Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 15, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 617,742,709 | ||
Entity Common Stock, Shares Outstanding | 45,954,992 | ||
Documents Incorporated by Reference | Document Form 10-K Reference Proxy Statement for the Annual Meeting of Shareholders scheduled for April 28, 2021 Items 10, 11, 12, 13 and 14 of Part III | ||
Entity Central Index Key | 0000887359 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 33,620 | $ 26,889 |
Short-term investments | 42,187 | 42,829 |
Accounts receivable (net of allowance for doubtful accounts of $143 and $306, respectively) | 34,504 | 32,168 |
Inventory | 9,356 | 6,816 |
Other current assets | 3,893 | 2,953 |
Total current assets | 123,560 | 111,655 |
Property and equipment, net | 7,633 | 7,144 |
Restricted cash | 211 | 89 |
Right-of-use assets | 50,105 | 25,103 |
Long-term investments | 24,099 | 9,247 |
Total assets | 205,608 | 153,238 |
Current liabilities: | ||
Accounts payable | 6,755 | 6,345 |
Accrued expenses | 11,293 | 7,948 |
Current portion of operating lease liabilities | 4,394 | 5,461 |
Other liabilities | 41 | 41 |
Total current liabilities | 22,483 | 19,795 |
Operating lease liabilities | 48,789 | 22,242 |
Other long-term liabilities | 76 | 110 |
Total liabilities | 71,348 | 42,147 |
COMMITMENTS AND CONTINGENCIES | ||
Shareholders’ equity: | ||
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 45,804 and 44,864, respectively | 510,061 | 489,749 |
Accumulated other comprehensive income | 14 | 21 |
Accumulated deficit | (375,815) | (378,679) |
Total shareholders’ equity | 134,260 | 111,091 |
Total liabilities and shareholders’ equity | $ 205,608 | $ 153,238 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 143 | $ 306 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 45,804,000 | 44,864,000 |
Common stock, shares outstanding (in shares) | 45,804,000 | 44,864,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Product sales, net | $ 121,968 | $ 117,850 | $ 90,857 |
Other revenue | 2,211 | 0 | 0 |
Total revenue | 124,179 | 117,850 | 90,857 |
Cost of product sales | 39,951 | 37,571 | 32,160 |
Gross profit | 84,228 | 80,279 | 58,697 |
Research and development | 13,020 | 30,391 | 13,599 |
Selling, general and administrative | 68,836 | 61,139 | 49,007 |
Total operating expenses | 81,856 | 91,530 | 62,606 |
Income (loss) from operations | 2,372 | (11,251) | (3,909) |
Other income (expense): | |||
Increase in fair value of warrants | 0 | 0 | (2,524) |
Loss on extinguishment of debt | 0 | 0 | (838) |
Interest income | 691 | 1,614 | 897 |
Interest expense | (6) | (8) | (1,732) |
Other expense | (13) | (20) | (31) |
Total other income (expense) | 672 | 1,586 | (4,228) |
Net income (loss) before tax provision | 3,044 | (9,665) | (8,137) |
Tax provision | 180 | 0 | 0 |
Net income (loss) | $ 2,864 | $ (9,665) | $ (8,137) |
Net income (loss) per share attributable to common shareholders (basic) (in USD per share) | $ 0.06 | $ (0.22) | $ (0.20) |
Weighted average common shares outstanding (basic) (in shares) | 45,221 | 44,180 | 40,242 |
Net income (loss) per share attributable to common shareholders (diluted) (in USD per share) | $ 0.06 | $ (0.22) | $ (0.20) |
Weighted average common shares outstanding (diluted) (in shares) | 47,282 | 44,180 | 40,242 |
Revenue, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 2,864 | $ (9,665) | $ (8,137) |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on investments | (7) | 60 | (39) |
Comprehensive income (loss) | $ 2,857 | $ (9,605) | $ (8,176) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Warrants | Accumulated Other Comprehensive Gain (loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2017 | 35,861,000 | ||||
Beginning balance at Dec. 31, 2017 | $ 22,540 | $ 383,020 | $ 397 | $ 0 | $ (360,877) |
Increase (Decrease) in Shareholders' Equity | |||||
Net income (loss) | (8,137) | (8,137) | |||
Compensation expense related to stock options granted, net of forfeitures | 7,223 | $ 7,223 | |||
Issuance of common stock, net of issuance costs (in shares) | 5,750,000 | ||||
Issuance of common stock, net of issuance costs | 70,028 | $ 70,028 | |||
Stock option exercises (in shares) | 1,180,000 | ||||
Stock option exercises | 3,705 | $ 3,705 | |||
Shares issued under the Employee Stock Purchase Plan (in shares) | 106,000 | ||||
Shares issued under the Employee Stock Purchase Plan | 656 | $ 656 | |||
Exercise of warrants resulting in issuance of common stock (in shares) | 681,000 | ||||
Exercise of warrants resulting in issuance of common stock | 6,255 | $ 6,548 | (293) | ||
Unrealized (gain) loss on investments | (39) | (39) | |||
Ending balance (in shares) at Dec. 31, 2018 | 43,578,000 | ||||
Ending balance at Dec. 31, 2018 | 102,231 | $ 471,180 | 104 | (39) | (369,014) |
Increase (Decrease) in Shareholders' Equity | |||||
Net income (loss) | (9,665) | (9,665) | |||
Compensation expense related to stock options granted, net of forfeitures | 13,179 | $ 13,179 | |||
Stock option exercises (in shares) | 1,197,000 | ||||
Stock option exercises | 4,354 | $ 4,354 | |||
Shares issued under the Employee Stock Purchase Plan (in shares) | 69,000 | ||||
Shares issued under the Employee Stock Purchase Plan | 932 | $ 932 | |||
Exercise of warrants resulting in issuance of common stock (in shares) | 20,000 | ||||
Exercise of warrants resulting in issuance of common stock | 0 | $ 104 | (104) | ||
Unrealized (gain) loss on investments | 60 | 60 | |||
Ending balance (in shares) at Dec. 31, 2019 | 44,864,000 | ||||
Ending balance at Dec. 31, 2019 | 111,091 | $ 489,749 | 0 | 21 | (378,679) |
Increase (Decrease) in Shareholders' Equity | |||||
Net income (loss) | 2,864 | 2,864 | |||
Compensation expense related to stock options granted, net of forfeitures | $ 13,843 | $ 13,843 | |||
Stock option exercises (in shares) | 790,532 | 790,000 | |||
Stock option exercises | $ 5,582 | $ 5,582 | |||
Shares issued under the Employee Stock Purchase Plan (in shares) | 117,000 | ||||
Shares issued under the Employee Stock Purchase Plan | 1,050 | $ 1,050 | |||
Issuance of stock for restricted stock units vesting (shares) | 47,000 | ||||
Restricted stock withheld for employee taxes (in shares) | (14,000) | ||||
Restricted stock withheld for employee taxes | (163) | $ (163) | |||
Unrealized (gain) loss on investments | (7) | (7) | |||
Ending balance (in shares) at Dec. 31, 2020 | 45,804,000 | ||||
Ending balance at Dec. 31, 2020 | $ 134,260 | $ 510,061 | $ 0 | $ 14 | $ (375,815) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance costs | $ 4,700,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | |||
Net income (loss) | $ 2,864 | $ (9,665) | $ (8,137) |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | |||
Depreciation and amortization | 2,383 | 1,744 | 1,426 |
Stock compensation expense | 13,843 | 13,179 | 7,223 |
Change in fair value of warrants | 0 | 0 | 2,524 |
Loss on extinguishment of debt | 0 | 0 | 838 |
Foreign currency translation loss | 63 | 42 | 51 |
Loss on sale of fixed assets | 30 | 0 | 22 |
Amortization of premiums and discounts on marketable securities | 318 | (610) | (327) |
Non-cash lease cost | 4,445 | 2,787 | 0 |
Changes in operating assets and liabilities: | |||
Inventory | (2,540) | (3,258) | 235 |
Accounts receivable | (2,336) | (8,714) | (5,184) |
Other current assets | (940) | (106) | (1,267) |
Accounts payable | 33 | (1,024) | 899 |
Accrued expenses | 3,345 | 1,018 | 1,493 |
Operating lease liabilities | (3,951) | (2,512) | |
Other non-current assets and liabilities, net | 15 | (64) | (208) |
Net cash provided by (used for) operating activities | 17,572 | (7,183) | (412) |
Investing activities: | |||
Purchases of investments | (63,057) | (72,346) | (66,549) |
Sales and maturities of investments | 48,523 | 85,577 | 2,200 |
Expenditures for property, plant and equipment | (2,626) | (2,616) | (2,678) |
Net cash provided by (used for) investing activities | (17,160) | 10,615 | (67,027) |
Financing activities: | |||
Net proceeds from equity offering | 0 | 0 | 70,028 |
Net proceeds from common stock issuance due to stock option exercises | 6,632 | 5,286 | 4,361 |
Proceeds from exercise of warrants | 0 | 0 | 2,716 |
Payments on long-term debt | 0 | 0 | (17,532) |
Fee on long-term debt | 0 | 0 | (710) |
Other | (191) | (26) | 0 |
Net cash provided by financing activities | 6,441 | 5,260 | 58,863 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 6,853 | 8,692 | (8,576) |
Cash, cash equivalents, and restricted cash at beginning of period | 26,978 | 18,286 | 26,862 |
Cash, cash equivalents, and restricted cash at end of period | $ 33,831 | $ 26,978 | $ 18,286 |
Organization
Organization | 12 Months Ended |
Dec. 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, or Vericel), 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 therapies for the sports medicine and severe burn care markets. Vericel currently markets two cell therapy products in the United States, MACI ® and Epicel ® . 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. Epicel (cultured epidermal autografts) is a permanent skin replacement 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 also holds an exclusive license from MediWound Ltd. (MediWound) for North American rights to NexoBrid ® , a registration-stage biological orphan product for debridement of severe thermal burns. The Company operates its business primarily in the U.S. in one reportable segment — the research, product development, manufacture and distribution of cellular therapies for use in the treatment of specific diseases. COVID-19 Throughout 2020, the pandemic caused by the spread of a novel strain of coronavirus (COVID-19) has created significant disruptions to the U.S. and global economy and has contributed to significant volatility in financial markets. The global impact of the outbreak is continually evolving and, as the virus spreads and infection rates surge in various locations, many state, local and national governments – including those in Massachusetts and Michigan, where the Company's operations are located – have responded by issuing, extending and supplementing orders requiring quarantines, restrictions on travel, and the mandatory closure of certain non-essential businesses, among other actions. In the U.S., the status and application of these orders have varied on a state-by-state basis since the early days of the pandemic. Many of the restrictions have been periodically updated as infections rates in the U.S. have risen and fallen and as world health leaders learn more about the virus, its transmission pathway and who is most at risk. Because Vericel is deemed an essential business, the Company has been exempted from government orders requiring the closure of workplaces and the cessation of business operations, as they have existed from time-to-time during the pandemic. Notwithstanding being an essential business, the Company’s business and operations have been adversely impacted by the effects of COVID-19. In mid-March, the American College of Surgeons and United States Surgeon General recommended that each hospital, health system, and surgeon minimize, postpone, or cancel electively scheduled surgeries. These recommendations were followed by numerous state level executive orders either restricting or partially restricting elective surgeries. Because MACI is an elective surgical procedure, as a result of these restrictions, beginning in mid-March 2020, the Company began to experience a significant increase in cancellations of scheduled MACI procedures as well as a slowdown in new MACI orders. The widespread suspension of elective procedures impacted the Company’s business and operations during the first and second quarters of 2020. These restrictions began to ease in May and, by the end of September 2020, there were no state orders in place that directly impacted a surgeon’s or patient’s ability to move forward with a MACI surgery. However, in late September and October 2020, the number of COVID-19 infections began to increase markedly in various geographies and by late December 2020 the rolling seven-day average of new daily coronavirus cases in the United States reached the highest level at any point during the pandemic. Because Epicel is used almost exclusively in the emergent setting by burn centers and surgeons throughout the country, Epicel revenue and procedure volumes have been less affected by the pandemic. Although hospitals are now better prepared for a subsequent surge in COVID-19 patients, the risk remains that regional or local restrictions could again be placed on the performance of elective surgical procedures if the number of COVID-19 infections in the United States continues to rise. At the outset of the pandemic, the Company put in place a comprehensive workplace protection plan, which institutes protective measures in response to COVID-19. These measures include mandatory employee training on social distancing and hygiene protocols, conducting daily health screenings of all employees, vendors and visitors entering our facilities, canceling all international business travel, limiting domestic business travel to essential purposes, requesting that employees limit non-essential personal travel, enhancing our facilities’ janitorial and sanitary procedures, making certain physical modifications and enhancements to our facilities to enable effective social distancing among employees, providing certain personal protective equipment to employees working in our offices, encouraging employees to work from home to the extent their job function enables them to do so, limiting third-party access to the Company’s facilities, encouraging the use of virtual employee meetings, modifying the manner and schedule of on-site production activities, and providing guidance to our field-based commercial teams concerning their communications and contact with customers and healthcare professionals. In addition, we put certain expense reduction measures in place including a reduction of discretionary spending. The Company is reviewing these measures regularly as the pandemic evolves and may take additional actions to the extent required. The accompanying Consolidated Financial Statements have been prepared on a basis which assumes that the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As of December 31, 2020, the Company had an accumulated deficit of $375.8 million and had net income of $2.9 million for the year ended December 31, 2020. The Company had cash and cash equivalents of $33.6 million and investments of $66.3 million as of December 31, 2020. The Company expects that cash from the sales of our products and 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 the Consolidated Financial Statements. However, the effects of the COVID-19 pandemic continue to evolve and may result in irrecoverable losses of customers and significantly impact long-term liquidity requiring the Company to engage in layoffs, furloughs and/or reductions in salaries. To the extent the United States experiences a resurgence in COVID-19 infections and elective surgery restrictions are reinstated on a widespread basis and significantly impact the Company’s business, the Company may need to access 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of Vericel and its wholly-owned subsidiaries, Vericel Denmark ApS, in Kastrup, Demark and Vericel Security Corporation (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. Vericel Denmark ApS ceased operations in 2015. