VCEL - Earnings call transcript Q1 2021

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Operator

Once again thank you for standing by and welcome to the Vericel’s First Quarter 2021 Conference Call. At this time, all participants are in listen-only mode. I would also like to remind you that this call is being recorded for replay. I would now like to turn over the conference over to Eric Burns, Vericel's Head of Financial Planning and Analysis and Investors Relations. Sir, the floor is yours.

Eric Burns

good and operator, you, morning, everyone. Thank Vericel discuss our to Corporation's highlights. first to call conference XXXX financial quarter Welcome results business and

filings Before fully risks forward-looking differ website. and remind the we me are Act results of with Private we to on statements Reform in that begin, call may are available could These today's actual involve Securities you Litigation expectations will uncertainties which covered described materially our statements that making our from XXXX. more under and the SEC, be on let cause

In results Investor of that of note addition, all release press section forward-looking any upon statements be Relations as represent on website. our of Please financial our date. a views is available copy today only should as as subsequent views of and representing our the our relied quarter not first

highlights a Vericel's Joe Nick website. call on our Officer, webcast Mara. or with We over accessed viewed Chief now the to Colangelo; on I also call call can presentation joined directly our from Nick. Executive turn have Financial Officer, be and am Chief this the today's on and short will that President I by

Nick Colangelo

first to our good more margin, based That strong flow last a the perspective. first in revenue year XXXX We on driven continuing the in exceeded biopsy everyone. MACI the achieving biopsies in surgeon of as to This total now deal regarding growth growth had March. by of XX% growth, gross these growth reported and revenue adjusted EBITDA increase for start the growth as growth broadening Vericel or and to business. both momentum the with strength quarter, operating quarter of lowest we the and cash the we is believe operating flow. and profitability growth $XX our that a of great first our by the second in in cash straight surgeons revenue, is revenue in important and few S&P quarter, revenue we to and the updated details the as in historically we million we're for reported of and to very leading results a year the strength continued biopsies MACI in quarter growth Joe momentum the the revenue investments was million in XX% and to record demonstrate morning, quarter, a from our Thanks, seasonally year approximately EBITDA raising entered ending index will outpace what the strong the across year, first quarter, that guidance to XXX cash the which performances financial the expect quarter. range. commercial business. and of of number cash our and results MACI biopsies year MACI provide had continue as no quarter base. last our an Epicel revenue flow growth adjusted than XX% The the underlying mid-XX% in for and growth Based generated recognized on Eric, which quarter for for increased the We and drivers was profitability further continue with time strong growth morning, revenue, these generated million, in positive first on a in through strong We of $XXX million profile, XX% business taking and of with quarter guidance Epicel $XXX total cash commercial implants, indicator the the we range addition focus the the fundamentals, the Small-Cap of generate underlying high financial flow, financial $XXX debt. versus in range company's implant From moments. in MACI a revenue both the with and to remains perspective, XX% be and biopsy

taking in quarter highest taking biopsies and most down the in in any was taking quarter fourth launched see the comparable fourth quarter step surgeons XXXX the had prior we second surgeons in to since of quarter. the year biopsies biopsies a of in number While seasonal to surgeons This first quarter number of we number we MACI. years, the the compared first of the

pleased to COVID-XX that taking Given headwinds full performance believe over with for first on the biopsies lingering growth the and in very XX% surgeons the track year. quarter, deliver we're this we're the of half in

following we We for UnitedHealthcare patients, rates but cases the policy, to Overall, sustainable the of for ahead. improve that underlying X. became expansion for positioning We profile growth business approval addressable the that into also its to coverage broad only years drive higher continued the access very effective medical MACI's MACI saw will in reinforce expanded access on patella the its to surgeons MACI believe fundamentals market. February not UnitedHealthcare favorable with which continue remain contribute significantly penetration and MACI the believe and strong, reimbursement us also

million, for $XX year. with start of strong very Turning revenue burn continued franchise. to great nearly the deliver care XXXX fourth close After a our we to to Epicel, results to quarter

business past fundamentals the strong. to First quarter outperform highest history in and XX%, quarters highest the second compared quarter in the grafts February in past patient, per revenue and three continue XXXX, very also Epicel average were new history. levels. record first increased volume achieved two over Epicel the for of quarters to grafts is average number quarterly revenue $X the quarterly revenue over over the as for a and the now more remain biopsies historical Epicel for The monthly Epicel of Epicel we than million underlying

