10,664 — 10,664 — 10,618 — 10,618 — $ 75,946 $ 21,945 $ 54,001 $ — $ 75,476 $ 5,838 $ 69,638 $ —

Net Loss Per Common Share

Net Loss Per Common Share	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Net Loss Per Common Share	Net Loss Per Common Share 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) 2019 2018 Numerator: Net loss $ (2,844 ) $ (7,659 ) Denominator for basic and diluted EPS: Weighted-average common shares outstanding 43,725 36,140 Net loss per share attributable to common shareholders (basic and diluted) $ (0.07 ) $ (0.21 ) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. The number of common equivalent shares (options of 6.0 million , restricted stock unit awards of 0.2 million and less than 0.1 million of warrants) that have been excluded from the computations of diluted net loss per common share at March 31, 2019 and 2018 were 6.2 million in the aggregate for both periods.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also pays for use of an offsite warehouse space and leases various vehicles and computer equipment. In March 2016, the Company amended its current lease in Cambridge to, among other provisions, extend the term 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 part of the operating lease assets under the new leasing guidance described below, on the Company's condensed consolidated balance sheet. As of March 31, 2019 , the Company has recorded $1.9 million of leasehold improvements funded by the tenant improvement allowance . The Company adopted the updated leasing guidance as described in note 7, as of January 1, 2019. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under previous lease guidance, were recognized as right to use assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense is recorded on a straight-line basis over the lease term. The Company's purchase commitments consist of minimum purchase amounts of materials used in the Company's cell manufacturing process to manufacture its marketed cell therapy products.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Subsequent Events On May 6, 2019, the Company entered into exclusive license and supply agreements with MediWound Ltd. (MediWound) to commercialize NexoBrid ® and any improvements to Nexobrid in all countries of North America (the Territory). NexoBrid is a topically-administered biological product that enzymatically removes nonviable burn tissue, or eschar, in patients with deep partial and full-thickness thermal burns. NexoBrid is currently in clinical development in the Territory, and pursuant to the terms of the License Agreement, MediWound will continue to conduct all clinical activities described in the development plan to support the filing of a biologics license application (BLA) with the United States Food and Drug Administration under the supervision of a Central Steering Committee comprised of members of each party. Within ten days from May 7, 2019, the Company is obligated to pay MediWound $17.5 million . The Company is also obligated to pay MediWound $7.5 million upon U.S. regulatory approval of the BLA for NexoBrid and up to $125 million contingent upon meeting certain sales milestones. The first sales milestone of $7.5 million would be triggered when NexoBrid annual net sales in North America exceed $75 million . The Company also will pay MediWound tiered royalties on net sales ranging from single-digit to low double-digit percentages, subject to customary reductions. The U.S. Biomedical Advanced Research and Development Authority (BARDA) has committed to procure NexoBrid, and the Company will pay a percentage of gross profits to Mediwound on initial committed amounts and a royalty on any additional BARDA purchases of NexoBrid beyond the initial committed amount. The Company also entered into a supply agreement with MediWound under which MediWound will manufacture NexoBrid for the Company on a unit price basis which may be increased based on a published index.

Recent Accounting Pronounceme_2

Recent Accounting Pronouncements - (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
New Accounting Pronouncements	Recent Accounting Pronouncements 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. The leasing Accounting Standard Update 2016-02, became effective for the Company on January 1, 2019, and was adopted using the modified retrospective method. See note 7 for further discussion. Measuring Credit Losses on Financial Instruments The FASB issued updated guidance on measuring credit losses on financial instruments. The guidance removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Prior to the updated guidance, credit losses are recognized when it is probable that the loss has been incurred. The revised guidance removes all recognition thresholds and requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that a company expected to collect over the instrument’s contractual life. The guidance is effective for annual reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact to its consolidated financial statements.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	3 Months Ended
	Mar. 31, 2019
Basis of Presentation [Abstract]
Schedule of cash flow, supplemental disclosures	The following table presents certain supplementary cash flows information for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, (In thousands) 2019 2018 Supplementary Cash Flows information: Warrants exercised for common stock $ — $ 2,000 Interest paid (net of interest capitalized) 2 357 Additions to equipment in process included in accounts payable 455 401 Right-of-use asset recognized 185 —

