Vericel (VCEL) 10-Q 11 May 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-35280
Entity Registrant Name	VERICEL CORPORATION
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	94-3096597
Entity Address, Address Line One	64 Sidney Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02139
City Area Code	617
Local Phone Number	588-5555
Title of 12(b) Security	Common Stock (No par value)
Trading Symbol	VCEL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		45,110,635
Entity Central Index Key	0000887359
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 45,623	$ 26,889
Short term investments	35,957	42,829
Accounts receivable (net of allowance for doubtful accounts of $223 and $306, respectively)	24,171	32,168
Inventory	7,282	6,816
Other current assets	3,504	2,953
Total current assets	116,537	111,655
Property and equipment, net	7,423	7,144
Restricted cash	89	89
Right-of-use assets	24,496	25,103
Long term investments	1,720	9,247
Total assets	150,265	153,238
Current liabilities:
Accounts payable	6,400	6,345
Accrued expenses	6,149	7,948
Current portion of operating lease liabilities	5,535	5,461
Other liabilities	41	41
Total current liabilities	18,125	19,795
Operating lease liabilities	21,597	22,242
Other long-term liabilities	91	110
Total liabilities	39,813	42,147
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity:
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 44,963 and 44,864, respectively	493,774	489,749
Other comprehensive gain	62	21
Accumulated deficit	(383,384)	(378,679)
Total shareholders’ equity	110,452	111,091
Total liabilities and shareholders’ equity	$ 150,265	$ 153,238

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 223	$ 306
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	44,963,000	44,864,000
Common stock, shares outstanding (in shares)	44,963,000	44,864,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Product sales, net	$ 26,678	$ 21,810
Cost of product sales	9,922	8,640
Gross profit	16,756	13,170
Research and development	3,763	3,008
Selling, general and administrative	18,069	13,520
Total operating expenses	21,832	16,528
Loss from operations	(5,076)	(3,358)
Other income (expense):
Interest income	306	480
Other income	(2)	(2)
Interest expense	67	36
Total other income (expense)	371	514
Net loss	$ (4,705)	$ (2,844)
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ (0.10)	$ (0.07)
Weighted average number of common shares outstanding (Basic and Diluted) (in shares)	44,924	43,725

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (4,705)	$ (2,844)
Other comprehensive loss:
Unrealized gain on investments	41	42
Comprehensive loss	$ (4,664)	$ (2,802)

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, 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 and restricted stock units 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
Unrealized gain on investments	42			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)
Beginning balance (in shares) at Dec. 31, 2019		44,864
Beginning balance at Dec. 31, 2019	111,091	$ 489,749	0	21	(378,679)
Increase (Decrease) in Shareholders' Equity
Net loss	(4,705)				(4,705)
Compensation expense related to stock options and restricted stock units granted, net of forfeitures	3,768	$ 3,768
Stock option exercises (in shares)		57
Stock option exercises	196	$ 196
Shares issued under the Employee Stock Purchase Plan (in shares)		20
Shares issued under the Employee Stock Purchase Plan	224	$ 224
Issuance of stock upon restricted stock unit vesting (in shares)		36
Issuance of stock upon restricted stock unit vesting	0
Restricted stock withheld for employee tax remittance (in shares)		(14)
Restricted stock withheld for employee tax remittance	(163)	$ (163)
Unrealized gain on investments	41			41
Ending balance (in shares) at Mar. 31, 2020		44,963
Ending balance at Mar. 31, 2020	$ 110,452	$ 493,774	$ 0	$ 62	$ (383,384)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities:
Net loss	$ (4,705)	$ (2,844)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	533	324
Stock compensation expense	3,768	2,628
Foreign currency translation loss	7	6
Amortization of premiums and discounts on marketable securities	(20)	(215)
Amortization and interest accretion related to operating leases	794	387
Changes in operating assets and liabilities:
Inventory	(466)	(505)
Accounts receivable	7,997	4,680
Prepaid and other current assets	(549)	168
Accounts payable	(59)	(1,368)
Accrued expenses	(1,864)	(2,751)
Operating lease liabilities	(750)	(310)
Other non-current assets and liabilities, net	0	(46)
Net cash provided by operating activities	4,686	154
Investing activities:
Purchases of short term investments	(5,676)	(10,686)
Maturities of short term investments	20,135	26,580
Expenditures for property, plant and equipment	(717)	(232)
Net cash provided by investing activities	13,742	15,662
Financing activities:
Net proceeds from common stock issuance due to stock option exercises	420	998
Payments on employee's behalf for taxes related to vesting of restricted stock unit awards	(97)	0
Other	(17)	(16)
Net cash provided by financing activities	306	982
Net increase in cash, cash equivalents, and restricted cash	18,734	16,798
Cash, cash equivalents, and restricted cash at beginning of period	26,978	18,286
Cash, cash equivalents, and restricted cash at end of period	$ 45,712	$ 35,084

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements as of March 31, 2020 and for the three months ended March 31, 2020 are unaudited and 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 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. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on our customers. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates. As of March 31, 2020, the Company has not recorded impairments to inventory, other current assets or longed-lived assets as a result of the COVID-19 pandemic and does not expect material impairments in the future. The Company has assessed the impact of COVID-19 on accounts receivables (see note 4) and investments (see note 8). 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, 2019 as filed with the SEC on February 25, 2020 (Annual Report). Consolidated Statement of Cash Flows The following table presents certain supplementary cash flows information for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, (In thousands) 2020 2019 Supplementary Cash Flows information: Non-cash information: Right-of-use asset and lease liability recognized 326 185 Additions to equipment in process included in accounts payable 105 455 Restricted shares held for employee tax remittance included in accounts payable 66 — Total cash, cash equivalents, and restricted cash of $45.7 million as of March 31, 2020 , shown in the statement of cash flows is comprised of cash and cash equivalents of $45.6 million and restricted cash of $0.1 million which is included in other long term assets on the consolidated balance sheet.