trends utilization And expectations planned we're important indicate NexoBrid, therefore be support number growth care a recent of XXXX. this can these due in To of sustainably continuing Epicel expansion to team. the prepare and severe our growth in have for staged higher increased believe Epicel of burn to our forecast, for we we level Epicel patients, demand product. variability that Although, launch burn challenging commercial the the recent of for the and to increased the of

continued of together Epicel. the preparation the Epicel support efforts increased to sales both, driven structural in on changes utilization team that the clinical believe Our force burn have and with will Epicel, and for support roles, our commercial NexoBrid. resources for launch planned the to additional increased include demand sales the care our drive increases for We

respect make with affairs to we activities. and NexoBrid of progress to commercial significant terms medical In continue pre-launch our -- our with

an campaign, to commercial market awareness access In state disease team and brand to addition development ongoing continues our advance multiple initiatives.

engage pediatric remains with leading centers Our centers teams the clinical across educational adult patients in a goal next are burn the June the continuing NexoBrid also medical new XX. regulatory initiatives and and Access study, expanded country. standpoint, at enrolling burn From through and to training which date affairs is PDUFA

MediWound NexoBrid apparent to Israel, potential FDA that information the due be in actions it informed However, impacting the the the is the information agency facilities the PDUFA-date. Accordingly, across industry, related be may recent the as to able also and conduct manufacturing MediWound impacted. and commercial the will be prior MediWound cycle. has to current to inspections. of to informed reviewed provided unlikely to the launch timing restrictions and travel The has additional COVID-XX CMC FDA review we requested Taiwan And FDA's of that, of these manufacturing that, complete facility has from FDA restrictions required is from inspections ability expect the during additional not NexoBrid pandemic CMC are approval

we procurement $X.X in we in communicated, revenue significant of approximately the not As million XXXX. commercial are NexoBrid BARDA we're XXXX, to expecting expecting recognize remaining previously while any revenue

approval performance our to NexoBrid call the to clinical for quarter bringing our with become believe standard well Joe, first package, forward Given financial NexoBrid that XXXX data burns. robust look patients we positioned on financial the remains on and turn U.S. removing its And updated over care market. I'll eschar now more a of severe we to provide to in details guidance. to

Joe Mara

XXXX. growth Nick. first the of XXX was million did million XXXX, emergency QX compared procurement and the stock of quarter revenue to revenue for a Note MACI The price approximate Epicel growth $X.X factored with was first MACI quarter of loss the incremental the to a improvement million net of sales million in expense, compensation quarter, non-cash compared well quarter the guidance. of share and an the XXXX. for million income to or XXXX. expenses MACI the higher compared of $X.X to compared share Total basis were quarter in grew into representing versus $XX.X estimates. our for XXXX, compensation period higher share in the operating with first as of first QX increased to revenue results or And XX% margin quarter compared sequential for based million, revenue a XXXX first to year. million, statement, primarily or both revenue the XX%, Non-GAAP million XX% favorable per the will the Starting to also revenue first included net approximately same compared $XX.X $X.X XX% EBITDA for that of which our driven impact this net $XX.X compared compared in on expense care the XX% increase expansion was quarter line stock adjustments, related for grew loss in quarter already point quarter quarter fourth million $XX.X with MACI include full our to operating for the expense was of a XXXX. to is quarter operating of first have per prior our of $X.X total included expenses first $XX.X force in impact million price. revenue account XXXX. quarter prior million $X.X the gross XXXX growth. exclude And million or XX% Total in the quarter is as million related XX%, $X.X the of million, MACI burn Gross net versus revenue profit and of been of that XXXX would Epicel by quarter revenue revenue, to $XX.X of in quarter $X.X if and $X.XX included respectively, million in XXXX. year $X.XX over Note, expenses first see those loss for revenue for quarter in for employee adjusted implant of period $XX.X in revenue increase increased XXXX. expenses by and net BARDA response the into of expenses our full we to our preparedness. million to strong QX full related related the the or revenue, Net and net Thanks not revenue of total adjustments, share the Epicel of XXXX for $XX $XX.X revenue, a you of of to NexoBrid, quarter which of operating