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Schedule of revenue by product and customer	The following table and description below reflect the products from which the Company generated its revenue: Three Months Ended March 31, Revenue by product (in thousands) 2019 2018 MACI implants and kits Implants based on contracted rate sold through a specialty pharmacy (a) 9,787 7,792 Implants subject to third party reimbursement sold through a specialty pharmacy (b) 2,743 1,008 Implants sold direct based on contracted rates (c) 3,226 2,674 Implants sold direct subject to third party reimbursement (d) 322 283 Biopsy kits - direct bill 542 436 Change in estimates related to prior periods (37 ) (138 ) Epicel Direct bill (hospital) 5,227 5,972 Total revenue 21,810 18,027 (a) Represents implants sold through Orsini or AllCare in which such specialty pharmacy has entered into a direct contract with the underlying insurance provider. The amount of reimbursement is known at the time of sale supported by the pharmacy's direct contract. (b) Represents implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history. (c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. (d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third party reimbursement from an underlying insurance provider.
Schedules of concentration of risk	The Company's concentration percentages were comprised of the following for MACI and Epicel: Revenue Concentration Accounts Receivable Concentration Three Months Ended March 31, March 31, December 31, 2019 2018 2019 2018 MACI 11 % 43 % 9 % 2 % Epicel 38 % 14 % 2 % 4 %

Selected Balance Sheet Compon_2

Selected Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Schedule of inventory	Inventory as of March 31, 2019 and December 31, 2018 : (In thousands) March 31, 2019 December 31, 2018 Raw materials $ 3,324 $ 2,872 Work-in-process 687 638 Finished goods 52 48 Inventory $ 4,063 $ 3,558
Schedule of property and equipment, net	Property and equipment, net as of March 31, 2019 and December 31, 2018 : (In thousands) March 31, 2019 December 31, 2018 Machinery and equipment $ 2,200 $ 1,536 Furniture, fixtures and office equipment 775 775 Computer equipment and software 3,829 3,712 Leasehold improvements 4,631 4,587 Construction in process 2,664 2,801 Financing right-of-use lease 175 — Total property and equipment, gross 14,274 13,411 Less: Accumulated depreciation (7,829 ) (7,505 ) $ 6,445 $ 5,906 Depreciation expense for the three months ended March 31, 2019 was $0.3 million and $0.4 million for the same period in 2018.
Schedule of accounts payable and accrued expenses	Accrued expenses as of March 31, 2019 and December 31, 2018 : (In thousands) March 31, 2019 December 31, 2018 Bonus related compensation $ 798 $ 5,161 Employee related accruals 2,782 1,559 Other accrued expenses 599 210 $ 4,179 $ 6,930

Stock Purchase Warrants (Tables

Stock Purchase Warrants (Tables)	3 Months Ended
	Mar. 31, 2019
Warrants and Rights Note Disclosure [Abstract]
Schedule of warrants outstanding	The following table describes the outstanding warrants classified in equity as of March 31, 2019 : December 2017 Warrants Exercise price $4.27 Expiration date December 6, 2023 Total shares issuable on exercise 26,951

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Assets And Liabilities	Total leased assets and liabilities as reassessed under the updated guidance and classified on the balance sheet, as of March 31, 2019 are as follows: (In thousands) Classification March 31, 2019 Assets Operating Right-of-use assets $ 25,183 Finance Property and equipment, net 175 $ 25,358 Liabilities Current Operating Current portion of operating lease liabilities 2,385 Finance Other liabilities 33 $ 2,418 Non-current Operating Operating lease liabilities 25,100 Finance Other long-term liabilities 133 $ 25,233
Maturity of lease liabilities	Maturity of lease liabilities as of March 31, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 3,661 $ 21 $ 3,682 2020 4,799 41 4,840 2021 4,805 41 4,846 2022 4,929 41 4,970 2023 4,901 41 4,942 2024 4,968 — 4,968 Thereafter 11,269 — 11,269 Total lease payments 39,332 185 39,517 Less: Interest (11,847 ) (19 ) (11,866 ) Present value of lease liabilities $ 27,485 $ 166 $ 27,651
Maturity of lease liabilities	Maturity of lease liabilities as of March 31, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 3,661 $ 21 $ 3,682 2020 4,799 41 4,840 2021 4,805 41 4,846 2022 4,929 41 4,970 2023 4,901 41 4,942 2024 4,968 — 4,968 Thereafter 11,269 — 11,269 Total lease payments 39,332 185 39,517 Less: Interest (11,847 ) (19 ) (11,866 ) Present value of lease liabilities $ 27,485 $ 166 $ 27,651
Lease term and discount rate	Lease terms and discount rates as of March 31, 2019 are as follows: March 31, 2019 Weighted average remaining lease term (years) Operating leases 7.54 Finance leases 4.25 Weighted average discount rate Operating leases 9.56 % Finance leases 5.00 %
Schedule Of Future Minimum Rental Payments For Operating And Capital Leases	Future minimum payments related to operating and capital leases, as reflected under the prior guidance, disclosed in note 16 in our Form 10-K for the fiscal year ended December 31, 2018 , are as follows with no changes from prior disclosure: (In thousands) Total 2018 2019 2020 2021 2022 More than 5 years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Capital leases 205 41 41 41 41 41 — Total $ 15,591 $ 4,920 $ 4,760 $ 4,795 $ 1,007 $ 109 $ —