Organization

Organization	3 Months Ended
	Mar. 31, 2020
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. The Company is a fully-integrated, commercial-stage biopharmaceutical company and is a leader in advanced cell therapies for the sports medicine and severe burn care markets. Vericel currently markets two cell therapy products, MACI ® and Epicel ® , in the United States. Vericel obtained both products in May 2014, as part of the acquisition of certain assets and the assumption of certain liabilities from Sanofi, a French société anonyme (Sanofi). 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. 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 biopharmaceuticals for use in the treatment of specific diseases. COVID-19 The novel coronavirus (COVID-19) outbreak was first reported by China in late December 2019 and rapidly spread globally. The World Health Organization (WHO) declared the outbreak a pandemic on March 11, 2020 and the President of the United States declared a national health emergency two days later. Subsequently most states' governments, including those in Massachusetts and Michigan where the Company's operations are located, issued, and have subsequently extended orders requiring businesses that do not conduct essential services to temporarily close their physical workplaces to employees and customers. Vericel is currently deemed an essential business and, as a result, is exempt from these state orders in their current form. Notwithstanding being an essential business, the Company’s business and operations have been, and are expected to continue to be, adversely impacted by the effects of COVID-19 as a result of various factors including, without limitation, the imposition of a widespread moratorium on the conduct of elective surgical procedures in the United States, the recent economic downturn due to the pandemic, the imposition of related public health measures and travel and business restrictions and disruptions to the ability of the Company’s employees to perform their jobs. The implantation of MACI is an elective surgical procedure. On March 13, 2020 and March 14, 2020, the American College of Surgeons and United States Surgeon General, respectively, recommended that each hospital, health system, and surgeon minimize, postpone, or cancel electively scheduled surgeries, which has resulted in a reduction in MACI sales. The stated purpose for these recommendations was that every elective surgery could spread COVID-19 within a facility, use up personal protective equipment (PPE) which may be needed by healthcare workers treating COVID-19 patients, and burden hospital workforce who may be needed to respond to COVID-19. These recommendations were followed by numerous state level executive orders either banning or partially banning elective surgeries. By April 3, 2020, 31 U.S. states had issued executive mandates calling for the suspension of elective or non-essential surgeries. These 31 states represent an estimated 69% of total U.S. surgical capacity. In addition, 14 states had either announced recommendations by state health agencies or voluntary initiatives by hospitals in these states to suspend elective surgeries. These 14 states represent an estimated 28% of total U.S. surgical capacity. In total by early April 45 states, representing over 95% of total U.S. surgical capacity had issued either mandates or recommendations and guidelines suspending elective procedures. As a result of these restrictions, beginning in mid-March 2020, the Company started to experience a significant increase in cancellations of scheduled MACI procedures as well as a slowdown in new MACI orders. The cancellations negatively impacted the Company’s results of operations for the quarter ended March 31, 2020 . The Company’s MACI business will continue to be negatively impacted so long as multiple state orders remain in effect restricting elective surgical procedures. Epicel may be less directly impacted by the pandemic given the critical nature of severe burn injuries, however trauma injury admissions have also been reported to be reduced due to the various COVID-19 related restrictions. Given the rare nature of the severe burns Epicel treats, it is difficult to ascertain whether a similar decline is occurring with severe burns. In addition, any prolonged disruption of the Company’s employees, distributors, suppliers or customers will impact its sales and operating results that could lead to potential impairments to inventory and accounts receivable. Going Concern 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 the satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2020 , the Company has an accumulated deficit of $383.4 million and had a net loss of $4.7 million for the three months ended March 31, 2020 . The Company had cash and cash equivalents of $45.7 million and investments of $37.7 million as of March 31, 2020 . The Company expects that existing cash, cash equivalents and investments will be sufficient to support the Company’s current operations through at least 12 months from the issuance of these financial statements. However, the continuing effects of the COVID-19 pandemic may require the Company to engage in layoffs, furloughs and/or reductions in salary, all of which may result in irrecoverable losses of customers and significantly impact long-term liquidity. If current elective surgery restrictions persist for 12 months or longer, the Company may need to a ccess additional capital; however, the Company may not be able to obtain financing on acceptable terms or at all, particularly in light of the impact of COVID-19 on the global economy and financial markets. The terms of any financing may adversely affect the holdings or the rights of the Company’s shareholders.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2020
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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 Accounting Standard Update (ASU) 2016-13, Financial Instruments-Credit Losses (Topic 326), became effective for the Company January 1, 2020. See note 4 and note 8 for further discussion. Fair Value Measurement Disclosure The FASB issued updated guidance through ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The revised guidance is intended to develop a more consistent disclosure framework that will increase clarity, remove, modify and add certain fair value disclosures to improve the effectiveness of the Company’s disclosures in the notes of the financial statements. This guidance became effective for the Company January 1, 2020 and had no impact to its consolidated financial statements. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (ASC 740). The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC 740, including requirements related to hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intra-period tax allocation exception to the incremental approach, ownership changes in investments, changes from a subsidiary to an equity method investment, interim-period accounting for enacted changes in tax law, and the year-to-date loss limitation in interim-period tax accounting. This guidance is effective for the Company for annual and interim periods beginning after December 31, 2020; however, early adoption is permitted. The Company is currently in the process of evaluating the impact to its consolidated financial statements.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2020
Risks and Uncertainties [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 facility) 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 contracts with two specialty pharmacies, Orsini Pharmaceutical Services, Inc. (Orsini) and AllCare Plus Pharmacy, Inc. (AllCare) to distribute its MACI product in arrangements whereby the Company retains the credit and collection risk from the end customer. The Company pays both specialty pharmacies a fee for each patient to whom MACI is dispensed. Both Orsini and AllCare perform collection activities to receive payment from customers. The Company has engaged a third-party to provide services in connection with a patient support program to manage patient cases and to ensure complete and correct billing information is provided to the insurers and hospitals. In addition, the Company also sells MACI directly to DMS Pharmaceutical (DMS) for military implants. The sales directly to DMS are sold at a contracted rate. There is no expected impact of COVID-19 on the Company's distributors or third-party service providers' ability to manage patient cases. Prior authorization and 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 recognizes product revenues from sales of all MACI implants upon delivery at which time the customer obtains control of the implant and the claim is billable. The total consideration which the Company expects to collect in exchange for MACI implants (the transaction price) may be fixed or variable. Direct sales to hospitals or distributors are recorded at a contracted price, and other than customary prompt pay discounts, there are typically no forms of variable consideration. When the Company sells MACI the patient is responsible for payment, however, the Company is typically reimbursed by a third-party insurer or government payer, subject to a patient co-pay amount. Reimbursements from third-party insurers and government payers vary by patient and payer and are based on either contracted rates, publicly available rates or a fee schedule. Net product revenue is recognized net of contractual allowances, which considers historical collection experience from both the payer and patient and the terms of the Company’s contractual arrangements. The Company estimates expected collections for these transactions using the portfolio approach. These estimates include the impact of contractual allowances, which considers historical collection experience from both the payer and patient, denial rates and the terms of the Company’s contractual arrangements. The Company records a reduction to revenue at the time of sale for its estimate of the amount of consideration that will not be collected. In addition, potential credit risk exposure has been evaluated for the Company's accounts receivable in accordance with ASC 326, Financial Instruments - Credit Losses. The Company assesses risk and determines a loss percentage by pooling account receivables based on similar risk characteristics. The loss percentage is based on current and historical information as well as reasonable and supportable forecasts. This loss percentage was applied to the accounts receivables as of March 31, 2020. The total allowance for uncollectible consideration was $3.5 million as of March 31, 2020 and $3.9 million at December 31, 2019 . The allowance includes estimated impacts of the COVID-19 outbreak and its potential impact on collections from third-party insurers, government payers, hospitals and patients. Changes to the estimate of the amount of consideration that will not be collected could have a material impact to the revenue recognized. A 0.5% change to the estimated uncollectible percentage could result in approximately a $0.5 million decrease or increase in the revenue recognized for the three months ended March 31, 2020 . Changes in estimates of the transaction price are recorded through revenue in the period in which such change occurs. Changes in estimates related to prior period sales resulted in an increase to revenue of $1.2 million and decrease of $0.04 million for the three months ended March 31, 2020 and 2019 , respectively. The change in estimate recorded during the three-months ended March 31, 2020 was primarily due to completion of the billing claims process for implants that occurred in late 2019. Upon completion of the billing claims process, the Company concluded that it was probable that a significant reversal in the amount of revenue recognized would not occur. 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 shows the products from which the Company generated its revenue: Three Months Ended March 31, Revenue by product (in thousands) 2020 2019 MACI implants and kits Implants based on contracted rate sold through a specialty pharmacy (a) $ 11,338 $ 9,787 Implants subject to third party reimbursement sold through a specialty pharmacy (b) 3,730 2,743 Implants sold direct based on contracted rates (c) 3,109 3,226 Implants sold direct subject to third party reimbursement (d) 436 322 Biopsy kits - direct bill 466 542 Change in estimates related to prior periods (e) 1,207 (37 ) Epicel Direct bill (hospital) 6,392 5,227 Total revenue $ 26,678 $ 21,810 (a) Represents implants sold through Orsini and AllCare in both 2020 and 2019 in which such specialty pharmacies have entered into a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy's direct contracts. Also represents direct sales under a contract to the specialty distributor DMS. (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. (e) Primarily represents changes in estimates related to implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The initial estimate of the amount of reimbursement is established based on a payer or state fee schedule and/or payer history. The change in estimates is a result of additional information or actual cash collections received in the current period. Concentration of Credit Risk The table below shows the Company’s total Epicel revenue and accounts receivable balances from customers whose revenue or accounts receivable concentration is greater than 10% in any of the periods disclosed below. The Company did not have MACI revenue or accounts receivable concentrations greater than 10% in any of the periods disclosed below. Revenue Concentration Accounts Receivable Concentration Three Months Ended March 31, March 31, December 31, 2020 2019 2020 2019 Epicel 12 % 9 % 3 % 2 %