our Importantly, of positive the time third EBITDA year. this is and quarter, first first EBITDA lowest the which our with is adjusted positive quarter consecutive seasonally reporting our for quarter adjusted revenue

are of operating and as debt. in $XXX generated on we our million in $XXX and with or to $XXX XXXX year million for expect Epicel compares investments, both in now drivers, of XX% $XXX This million And revenue million $XXX revenue and MACI the revenue of approximately cash our company strength growth. XX, of first we of previous cash to Based our guidance and flow increasing Transitioning QX, quarter. to updated XX% Finally XXXX. end the December $XXX to the in of million underlying growth growth. full guidance no had and as the guidance approximately year QX, full terms or of compared XX% XX% both to of million to $XX.X million total

for range the for our our to our second the guidance franchises, year The biopsy In few at to mid-XX% full over performance MACI the convert is expect increase the third growth with typically implants which quarter. of end MACI higher driven half upper to in begin revenue by terms on previous in months, we our would range. the year past of based guidance expectations the of to be

the a and After to trends, to high revenue of burn revenue start the in both our our the guidance to care versus in we year range Moving expect previous for terms underlying year now growth commercial franchise. of growth. mid-teens XX% be strong

approximately overall the year. NexoBrid expected care BARDA is Our burn franchise revenue now to including XX% for be

increase remaining for expect year concludes million the $XXX sequential with to full to revenue XX% second expectations, operating of in year quarters. to to And XX.X% spend to the on continue expected our our increasing be now full about XX.X% like to we the $X and for year based our to we P&L, the of the then each open in expenses questions. XX% for to to approximately to expenses operator adjusted full million prepared a and compared gross be the to be of to down EBITDA prior This finally approximately guidance now non-GAAP increased Moving of I'd margin million $XX XX%. quarter your are ask margin the the operating call remarks. in XX% approximately

Operator

Zimmerman [Operator of question of Instructions] the BTIG. line Your first is Ryan from

now Your open. line is

Ryan Zimmerman

Thanks for the question. taking

know I So too. giving maybe on the right MediWound their is to start call delay now here. And NexoBrid

But and long have proceed? talk in commentary. delay what guidance think occur? the pick of terms helping terms commercial this in you additional any approved then of to be think expect Just and color there when can some of have NexoBrid you activities on they about up you investors cycle? review will how I kind Or So about

Nick Colangelo

Thanks, Ryan. Yes.

inspection Ryan point to what left months that there do an two to with is an say being likely this at impact. going is date and the to trying than less it's PDUFA scheduled So be we're without

have happen. in or attention. information do FDA aren't play to delay the trying we a different to the a for that But speak Now, out. the investors' going what certainly of to they're likely can that we number scenarios or bring to There's we're position will what is predict how do

a is in can these complete when I happening requested. those And You it letter. amendment, across it kinds a category if of with there's you a could the can around industry the history deferral a additional be fall It where either the all can see the into issues. see right, or delay think be major recent it information response of of FDA

Ryan Zimmerman

hear as proceed. a we to We'll turning Okay. for guidance more Maybe follow-up. about moment to that

expectations. doing is your certainly Epicel, So better than think I

of about I X.X% you guidance guys the X%. so by Your beat midpoint or think from

maybe composition help think in of year? in understand to So MACI mid-XXs underlying terms dynamics here. maybe growth differently, the Or, just for the the the about us guidance of just said the how

of last you growth. with Just But year, strong a to more biopsies. dynamics, you surgeons a biopsy really so you biopsy think the respect I sending clearly with have exited bit backlog and

less some And surgeon would additional broader helpful. more I dynamics a are per color so of, around surgeon whether how color -- biopsy maybe base? terms think you think there in biopsies you're seeing Any I but maybe be