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of expenses during the reported period. The Company is monitoring the potential impact of the COVID-19 pandemic on its business and financial statements. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments reflected in these financial statements or a revision of the carrying value of its assets or liabilities as of the issuance of these financial statements. These estimates may change as new events occur and additional information is obtained. Actual results could differ from those estimates. Consolidated Statement of Cash Flows The following table presents certain supplementary cash flows information for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (In thousands) 2020 2019 2018 Supplementary Cash Flows information: Non-cash information: Warrants exercised for common stock $ — $ 104 $ 3,538 Right-of-use asset and lease liability recognized 29,573 2,599 — Additions to property and equipment included in accounts payable 531 217 606 Cash information: Interest paid (net of interest capitalized) $ 6 $ 8 $ 2,230 Year Ended December 31, (In thousands) 2020 2019 2018 Reconciliation of cash, cash equivalents, and restricted cash reported in the statement of financial position: Cash and cash equivalents $ 33,620 $ 26,889 $ 18,286 Restricted cash, included in other long-term assets 211 89 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 33,831 $ 26,978 $ 18,286 Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase and consist primarily of demand deposits, money market funds, overnight repurchase agreements and short duration agency bonds and commercial paper. Restricted cash Amounts included in restricted cash represent those required to be set aside to meet contractual terms of a lease agreement held by the Company. Investments Investments classified as short-term have maturities of less than one year. Investments classified as long-term are those that: (i) have a maturity of greater than one year, and (ii) we do not intend to liquidate within the next twelve months, although these funds are available for use and, therefore, are classified as available-for-sale. The Company’s investment strategy is to buy short-duration marketable securities with a high credit rating. As of December 31, 2020 and 2019, all marketable securities held by the Company had remaining contractual maturities of three years or less. Unrealized gains are included as a component of accumulated other comprehensive income in the consolidated balance sheets and statements of stockholders’ equity and a component of total comprehensive income (loss) in the consolidated statements of comprehensive income (loss), until realized. Unrealized losses are evaluated for impairment under ASC 326, Financial Instruments - Credit Losses , to determine if the impairment is credit-related or non credit-related. Credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, and non credit-related impairment is recognized in other comprehensive income (loss), net of taxes. Inventory Inventories are measured at the lower of cost or net realizable value. Cost is calculated based upon standard-cost which approximates costs determined on the first-in, first-out method. The Company periodically reviews its inventories for excess or obsolescence and writes down obsolete or other unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by the Company, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written down are charged to cost of sales. Leases The Company adopted the new leasing standards using the modified retrospective transition approach, as of January 1, 2019, with no restatement of prior periods. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under the prior lease guidance, were recognized as right-of-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. Certain lease agreements include rental payments that are adjusted periodically for inflation or other variables. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. In addition to rent, the leases may require the Company to pay additional amounts for taxes, insurance, maintenance and other expenses, which are generally referred to as non-lease components. Variable non-lease components are not measured as part of the right-of-use asset and liability. Only when lease components and their associated non-lease components are fixed are they accounted for as a single lease component and are recognized as part of a right-of-use asset and liability. Some leases contain clauses for renewal at the Company’s option with renewal terms that generally extend the lease term from 1 to 5 years. Certain lease agreements contain options to purchase the leased property and options to terminate the lease. Payments to be made in option periods are recognized as part of the right-of-use lease assets and lease liabilities when it is reasonably certain that the option to extend the lease will be exercised or the option to terminate the lease will not be exercised, or is not at the Company’s option. The Company determines whether the reasonably certain threshold is met by considering contract-, asset-, market-, and entity-based factors. A portfolio approach is applied to certain lease contracts with similar characteristics. The Company’s lease agreements do not contain any significant residual value guarantees or material restrictive covenants imposed by the leases. Accounts Receivable Accounts receivable are initially recorded at the contractual amount owed by the customer or based on expected payments from the insurance provider, hospital or patient. Allowances for doubtful accounts are established when the facts and circumstances indicate that a receivable may not be collectible. 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 calculated through the use of forecasts that are based on current and historical economic and financial information. Property, Plant and Equipment Property, plant and equipment are initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use or, in the case of assets acquired in a business combination, at fair value as at the date of the combination. After initial measurement, property, plant and equipment are carried at cost less accumulated depreciation and impairment. Repair and maintenance costs of property, plant and equipment are expensed as incurred. The depreciable value of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life. The useful lives of property, plant and equipment are as follows: • Machinery and Equipment: 5 years • Furniture, fixtures, and office equipment: 3 to 5 years • Computer equipment and software: 3 years • Building improvements and leasehold improvements: Shorter of the remaining life of the lease or 10 years The costs of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations. Revenue Recognition and Net Product Sales MACI, MACI Biopsy Kits, Epicel and NexoBrid The Company recognizes product revenue from sales to a customer (whether a distributor, or hospital ) following the five step model in ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation. Under this revenue standard, the Company recognizes revenue when its customer obtains control of the promised goods, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods. There are no contractual rights of returns, refunds or similar obligations related to MACI, kits, Epicel or NexoBrid as of December 31, 2020; however, in certain limited cases the Company will accept a product return if a surgery is canceled. Revenue is not recognized in certain canceled cases. For MACI, MACI kits and Epicel there are no variable pricing arrangements related to warranties or rebates offered to customers. The majority of orders are due within 60 to 90 days of delivery. Shipping and handling fees are included as a component of revenue. The Company recognizes any commission fees as an expense when incurred. These fees are included in selling, general, and administrative expenses. NexoBrid The U.S. Biomedical Advanced Research and Development Authority (BARDA) has committed to procure NexoBrid from MediWound, under which MediWound will manufacture and supply NexoBrid on a unit price basis, which may be increased pursuant to the terms of the agreement. The Company does not hold a direct contract or distribution agreement with BARDA, or take title to the product. The Company recognizes income from sales of NexoBrid to BARDA upon delivery, at which time BARDA is in control of the product. The Company does not control the specified goods or services before they are transferred to the customer. MediWound has promised to provide the goods to BARDA and has completed all significant compliance aspects of being a contractor for BARDA and continue to be responsible for all compliance. The Company records the NexoBrid revenue based on a specified percentage of the gross profit MediWound recognizes on the sale in accordance with the license agreement. Research and Development Expense Research and development activities represent a significant part of the Company’s business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of consumers and patients. Research and development expenses are expensed as incurred. Stock-Based Compensation The Company’s accounting for stock-based compensation requires it to determine the fair value of common stock issued in the form of stock option awards and restricted stock units. The Company uses the value of its common stock at the date of the grant in the calculation of the fair value of its share-based awards. The fair value of restricted stock units held by the employees is determined based on the fair value of the Company’s common stock on the date of the grant. The fair value of stock options held by the employees is determined using a Black-Scholes option valuation method, which is a valuation technique that is acceptable for share-based payment accounting. Key assumptions in determining fair value include volatility, risk-free interest rate, dividend yield and expected term. The assumptions used in calculating the fair value of stock options represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. In addition, the Company estimates the expected forfeiture rate and only recognize expense for those stock options expected to vest over the service period. The estimated forfeiture rate considers the historical experience of the Company’s stock-based awards. If the actual forfeiture rate is different from the estimate, expense is adjusted accordingly. For certain non-employee consultants, stock option awards continue to vest post-termination. The Company also has an Employee Stock Purchase Plan (ESPP) which is a compensatory plan. Compensation expense is recorded based on the fair 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. Comprehensive Loss Comprehensive loss is the change in stockholders’ equity during a period arising from any gain or loss unrealized related to the Company’s investments. Income Taxes Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized based on the weight of available evidence, that a portion or all of the deferred tax assets will not be realized. When evaluating the realizability of the deferred tax assets, all evidence, both positive and negative, is considered. Items considered when evaluating the need for a valuation allowance include the ability to carry back losses, future reversals of existing temporary differences, tax planning strategies, and expectations of future earnings. The Company records uncertain tax positions in the consolidated financial statements only if it is more likely than not that the uncertain tax position will be sustained upon examination by the taxing authorities. The Company records interest and penalties related to uncertain tax positions in income tax expense. Net Income (Loss) Per Share Attributable to Common Shareholders Basic and diluted earnings (loss) per share is calculated using the two-class method. Basic earnings (loss) per share which is based on an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares. There were no undeclared dividends for the year ended December 31, 2020 or 2019. Diluted earnings (loss) per share includes convertible securities or common equivalent share (stock options and warrants) in addition to the Company’s common shares. Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. Financial Instruments The Company’s financial instruments include receivables for which the current carrying amounts approximate market value, based upon their short-term nature and marketable debt securities which are classified as available-for-sale and carried at fair value on a settlement date basis. Warrants Warrants that could be cash settled or have anti-dilution price protection provisions are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in our statement of operations in each subsequent period. Warrants that meet the requirements for equity classification are recorded at fair value with no subsequent remeasurement. In general, warrants are measured using the Black-Scholes valuation model. The methodology is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent our best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the change in estimated fair value of the warrant liability for those warrants that could be cash settled or have anti-dilution price protection provisions, could be materially different. As of December 31, 2019 and 2020, there were no outstanding warrants. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [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 were recognized when it was probable that the loss had 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 created a more consistent disclosure framework that increased clarity and removed, modified and added certain fair value disclosures to improve the effectiveness of the Company’s disclosures in the notes of the Consolidated Financial Statements. This guidance became effective for the Company January 1, 2020 and had no impact on 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 on its Consolidated Financial Statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Revenue | Revenue Revenue Recognition and Net Product Sales As disclosed in note 2, the Company recognizes product revenue from sales of MACI biopsy kits, MACI implants, Epicel grafts and other sources following the five-step model in Accounting Standards Codification 606, Revenue Recognition, (ASC 606). MACI Biopsy Kits MACI biopsy kits are sold directly to hospitals based on contracted rates in an 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 is used by the doctor to provide a sample of cartilage tissue to the Company, which can later be used to manufacture a MACI implant. The ordering of the kit does not obligate the Company to manufacture an implant nor does the receipt of the cartilage tissue. The customer’s order of an implant is separate from the process of ordering the biopsy kit. Therefore, the sale of the biopsy 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 MACI in a manner in which 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 collect 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 patients. The sales directly to DMS are made at a contracted rate. 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 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, fee schedules or past payer precedents. Net product revenue is recognized net of estimated 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 estimates expected collections for these transactions using the portfolio approach. 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 calculated through the use of forecasts that are based on current and historical economic and financial information. This loss percentage was applied to the accounts receivables as of December 31, 2020. The total allowance for uncollectible consideration was $5.3 million and $3.9 million as of December 31, 2020, and 2019, respectively. 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 $0.3 million decrease or increase in the revenue recognized for the year ended December 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 $0.7 million, increase of $0.7 million and decrease of $0.2 million for the years ended December 31, 2020, 2019, and 2018, respectively. Epicel The Company sells Epicel directly to hospitals based on contracted rates stated in an approved contract or purchase order. Similar to MACI, there is no obligation to manufacture Epicel 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 Epicel grafts and the claim is billable to the hospital. NexoBrid The Company entered into exclusive license and supply agreements with MediWound, under which MediWound will manufacture and supply NexoBrid on a unit price basis, which may be increased pursuant to the terms of the agreement. BARDA has committed to procure NexoBrid from MediWound and, as of December 31, 2020, the Company did not hold a direct contract or distribution agreement with BARDA, or take title to the product. The Company recognizes revenue based on a percentage of gross profits for sales of NexoBrid to BARDA upon delivery, at which time BARDA is in control of the product. For the year ended December 31, 2020, the first orders of NexoBrid were delivered and the Company recognized $2.2 million of revenue. See note 16 for further discussion of the NexoBrid license and supply agreements. Revenue by Product and Customer The following table and description below shows the products from which the Company generated its revenue: Year Ended December 31, Revenue by product (in thousands) 2020 2019 2018 MACI and Carticel implants and kits Implants based on contracted rate sold through a specialty pharmacy (a) $ 57,593 $ 56,185 $ 42,926 Implants subject to third-party reimbursement sold through a specialty pharmacy (b) 16,320 17,076 8,621 Implants sold direct based on contracted rates (c) 15,144 13,933 12,122 Implants sold direct subject to third-party reimbursement (d) 2,754 1,529 2,257 Biopsy kits - direct bill 1,908 2,243 1,997 Change in estimates related to prior periods (e) 713 654 (182) Epicel Direct bill (hospital) 27,536 26,230 23,116 NexoBrid (f) 2,211 — — Total revenue $ 124,179 $ 117,850 $ 90,857 (a) Represents implants sold through Orsini and AllCare whereby such specialty pharmacies have 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. (b) Represents implants sold through Orsini or AllCare whereby 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. Also represents direct sales under a contract to specialty distributor DMS. (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, changes in collection expectations or actual cash collections received in the current period. (f) Represents revenue based on a percentage of gross profits for sales of NexoBrid to BARDA, pursuant to the license agreement between the Company and MediWound. Concentration of Credit Risk For the year ended December 31, 2018, MACI revenue concentration from its largest customer was 16%. The Company’s total revenue and accounts receivable balances for the years ended December 31, 2020 and 2019 from its largest customer of MACI and Epicel did not exceed 10%. |
Selected Balance Sheet Componen
Selected Balance Sheet Components | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Components | Selected Balance Sheet Components Inventory Inventory as of December 31, 2020 and 2019: (In thousands) 2020 2019 Raw materials $ 8,775 $ 6,085 Work-in-process 537 541 Finished goods 44 190 Inventory $ 9,356 $ 6,816 Property and Equipment Property and Equipment, net as of December 31, 2020 and 2019: (In thousands) 2020 2019 Machinery and equipment $ 3,672 $ 3,152 Furniture, fixtures and office equipment 809 775 Computer equipment and software 6,846 6,174 Leasehold improvements 5,560 5,256 Construction in process 2,021 859 Financing right-of-use lease 111 148 Total property and equipment, gross 19,019 16,364 Less accumulated depreciation (11,386) (9,220) $ 7,633 $ 7,144 Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $2.4 million, $1.7 million and $1.4 million, respectively. Accrued Expenses Accrued Expenses as of December 31, 2020 and 2019: (In thousands) 2020 2019 Bonus related compensation $ 5,721 $ 5,116 Employee related accruals 3,482 1,785 Other accrued expenses 2,090 1,047 Accrued expenses $ 11,293 $ 7,948 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt On December 19, 2018, the Company prepaid in full all outstanding indebtedness under, and terminated, the Loan and Security Agreement dated as of September 9, 2016, by and between the Company, Silicon Valley Bank as Agent and Silicon Valley Bank, MidCap Financial Trust, MidCap Funding III Trust and other lenders listed therein as lenders (SVB Loan Agreement), as amended December 30, 2016, May 9, 2017 and December 6, 2017, which termination was effective December 19, 2018. Warrants were issued to SVB and MidCap in conjunction with the modified debt agreement. On the date of termination, the Company paid in full $17.1 million in outstanding borrowings at the time of termination. In connection with the termination of the SVB Loan Agreement, the Company paid an additional prepayment premium of 1.5% in the amount of $0.2 million and a final payment of 3.6% in the amount of $0.5 million. |
Leases
Leases | 12 Months Ended |
Dec. 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 present value of 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-of-use assets and liabilities, on a discounted basis on the balance sheet. Effective October 21, 2020 the Company entered into an agreement with one of its Cambridge, Massachusetts facility leases. The agreement extended the terms of the lease to expire on February 29, 2032, with monthly contractual lease payments ranging from $0.4 million to $0.6 million. The agreement also provides a tenant improvement allowance of approximately $4.3 million, available through December 31, 2023. Leases with an initial term of 12 months or less are not recorded on the balance sheet and for the year ended December 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 years ended December 31, 2020, 2019, the Company recognized $6.3 million and $5.4 million, respectively, and in 2018 (under the prior leasing guidance) the Company recognized $5.2 million of operating lease expense. For the years ended December 31, 2020, 2019 and 2018, the Company recognized less than $0.1 million of financing lease expense. 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 classified on the balance sheet as of December 31, 2020 and 2019 are as follows: December 31, (In thousands) Classification 2020 2019 Assets Operating Right-of-use assets $ 50,105 $ 25,103 Finance Property and equipment, net 111 148 $ 50,216 $ 25,251 Liabilities Current Operating Current portion of operating lease liabilities $ 4,394 $ 5,461 Finance Other liabilities 41 41 $ 4,435 $ 5,502 Non-current Operating Operating lease liabilities $ 48,789 $ 22,242 Finance Other long-term liabilities 76 110 $ 48,865 $ 22,352 Cash paid for amounts included in the measurement of the Company’s operating lease liabilities was $5.8 million and $5.0 million for the year ended December 31, 2020 and 2019, respectively. Maturity of lease liabilities as of December 31, 2020 are as follows: (In thousands) Operating Leases Finance Leases Total 2021 $ 4,394 $ 41 $ 4,435 2022 4,177 41 4,218 2023 6,973 41 7,014 2024 6,934 — 6,934 2025 6,340 — 6,340 more than 5 years 43,507 — 43,507 Total lease payments $ 72,325 $ 123 $ 72,448 Less: interest (19,142) (7) (19,149) Present value of lease liabilities $ 53,183 $ 116 $ 53,299 An explicit rate is not provided in some of the Company’s leases, therefore the Company uses a mix of incremental borrowing rate based on the information available at commencement date through market sources including relevant peer borrowing rates, as well as implicit and explicit rates in determining the present value of lease payments. 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 the renewal period was accordingly included in the lease term and related calculations. Lease terms and discount rates as of December 31, 2020 are as follows: December 31, 2020 2019 Weighted-average remaining lease term (years) Operating leases 10.6 6.8 Finance leases 2.5 3.5 Weighted-average discount rate Operating leases 5.42% 9.44% Finance leases 5.00% 5.00% |
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 present value of 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-of-use assets and liabilities, on a discounted basis on the balance sheet. Effective October 21, 2020 the Company entered into an agreement with one of its Cambridge, Massachusetts facility leases. The agreement extended the terms of the lease to expire on February 29, 2032, with monthly contractual lease payments ranging from $0.4 million to $0.6 million. The agreement also provides a tenant improvement allowance of approximately $4.3 million, available through December 31, 2023. Leases with an initial term of 12 months or less are not recorded on the balance sheet and for the year ended December 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 years ended December 31, 2020, 2019, the Company recognized $6.3 million and $5.4 million, respectively, and in 2018 (under the prior leasing guidance) the Company recognized $5.2 million of operating lease expense. For the years ended December 31, 2020, 2019 and 2018, the Company recognized less than $0.1 million of financing lease expense. 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 classified on the balance sheet as of December 31, 2020 and 2019 are as follows: December 31, (In thousands) Classification 2020 2019 Assets Operating Right-of-use assets $ 50,105 $ 25,103 Finance Property and equipment, net 111 148 $ 50,216 $ 25,251 Liabilities Current Operating Current portion of operating lease liabilities $ 4,394 $ 5,461 Finance Other liabilities 41 41 $ 4,435 $ 5,502 Non-current Operating Operating lease liabilities $ 48,789 $ 22,242 Finance Other long-term liabilities 76 110 $ 48,865 $ 22,352 Cash paid for amounts included in the measurement of the Company’s operating lease liabilities was $5.8 million and $5.0 million for the year ended December 31, 2020 and 2019, respectively. Maturity of lease liabilities as of December 31, 2020 are as follows: (In thousands) Operating Leases Finance Leases Total 2021 $ 4,394 $ 41 $ 4,435 2022 4,177 41 4,218 2023 6,973 41 7,014 2024 6,934 — 6,934 2025 6,340 — 6,340 more than 5 years 43,507 — 43,507 Total lease payments $ 72,325 $ 123 $ 72,448 Less: interest (19,142) (7) (19,149) Present value of lease liabilities $ 53,183 $ 116 $ 53,299 An explicit rate is not provided in some of the Company’s leases, therefore the Company uses a mix of incremental borrowing rate based on the information available at commencement date through market sources including relevant peer borrowing rates, as well as implicit and explicit rates in determining the present value of lease payments. 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 the renewal period was accordingly included in the lease term and related calculations. Lease terms and discount rates as of December 31, 2020 are as follows: December 31, 2020 2019 Weighted-average remaining lease term (years) Operating leases 10.6 6.8 Finance leases 2.5 3.5 Weighted-average discount rate Operating leases 5.42% 9.44% Finance leases 5.00% 5.00% |