Selected Balance Sheet Componen

Selected Balance Sheet Components	3 Months Ended
	Mar. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Selected Balance Sheet Components	Selected Balance Sheet Components Inventory Inventory as of March 31, 2020 and December 31, 2019 : (In thousands) March 31, 2020 December 31, 2019 Raw materials $ 6,576 $ 6,085 Work-in-process 617 541 Finished goods 89 190 Inventory $ 7,282 $ 6,816 Property and Equipment Property and Equipment, net as of March 31, 2020 and December 31, 2019 : (In thousands) March 31, 2020 December 31, 2019 Machinery and equipment $ 3,096 $ 3,152 Furniture, fixtures and office equipment 810 775 Computer equipment and software 6,220 6,174 Leasehold improvements 5,256 5,256 Construction in process 1,532 859 Financing right-of-use lease 138 148 Total property and equipment, gross 17,052 16,364 Less accumulated depreciation (9,629 ) (9,220 ) $ 7,423 $ 7,144 Depreciation expense for the three months ended March 31, 2020 was $0.5 million and $0.3 million for the same period in 2019 . Accrued Expenses Accrued Expenses as of March 31, 2020 and December 31, 2019 : (In thousands) March 31, 2020 December 31, 2019 Bonus related compensation $ 2,014 $ 5,116 Employee related accruals 2,653 1,785 Other accrued expenses 1,482 1,047 Accrued expenses $ 6,149 $ 7,948