Nick Colangelo

biopsy mentioned same Yes. on fourth XX% Joe guidance. without can call in And up would that, saw Obviously, pick We wasn't have growth half growth surgeon of quarter. back had after that the related we strong year fourth XXXX. levels, expect a the we'd And the start in during that also first and we impact. dip, our the course, of a in Ryan, to then biopsies COVID-XX it COVID we to growth. the grow quarter the mentioned bounced the taking first growth I'll the strengthening sort biopsy XXXX seeing then, plus of we're quarter, so had and biopsy to throughout that per

the in And expect remains surgeons. growth we biopsying XX-plus dynamic percent the the where so same,

increase that, call But that to mid-XX% in to an average when of note, driver per because was -- expect out as for number it's of the we the guide revenue additional strong biopsies You're sort biopsy the in growth, we performance. big right then pointed a surgeon. or we

of been the is couple past dynamic with what consistent over So quarters. we've saying that pretty

Joe Mara

Yes.

as to Just well. add

as about on think about and is call that months. I few talked Nick we again, in again, to think the referenced, just the biopsies underlying strength the over those seeing and is are both surgeons So last way our

So in biopsies. back strength relative of low half in is on to increase from the think be now about guidance those we that as to about guidance cadence mid-XX% initial the the that's that expectation our basically we really more think of about to going to as our the year. MACI It mid-XXs. is the And growth

Ryan Zimmerman

you. Thank

Operator

Our Kaila next the from Securities. of Truist line from question Krum is

Your open. is now line

Kaila Krum

for Great. Thanks Hi, taking guys. our questions.

on you before follow-up be have on any then question I ballpark of months And And guys point at Ryan's for think to Can point? still product earlier you facility, date just mean, in So that to completed progress given but back. additional of a US? any officially to like made the just steps were this gaining I the NexoBrid. trying for have that inspection right yet? the determine it Have sounds a they hasn't this couple clarify FDA you approval scheduled sort the the price the MediWound the for at that

Nick Colangelo

Yes.

be and So the we to used know that inspection to the conduct that's prior we at an we they may -- was that words date time. this unable PDUFA all

of there's that's standard would indication So of no get scheduled. I And of when kind sort practice. that think

that the for is In pricing terms NexoBrid up. wrapping of study

kind results at in of We then here the sort appropriate share expect to the of short And order. time. get we would that final pretty

Kaila Krum

Okay. That performance. almost you've then makes Epicel. mean And quarters two sense. of had million I consecutive $XX now on just

quarterly drove So be why performance record help And $X first sort Thank then million us going forward? of there in the understand can anything that February? you month a was you. specific baseline wouldn't for

Nick Colangelo

Thanks Kaila.

about that that a over -- did of quarters say there's anything past we February. particularly -- So We two we on call really mentioned for have unique number time period. as record there's you can't the the biopsies

February. the when particularly And with tend of but higher get you patients, funnel about top to is obviously filled more the unique so, nothing volumes

which about we on grafts -- surgeons. who reps number doing sort patient job process great just seeing we've treatment of higher of earlier per order are sales back really important where to as are before the talked with having engaged and per our a goes is it think I a in plans what

dynamic and we've that forward. that we seen expect a I that think that's continue going clear to

of the Joe let baseline terms you that one. In I'll take

Joe Mara

Yes.

for So question. thanks the

about we I think as think Epicel.

given -- is over if look to difficult this But in of a the of just the two last you million. QX if in really three our product the type three you course quarters, terms back And about there's is. run about really talked quarters Of it and predict product as look and $X is rate you quarters, strong over the last variability QX.

as So single which initial digits. than in guidance higher guidance about we think was teens, was the our

to Now XXs. up we're high the

continue So a million as to from at you're year. quarters remaining in And think perspective, something run we'll the $X.X product. quarters. a the an I relative rate the rate and team doing to is where our on looking over about job were But great closer and Nick certainly above push it run the to said last we as is we think the three increase still

Kaila Krum

Great. Thanks guys.

Joe Mara

you. Thank

Operator

from the is Your line of SVB Antalffy Danielle Leerink. next question of

Your line is now open.