Cash Equivalents and Investment
Cash Equivalents and Investments | 12 Months Ended |
Dec. 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 pursuant to ASC 320, Investments – Debt and Equity Securities , and carried at fair value in the 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 December 31, 2020 and December 31, 2019: December 31, 2020 Gross Unrealized Amortized Cost Gains Losses Credit Losses Estimated Fair Value Money market funds $ 3,698 $ — $ — $ — $ 3,698 Commercial paper 8,993 1 — — 8,994 Corporate notes 35,917 — — (6) 35,911 U.S. government securities 12,828 14 — — 12,842 U.S. government agency bonds 5,000 1 — — 5,001 U.S. asset-backed securities 3,534 4 — — 3,538 $ 69,970 $ 20 $ — $ (6) $ 69,984 Classified as: Cash equivalents $ 3,698 Short-term investments 42,187 Long-term investments 24,099 $ 69,984 December 31, 2019 Gross Unrealized (In thousands) Amortized Cost Gains Losses Estimated Fair Value 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 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 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. Options and restricted stock units generally become exercisable or vest 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 Amended and Restated 2019 Omnibus Incentive Plan (2019 Plan) was approved on April 29, 2020 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 December 31, 2020, there were 4,544,084 shares available for future grant under the 2019 Plan. Employee Stock Purchase Plan Employees are able to purchase stock under the ESPP. The ESPP allows for the issuance of an aggregate of 1,000,000 shares of common stock of which 708,452 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 January 2021, employees purchased 14,954 shares resulting in proceeds from the sale of common stock of $0.2 million under the ESPP for the fourth quarter of 2020. The total share-based compensation expense for the ESPP for the years ended December 31, 2020, 2019, and 2018 was approximately $0.4 million, $0.3 million, and $0.3 million, respectively. Service-Based Stock Options During the year ended December 31, 2020, the Company granted 1,356,540 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 78,750 non-employee director options which vest over one year) and have a term of ten years. The weighted-average grant-date fair value of service-based options granted during the years ended December 31, 2020, 2019, and 2018 was $8.86, $12.62 and $6.96, respectively. The net compensation costs recorded for the service-based stock options related to employees and directors (including the impact of forfeitures) for the years ended December 31, 2020, 2019, and 2018 were $12.1 million, $11.8 million and $6.9 million, respectively. 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: Year Ended December 31, Service-Based Stock Options 2020 2019 2018 Expected dividend rate —% —% —% Expected stock price volatility 71.1 - 78.7% 77.9 - 85.5% 82.3 – 88.3% Risk-free interest rate 0.33 - 1.7% 1.4 - 2.7% 2.4 – 3.1% Expected life (years) 5.3 - 6.3 5.3 - 6.3 5.3 - 6.3 The following table summarizes the activity for service-based stock options for the indicated periods: Service-Based Stock Options Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Thousands) Outstanding at December 31, 2019 5,052,950 $ 10.35 7.7 $ 37,974 Granted 1,356,540 13.42 Exercised (790,532) 7.06 Expired (29,115) 21.38 Forfeited (353,799) 13.82 Outstanding at December 31, 2020 5,236,044 $ 11.34 7.3 $ 102,654 Exercisable at December 31, 2020 2,885,729 $ 9.16 6.4 $ 63,037 As of December 31, 2020, 4,949,912 shares are vested and expected to vest. As of December 31, 2020, there was approximately $13.1 million, of total unrecognized compensation cost related to non-vested service-based stock options granted under the 2019 Plan and the Prior Plans. That cost is expected to be recognized over a weighted-average period o f 2.7 y ears. The total intrinsic value of stock options exercised for the years ended December 31, 2020, 2019, and 2018 was $10.5 million, $16.1 million and $11.4 million, respectively. Restricted Stock Units 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 the grant date and is amortized over the expected vesting period. 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 46,712 units vesting during the year ended December 31, 2020, 13,872 shares were withheld for payment of taxes on the employees’ behalf and retired from the 2019 Plan. No shares were withheld for payment of taxes on 10,500 of the vested units, as no shares are withheld at vesting for shares awarded to the Company’s Board of Directors. The following table summarizes the activity for restricted stock awards for the indicated periods: Restricted Stock Units Number of Restricted Stock Awards Weighted-Average Grant Date Fair Value Weighted-Average Term Aggregate Intrinsic Value Outstanding at December 31, 2019 157,030 $ 17.80 1.6 $ 2,732 Granted 196,836 11.41 2,246 Vested (46,712) 17.59 Forfeited (36,515) 15.00 Unvested at December 31, 2020 270,639 $ 13.57 1.4 $ 8,357 The total grant-date fair value of restricted stock units granted in the year ended December 31, 2020 and 2019 was $2.2 million and $3.3 million, respectively. The net compensation costs recorded for the service-based restricted stock units related to employees and directors (including the impact of forfeitures) for the year ended December 31, 2020, and 2019 was $1.4 million and $1.0 million, respectively. At December 31, 2020 and 2019, the total unrecognized compensation cost related to the restricted stock awards was $2.1 million and $1.8 million, respectively, and the weighted-average period over which that cost is expected to be recognized was 2.7 and 3.1 years for the same periods, respectively. The total fair value of restricted stock awards vested in the year ended December 31, 2020 was $0.6 million and no awards were vested in the year ended December 31, 2019. 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: Years Ended December 31, (in thousands) 2020 2019 2018 Cost of goods sold $ 1,949 $ 2,029 $ 1,015 Research and development 1,884 2,428 1,672 Selling, general and administrative 10,010 8,722 4,536 Total non-cash stock-based compensation expense $ 13,843 $ 13,179 $ 7,223 |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share The following reflects the net income (loss) attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Year Ended December 31, (Amounts in thousands, except per share amounts) 2020 2019 2018 Numerator: Net income (loss) $ 2,864 $ (9,665) $ (8,137) Denominator: Weighted-average common shares outstanding (basic) 45,221 44,180 40,242 Net income (loss) per share attributable to common shareholders (basic) $ 0.06 $ (0.22) $ (0.20) Weighted-average common shares outstanding (diluted) 47,282 44,180 40,242 Net income (loss) per share attributable to common shareholders (diluted) $ 0.06 $ (0.22) $ (0.20) Anti-dilutive shares excluded from the calculation of diluted earnings per share (a) (amounts in millions): Stock options 2.2 5.1 4.8 Restricted stock unit awards — 0.2 — (a) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholder's Equity Public Equity Offering In June 2018, the Company sold 5,750,000 shares of its common stock in an underwritten public offering at a price of $13.00 per share. The Company received proceeds of $70.1 million, net of $4.7 million of underwriters’ discount and issuance costs consisting primarily of legal and accounting fees. The Company recorded these proceeds as a common stock issuance. |
Stock Purchase Warrants
Stock Purchase Warrants | 12 Months Ended |
Dec. 31, 2020 | |
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. The fair value of warrants previously issued were 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 will remain at zero. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 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 December 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, U.S. government securities, U.S. government agency bonds and U.S. 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: December 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 $ 3,698 $ 3,698 $ — $ — $ 5,381 $ 5,381 $ — $ — Commercial paper 8,994 — 8,994 — 11,892 — 11,892 — Corporate notes 35,911 — 35,911 — 18,380 — 18,380 — U.S. government securities 12,842 — 12,842 — 11,295 — 11,295 — U.S. government agency bonds 5,001 — 5,001 — — — — — U.S. asset-backed securities 3,538 — 3,538 — 10,509 — 10,509 — $ 69,984 $ 3,698 $ 66,286 $ — $ 57,457 $ 5,381 $ 52,076 $ — The fair values of the cash equivalents and marketable securities are based on observable market prices. The Company’s accounts receivables, accounts payable and accrued expenses are valued at cost which approximates fair value. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Loss before income taxes for U.S and non-U.S operations was as follows: Year Ended December 31, 2020 2019 2018 U.S. income (loss) $ 2,767 $ (9,632) $ (8,056) Non U.S. income (loss) 97 (33) (81) $ 2,864 $ (9,665) $ (8,137) A reconciliation of income taxes computed using the federal statutory rate to the taxes reported in the consolidated statements of operations is as follows: Year Ended December 31, (In thousands) 2020 2019 2018 Income (loss) before income taxes $ 2,864 $ (9,665) $ (8,137) Federal statutory rate 21 % 21 % 21 % Taxes computed at federal statutory rate 601 (2,030) (1,709) State and local income taxes 200 (484) (385) Nondeductible share-based compensation 437 (1,329) (605) Federal and state rate change 249 (164) 839 Research and orphan drug credits (8,827) — — Other 132 (49) 172 Change in valuation allowance 7,388 4,056 1,688 Reported income taxes $ 180 $ — $ — Deferred tax assets (liabilities) consist of the following: Year Ended December 31, (In thousands) 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 8,411 $ 10,542 Employee benefits and stock compensation 5,692 4,329 Research and development costs 6,411 7,851 Intangible assets 3,279 4,350 Operating lease liability 13,687 7,245 Inventory reserve 3,813 3,303 Tax credit carryforward 10,085 — Other, net 38 119 Total deferred tax assets 51,416 37,739 Less: valuation allowance (37,379) (29,991) Total net deferred tax assets 14,037 7,748 Deferred tax liabilities: Right of use asset (13,463) (7,143) Fixed assets (574) (605) Total net deferred tax liabilities (14,037) (7,748) Net deferred tax assets and liabilities $ — $ — For the year-ended December 31, 2020, we recorded income tax expense as a result of taxable income in certain states where the net operating loss carryforwards and related deferred tax assets have been fully utilized. As of December 31, 2020, the Company’s U.S. federal and state tax net operating loss carryforwards available to offset future profits, after considering the annual Section 382 limit described below, are $32.3 million and $21.3 million, respectively. These net operating loss carryforwards will expire between 2021 and 2039 with the exception of the federal net operating loss generated in 2018. The federal net operating loss of $1.5 million generated in 2018 can be carried forward indefinitely. The projected annual limitation on the use of the net operating losses that existed prior to September 17, 2014 as a result of our change in control in 2014 per Section 382 of the Internal Revenue Code is $0.8 million. As a result, a significant portion of the net operating losses and tax credit carryforwards will expire prior to their utilization, regardless of the level of future profitability. As of December 31, 2020, the Company’s U.S. federal tax credit carryforwards available to offset future profits are $10.1 million. During 2020, the Company determined to pursue certain available tax credits and performed a research and development and orphan drug credit tax studies. As a result of completion of these studies it was determined that the Company now has a sufficient basis to claim the credits and has recognized a tax credit carryforward in the current period. These credit carryforwards will expire between 2034 and 2040. In accordance with the accounting guidance for income taxes, the Company estimated whether recoverability of its deferred tax assets is “more likely than not,” based on forecasts of taxable income in the related tax jurisdictions. In this estimate, the Company uses historical results, projected future operating results based upon approved business plans, eligible carry forward periods, tax planning opportunities and other relevant considerations. Based on these factors, including historical losses incurred by the Company, a full valuation allowance for the deferred tax assets, including the deferred tax assets for the aforementioned net operating losses and credits, has been provided since they are not more likely than not to be realized. If the Company continues to achieve profitability, these deferred tax assets may be available to offset future income taxes and the valuation could be released. The change in the valuation allowance was an increase of $7.4 million and $4.1 million for the years ended December 31, 2020 and 2019, respectively. The Company assesses uncertain tax positions in accordance with the guidance for accounting for uncertain tax positions. This pronouncement prescribes a recognition threshold and measurement methodology for recording within the financial statements uncertain tax positions taken, or expected to be taken, in the Company’s income tax returns. To the extent the uncertain tax positions do not meet the “more likely than not” threshold, the Company has derecognized such positions. To the extent the uncertain tax positions meet the “more likely than not” threshold, the Company has measured and recorded the highest probable benefit, and have established appropriate reserves for benefits that exceed the amount likely to be sustained upon examination. The Company currently has not recorded any uncertain tax positions and does not anticipate that the unrecognized tax benefits will significantly increase or decrease within the next twelve months. The Company files U.S. federal and state income tax returns with varying statute of limitations. During the year-ended December 31, 2020 examinations by U.S. tax authorities have been completed for 2017 and 2018. Due to the Company’s net operating loss carryforwards, federal income tax returns from incorporation are still subject to examination. The Company files in several state tax jurisdictions and are subject to examination in years ranging from incorporation to 2020. |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Savings Plan | Employee Savings Plan The Company has a 401(k) savings plan that allows participating employees to contribute a portion of their salary, subject to annual limits and minimum qualifications. The Board may, at its sole discretion, approve Company matching contributions to the plan. The Company made contributions of $0.8 million, $0.7 million and $0.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Nexobrid License and Supply Agr