Stock-based Compensation (Table

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of non-cash stock-based compensation expense	Non-cash stock-based compensation expense (employee stock purchase plan, service-based stock options and restricted stock units) included in cost of goods sold, research and development expenses and selling, general and administrative expenses is summarized in the following table: Three Months Ended March 31, (In thousands) 2019 2018 Cost of goods sold $ 260 $ 142 Research and development 525 475 Selling, general and administrative 1,843 725 Total non-cash stock-based compensation expense $ 2,628 $ 1,342
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 2019 2018 Expected dividend rate — % — % Expected stock price volatility 84.5-85.5% 82.3-84.4% Risk-free interest rate 2.4 – 2.7% 2.4-2.8% Expected life (years) 6.1-6.3 6.1-6.3

Cash Equivalents and Investme_2

Cash Equivalents and Investments (Tables)	3 Months Ended
	Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Schedule of fair value of securities, not including cash	The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of March 31, 2019 and December 31, 2018: March 31, 2019 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 21,947 $ — $ (2 ) $ 21,945 Repurchase agreements 5,000 — — 5,000 Commercial paper 19,505 — — 19,505 Corporate notes 15,332 2 — 15,334 U.S. government securities 3,498 — — 3,498 U.S. asset-backed securities 10,661 3 — 10,664 $ 75,943 $ 5 $ (2 ) $ 75,946 Classified as: Cash equivalents $ 26,945 Short-term investments 49,001 $ 75,946 December 31, 2018 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 5,838 $ — $ — $ 5,838 Repurchase agreements 5,000 — — 5,000 Commercial paper 30,710 — — 30,710 Corporate notes 13,168 — (24 ) 13,144 U.S. government securities 10,167 — (1 ) 10,166 U.S. asset-backed securities 10,632 — (14 ) 10,618 $ 75,515 $ — $ (39 ) $ 75,476 Classified as: Cash equivalents $ 10,838 Short-term investments 64,638 $ 75,476

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2019
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 financial instruments that are measured at fair value on a recurring basis: March 31, 2019 December 31, 2018 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 21,945 $ 21,945 $ — $ — $ 5,838 $ 5,838 $ — $ — Repurchase agreements 5,000 — 5,000 — 5,000 — 5,000 — Commercial paper 19,505 — 19,505 — 30,710 — 30,710 — Corporate notes 15,334 — 15,334 — 13,144 — 13,144 — U.S. government securities 3,498 — 3,498 — 10,166 — 10,166 — U.S. asset-backed securities 10,664 — 10,664 — 10,618 — 10,618 — $ 75,946 $ 21,945 $ 54,001 $ — $ 75,476 $ 5,838 $ 69,638 $ —

Net Loss Per Common Share (Tabl

Net Loss Per Common Share (Tables)	3 Months Ended
	Mar. 31, 2019
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) 2019 2018 Numerator: Net loss $ (2,844 ) $ (7,659 ) Denominator for basic and diluted EPS: Weighted-average common shares outstanding 43,725 36,140 Net loss per share attributable to common shareholders (basic and diluted) $ (0.07 ) $ (0.21 )

Organization (Details)

Organization (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)segment	Mar. 31, 2018USD ($)	Dec. 31, 2018USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments | segment	1
Accumulated deficit	$ 371,858		$ 369,014
Net loss	2,844	$ 7,659
Cash and cash equivalents	35,084		18,286
Short term investments	$ 49,001		$ 64,638