Danielle Antalffy

seeing the force sales the wants to that added one? about Hi, Congrats taking I'm least take you you or thanks really them sounds were COVID, able just like this to question. on what with them. at maybe Nick Granted added. for strong you're but the Joe so perspective you a much onboard curious a year. whoever from productivity it start before to right

given driving seeing stronger timeframe the you're But ramp ramp growth restrictions as Any of their April great. the kind of part have productivity of biopsy color the that to they sort now you're be ease? start that start started in to seeing what correct what's me, last if there? seen year. would likely of I'm delayed, you wrong so, And but productivity Is

Nick Colangelo

mentioned And terms we've have Yes. in norms. industry productive, practice force to last sales I Thanks followed compared which year of as think been our pretty we same always Danielle. expansions the

But rep take we to added our As rep. essentially were to productivity relatively fact year a the out strong we as a a build about time in step expected And the increased bit sales new measured last the ground we business about of per the scaled delay and we seeing number larger by revenue lot really when of and force there reps back we it reps. such running. field that but teams the a was the hit a get into plans getting then month, gave talked of that

brought quarter terms really often third of mentioned leading right happens the year think of new in reps. biopsying we were in way. I in new the that that because the surgeons, experienced And territories last growth we

they I large-cap with of reps average were sports med -- think on sort of about experience. tech medicine XX average years

of the they relationships. territories we that kind into to So as at them. then that. of remember the and this have year point we're existing And think bring you I saw taking quarter bit little of a first look you basically realigning And

There's even that are I from So and into it's are a our a Greenfield not walking say implant of legacy original territories aligned business perspective for there. the situation. book And the pretty we like expansion XX that an the can metrics rates. those much a reps think biopsy growth perspective with territory

feeling so And we're good.

We be same prior as productivity profile added. the reps -- expect that we've that cohorts the they'll of have

Danielle Antalffy

question on Understood. that. And Thank just then a biopsy you conversion rate. the for

So outpacing to which and like the leading look you few obviously But big here we Thanks ahead seeing that to over sounds positive more conversion contributing see biopsies be XXXX, Are front? certainly side indicator. implants, it the mover how guys we of other on thinking the the growth to progress is great about that things. next needle as any a much. is importantly And then so profile also years? are on should but

Nick Colangelo

probably fact consistently over and going getting we the and are we've into number and biopsies growth of growth next pretty the as average to the a of talked surgeons adding work number second the and we time per the surgeons. has the conversion being into of the surgeon. They this towards And earlier those the rate. practices. the biopsies And surgeons drivers stable and to the more then do brand certainly, be about per conversion to up years, of about growth then Yes. of first biopsies, And our Danielle. for MACI-b is rate their biopsying surgeon the the then being for adding And at penetration being that the and three as lower drivers surgeons driver primary talked couple expect to the year business with penetration taking when Thanks, biopsying remain breadth tend depth first of And customer target that over dynamic unfolding. average. a base, convert a engage we're the new rate as the the lot of they then with large new number

And so once we driving saturate conversion rate of in the our target surgeon base years take of predominant X,XXX surgeon surgeons the of then terms and in will over per the the next years. number few the role growth out biopsies

over for expect increase to and the conversion stable be we rate then So this year time.

Danielle Antalffy

it. Got

so Thanks Okay. much.

Nick Colangelo

Danielle. Thanks,

Joe Mara

Thank you.

Operator

Your is the Chris of line from from Stephens. Cooley next question

line open. Your is now

Chris Cooley

and great appreciate the on questions. the start it year. on Good And a congratulations morning taking

at about profile of still the franchise, for Are existing although, we quickly there. Or You the of reps the that? opportunities that if leverage there get coming now? just still maybe with group could model margin with productivity I we we just what you and is bit may. now, existing about two scale on just you to group see Just top the burn you're increased me the wanted little the at essentially going how Nick, business? is seeing the forward talk think operating incremental And scaling? so do a in about think

margin Thanks. franchise from a the follow-up. broadly I Epicel contribution at have then more And or quick Just burn longer-term? trying the get to

Nick Colangelo

Yes.

increased that roles margin turn seeing Epicel of sales about fact sales two support quarters reps this sort first and and because we that continuing talked they're And productivity. restructured to the driving part the the with do increase about for force start But Joe that think just it's as scale over sure. operating talk just over I'll both that's to as it efficiencies impacts. past that we the we're meaningful into So sales really growth rep sort of there really to then of and question a I we of number clinical added and dynamic haven't the

four the reps are seven Now we earlier XX on embarking know go did the reps planning currently. we're expansion and to we call NexoBrid as that and mention And on for we you seven to that planning specialists specialists. support launch are from support clinical as clinical

couple to of support So sales side. management another we're on going add the clinical and people one

And business of to grow continuing Epicel that's so think alone. because a we room we're in still and the expansion there's our just staged lot

I the clear. think NexoBrid plan for course And to of that's and that get for to up then launch event. full-scale

to So kind that with we're margins operating of taking impacts of sort generally -- the those margin about talk as let increased our kind I'll Joe that's the of approach and improve our continue performance.