Nexobrid License and Supply Agreements | 12 Months Ended |
Dec. 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 to commercialize NexoBrid and any improvements to NexoBrid in North America. NexoBrid is a topically-administered biological product that enzymatically removes nonviable burn tissue, or eschar. On June 30, 2020, the Company announced the submission of a BLA to the FDA seeking the approval of NexoBrid for eschar removal (debridement) in adults with deep partial-thickness and/or full-thickness thermal burns. Subsequently, on September 16, 2020, the Company announced that the FDA accepted the BLA for review and has assigned a Prescription Drug User Fee Act (PDUFA) target date of June 29, 2021. Pursuant to the terms of the license agreement, if the BLA is approved, MediWound will transfer the BLA to Vericel and Vericel will market NexoBrid in the U.S. Both MediWound and Vericel, under the supervision of a Central Steering Committee comprised of members of both companies will continue to guide the development of NexoBrid in North America. NexoBrid is approved in the European Union and other international markets and has been designated as an orphan biologic in the United States, European Union and other international markets. In May 2019, the Company paid MediWound $17.5 million in consideration for the license. The $17.5 million upfront payment was recorded to research and development expense during 2019, as the license was considered in process research and development. The Company is also obligated to pay MediWound $7.5 million, which is contingent 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. As of December 31, 2020, the milestone payments are not yet probable and therefore, not considered a liability. 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 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. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Manufacturing and Supply Agreements Matricel — In October 2015, the Company signed a long-term supply agreement with Matricel GmbH for the ACI-Maix collagen membrane used in the manufacture of MACI. The Company and Matricel amended the agreement on March 17, 2018. Under the agreement, the Company has committed to purchase annually approximately $0.6 million per year, the Company has fulfilled this commitment for the years ended December 31, 2020, 2019 and 2018, respectively. The agreement is effective until December 31, 2022 and contains a 5-year renewal option by the Company and an additional 5-year automatic renewal, unless otherwise terminated. Manufacture, Supply and Other Agreements — The Company has entered into various agreements relating to the manufacture of its products and the supply of certain components. If the manufacturing or supply agreements expire or are otherwise terminated, the Company may not be able to identify and obtain ancillary materials that are necessary to develop its products and such expiration and termination could have a material effect on the Company’s business. 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. Future minimum purchase commitments related to our contractual obligations are as follows: Payments Due by Period Contractual Obligations (in thousands) Total 2021 2022 2023 2024 2025 More than 5 Years Purchase commitments $ 7,864 $ 7,182 $ 682 $ — $ — $ — $ — |
Supplementary Quarterly Financi
Supplementary Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Supplementary Quarterly Financial Information (unaudited) | Supplementary Quarterly Financial Information (unaudited) Quarterly earnings per share amounts may not sum to the totals for each of the years, since quarterly computations are based on weighted-average common shares outstanding during each quarter. In thousands, except per share data First Quarter Second Quarter Third Quarter Fourth Quarter Year 2020 Revenues $ 26,678 $ 20,014 $ 32,258 $ 45,229 $ 124,179 Gross profit 16,756 11,354 22,471 33,647 84,228 Income (Loss) from operations (5,076) (8,358) 3,517 12,289 2,372 Net Income (loss) (4,705) (8,269) 3,618 12,220 2,864 Net Income (loss) per share (Basic) (0.10) (0.18) 0.08 0.27 0.06 Net Income (loss) per share (Diluted) (0.10) (0.18) 0.08 0.25 0.06 2019 Revenues $ 21,810 $ 26,151 $ 30,499 $ 39,390 $ 117,850 Gross profit 13,170 17,129 21,175 28,805 80,279 Income (Loss) from operations (3,358) (20,200) 3,097 9,210 (11,251) Net Income (loss) (2,844) (19,792) 3,470 9,501 (9,665) Net Income (loss) per share (Basic) (0.07) (0.45) 0.08 0.21 (0.22) Net Income (loss) per share (Diluted) (0.07) (0.45) 0.07 0.20 (0.22) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of Vericel and its wholly-owned subsidiaries, Vericel Denmark ApS, in Kastrup, Demark and Vericel Security Corporation (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. Vericel Denmark ApS ceased operations in 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of expenses during the reported period. The Company is monitoring the potential impact of the COVID-19 pandemic on its business and financial statements. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments reflected in these financial statements or a revision of the carrying value of its assets or liabilities as of the issuance of these financial statements. These estimates may change as new events occur and additional information is obtained. Actual results could differ from those estimates. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase and consist primarily of demand deposits, money market funds, overnight repurchase agreements and short duration agency bonds and commercial paper. |
Restricted cash | Restricted cash Amounts included in restricted cash represent those required to be set aside to meet contractual terms of a lease agreement held by the Company. |
Investments | Investments Investments classified as short-term have maturities of less than one year. Investments classified as long-term are those that: (i) have a maturity of greater than one year, and (ii) we do not intend to liquidate within the next twelve months, although these funds are available for use and, therefore, are classified as available-for-sale. The Company’s investment strategy is to buy short-duration marketable securities with a high credit rating. As of December 31, 2020 and 2019, all marketable securities held by the Company had remaining contractual maturities of three years or less. Unrealized gains are included as a component of accumulated other comprehensive income in the consolidated balance sheets and statements of stockholders’ equity and a component of total comprehensive income (loss) in the consolidated statements of comprehensive income (loss), until realized. Unrealized losses are evaluated for impairment under ASC 326, Financial Instruments - Credit Losses |
Inventory | Inventory Inventories are measured at the lower of cost or net realizable value. Cost is calculated based upon standard-cost which approximates costs determined on the first-in, first-out method. The Company periodically reviews its inventories for excess or obsolescence and writes down obsolete or other unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by the Company, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written down are charged to cost of sales. |
Leases | Leases The Company adopted the new leasing standards using the modified retrospective transition approach, as of January 1, 2019, with no restatement of prior periods. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under the prior lease guidance, were recognized as right-of-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. Certain lease agreements include rental payments that are adjusted periodically for inflation or other variables. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. In addition to rent, the leases may require the Company to pay additional amounts for taxes, insurance, maintenance and other expenses, which are generally referred to as non-lease components. Variable non-lease components are not measured as part of the right-of-use asset and liability. Only when lease components and their associated non-lease components are fixed are they accounted for as a single lease component and are recognized as part of a right-of-use asset and liability. Some leases contain clauses for renewal at the Company’s option with renewal terms that generally extend the lease term from 1 to 5 years. Certain lease agreements contain options to purchase the leased property and options to terminate the lease. Payments to be made in option periods are recognized as part of the right-of-use lease assets and lease liabilities when it is reasonably certain that the option to extend the lease will be exercised or the option to terminate the lease will not be exercised, or is not at the Company’s option. The Company determines whether the reasonably certain threshold is met by considering contract-, asset-, market-, and entity-based factors. A portfolio approach is applied to certain lease contracts with similar characteristics. The Company’s lease agreements do not contain any significant residual value guarantees or material restrictive covenants imposed by the leases. |
Accounts Receivable | Accounts Receivable Accounts receivable are initially recorded at the contractual amount owed by the customer or based on expected payments from the insurance provider, hospital or patient. Allowances for doubtful accounts are established when the facts and circumstances indicate that a receivable may not be collectible. Potential credit risk exposure has been evaluated for the Company’s accounts receivable in accordance with ASC 326, Financial Instruments - Credit Losses. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use or, in the case of assets acquired in a business combination, at fair value as at the date of the combination. After initial measurement, property, plant and equipment are carried at cost less accumulated depreciation and impairment. Repair and maintenance costs of property, plant and equipment are expensed as incurred. The depreciable value of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life. The useful lives of property, plant and equipment are as follows: • Machinery and Equipment: 5 years • Furniture, fixtures, and office equipment: 3 to 5 years • Computer equipment and software: 3 years • Building improvements and leasehold improvements: Shorter of the remaining life of the lease or 10 years The costs of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations. |
Revenue Recognition and Net Product Sales | Revenue Recognition and Net Product Sales MACI, MACI Biopsy Kits, Epicel and NexoBrid The Company recognizes product revenue from sales to a customer (whether a distributor, or hospital ) following the five step model in ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation. Under this revenue standard, the Company recognizes revenue when its customer obtains control of the promised goods, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods. There are no contractual rights of returns, refunds or similar obligations related to MACI, kits, Epicel or NexoBrid as of December 31, 2020; however, in certain limited cases the Company will accept a product return if a surgery is canceled. Revenue is not recognized in certain canceled cases. For MACI, MACI kits and Epicel there are no variable pricing arrangements related to warranties or rebates offered to customers. The majority of orders are due within 60 to 90 days of delivery. Shipping and handling fees are included as a component of revenue. The Company recognizes any commission fees as an expense when incurred. These fees are included in selling, general, and administrative expenses. NexoBrid The U.S. Biomedical Advanced Research and Development Authority (BARDA) has committed to procure NexoBrid from MediWound, under which MediWound will manufacture and supply NexoBrid on a unit price basis, which may be increased pursuant to the terms of the agreement. The Company does not hold a direct contract or distribution agreement with BARDA, or take title to the product. The Company recognizes income from sales of NexoBrid to BARDA upon delivery, at which time BARDA is in control of the product. The Company does not control the specified goods or services before they are transferred to the customer. MediWound has promised to provide the goods to BARDA and has completed all significant compliance aspects of being a contractor for BARDA and continue to be responsible for all compliance. The Company records the NexoBrid revenue based on a specified percentage of the gross profit MediWound recognizes on the sale in accordance with the license agreement. |