Leases (Notes)

Leases (Notes)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases	Leases The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Ann Arbor facility includes office space, and 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. 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. All operating lease commitments with a lease term greater than 12 months are 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 both the three months ended March 31, 2020 and 2019 , lease expense of less than $0.1 million was recorded related to short-term leases. The contribution toward the cost of tenant improvements is recorded as a reduction of the operating lease assets. For the three months ended March 31, 2020 and 2019 , the Company recognized $1.4 million and $1.3 million of operating lease expense and less than $0.1 million of financing lease expense for the three months ended March 31, 2020 and 2019 , respectively. The Company’s leases contain non-lease components and activities that do not transfer a good or service to the Company. The Company elected not to combine lease and non-lease components and therefore non-lease costs 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, 2020 and December 31, 2019 are as follows: (In thousands) Classification March 31, 2020 December 31, 2019 Assets Operating Right-of-use assets $ 24,496 $ 25,103 Finance Property and equipment, net 139 148 $ 24,635 $ 25,251 Liabilities Current Operating Current portion of operating lease liabilities $ 5,535 $ 5,461 Finance Other liabilities 41 41 $ 5,576 $ 5,502 Non-current Operating Operating lease liabilities $ 21,597 $ 22,242 Finance Other long-term liabilities 91 110 $ 21,688 $ 22,352
Leases	Leases The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Ann Arbor facility includes office space, and 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. 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. All operating lease commitments with a lease term greater than 12 months are 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 both the three months ended March 31, 2020 and 2019 , lease expense of less than $0.1 million was recorded related to short-term leases. The contribution toward the cost of tenant improvements is recorded as a reduction of the operating lease assets. For the three months ended March 31, 2020 and 2019 , the Company recognized $1.4 million and $1.3 million of operating lease expense and less than $0.1 million of financing lease expense for the three months ended March 31, 2020 and 2019 , respectively. The Company’s leases contain non-lease components and activities that do not transfer a good or service to the Company. The Company elected not to combine lease and non-lease components and therefore non-lease costs 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, 2020 and December 31, 2019 are as follows: (In thousands) Classification March 31, 2020 December 31, 2019 Assets Operating Right-of-use assets $ 24,496 $ 25,103 Finance Property and equipment, net 139 148 $ 24,635 $ 25,251 Liabilities Current Operating Current portion of operating lease liabilities $ 5,535 $ 5,461 Finance Other liabilities 41 41 $ 5,576 $ 5,502 Non-current Operating Operating lease liabilities $ 21,597 $ 22,242 Finance Other long-term liabilities 91 110 $ 21,688 $ 22,352

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [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 and restricted stock units 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. The 2019 Omnibus Incentive Plan (2019 Plan) was approved on May 1, 2019 and 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 2019 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2019 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan, the 2009 Second Amended and Restated Omnibus Incentive Plan and the 2017 Omnibus Incentive Plan (Prior Plans), and no new grants have been granted under the Prior Plans after approval. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the 2019 Plan. As of March 31, 2020 , there were 1,959,142 shares available for future grant under the 2019 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 628,770 have been issued since the inception of the benefit 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. In April 2020, employees purchased 32,971 shares resulting in proceeds from the sale of common stock of $0.2 million under the ESPP for the first quarter of 2020. Service-Based Stock Options During the three months ended March 31, 2020 , the Company granted 1,186,140 service-based options to purchase common stock. The exercise price of the options is 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 during the three months ended March 31, 2020 and 2019 was $8.64 and $12.82 , respectively. Restricted Stock Units During the three months ended March 31, 2020 and 2019 , the Company granted 186,136 and 176,422 , service-based restricted stock units, respectively. The restricted stock units vest annually over four years in equal installments commencing on the first anniversary of the grant date (other than non-employee director options which vest over one year from the grant date). 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 granted during the three months ended March 31, 2020 and 2019 was $11.24 and $17.77 , respectively. The aggregate fair value of restricted stock units for the three months ended March 31, 2020 and 2019 was $2.1 million and $3.1 million, respectively. As restricted stock units vest, a portion of the shares awarded are withheld and net settled by the Company to cover employee tax obligations. As a result of 36,212 units vesting in the three months ended March 31, 2020 , 13,872 shares were withheld for payment of taxes on the employee's behalf and retired from the 2019 Plan. 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) 2020 2019 Cost of goods sold $ 493 $ 260 Research and development 513 525 General, selling and administrative 2,762 1,843 Total non-cash stock-based compensation expense $ 3,768 $ 2,628