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Basis of Presentation [Abstract]
Warrants exercised for common stock	$ 0	$ 2,000
Interest paid (net of interest capitalized)	2	357
Additions to equipment in process included in accounts payable	455	401
Finance	$ 185	$ 0

Revenue - Revenue by product an

Revenue - Revenue by product and customer (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Product sales, net	$ 22,000	$ 18,027,000
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
Disaggregation of Revenue [Line Items]
Product sales, net	(37)	(138,000)
Implants | Contracted rate | Third party distributor
Disaggregation of Revenue [Line Items]
Product sales, net	10,000	7,792,000
Implants | Contracted rate | Provider or Facility
Disaggregation of Revenue [Line Items]
Product sales, net	3,226	2,674,000
Implants | Time-and-materials Contract | Third party distributor
Disaggregation of Revenue [Line Items]
Product sales, net	2,743	1,008,000
Implants | Time-and-materials Contract | Time-and-materials Contract
Disaggregation of Revenue [Line Items]
Product sales, net	322	283,000
Biopsy kits | Direct bill
Disaggregation of Revenue [Line Items]
Product sales, net	542	436,000
Epicel | Direct bill
Disaggregation of Revenue [Line Items]
Product sales, net	$ 5,227	$ 5,972,000

Revenue - Concentration of Cred

Revenue - Concentration of Credit Risk (Details) - Customer concentration	3 Months Ended			12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2018
MACI | Revenue Concentration
CONCENTRATION
Concentration risk	11.00%		43.00%
MACI | Accounts Receivable Concentration
CONCENTRATION
Concentration risk	9.00%			2.00%
Epicel | Revenue Concentration
CONCENTRATION
Concentration risk	38.00%		14.00%
Epicel | Accounts Receivable Concentration
CONCENTRATION
Concentration risk	2.00%	4.00%

Selected Balance Sheet Compon_3

Selected Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventory:
Raw materials	$ 3,324	$ 2,872
Work-in-process	687	638
Finished goods	52	48
Inventory	$ 4,063	$ 3,558

Selected Balance Sheet Compon_4

Selected Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Property and equipment, net:
Total property and equipment, gross	$ 14,274		$ 13,411
Finance	175		0
Less: Accumulated depreciation	(7,829)		(7,505)
Total, net	6,445		5,906
Depreciation and amortization	300	$ 400
Machinery and equipment
Property and equipment, net:
Total property and equipment, gross	2,200		1,536
Furniture, fixtures and office equipment
Property and equipment, net:
Total property and equipment, gross	775		775
Computer equipment and software
Property and equipment, net:
Total property and equipment, gross	3,829		3,712
Leasehold improvements
Property and equipment, net:
Total property and equipment, gross	4,631		4,587
Construction in process
Property and equipment, net:
Total property and equipment, gross	$ 2,664		$ 2,801

Selected Balance Sheet Compon_5

Selected Balance Sheet Components - Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts payable and accrued expenses:
Bonus related compensation	$ 798	$ 5,161
Employee related accruals	2,782	1,559
Other accrued expenses	599	210
Total	$ 4,179	$ 6,930

Stock Purchase Warrants (Detail

Stock Purchase Warrants (Details)	Mar. 31, 2019$ / sharesshares
Measurement Input, Expected Dividend Rate
Stock Purchase Warrants
Warrants and Rights Outstanding ( as a percent )	0
December 2017 Warrants
Stock Purchase Warrants
Exercise price (in dollars per share) | $ / shares	$ 4.27
Total shares issuable on exercise (in shares) | shares	26,951

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019
Leases [Abstract]
Short-term lease cost	$ 100
Net Lease Assets	25,358		$ 25,600
Lease Liability	27,651		$ 27,800
Operating Lease Expense	1,300	$ 1,300
Finance Lease Expense	$ 100	100
Capital Leases Expense		$ 1,400