Joe Mara

Yes.

increase right continue this for franchise now, fits where the thanks in about. So talked leverage to certainly think I the profile add we these are side. burn plus think investments as mean we're an Nick potentially And We XX% gross margin the gross modest on into But burn operating think to think mean speaking our we're income expense I it from around think being is thinking still the or I what this around we about line question. looking to just Epicel kind I I mean, margins. on perspective. franchises. broadly of the of have care we XX%. operating the really about about both as

for and year, add in don't at the leverage $XX year $XX would that burn picture you And which guidance our a have number million company, of to you if So a XXXX. think look million. if We'll it actually and great cash which to you're point as the kind last for to margins. we're care continue you million, this is at is bigger example year, EBITDA around proxy material I flow at around at impact Xx And back both I about look for this we $XX of increase the operating beyond. look think will

look we we something care going and something grow to not an to the help our pay side, attention to perspective. certainly think to but investment burn But certainly impact is will from we're on this this continue a time. margin margins So that's over from perspective,

Chris Cooley

Are Appreciate covered your you I'm acceptances market? But that change those are at a bit think on trying if stated from as are I of result prepared a just when much. the the just UnitedHealth type were more then benefit finely basically in that UnitedHealth. you in little just And coverage towards the to color. so call. growth the in curious from MACI more that in a earlier the curious remarks, I a there? I'm surgeons of seeing seeing surgeons increased that in you side you you the parse from increase taken biopsies look equation, this apologize you UNH? skewed the Thank

Nick Colangelo

Yep.

mentioned we a for earnings right, the that we'll very patients first frequently, we be not on patella of to for our believe halo and call sort quarter us as strong overall sort these yes, effect able win obviously, treat reinforcing important really call of is reimbursement only the because UnitedHealthcare previously but So on of more this just MACI.

saw So February policy effective we yes on just the uptick. an became almost update immediate Xst. Remember

in maybe and are first middle for rates overall in of line non-patella maybe those or at above national even average. right or the above that slightly quarter. Immediate sort terms approval of So cases uptick the of cases slightly

they the know don't rates. that accelerated physicians? really I'd fine approval of the plan yet. new added focused a the the information principally on a covered in saying we sort then if lives good So or they think you've I country. United a represents just So only sort of surgeons think practice. commercial United it's because early are board insurance in I of people have take the it someone of it's with dominant to there's But and of I'd is largest effect XX% that of the right? overall product little to sort be even a of who happen have little sort say great patients. United that surprised skewed jumped about cut increase their just success of

Chris Cooley

you. Thank

Operator

line question next Cohen is from Jeffrey Ladenburg the Thalmann. Your of from

Your open. line now is

Jeffrey Cohen

are you? Joe. Hi, How Nick and

Nick Colangelo

Thanks, doing We’re well. Jeff.

Joe Mara

Great. Thanks.

Jeffrey Cohen

with on you start So Joe, the if I guide at that could gave you XXX. OpEx

about some throughout composition of of OpEx cadence Was should You had that year? commentary. there be additional some the additional the the we thinking

Joe Mara

Yes.

-- we was our million $XXX $XXX was XX full year guidance OpEx that said of did not on what in the previous million -- for $XX year and has QX. about million think about was And talked we what I full we our changed. guidance So OpEx

is of of expenses. about we the two on expect and still in a remaining sequential What in And was that's quarters. our part latest terms about increase the in the quarters operating really million way how flowing seeing our QX and the through what there $XX approximately million share timing that's expenses just compensation price impacting outlook we that expense, So that the then P&L. talked $X operating about talked is of the which stock non-cash we which higher is you're

QX QX So will and of remaining said was portion in that that quarters. couple of a the then in in step-up differently there and also