Cash Equivalents and Investment

Cash Equivalents and Investments	3 Months Ended
	Mar. 31, 2020
Cash and Cash Equivalents [Abstract]
Cash Equivalents and Investments	Cash Equivalents and Investments Marketable debt securities held by the Company are classified as available-for-sale and carried at fair value in the accompanying consolidated balance sheets on a settlement date basis. The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of March 31, 2020 and December 31, 2019 : March 31, 2020 Gross Unrealized Estimated Fair Value Amortized Cost Gains Losses Credit Losses Money market funds $ 32,089 $ — $ — — $ 32,089 Commercial paper 7,061 — — — 7,061 Corporate notes 14,466 — (44 ) — 14,422 U.S. government securities 7,786 103 — — 7,889 U.S. asset-backed securities 8,303 3 — — 8,306 $ 69,705 $ 106 $ (44 ) $ — $ 69,767 Classified as: Cash equivalents $ 32,090 Short term investments 35,957 Long term investments 1,720 $ 69,767 December 31, 2019 Gross Unrealized Estimated Fair Value (In thousands) Amortized Cost Gains Losses Money market funds $ 5,381 $ — $ — $ 5,381 Commercial paper 11,892 — — 11,892 Corporate notes 18,369 11 — 18,380 U.S. government securities 11,291 4 — 11,295 U.S. asset-backed securities 10,503 6 — 10,509 $ 57,436 $ 21 $ — $ 57,457 Classified as: Cash equivalents $ 5,381 Short-term investments 42,829 Long term investments 9,247 $ 57,457 There were no marketable securities that the Company considers to be other-than-temporarily impaired as of March 31, 2020 and December 31, 2019 . The Company's investment strategy is to buy short-duration marketable securities with a high credit rating. As of March 31, 2020 , all marketable securities held by the Company had remaining contractual maturities of three years 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 statement of operations. Upon adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), the Company evaluated its investments for impairment under the new framework. Any allowance for credit losses are recorded at the lower of either the fair market value less book value or the difference between the present value of future cash flows and the book value. As of March 31, 2020, the analysis under ASU 2016-13 and the current macroeconomic impact of the COVID-19 pandemic did not result in material allowances for credit losses. There have been no impairments of the Company’s assets measured and carried at fair value for the three months ended March 31, 2020

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
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; • 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 from December 31, 2019 to March 31, 2020. 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, 2020 December 31, 2019 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 32,089 32,089 — — 5,381 5,381 — — Repurchase agreements — — — — — — — — Commercial paper 7,061 — 7,061 — 11,892 — 11,892 — Corporate notes 14,422 — 14,422 — 18,380 — 18,380 — U.S. government securities 7,889 — 7,889 — 11,295 — 11,295 — U.S. asset-backed securities 8,306 — 8,306 — 10,509 — 10,509 — 69,767 32,089 37,678 — 57,457 5,381 52,076 — The fair values of the cash equivalents and marketable securities are based on observable market prices. See note 8 for impact of ASU 2016-13 on the investment valuation.

Net Loss Per Common Share

Net Loss Per Common Share	3 Months Ended
	Mar. 31, 2020
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) 2020 2019 Numerator: Net loss $ (4,705 ) $ (2,844 ) Denominator: Basic and diluted EPS: weighted-average common shares outstanding 44,924 43,725 Net loss per share attributable to common shareholders (basic and diluted) $ (0.10 ) $ (0.07 ) Anti-dilutive shares excluded from the calculation of diluted earnings per share (a) (amounts in millions): Stock options 6.2 6.0 Restricted stock unit awards 0.3 0.2 Warrants — 0.1 (a) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive.

Nexobrid License and Supply Agr

Nexobrid License and Supply Agreements	3 Months Ended
	Mar. 31, 2020
Related Party Transactions [Abstract]
Nexobrid License and Supply Agreements	NexoBrid License and Supply Agreements 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. 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 North America, 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 BLA filing with the United States Food and Drug Administration under the supervision of a Central Steering Committee comprised of members of each party. In May 2019, the Company paid MediWound $17.5 million in consideration of the license. The $17.5 million upfront payment was recorded to research and development expense during 2019, as the license is considered in process research and development. 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 annual net sales of NexoBrid or improvements to it in North America exceed $75 million . The Company also will pay MediWound tiered royalties on net sales ranging from mid-high single-digit to mid-teen 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. MediWound is obligated to supply the Company with NexoBrid for sale in North America on an exclusive basis for the first five years of the term of the supply agreement. After the exclusivity period or upon supply failure, the Company will be permitted to establish an alternate source of supply. As of March 31, 2020 , the milestone payments are not yet probable and therefore, not considered a commitment.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies 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.

Basis of Presentation - (Polici

Basis of Presentation - (Policies)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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 Accounting Standard Update (ASU) 2016-13, Financial Instruments-Credit Losses (Topic 326), became effective for the Company January 1, 2020. See note 4 and note 8 for further discussion. Fair Value Measurement Disclosure The FASB issued updated guidance through ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The revised guidance is intended to develop a more consistent disclosure framework that will increase clarity, remove, modify and add certain fair value disclosures to improve the effectiveness of the Company’s disclosures in the notes of the financial statements. This guidance became effective for the Company January 1, 2020 and had no impact to its consolidated financial statements. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (ASC 740). The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC 740, including requirements related to hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intra-period tax allocation exception to the incremental approach, ownership changes in investments, changes from a subsidiary to an equity method investment, interim-period accounting for enacted changes in tax law, and the year-to-date loss limitation in interim-period tax accounting. This guidance is effective for the Company for annual and interim periods beginning after December 31, 2020; however, early adoption is permitted. 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, 2020
Accounting Policies [Abstract]
Supplementary cash flows information	The following table presents certain supplementary cash flows information for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, (In thousands) 2020 2019 Supplementary Cash Flows information: Non-cash information: Right-of-use asset and lease liability recognized 326 185 Additions to equipment in process included in accounts payable 105 455 Restricted shares held for employee tax remittance included in accounts payable 66 —