Leases Maturities of lease liab

Leases Maturities of lease liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Operating Leases
2019	$ 3,661
2020	4,799
2021	4,805
2022	4,929
2023	4,901
2024	4,968
Thereafter	11,269
Total lease payments	39,332
Less: Interest	(11,847)
Present value of lease liabilities	27,485
Finance Leases
2019	21
2020	41
2021	41
2022	41
2023	41
2024	0
Thereafter	0
Total lease payments	185
Less: Interest	(19)
Present value of lease liabilities	166
2019	3,682
2020	4,840
2021	4,846
2022	4,970
2023	4,942
2024	4,968
Thereafter	11,269
Total lease payments	39,517
Less: Interest	(11,866)
Present value of lease liabilities	$ 27,651	$ 27,800

Leases Lease term and discount

Leases Lease term and discount rate (Details)	Mar. 31, 2019
Leases [Abstract]
Operating Lease Lease Term ( in years )	7 years 6 months 15 days
Finance Lease Lease Term ( in years )	4 years 3 months
Operating Lease Discount Rate ( as a percent )	9.56%
Finance Lease Discount Rate ( as a percent )	5.00%

Leases Assets And Liabilities (

Leases Assets And Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
ASSETS
Right-of-use assets	$ 25,183		$ 0
Finance	175		0
Right Of Use Asset	25,358	$ 25,600
Current liabilities:
Operating	2,385		0
Finance	33
Lease Liability Current	2,418
Non-current
Operating	25,100		$ 0
Finance	133
Lease Liability Noncurrent	$ 25,233

Leases Schedule Prior To Adopti

Leases Schedule Prior To Adoption (Details) $ in Thousands	Dec. 31, 2018USD ($)
Operating leases
Total	$ 15,386
2018	4,879
2019	4,719
2020	4,754
2021	966
2022	68
More than 5 years	0
Capital leases
Total	205
2018	41
2019	41
2020	41
2021	41
2022	41
More than 5 years	0
Operating And Capital Leases [Abstract]
Total	15,591
2018	4,920
2019	4,760
2020	4,795
2021	1,007
2022	109
More than 5 years	$ 0

Stock-based Compensation (Detai

Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 01, 2019	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Stock-Based Compensation
Shares issued under the Employee Stock Purchase Plan		$ 218	$ 127
Stock-based compensation expense		$ 2,628	$ 1,342
2004, 2001, 1992, and 2009 Plans
Stock-Based Compensation
Number of shares available for grant (in shares)		0
2017 Plan
Stock-Based Compensation
Number of shares available for grant (in shares)		1,304,357
Service-Based Stock Options
Stock-Based Compensation
Expiration period		10 years
Vesting period		4 years
Granted (in shares)		1,486,010
Grant date fair value (in dollars per share)		$ 12.82	$ 6.63
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected dividend rate		0.00%	0.00%
Restricted Stock or Unit Expense		$ 3,100
Service-Based Stock Options | Maximum
Stock-Based Compensation
Expiration period		10 years
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected stock price volatility		85.50%	84.40%
Risk-free interest rate		2.70%	2.80%
Expected life		6 years 3 months 18 days	6 years 3 months 18 days
Service-Based Stock Options | Minimum
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected stock price volatility		84.50%	82.30%
Risk-free interest rate		2.40%	2.40%
Expected life		6 years 1 month 6 days	6 years 1 month 6 days
Restricted Stock Units (RSUs) [Member]
Stock-Based Compensation
Granted (in shares)		176,422
Grant date fair value (in dollars per share)		$ 17.77
Employee Stock
Stock-Based Compensation
Employee Stock Purchase Plan, number of shares authorized (in shares)		1,000,000
Employee Stock Purchase Plan, grants since inception (in shares)				540,248
Employee Stock | Subsequent Event
Stock-Based Compensation
Shares issued under the Employee Stock Purchase Plan ( in shares )	14,228
Shares issued under the Employee Stock Purchase Plan	$ 200

Stock-based Compensation - Non

Stock-based Compensation - Non-cash Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Non-cash stock-based compensation expense	$ 2,628	$ 1,342
Cost of goods sold
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Non-cash stock-based compensation expense	260	142
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Non-cash stock-based compensation expense	525	475
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Non-cash stock-based compensation expense	$ 1,843	$ 725