Research and Development Expense | Research and Development Expense Research and development activities represent a significant part of the Company’s business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of consumers and patients. Research and development expenses are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company’s accounting for stock-based compensation requires it to determine the fair value of common stock issued in the form of stock option awards and restricted stock units. The Company uses the value of its common stock at the date of the grant in the calculation of the fair value of its share-based awards. The fair value of restricted stock units held by the employees is determined based on the fair value of the Company’s common stock on the date of the grant. The fair value of stock options held by the employees is determined using a Black-Scholes option valuation method, which is a valuation technique that is acceptable for share-based payment accounting. Key assumptions in determining fair value include volatility, risk-free interest rate, dividend yield and expected term. The assumptions used in calculating the fair value of stock options represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. In addition, the Company estimates the expected forfeiture rate and only recognize expense for those stock options expected to vest over the service period. The estimated forfeiture rate considers the historical experience of the Company’s stock-based awards. If the actual forfeiture rate is different from the estimate, expense is adjusted accordingly. For certain non-employee consultants, stock option awards continue to vest post-termination. The Company also has an Employee Stock Purchase Plan (ESPP) which is a compensatory plan. Compensation expense is recorded based on the fair 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. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is the change in stockholders’ equity during a period arising from any gain or loss unrealized related to the Company’s investments. |
Income Taxes | Income Taxes Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized based on the weight of available evidence, that a portion or all of the deferred tax assets will not be realized. When evaluating the realizability of the deferred tax assets, all evidence, both positive and negative, is considered. Items considered when evaluating the need for a valuation allowance include the ability to carry back losses, future reversals of existing temporary differences, tax planning strategies, and expectations of future earnings. The Company records uncertain tax positions in the consolidated financial statements only if it is more likely than not that the uncertain tax position will be sustained upon examination by the taxing authorities. The Company records interest and penalties related to uncertain tax positions in income tax expense. |
Net Income (Loss) Per Share Attributable to Common Shareholders | Net Income (Loss) Per Share Attributable to Common Shareholders Basic and diluted earnings (loss) per share is calculated using the two-class method. Basic earnings (loss) per share which is based on an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares. There were no undeclared dividends for the year ended December 31, 2020 or 2019. Diluted earnings (loss) per share includes convertible securities or common equivalent share (stock options and warrants) in addition to the Company’s common shares. Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. |
Financial Instruments | Financial Instruments The Company’s financial instruments include receivables for which the current carrying amounts approximate market value, based upon their short-term nature and marketable debt securities which are classified as available-for-sale and carried at fair value on a settlement date basis. |
Warrants | Warrants |
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 were recognized when it was probable that the loss had 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 created a more consistent disclosure framework that increased clarity and removed, modified and added certain fair value disclosures to improve the effectiveness of the Company’s disclosures in the notes of the Consolidated Financial Statements. This guidance became effective for the Company January 1, 2020 and had no impact on 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 on its Consolidated Financial Statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Supplementary cash flows information | The following table presents certain supplementary cash flows information for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (In thousands) 2020 2019 2018 Supplementary Cash Flows information: Non-cash information: Warrants exercised for common stock $ — $ 104 $ 3,538 Right-of-use asset and lease liability recognized 29,573 2,599 — Additions to property and equipment included in accounts payable 531 217 606 Cash information: Interest paid (net of interest capitalized) $ 6 $ 8 $ 2,230 Year Ended December 31, (In thousands) 2020 2019 2018 Reconciliation of cash, cash equivalents, and restricted cash reported in the statement of financial position: Cash and cash equivalents $ 33,620 $ 26,889 $ 18,286 Restricted cash, included in other long-term assets 211 89 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 33,831 $ 26,978 $ 18,286 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 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: Year Ended December 31, Revenue by product (in thousands) 2020 2019 2018 MACI and Carticel implants and kits Implants based on contracted rate sold through a specialty pharmacy (a) $ 57,593 $ 56,185 $ 42,926 Implants subject to third-party reimbursement sold through a specialty pharmacy (b) 16,320 17,076 8,621 Implants sold direct based on contracted rates (c) 15,144 13,933 12,122 Implants sold direct subject to third-party reimbursement (d) 2,754 1,529 2,257 Biopsy kits - direct bill 1,908 2,243 1,997 Change in estimates related to prior periods (e) 713 654 (182) Epicel Direct bill (hospital) 27,536 26,230 23,116 NexoBrid (f) 2,211 — — Total revenue $ 124,179 $ 117,850 $ 90,857 (a) Represents implants sold through Orsini and AllCare whereby such specialty pharmacies have 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. (b) Represents implants sold through Orsini or AllCare whereby 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. Also represents direct sales under a contract to specialty distributor DMS. (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, changes in collection expectations or actual cash collections received in the current period. (f) Represents revenue based on a percentage of gross profits for sales of NexoBrid to BARDA, pursuant to the license agreement between the Company and MediWound. |
Selected Balance Sheet Compon_2
Selected Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventory | Inventory as of December 31, 2020 and 2019: (In thousands) 2020 2019 Raw materials $ 8,775 $ 6,085 Work-in-process 537 541 Finished goods 44 190 Inventory $ 9,356 $ 6,816 |
Schedule of property and equipment, net | Property and Equipment, net as of December 31, 2020 and 2019: (In thousands) 2020 2019 Machinery and equipment $ 3,672 $ 3,152 Furniture, fixtures and office equipment 809 775 Computer equipment and software 6,846 6,174 Leasehold improvements 5,560 5,256 Construction in process 2,021 859 Financing right-of-use lease 111 148 Total property and equipment, gross 19,019 16,364 Less accumulated depreciation (11,386) (9,220) $ 7,633 $ 7,144 |
Schedule of accrued expenses | Accrued Expenses as of December 31, 2020 and 2019: (In thousands) 2020 2019 Bonus related compensation $ 5,721 $ 5,116 Employee related accruals 3,482 1,785 Other accrued expenses 2,090 1,047 Accrued expenses $ 11,293 $ 7,948 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Total leased assets and liabilities | Total leased assets and liabilities classified on the balance sheet as of December 31, 2020 and 2019 are as follows: December 31, (In thousands) Classification 2020 2019 Assets Operating Right-of-use assets $ 50,105 $ 25,103 Finance Property and equipment, net 111 148 $ 50,216 $ 25,251 Liabilities Current Operating Current portion of operating lease liabilities $ 4,394 $ 5,461 Finance Other liabilities 41 41 $ 4,435 $ 5,502 Non-current Operating Operating lease liabilities $ 48,789 $ 22,242 Finance Other long-term liabilities 76 110 $ 48,865 $ 22,352 |
Maturity of lease liabilities | Maturity of lease liabilities as of December 31, 2020 are as follows: (In thousands) Operating Leases Finance Leases Total 2021 $ 4,394 $ 41 $ 4,435 2022 4,177 41 4,218 2023 6,973 41 7,014 2024 6,934 — 6,934 2025 6,340 — 6,340 more than 5 years 43,507 — 43,507 Total lease payments $ 72,325 $ 123 $ 72,448 Less: interest (19,142) (7) (19,149) Present value of lease liabilities $ 53,183 $ 116 $ 53,299 |
Maturity of lease liabilities | Maturity of lease liabilities as of December 31, 2020 are as follows: (In thousands) Operating Leases Finance Leases Total 2021 $ 4,394 $ 41 $ 4,435 2022 4,177 41 4,218 2023 6,973 41 7,014 2024 6,934 — 6,934 2025 6,340 — 6,340 more than 5 years 43,507 — 43,507 Total lease payments $ 72,325 $ 123 $ 72,448 Less: interest (19,142) (7) (19,149) Present value of lease liabilities $ 53,183 $ 116 $ 53,299 |
Lease term and discount rate | Lease terms and discount rates as of December 31, 2020 are as follows: December 31, 2020 2019 Weighted-average remaining lease term (years) Operating leases 10.6 6.8 Finance leases 2.5 3.5 Weighted-average discount rate Operating leases 5.42% 9.44% Finance leases 5.00% 5.00% |
Cash Equivalents and Investme_2
Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 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 December 31, 2020 and December 31, 2019: December 31, 2020 Gross Unrealized Amortized Cost Gains Losses Credit Losses Estimated Fair Value Money market funds $ 3,698 $ — $ — $ — $ 3,698 Commercial paper 8,993 1 — — 8,994 Corporate notes 35,917 — — (6) 35,911 U.S. government securities 12,828 14 — — 12,842 U.S. government agency bonds 5,000 1 — — 5,001 U.S. asset-backed securities 3,534 4 — — 3,538 $ 69,970 $ 20 $ — $ (6) $ 69,984 Classified as: Cash equivalents $ 3,698 Short-term investments 42,187 Long-term investments 24,099 $ 69,984 December 31, 2019 Gross Unrealized (In thousands) Amortized Cost Gains Losses Estimated Fair Value 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 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of fair value assumptions | 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: Year Ended December 31, Service-Based Stock Options 2020 2019 2018 Expected dividend rate —% —% —% Expected stock price volatility 71.1 - 78.7% 77.9 - 85.5% 82.3 – 88.3% Risk-free interest rate 0.33 - 1.7% 1.4 - 2.7% 2.4 – 3.1% Expected life (years) 5.3 - 6.3 5.3 - 6.3 5.3 - 6.3 |
Summary of activity for service-based stock options | The following table summarizes the activity for service-based stock options for the indicated periods: Service-Based Stock Options Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Thousands) Outstanding at December 31, 2019 5,052,950 $ 10.35 7.7 $ 37,974 Granted 1,356,540 13.42 Exercised (790,532) 7.06 Expired (29,115) 21.38 Forfeited (353,799) 13.82 Outstanding at December 31, 2020 5,236,044 $ 11.34 7.3 $ 102,654 Exercisable at December 31, 2020 2,885,729 $ 9.16 6.4 $ 63,037 |
Summary of activity for restricted stock awards | The following table summarizes the activity for restricted stock awards for the indicated periods: Restricted Stock Units Number of Restricted Stock Awards Weighted-Average Grant Date Fair Value Weighted-Average Term Aggregate Intrinsic Value Outstanding at December 31, 2019 157,030 $ 17.80 1.6 $ 2,732 Granted 196,836 11.41 2,246 Vested (46,712) 17.59 Forfeited (36,515) 15.00 Unvested at December 31, 2020 270,639 $ 13.57 1.4 $ 8,357 |
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: Years Ended December 31, (in thousands) 2020 2019 2018 Cost of goods sold $ 1,949 $ 2,029 $ 1,015 Research and development 1,884 2,428 1,672 Selling, general and administrative 10,010 8,722 4,536 Total non-cash stock-based compensation expense $ 13,843 $ 13,179 $ 7,223 |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 12 Months Ended |
Dec. 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 income (loss) attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Year Ended December 31, (Amounts in thousands, except per share amounts) 2020 2019 2018 Numerator: Net income (loss) $ 2,864 $ (9,665) $ (8,137) Denominator: Weighted-average common shares outstanding (basic) 45,221 44,180 40,242 Net income (loss) per share attributable to common shareholders (basic) $ 0.06 $ (0.22) $ (0.20) Weighted-average common shares outstanding (diluted) 47,282 44,180 40,242 Net income (loss) per share attributable to common shareholders (diluted) $ 0.06 $ (0.22) $ (0.20) Anti-dilutive shares excluded from the calculation of diluted earnings per share (a) (amounts in millions): Stock options 2.2 5.1 4.8 Restricted stock unit awards — 0.2 — (a) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 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: December 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 $ 3,698 $ 3,698 $ — $ — $ 5,381 $ 5,381 $ — $ — Commercial paper 8,994 — 8,994 — 11,892 — 11,892 — Corporate notes 35,911 — 35,911 — 18,380 — 18,380 — U.S. government securities 12,842 — 12,842 — 11,295 — 11,295 — U.S. government agency bonds 5,001 — 5,001 — — — — — U.S. asset-backed securities 3,538 — 3,538 — 10,509 — 10,509 — $ 69,984 $ 3,698 $ 66,286 $ — $ 57,457 $ 5,381 $ 52,076 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of income (loss) before income taxes for U.S. and non-U.S. operations | Loss before income taxes for U.S and non-U.S operations was as follows: Year Ended December 31, 2020 2019 2018 U.S. income (loss) $ 2,767 $ (9,632) $ (8,056) Non U.S. income (loss) 97 (33) (81) $ 2,864 $ (9,665) $ (8,137) |
Schedule of reconciliation of income taxes computed using the federal statutory rate to the taxes reported in consolidated statements of operations | A reconciliation of income taxes computed using the federal statutory rate to the taxes reported in the consolidated statements of operations is as follows: Year Ended December 31, (In thousands) 2020 2019 2018 Income (loss) before income taxes $ 2,864 $ (9,665) $ (8,137) Federal statutory rate 21 % 21 % 21 % Taxes computed at federal statutory rate 601 (2,030) (1,709) State and local income taxes 200 (484) (385) Nondeductible share-based compensation 437 (1,329) (605) Federal and state rate change 249 (164) 839 Research and orphan drug credits (8,827) — — Other 132 (49) 172 Change in valuation allowance 7,388 4,056 1,688 Reported income taxes $ 180 $ — $ — |