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2020
Risks and Uncertainties [Abstract]
Disaggregation of Revenue	The following table and description below shows the products from which the Company generated its revenue: Three Months Ended March 31, Revenue by product (in thousands) 2020 2019 MACI implants and kits Implants based on contracted rate sold through a specialty pharmacy (a) $ 11,338 $ 9,787 Implants subject to third party reimbursement sold through a specialty pharmacy (b) 3,730 2,743 Implants sold direct based on contracted rates (c) 3,109 3,226 Implants sold direct subject to third party reimbursement (d) 436 322 Biopsy kits - direct bill 466 542 Change in estimates related to prior periods (e) 1,207 (37 ) Epicel Direct bill (hospital) 6,392 5,227 Total revenue $ 26,678 $ 21,810 (a) Represents implants sold through Orsini and AllCare in both 2020 and 2019 in which such specialty pharmacies have entered into a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy's direct contracts. Also represents direct sales under a contract to the specialty distributor DMS. (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. (e) Primarily represents changes in estimates related to implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The initial estimate of the amount of reimbursement is established based on a payer or state fee schedule and/or payer history. The change in estimates is a result of additional information or actual cash collections received in the current period.
Schedules of concentration of risk	The table below shows the Company’s total Epicel revenue and accounts receivable balances from customers whose revenue or accounts receivable concentration is greater than 10% in any of the periods disclosed below. The Company did not have MACI revenue or accounts receivable concentrations greater than 10% in any of the periods disclosed below. Revenue Concentration Accounts Receivable Concentration Three Months Ended March 31, March 31, December 31, 2020 2019 2020 2019 Epicel 12 % 9 % 3 % 2 %

Selected Balance Sheet Compon_2

Selected Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Schedule of inventory	Inventory as of March 31, 2020 and December 31, 2019 : (In thousands) March 31, 2020 December 31, 2019 Raw materials $ 6,576 $ 6,085 Work-in-process 617 541 Finished goods 89 190 Inventory $ 7,282 $ 6,816
Schedule of property and equipment, net	Property and Equipment, net as of March 31, 2020 and December 31, 2019 : (In thousands) March 31, 2020 December 31, 2019 Machinery and equipment $ 3,096 $ 3,152 Furniture, fixtures and office equipment 810 775 Computer equipment and software 6,220 6,174 Leasehold improvements 5,256 5,256 Construction in process 1,532 859 Financing right-of-use lease 138 148 Total property and equipment, gross 17,052 16,364 Less accumulated depreciation (9,629 ) (9,220 ) $ 7,423 $ 7,144
Schedule of accrued expenses	Accrued Expenses as of March 31, 2020 and December 31, 2019 : (In thousands) March 31, 2020 December 31, 2019 Bonus related compensation $ 2,014 $ 5,116 Employee related accruals 2,653 1,785 Other accrued expenses 1,482 1,047 Accrued expenses $ 6,149 $ 7,948

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
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, 2020 and December 31, 2019 are as follows: (In thousands) Classification March 31, 2020 December 31, 2019 Assets Operating Right-of-use assets $ 24,496 $ 25,103 Finance Property and equipment, net 139 148 $ 24,635 $ 25,251 Liabilities Current Operating Current portion of operating lease liabilities $ 5,535 $ 5,461 Finance Other liabilities 41 41 $ 5,576 $ 5,502 Non-current Operating Operating lease liabilities $ 21,597 $ 22,242 Finance Other long-term liabilities 91 110 $ 21,688 $ 22,352

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [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) 2020 2019 Cost of goods sold $ 493 $ 260 Research and development 513 525 General, selling and administrative 2,762 1,843 Total non-cash stock-based compensation expense $ 3,768 $ 2,628

Cash Equivalents and Investme_2

Cash Equivalents and Investments (Tables)	3 Months Ended
	Mar. 31, 2020
Cash and Cash Equivalents [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, 2020 and December 31, 2019 : March 31, 2020 Gross Unrealized Estimated Fair Value Amortized Cost Gains Losses Credit Losses Money market funds $ 32,089 $ — $ — — $ 32,089 Commercial paper 7,061 — — — 7,061 Corporate notes 14,466 — (44 ) — 14,422 U.S. government securities 7,786 103 — — 7,889 U.S. asset-backed securities 8,303 3 — — 8,306 $ 69,705 $ 106 $ (44 ) $ — $ 69,767 Classified as: Cash equivalents $ 32,090 Short term investments 35,957 Long term investments 1,720 $ 69,767 December 31, 2019 Gross Unrealized Estimated Fair Value (In thousands) Amortized Cost Gains Losses Money market funds $ 5,381 $ — $ — $ 5,381 Commercial paper 11,892 — — 11,892 Corporate notes 18,369 11 — 18,380 U.S. government securities 11,291 4 — 11,295 U.S. asset-backed securities 10,503 6 — 10,509 $ 57,436 $ 21 $ — $ 57,457 Classified as: Cash equivalents $ 5,381 Short-term investments 42,829 Long term investments 9,247 $ 57,457

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2020
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, 2020 December 31, 2019 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 32,089 32,089 — — 5,381 5,381 — — Repurchase agreements — — — — — — — — Commercial paper 7,061 — 7,061 — 11,892 — 11,892 — Corporate notes 14,422 — 14,422 — 18,380 — 18,380 — U.S. government securities 7,889 — 7,889 — 11,295 — 11,295 — U.S. asset-backed securities 8,306 — 8,306 — 10,509 — 10,509 — 69,767 32,089 37,678 — 57,457 5,381 52,076 —

Net Loss Per Common Share (Tabl

Net Loss Per Common Share (Tables)	3 Months Ended
	Mar. 31, 2020
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) 2020 2019 Numerator: Net loss $ (4,705 ) $ (2,844 ) Denominator: Basic and diluted EPS: weighted-average common shares outstanding 44,924 43,725 Net loss per share attributable to common shareholders (basic and diluted) $ (0.10 ) $ (0.07 ) Anti-dilutive shares excluded from the calculation of diluted earnings per share (a) (amounts in millions): Stock options 6.2 6.0 Restricted stock unit awards 0.3 0.2 Warrants — 0.1 (a) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive.