Cash Equivalents and Investme_3

Cash Equivalents and Investments - Schedule of Fair Value of Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 75,943	$ 75,515
Gains	5	0
Losses	(2)	(39)
Fair Value	75,946	75,476
Cash equivalents
Debt Securities, Available-for-sale [Line Items]
Fair Value	26,945	10,838
Short-term investments
Debt Securities, Available-for-sale [Line Items]
Fair Value	49,001	64,638
Money market funds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	21,947	5,838
Gains	0	0
Losses	(2)	0
Fair Value	21,945	5,838
Repurchase agreements
Debt Securities, Available-for-sale [Line Items]
Payments to Acquire Debt Securities, Available-for-sale	5,000
Amortized Cost	5,000	5,000
Gains	0	0
Losses	0	0
Fair Value	5,000	5,000
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	19,505	30,710
Gains	0	0
Losses	0	0
Fair Value	19,505	30,710
Corporate notes
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	15,332	13,168
Gains	2	0
Losses	0	(24)
Fair Value	15,334	13,144
U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,498	10,167
Gains	0	0
Losses	0	(1)
Fair Value	3,498	10,166
U.S. asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	10,661	10,632
Gains	3	0
Losses	0	(14)
Fair Value	$ 10,664	$ 10,618

Fair Value Measurements - Recu

Fair Value Measurements - Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets:
Assets, fair value	$ 75,946	$ 75,476
Level 1
Assets:
Assets, fair value	21,945	5,838
Level 2
Assets:
Assets, fair value	54,001	69,638
Level 3
Assets:
Assets, fair value	0	0
Money market funds
Assets:
Assets, fair value	21,945	5,838
Money market funds | Level 1
Assets:
Assets, fair value	21,945	5,838
Money market funds | Level 2
Assets:
Assets, fair value	0	0
Money market funds | Level 3
Assets:
Assets, fair value	0	0
Repurchase agreements
Assets:
Assets, fair value	5,000	5,000
Repurchase agreements | Level 1
Assets:
Assets, fair value	0	0
Repurchase agreements | Level 2
Assets:
Assets, fair value	5,000	5,000
Repurchase agreements | Level 3
Assets:
Assets, fair value	0	0
Commercial paper
Assets:
Assets, fair value	19,505	30,710
Commercial paper | Level 1
Assets:
Assets, fair value	0	0
Commercial paper | Level 2
Assets:
Assets, fair value	19,505	30,710
Commercial paper | Level 3
Assets:
Assets, fair value	0	0
Corporate notes
Assets:
Assets, fair value	15,334	13,144
Corporate notes | Level 1
Assets:
Assets, fair value	0	0
Corporate notes | Level 2
Assets:
Assets, fair value	15,334	13,144
Corporate notes | Level 3
Assets:
Assets, fair value	0	0
U.S. government securities
Assets:
Assets, fair value	3,498	10,166
U.S. government securities | Level 1
Assets:
Assets, fair value	0	0
U.S. government securities | Level 2
Assets:
Assets, fair value	3,498	10,166
U.S. government securities | Level 3
Assets:
Assets, fair value	0	0
U.S. asset-backed securities
Assets:
Assets, fair value	10,664	10,618
U.S. asset-backed securities | Level 1
Assets:
Assets, fair value	0	0
U.S. asset-backed securities | Level 2
Assets:
Assets, fair value	10,664	10,618
U.S. asset-backed securities | Level 3
Assets:
Assets, fair value	$ 0	$ 0

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, 2019	Mar. 31, 2018
Numerator:
Net loss	$ (2,844)	$ (7,659)
Denominator for basic and diluted EPS:
Weighted-average common shares outstanding (in shares)	43,725	36,140
Net loss per share attributable to common shareholders (basic and diluted) (in dollars per share)	$ (0.07)	$ (0.21)
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares)	6,200	6,200
Options
Denominator for basic and diluted EPS:
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares)	6,000	6,000
Restricted Stock
Denominator for basic and diluted EPS:
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares)	200	200
Warrants
Denominator for basic and diluted EPS:
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares)	100	100

Commitments and Contingencies -

Commitments and Contingencies - (Details) $ in Millions	Mar. 31, 2019USD ($)
Commitments and Contingencies Disclosure [Abstract]
Incentive from Lessor	$ 2
Deferred Rent Credit	$ 1.9

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event - MediWound Ltd	May 07, 2019USD ($)
Subsequent Event [Line Items]
License agreement, obligation	$ 17,500,000
License agreement, initial contingent milestone payment	7,500,000
License agreement, maximum contingent milestone payments	125,000,000
License agreement, initial sales milestone	$ 75,000,000