Schedule of deferred tax assets | Deferred tax assets (liabilities) consist of the following: Year Ended December 31, (In thousands) 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 8,411 $ 10,542 Employee benefits and stock compensation 5,692 4,329 Research and development costs 6,411 7,851 Intangible assets 3,279 4,350 Operating lease liability 13,687 7,245 Inventory reserve 3,813 3,303 Tax credit carryforward 10,085 — Other, net 38 119 Total deferred tax assets 51,416 37,739 Less: valuation allowance (37,379) (29,991) Total net deferred tax assets 14,037 7,748 Deferred tax liabilities: Right of use asset (13,463) (7,143) Fixed assets (574) (605) Total net deferred tax liabilities (14,037) (7,748) Net deferred tax assets and liabilities $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum purchase commitments related to contractual obligations | Future minimum purchase commitments related to our contractual obligations are as follows: Payments Due by Period Contractual Obligations (in thousands) Total 2021 2022 2023 2024 2025 More than 5 Years Purchase commitments $ 7,864 $ 7,182 $ 682 $ — $ — $ — $ — |
Supplementary Quarterly Finan_2
Supplementary Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | In thousands, except per share data First Quarter Second Quarter Third Quarter Fourth Quarter Year 2020 Revenues $ 26,678 $ 20,014 $ 32,258 $ 45,229 $ 124,179 Gross profit 16,756 11,354 22,471 33,647 84,228 Income (Loss) from operations (5,076) (8,358) 3,517 12,289 2,372 Net Income (loss) (4,705) (8,269) 3,618 12,220 2,864 Net Income (loss) per share (Basic) (0.10) (0.18) 0.08 0.27 0.06 Net Income (loss) per share (Diluted) (0.10) (0.18) 0.08 0.25 0.06 2019 Revenues $ 21,810 $ 26,151 $ 30,499 $ 39,390 $ 117,850 Gross profit 13,170 17,129 21,175 28,805 80,279 Income (Loss) from operations (3,358) (20,200) 3,097 9,210 (11,251) Net Income (loss) (2,844) (19,792) 3,470 9,501 (9,665) Net Income (loss) per share (Basic) (0.07) (0.45) 0.08 0.21 (0.22) Net Income (loss) per share (Diluted) (0.07) (0.45) 0.07 0.20 (0.22) |
Organization (Details)
Organization (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Accumulated deficit | $ 375,815 | $ 378,679 | $ 375,815 | $ 378,679 | |||||||
Net income | (12,220) | $ (3,618) | $ 8,269 | $ 4,705 | (9,501) | $ (3,470) | $ 19,792 | $ 2,844 | (2,864) | 9,665 | $ 8,137 |
Cash and cash equivalents | 33,620 | $ 26,889 | 33,620 | $ 26,889 | $ 18,286 | ||||||
Short term investments | $ 66,300 | $ 66,300 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Supplementary cash flows information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Non-cash information: | ||||
Warrants exercised for common stock | $ 0 | $ 104 | $ 3,538 | |
Right-of-use asset and lease liability recognized | 29,573 | 2,599 | 0 | |
Additions to property and equipment included in accounts payable | 531 | 217 | 606 | |
Cash information: | ||||
Interest paid (net of interest capitalized) | 6 | 8 | 2,230 | |
Cash and cash equivalents | 33,620 | 26,889 | 18,286 | |
Restricted cash, included in other long-term assets | 211 | 89 | 0 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 33,831 | $ 26,978 | $ 18,286 | $ 26,862 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment | ||
Warrants outstanding (in shares) | 0 | 0 |
Minimum | ||
Property, Plant and Equipment | ||
Duration of lease renewal terms | 1 year | |
Maximum | ||
Property, Plant and Equipment | ||
Duration of lease renewal terms | 5 years | |
Machinery and Equipment | ||
Property, Plant and Equipment | ||
Useful lives (in years) | 5 years | |
Furniture, fixtures and office equipment | Minimum | ||
Property, Plant and Equipment | ||
Useful lives (in years) | 3 years | |
Furniture, fixtures and office equipment | Maximum | ||
Property, Plant and Equipment | ||
Useful lives (in years) | 5 years | |
Computer equipment and software | ||
Property, Plant and Equipment | ||
Useful lives (in years) | 3 years | |
Building improvements and leasehold improvements | ||
Property, Plant and Equipment | ||
Useful lives (in years) | 10 years |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONCENTRATION | |||
Allowance for doubtful accounts | $ 5,300 | $ 3,900 | |
Change in estimate of uncollectible (percent) | 0.50% | ||
Change in revenue recognized due to 0.5% change in uncollectible percentage | $ 300 | ||
Increase (decrease) to revenues | 121,968 | 117,850 | $ 90,857 |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
CONCENTRATION | |||
Increase (decrease) to revenues | $ 713 | $ 654 | $ (182) |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | $ 121,968 | $ 117,850 | $ 90,857 | ||||||||
Revenues | $ 45,229 | $ 32,258 | $ 20,014 | $ 26,678 | $ 39,390 | $ 30,499 | $ 26,151 | $ 21,810 | 124,179 | 117,850 | 90,857 |
Other revenue | 2,211 | 0 | 0 | ||||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 713 | 654 | (182) | ||||||||
NexoBrid | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Other revenue | 2,211 | 0 | 0 | ||||||||
Through Intermediary | Implants | Contract rate | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 57,593 | 56,185 | 42,926 | ||||||||
Through Intermediary | Implants | Time-and-materials contract | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 16,320 | 17,076 | 8,621 | ||||||||
Directly to consumer | Implants | Contract rate | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 15,144 | 13,933 | 12,122 | ||||||||
Directly to consumer | Implants | Time-and-materials contract | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 2,754 | 1,529 | 2,257 | ||||||||
Directly to consumer | Biopsy kits | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 1,908 | 2,243 | 1,997 | ||||||||
Directly to consumer | Epicel | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | $ 27,536 | $ 26,230 | $ 23,116 |
Revenue - Schedules of concentr
Revenue - Schedules of concentration of risk (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Concentration | Customer concentration | MACI | |
Product Information [Line Items] | |
Concentration risk (as a percent) | 16.00% |
Selected Balance Sheet Compon_3
Selected Balance Sheet Components - Schedule of inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory: | ||
Raw materials | $ 8,775 | $ 6,085 |
Work-in-process | 537 | 541 |
Finished goods | 44 | 190 |
Inventory | $ 9,356 | $ 6,816 |
Selected Balance Sheet Compon_4
Selected Balance Sheet Components - Schedule of property and equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment, net: | |||
Financing right-of-use lease | $ 111 | $ 148 | |
Total property and equipment, gross | 19,019 | 16,364 | |
Less accumulated depreciation | (11,386) | (9,220) | |
Total property and equipment, net | 7,633 | 7,144 | |
Depreciation expense | 2,400 | 1,700 | $ 1,400 |
Machinery and equipment | |||
Property and equipment, net: | |||
Total property and equipment, gross | 3,672 | 3,152 | |
Furniture, fixtures and office equipment | |||
Property and equipment, net: | |||
Total property and equipment, gross | 809 | 775 | |
Computer equipment and software | |||
Property and equipment, net: | |||
Total property and equipment, gross | 6,846 | 6,174 | |
Leasehold improvements | |||
Property and equipment, net: | |||
Total property and equipment, gross | 5,560 | 5,256 | |
Construction in process | |||
Property and equipment, net: | |||
Total property and equipment, gross | $ 2,021 | $ 859 |
Selected Balance Sheet Compon_5
Selected Balance Sheet Components - Schedule of accrued expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued expenses | ||
Bonus related compensation | $ 5,721 | $ 5,116 |
Employee related accruals | 3,482 | 1,785 |
Other accrued expenses | 2,090 | 1,047 |
Accrued expenses | $ 11,293 | $ 7,948 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Dec. 19, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 0 | $ 0 | $ 17,532 | |
Loss on extinguishment of debt | $ 0 | $ 0 | 838 | |
SVB and MidCap | Term loan | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 17,100 | |||
Pre-payment premium (as a percent) | 1.50% | |||
Payment for debt extinguishment or debt prepayment cost | $ 200 | |||
Stated percentage for final payment (as a percent) | 3.60% | |||
Debt instrument final payment | $ 500 | |||
Loss on extinguishment of debt | $ 800 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | Oct. 21, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | ||||
Short-term lease costs (less than) | $ 0.1 | $ 0.1 | ||
Operating lease expense | 6.3 | 5.4 | ||
Rent expense | $ 5.2 | |||
Finance lease expense | 0.1 | 0.1 | $ 0.1 | |
Measurement of lease liability | 5.8 | $ 5 | ||
Cambridge, Massachusetts | ||||
Lessee, Lease, Description [Line Items] | ||||
Tenant improvement allowance | $ 4.3 | |||
Minimum | Cambridge, Massachusetts | ||||
Lessee, Lease, Description [Line Items] | ||||
Monthly contractual lease payments | $ 0.4 | |||
Maximum | Cambridge, Massachusetts | ||||
Lessee, Lease, Description [Line Items] | ||||
Monthly contractual lease payments | $ 0.6 |
Leases - Assets And Liabilities
Leases - Assets And Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Operating | $ 50,105 | $ 25,103 |
Finance | 111 | 148 |
Right-of-use assets | $ 50,216 | $ 25,251 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Current | ||
Operating | $ 4,394 | $ 5,461 |
Finance | 41 | 41 |
Lease liability current | 4,435 | 5,502 |
Non-current | ||
Operating | 48,789 | 22,242 |
Finance | 76 | 110 |
Lease liability noncurrent | $ 48,865 | $ 22,352 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 4,394 |
2022 | 4,177 |
2023 | 6,973 |
2024 | 6,934 |
2025 | 6,340 |
more than 5 years | 43,507 |
Total lease payments | 72,325 |
Less: interest | (19,142) |
Present value of lease liabilities | 53,183 |
Finance Leases | |
2021 | 41 |
2022 | 41 |
2023 | 41 |
2024 | 0 |
2025 | 0 |
more than 5 years | 0 |
Total lease payments | 123 |
Less: interest | (7) |
Present value of lease liabilities | 116 |
2021 | 4,435 |
2022 | 4,218 |
2023 | 7,014 |
2024 | 6,934 |
2025 | 6,340 |
more than 5 years | 43,507 |
Total lease payments | 72,448 |
Less: interest | (19,149) |
Present value of lease liabilities | $ 53,299 |
Leases - Lease term and discoun
Leases - Lease term and discount rate (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term - Operating lease term | 10 years 7 months 6 days | 6 years 9 months 18 days |
Weighted-average remaining lease term - Finance lease term | 2 years 6 months | 3 years 6 months |
Weighted-average discount rate - Operating lease discount rate | 5.42% | 9.44% |
Weighted-average discount rate - Finance lease discount rate | 5.00% | 5.00% |
Cash Equivalents and Investme_3
Cash Equivalents and Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 69,970,000 | $ 57,436,000 |
Gains | 20,000 | 21,000 |
Losses | 0 | 0 |
Credit Losses | (6,000) | |
Estimated Fair Value | 69,984,000 | 57,457,000 |
Asset impairment charges | 0 | |
Cash equivalents | ||
Marketable Securities [Line Items] | ||
Estimated Fair Value | 3,698,000 | 5,381,000 |
Short-term investments | ||
Marketable Securities [Line Items] | ||
Estimated Fair Value | 42,187,000 | 42,829,000 |
Long-term investments | ||
Marketable Securities [Line Items] | ||
Estimated Fair Value | 24,099,000 | 9,247,000 |
Money market funds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 3,698,000 | 5,381,000 |
Gains | 0 | 0 |
Losses | 0 | 0 |
Credit Losses | 0 | |
Estimated Fair Value | 3,698,000 | 5,381,000 |
Commercial paper | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 8,993,000 | 11,892,000 |
Gains | 1,000 | 0 |
Losses | 0 | 0 |
Credit Losses | 0 | |
Estimated Fair Value | 8,994,000 | 11,892,000 |
Corporate notes | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 35,917,000 | 18,369,000 |
Gains | 0 | 11,000 |
Losses | 0 | 0 |
Credit Losses | (6,000) | |
Estimated Fair Value | 35,911,000 | 18,380,000 |
U.S. government securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 12,828,000 | 11,291,000 |
Gains | 14,000 | 4,000 |
Losses | 0 | 0 |
Credit Losses | 0 | |
Estimated Fair Value | 12,842,000 | 11,295,000 |
U.S. government agency bonds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 5,000,000 | |
Gains | 1,000 | |
Losses | 0 | |
Credit Losses | 0 | |
Estimated Fair Value | 5,001,000 | |
U.S. asset-backed securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 3,534,000 | 10,503,000 |
Gains | 4,000 | 6,000 |
Losses | 0 | 0 |
Credit Losses | 0 | |
Estimated Fair Value | $ 3,538,000 | $ 10,509,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 72 Months Ended | ||
Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Stock-Based Compensation | ||||||
Shares issued under the Employee Stock Purchase Plan (in shares) | $ 1,050 | $ 932 | $ 656 | |||
Granted (in shares) | 1,356,540 | |||||
Expected to vest (in shares) | 4,949,912 | 4,949,912 | 4,949,912 | |||
Total unrecognized compensation cost | $ 13,100 | $ 13,100 | $ 13,100 | |||
Intrinsic value of stock options exercised | $ 10,500 | 16,100 | 11,400 | |||
Stock options | ||||||
Stock-Based Compensation | ||||||
Expiration period | 10 years | |||||
Vesting period | 4 years | |||||
Stock-based compensation expense | $ 12,100 | $ 11,800 | $ 6,900 | |||
Granted (in shares) | 1,356,540 | |||||
Weighted average grant-date fair value (in dollars per share) | $ 8.86 | $ 12.62 | $ 6.96 | |||
Weighted average period over which unrecognized compensation is expected to be recognized | 2 years 8 months 12 days | |||||
Employee stock | ||||||
Stock-Based Compensation | ||||||
Common stock available for issuance (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | |||
Common stock granted since inception (in shares) | 708,452 | |||||
Shares issued under the Employee Stock Purchase Plan (in shares) | $ 200 | |||||
Stock-based compensation expense | $ 400 | $ 300 | $ 300 | |||
Restricted stock unit awards | ||||||
Stock-Based Compensation | ||||||
Vesting period | 4 years | |||||
Stock-based compensation expense | $ 1,400 | $ 1,000 | ||||
Weighted average period over which unrecognized compensation is expected to be recognized | 2 years 8 months 12 days | 3 years 1 month 6 days | ||||
Vested (shares) | 46,712 | 0 | ||||
Shares withheld for payment of tax (in shares) | 13,872 | |||||
Grant-date fair value of restricted stock units granted | $ 2,246 | $ 3,300 | ||||
Unrecognized compensation cost | $ 2,100 | 2,100 | $ 1,800 | $ 2,100 | ||
Fair value of vested awards | $ 600 | |||||
Subsequent event | Employee stock | ||||||
Stock-Based Compensation | ||||||