Organization - Narrative (Detai

Organization - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)segmentproduct	Mar. 31, 2019USD ($)	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of therapy products | product	2
Number of reportable segments | segment	1
Accumulated deficit	$ 383,384		$ 378,679
Net loss	4,705	$ 2,844
Cash, cash equivalents, and restricted cash	45,712	$ 35,084	26,978	$ 18,286
Cash and cash equivalents	45,623		$ 26,889
Short term investments	$ 37,700

Basis of Presentation - Supplem

Basis of Presentation - Supplementary cash flows information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Non-cash information:
Right-of-use asset and lease liability recognized	$ 326	$ 185
Additions to equipment in process included in accounts payable	105	455
Restricted shares held for employee tax remittance included in accounts payable	$ 66	$ 0

Basis of Presentation - Narrati

Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Cash, cash equivalents, and restricted cash	$ 45,712	$ 26,978	$ 35,084	$ 18,286
Cash and cash equivalents	45,623	$ 26,889
Restricted cash	$ 100

Revenue - (Details)

Revenue - (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
CONCENTRATION
Allowance for doubtful accounts	$ 3,500		$ 3,900
Change in estimate of uncollectible (percent)	0.50%
Change in revenue recognized due to 0.5% change in uncollectible percentage	$ 500
Increase (decrease) to revenues	26,678	$ 21,810
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
CONCENTRATION
Increase (decrease) to revenues	$ 1,207	$ (37)

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Product sales, net	$ 26,678	$ 21,810
Revenues	26,678	21,810
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
Disaggregation of Revenue [Line Items]
Product sales, net	1,207	(37)
Through Intermediary | Implants | Contract rate
Disaggregation of Revenue [Line Items]
Product sales, net	11,338	9,787
Through Intermediary | Implants | Time-and-materials contract
Disaggregation of Revenue [Line Items]
Product sales, net	3,730	2,743
Time-and-materials contract | Implants | Time-and-materials contract
Disaggregation of Revenue [Line Items]
Product sales, net	436	322
Provider or Facility | Implants | Contract rate
Disaggregation of Revenue [Line Items]
Product sales, net	3,109	3,226
Directly to consumer | Biopsy kits
Disaggregation of Revenue [Line Items]
Product sales, net	466	542
Directly to consumer | Epicel
Disaggregation of Revenue [Line Items]
Product sales, net	$ 6,392	$ 5,227

Revenue - Schedules of concentr

Revenue - Schedules of concentration of risk (Details) - Customer concentration - Epicel	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue Concentration
Product Information [Line Items]
Concentration risk (as a percent)	12.00%	9.00%
Accounts Receivable Concentration
Product Information [Line Items]
Concentration risk (as a percent)	3.00%		2.00%

Selected Balance Sheet Compon_3

Selected Balance Sheet Components - Schedule of inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Inventory:
Raw materials	$ 6,576	$ 6,085
Work-in-process	617	541
Finished goods	89	190
Inventory	$ 7,282	$ 6,816

Selected Balance Sheet Compon_4

Selected Balance Sheet Components - Schedule of property and equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Property and equipment, net:
Financing right-of-use lease	$ 138		$ 148
Total property and equipment, gross	17,052		16,364
Less accumulated depreciation	(9,629)		(9,220)
Property and equipment, net	7,423		7,144
Depreciation expense	500	$ 300
Machinery and equipment
Property and equipment, net:
Total property and equipment, gross	3,096		3,152
Furniture, fixtures and office equipment
Property and equipment, net:
Total property and equipment, gross	810		775
Computer equipment and software
Property and equipment, net:
Total property and equipment, gross	6,220		6,174
Leasehold improvements
Property and equipment, net:
Total property and equipment, gross	5,256		5,256
Construction in process
Property and equipment, net:
Total property and equipment, gross	$ 1,532		$ 859

Selected Balance Sheet Compon_5

Selected Balance Sheet Components - Schedule of accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accrued expenses
Bonus related compensation	$ 2,014	$ 5,116
Employee related accruals	2,653	1,785
Other accrued expenses	1,482	1,047
Accrued expenses	$ 6,149	$ 7,948

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Short-term lease costs (less than)	$ 0.1	$ 0.1
Operating lease expense	1.4	1.3
Finance lease expense	$ 0.1	$ 0.1

Leases - Assets And Liabilities

Leases - Assets And Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets
Operating	$ 24,496	$ 25,103
Finance	139	148
Right-of-use assets	24,635	25,251
Current
Operating	5,535	5,461
Finance	41	41
Lease liability current	5,576	5,502
Non-current
Operating	21,597	22,242
Finance	91	110
Lease liability noncurrent	$ 21,688	$ 22,352

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		63 Months Ended
	Apr. 30, 2020	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020
Stock-Based Compensation
Shares issued under the Employee Stock Purchase Plan (in shares)		$ 224	$ 218
Employee stock
Stock-Based Compensation
Common stock available for issuance (in shares)		1,000,000		1,000,000
Common stock granted since inception (in shares)				628,770
Employee stock | Subsequent event
Stock-Based Compensation
Shares purchased during period (in shares)	32,971
Shares issued under the Employee Stock Purchase Plan (in shares)	$ 200
Service-based stock options
Stock-Based Compensation
Expiration period		10 years
Vesting period		4 years
Granted (in shares)		1,186,140
Weighted average grant-date fair value (in dollars per share)		$ 8.64	$ 12.82
Service-based stock options | Nonemployee directors
Stock-Based Compensation
Expiration period		10 years
Vesting period		1 year
Restricted Stock Units (RSUs)
Stock-Based Compensation
Vesting period		4 years
Restricted stock units granted (shares)		186,136	176,422
Weighted-average grant date fair value (in usd per share)		$ 11.24	$ 17.77
Grant-date fair value of restricted stock units granted		$ 2,100	$ 3,100
Shares vested in period (shares)		36,212
Restricted stock withheld for employee tax remittance (in shares)		13,872
Restricted Stock Units (RSUs) | Nonemployee directors
Stock-Based Compensation
Vesting period		1 year
Prior Plans
Stock-Based Compensation
Awards available for future grant under the Plan (in shares)		0		0
Omnibus Incentive Plan 2019
Stock-Based Compensation
Awards available for future grant under the Plan (in shares)		1,959,142		1,959,142

Stock-Based Compensation - Sche

Stock-Based Compensation - Schedule of non-cash stock-based compensation expense (Details) - Employee stock purchase plan and service-based stock options - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	$ 3,768	$ 2,628
Cost of goods sold
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	493	260
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	513	525
General, selling and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	$ 2,762	$ 1,843

Cash Equivalents and Investme_3

Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Marketable Securities [Line Items]
Amortized Cost	$ 69,705	$ 57,436
Gains	106	21
Losses	(44)	0
Credit Losses	0
Fair Value	69,767	57,457
Cash equivalents
Marketable Securities [Line Items]
Fair Value	32,090	5,381
Short term investments
Marketable Securities [Line Items]
Fair Value	35,957	42,829
Long term investments
Marketable Securities [Line Items]
Fair Value	1,720	9,247
Money market funds
Marketable Securities [Line Items]
Amortized Cost	32,089	5,381
Gains	0	0
Losses	0	0
Credit Losses	0
Fair Value	32,089	5,381
Commercial paper
Marketable Securities [Line Items]
Amortized Cost	7,061	11,892
Gains	0	0
Losses	0	0
Credit Losses	0
Fair Value	7,061	11,892
Corporate notes
Marketable Securities [Line Items]
Amortized Cost	14,466	18,369
Gains	0	11
Losses	(44)	0
Credit Losses	0
Fair Value	14,422	18,380
U.S. government securities
Marketable Securities [Line Items]
Amortized Cost	7,786	11,291
Gains	103	4
Losses	0	0
Credit Losses	0
Fair Value	7,889	11,295
U.S. asset-backed securities
Marketable Securities [Line Items]
Amortized Cost	8,303	10,503
Gains	3	6
Losses	0	0
Credit Losses	0
Fair Value	$ 8,306	$ 10,509

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	$ 69,767	$ 57,457
Recurring
Liabilities that are measured at fair value on a recurring basis
Repurchase agreements	0	0
Assets, fair value	69,767	57,457
Recurring | Level 1
Liabilities that are measured at fair value on a recurring basis
Repurchase agreements	0	0
Assets, fair value	32,089	5,381
Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Repurchase agreements	0	0
Assets, fair value	37,678	52,076
Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Repurchase agreements	0	0
Assets, fair value	0	0
Commercial paper | Recurring
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	7,061	11,892
Commercial paper | Recurring | Level 1
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Commercial paper | Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	7,061	11,892
Commercial paper | Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Corporate Note Securities | Recurring
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	14,422	18,380
Corporate Note Securities | Recurring | Level 1
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Corporate Note Securities | Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	14,422	18,380
Corporate Note Securities | Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
US Government Debt Securities | Recurring
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	7,889	11,295
US Government Debt Securities | Recurring | Level 1
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
US Government Debt Securities | Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	7,889	11,295
US Government Debt Securities | Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Asset-backed Securities
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	8,306	10,509
Asset-backed Securities | Recurring
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	8,306	10,509
Asset-backed Securities | Recurring | Level 1
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Asset-backed Securities | Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	8,306	10,509
Asset-backed Securities | Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Money market funds | Recurring
Liabilities that are measured at fair value on a recurring basis
Money market funds	32,089	5,381
Money market funds | Recurring | Level 1
Liabilities that are measured at fair value on a recurring basis
Money market funds	32,089	5,381
Money market funds | Recurring | Level 2
Liabilities that are measured at fair value on a recurring basis
Money market funds	0	0
Money market funds | Recurring | Level 3
Liabilities that are measured at fair value on a recurring basis
Money market funds	$ 0	$ 0

Net Loss Per Common Share - Nar

Net Loss Per Common Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Numerator:
Net loss	$ (4,705)	$ (2,844)
Denominator for basic and diluted EPS:
Basic and diluted EPS: weighted-average common shares outstanding (in shares)	44,924	43,725
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ (0.10)	$ (0.07)
Service-based stock options
Denominator for basic and diluted EPS:
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)	6,200	6,000
Restricted Stock Units (RSUs)
Denominator for basic and diluted EPS:
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)	300	200
Warrants
Denominator for basic and diluted EPS:
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)	0	100

Nexobrid License and Supply A_2

Nexobrid License and Supply Agreements (Details) - MediWound Ltd $ in Millions	1 Months Ended
	May 31, 2019USD ($)
Related Party Transaction [Line Items]
Consideration payment for license	$ 17.5
Payable	17.5
Contingent consideration	7.5
Max contingent consideration	125
Sales Initial milestone	$ 75