Shares purchased during period (in shares) | 14,954 | |||||
Prior Plans | ||||||
Stock-Based Compensation | ||||||
Awards available for future grant under the Plan (in shares) | 0 | 0 | 0 | |||
Omnibus Incentive Plan 2019 | ||||||
Stock-Based Compensation | ||||||
Awards available for future grant under the Plan (in shares) | 4,544,084 | 4,544,084 | 4,544,084 | |||
Nonemployee directors | Stock options | ||||||
Stock-Based Compensation | ||||||
Expiration period | 10 years | |||||
Vesting period | 1 year | |||||
Granted (in shares) | 78,750 | |||||
Nonemployee directors | Restricted stock unit awards | ||||||
Stock-Based Compensation | ||||||
Vested (shares) | 10,500 | |||||
Shares withheld for payment of tax (in shares) | 0 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of fair value assumptions (Details) - Stock options | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-Based Compensation | |||
Expected dividend rate | 0.00% | 0.00% | 0.00% |
Minimum | |||
Stock-Based Compensation | |||
Expected stock price volatility | 71.10% | 77.90% | 82.30% |
Risk-free interest rate | 0.33% | 1.40% | 2.40% |
Expected life (years) | 5 years 3 months 18 days | 5 years 3 months 18 days | 5 years 3 months 18 days |
Maximum | |||
Stock-Based Compensation | |||
Expected stock price volatility | 78.70% | 85.50% | 88.30% |
Risk-free interest rate | 1.70% | 2.70% | 3.10% |
Expected life (years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of activity for service-based stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Options | ||
Outstanding at the beginning of the period (in shares) | 5,052,950 | |
Granted (in shares) | 1,356,540 | |
Exercised (in shares) | (790,532) | |
Expired (in shares) | (29,115) | |
Forfeited (in shares) | (353,799) | |
Outstanding at the end of the period (in shares) | 5,236,044 | 5,052,950 |
Exercisable at the end of the period (in shares) | 2,885,729 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 10.35 | |
Granted (in dollars per share) | 13.42 | |
Exercised (in dollars per share) | 7.06 | |
Expired (in dollars per share) | 21.38 | |
Forfeited (in dollars per share) | 13.82 | |
Outstanding at the end of the period (in dollars per share) | 11.34 | $ 10.35 |
Exercisable at the end of the period (in dollars per share) | $ 9.16 | |
Weighted Average Remaining Contractual Term | ||
Outstanding | 7 years 3 months 18 days | 7 years 8 months 12 days |
Exercisable at end of period | 6 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 102,654 | $ 37,974 |
Exercisable at end of period | $ 63,037 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of restricted stock awards activity (Details) - Restricted stock unit awards - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Restricted Stock Awards | ||
Outstanding at beginning of period (shares) | 157,030 | |
Granted (shares) | 196,836 | |
Vested (shares) | (46,712) | 0 |
Forfeited (shares) | (36,515) | |
Unvested at end of period (shares) | 270,639 | 157,030 |
Weighted-Average Grant Date Fair Value | ||
Unvested at beginning of period (in usd per share) | $ 17.80 | |
Granted (in usd per share) | 11.41 | |
Vested (in usd per share) | 17.59 | |
Forfeited (in usd per share) | 15 | |
Unvested at end of period (in usd per share) | $ 13.57 | $ 17.80 |
Unvested - Weighted Average Term | 1 year 4 months 24 days | 1 year 7 months 6 days |
Aggregate Intrinsic Value | ||
Granted - Aggregate Intrinsic Value | $ 2,246 | $ 3,300 |
Unvested - Aggregate Intrinsic Value | $ 8,357 | $ 2,732 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of non-cash stock-based compensation expense (Details) - Employee stock purchase plan and service-based stock options - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total non-cash stock-based compensation expense | $ 13,843 | $ 13,179 | $ 7,223 |
Cost of goods sold | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total non-cash stock-based compensation expense | 1,949 | 2,029 | 1,015 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total non-cash stock-based compensation expense | 1,884 | 2,428 | 1,672 |
Selling, general and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total non-cash stock-based compensation expense | $ 10,010 | $ 8,722 | $ 4,536 |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||||||||||
Net income (loss) | $ 12,220 | $ 3,618 | $ (8,269) | $ (4,705) | $ 9,501 | $ 3,470 | $ (19,792) | $ (2,844) | $ 2,864 | $ (9,665) | $ (8,137) |
Denominator for basic and diluted EPS: | |||||||||||
Weighted average common shares outstanding (basic) (in shares) | 45,221 | 44,180 | 40,242 | ||||||||
Net income (loss) per share attributable to common shareholders (basic) (in USD per share) | $ 0.27 | $ 0.08 | $ (0.18) | $ (0.10) | $ 0.21 | $ 0.08 | $ (0.45) | $ (0.07) | $ 0.06 | $ (0.22) | $ (0.20) |
Weighted average common shares outstanding (diluted) (in shares) | 47,282 | 44,180 | 40,242 | ||||||||
Net income (loss) per share attributable to common shareholders (diluted) (in USD per share) | $ 0.25 | $ 0.08 | $ (0.18) | $ (0.10) | $ 0.20 | $ 0.07 | $ (0.45) | $ (0.07) | $ 0.06 | $ (0.22) | $ (0.20) |
Stock options | |||||||||||
Denominator for basic and diluted EPS: | |||||||||||
Anti-dilutive shares excluded from the calculation of diluted earnings per share (in shares) | 2,200 | 5,100 | 4,800 | ||||||||
Restricted stock unit awards | |||||||||||
Denominator for basic and diluted EPS: | |||||||||||
Anti-dilutive shares excluded from the calculation of diluted earnings per share (in shares) | 0 | 200 | 0 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - Public Stock Offering $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Shareholders' Equity | |
Public offering price per share (in dollars per share) | $ / shares | $ 13 |
Sale of stock, consideration received on transaction | $ 70.1 |
Commission and issuance cost | $ 4.7 |
Common Stock | |
Shareholders' Equity | |
Sale of stock, number of shares issued in transaction (in shares) | shares | 5,750 |
Stock Purchase Warrants (Detail
Stock Purchase Warrants (Details) | 12 Months Ended | |
Dec. 31, 2019$ / sharesshares | Dec. 31, 2020shares | |
Stock Purchase Warrants | ||
Exercise price (in dollars per share) | $ / shares | $ 4.27 | |
Warrants outstanding (in shares) | 0 | 0 |
Expected Dividend | ||
Stock Purchase Warrants | ||
Expected dividend rate (percent) | 0 | |
Common Stock | ||
Stock Purchase Warrants | ||
Conversion of preferred stock for common stock (in shares) | 19,808 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | $ 69,984 | $ 57,457 |
U.S. government securities | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 12,842 | 11,295 |
U.S. government agency bonds | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 5,001 | |
Asset-backed Securities | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 3,538 | 10,509 |
Recurring | ||
Liabilities that are measured at fair value on a recurring basis | ||
Assets, fair value | 69,984 | 57,457 |
Recurring | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Assets, fair value | 3,698 | 5,381 |
Recurring | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Assets, fair value | 66,286 | 52,076 |
Recurring | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Assets, fair value | 0 | 0 |
Recurring | Commercial paper | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 8,994 | 11,892 |
Recurring | Commercial paper | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | Commercial paper | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 8,994 | 11,892 |
Recurring | Commercial paper | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | Corporate notes | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 35,911 | 18,380 |
Recurring | Corporate notes | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | Corporate notes | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 35,911 | 18,380 |
Recurring | Corporate notes | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | U.S. government securities | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 12,842 | 11,295 |
Recurring | U.S. government securities | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | U.S. government securities | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 12,842 | 11,295 |
Recurring | U.S. government securities | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | U.S. government agency bonds | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 5,001 | 0 |
Recurring | U.S. government agency bonds | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | U.S. government agency bonds | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 5,001 | 0 |
Recurring | U.S. government agency bonds | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | Asset-backed Securities | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 3,538 | 10,509 |
Recurring | Asset-backed Securities | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | Asset-backed Securities | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 3,538 | 10,509 |
Recurring | Asset-backed Securities | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Debt securities, fair value | 0 | 0 |
Recurring | Money market funds | ||
Liabilities that are measured at fair value on a recurring basis | ||
Money market funds | 3,698 | 5,381 |
Recurring | Money market funds | Level 1 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Money market funds | 3,698 | 5,381 |
Recurring | Money market funds | Level 2 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Money market funds | 0 | 0 |
Recurring | Money market funds | Level 3 | ||
Liabilities that are measured at fair value on a recurring basis | ||
Money market funds | $ 0 | $ 0 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Loss before income taxes | $ 2,864 | $ (9,665) | $ (8,137) |
U.S. income (loss) | |||
Operating Loss Carryforwards [Line Items] | |||
Loss before income taxes | 2,767 | (9,632) | (8,056) |
Non U.S. income (loss) | |||
Operating Loss Carryforwards [Line Items] | |||
Loss before income taxes | $ 97 | $ (33) | $ (81) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of income taxes computed using the federal statutory rate to the taxes reported in consolidated statements of operations | |||
Income (loss) before income taxes | $ 2,864 | $ (9,665) | $ (8,137) |
Federal statutory rate | 21.00% | 21.00% | 21.00% |
Taxes computed at federal statutory rate | $ 601 | $ (2,030) | $ (1,709) |
State and local income taxes | 200 | (484) | (385) |
Nondeductible share-based compensation | 437 | (1,329) | (605) |
Federal and state rate change | 249 | (164) | 839 |
Research and orphan drug credits | (8,827) | 0 | 0 |
Other | 132 | (49) | 172 |
Change in valuation allowance | 7,388 | 4,056 | 1,688 |
Reported income taxes | 180 | 0 | $ 0 |
Deferred tax assets | |||
Net operating loss carryforwards | 8,411 | 10,542 | |
Employee benefits and stock compensation | 5,692 | 4,329 | |
Research and development costs | 6,411 | 7,851 | |
Intangible assets | 3,279 | 4,350 | |
Operating lease liability | 13,687 | 7,245 | |
Inventory reserve | 3,813 | 3,303 | |
Tax credit carryforward | 10,085 | 0 | |
Other, net | 38 | 119 | |
Total deferred tax assets | 51,416 | 37,739 | |
Less: valuation allowance | (37,379) | (29,991) | |
Total net deferred tax assets | 14,037 | 7,748 | |
Deferred tax liabilities: | |||
Right of use asset | (13,463) | (7,143) | |
Fixed assets | (574) | (605) | |
Total net deferred tax liabilities | (14,037) | (7,748) | |
Net deferred tax assets and liabilities | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||||||||
Profit (loss) from operations | $ 12,289 | $ 3,517 | $ (8,358) | $ (5,076) | $ 9,210 | $ 3,097 | $ (20,200) | $ (3,358) | $ 2,372 | $ (11,251) | $ (3,909) |
Projected annual limitation on the use of the net operating losses that existed prior to September 17, 2014 | 800 | 800 | |||||||||
General business tax credit carryforward | 10,085 | $ 0 | 10,085 | 0 | |||||||
Increase (decrease) in valuation allowance | 7,400 | $ 4,100 | |||||||||
Federal | Internal Revenue Service | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Net operating loss carryforwards | 32,300 | 32,300 | |||||||||
Profit (loss) from operations | (1,500) | ||||||||||
State | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Net operating loss carryforwards | $ 21,300 | $ 21,300 |
Employee Savings Plan (Details)
Employee Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Contributions made under 401(k) savings plan | $ 0.8 | $ 0.7 | $ 0.6 |
NexoBrid License and Supply A_2
NexoBrid License and Supply Agreements (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Revenue recognized | $ 2,211 | $ 0 | $ 0 | |
MediWound Ltd | ||||
Related Party Transaction [Line Items] | ||||
Consideration paid | $ 17,500 | |||
Payable | 17,500 | |||
Contingent consideration | 7,500 | |||
Max contingent consideration | 125,000 | |||
Sales Initial milestone | $ 75,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase obligation, annual commitment | $ 600 | $ 7,182 |
Purchase obligation, renewal option, term | 5 years | |
Purchase obligation, automatic renewal, term | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Oct. 31, 2015 |
Purchase commitments | ||
Total | $ 7,864 | |
2021 | 7,182 | $ 600 |
2022 | 682 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
More than 5 Years | $ 0 |
Supplementary Quarterly Finan_3
Supplementary Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 45,229 | $ 32,258 | $ 20,014 | $ 26,678 | $ 39,390 | $ 30,499 | $ 26,151 | $ 21,810 | $ 124,179 | $ 117,850 | $ 90,857 |
Gross profit | 33,647 | 22,471 | 11,354 | 16,756 | 28,805 | 21,175 | 17,129 | 13,170 | 84,228 | 80,279 | 58,697 |
Income (Loss) from operations | 12,289 | 3,517 | (8,358) | (5,076) | 9,210 | 3,097 | (20,200) | (3,358) | 2,372 | (11,251) | (3,909) |
Net Income (loss) | $ 12,220 | $ 3,618 | $ (8,269) | $ (4,705) | $ 9,501 | $ 3,470 | $ (19,792) | $ (2,844) | $ 2,864 | $ (9,665) | $ (8,137) |
Net income (loss) per share attributable to common shareholders (basic) (in USD per share) | $ 0.27 | $ 0.08 | $ (0.18) | $ (0.10) | $ 0.21 | $ 0.08 | $ (0.45) | $ (0.07) | $ 0.06 | $ (0.22) | $ (0.20) |
Net income (loss) per share (Diluted) (in USD per share) | $ 0.25 | $ 0.08 | $ (0.18) | $ (0.10) | $ 0.20 | $ 0.07 | $ (0.45) | $ (0.07) | $ 0.06 | $ (0.22) | $ (0.20) |