Jeffrey Cohen

there? anything super the about That’s to And call didn't the surgeon you helpful. I commentary, out any in far quarter? but how Okay. talk Maybe could so training first there second that's is quarter? throughout looking previous hear

Nick Colangelo

The because online. on focus MACI we training be of right? simple biopsying can Jeff, the a Yes. surgeons, done procedure such it's element for number

what for saw -- driven as gating the growth. in really the about So quarter we was many first us. surgeons really the surgeon in how that biopsy not is. It's that by growth biopsies the the strength And in is mentioned, the and biopsying a we item

continues adopted an increasing surgeon that So I to be broadly base. think the by that brand tells you

Jeffrey Cohen

And Okay, lastly me. then got it. for

some feeling probably regard defects that and but cartilage front, with You've about on patella are have of some done there? extra work out do TAM additional the this you the a to

Nick Colangelo

talked And patella. or involved about around it think to the is about market, injuries And defects XX% then that expansion. of about in medical We XX,XXX of United make cartilage commercial Yes. XX% addressable patients that obviously, the United, patient’s, covers up our the about U.S. policy the the way patients of

to So patella $X -- you to gets say point that $XX-ish relates cases. times gets say do you to TAM the about our can think United patients it X,XXX and price math billion the I could million you you of of

covered. already that whole on surgeons much process rates. the all the rates we a don't were to cases time lower Now these lot business. spend of were a go Obviously to was The the trying one-off through approval getting overall to But the issue approval issue want really the of business. basis get than not is

just because patients. each medical and addressable patella of helps. it policy. of the the There's that There's were really it number attributable So patients a year denied on to it a portion market these that's was wasn't

up that you pick out there for So business piece and there's ahead. then incremental the years

Jeffrey Cohen

Okay. And then me. lastly for

remaining for $X.X XXXX. You million contract had BARDA mentioned the on

balance we to what XXXX quarters. of any itself? we continue commentary this through look would estimated year regard does the on also that think unto rate billion for like see then I had with three And and BARDA the where QX $X around

Nick Colangelo

Yes.

was $XXX,XXX -- for year we're and in But we remainder contract obviously So recognized of the revenue total. the this million $X.X already. the of

So than remaining over be there's a recognized less to million $X quarters. three bit little the

remains that beyond that. the No So same. commentary

So -- model. year the for the this you in for least keep at that can

Jeffrey Cohen

Perfect.

for Okay. Thanks the That’s it questions. for me. taking

Nick Colangelo

All right. Thank you.

Joe Mara

you. Thank

Operator

the line from DeGeeter is question Kevin next of of Oppenheimer. Your

is line open. now Your

Kevin DeGeeter

NexoBrid, probably guys. Hey, appreciate With site great. can correct not I from hear regard stated has regard if statement? additional you surprise around that's Thanks information that But big for you the that some requested context taking correctly did to MediWound? a the And to question with inspection provide CMC my FDA I there. comments the

Nick Colangelo

right? through for requests that And the Yes. We did there's go So there's then time FDA any so inspection and an issue. information mention on. you review

that they'll information yes, has review MediWound the so, cycle. And communicated able that we the to say additional unlikely review to did FDA current be that during it's

Kevin DeGeeter

feel in up, Just of plan? uncertainty with comfortable according And to to regard to uncertainty reduction of it. the a more to do timing. some what regards at on and trying portions less investments? Got the forward elements investment before with given put do need guidance and our particularly then you moving commercial you the just little continue -- context. clarity more or with preparation some And What scale in this least OpEx prelaunch of

Nick Colangelo

philosophical impact might have just the that that our what might I'll chime and approach can, of, start on -- Well, in kind Joe Yes. with on OpEx.

So, From developed a of that to activities. want. into and fall the all our of caught right? then we medical study and development materials stuff side, Access And still and clinical the that continue of training you those kits continue can on. number really study. access during there's the buckets, at one, upon a of three continue enroll conferences will it's at disease putting is to standpoint as approval. the P&T I brand those things market activities together we But We state various patients mentioned to being flat-footed so down want completing move still and this expanded looking slow prep important. forward. kind awareness is because pricing all don't And implemented commercial That in kind campaign some We're affairs There's from you if be ongoing period.

so thing they going same to There's And -- so that's moving the pieces. forward. And small And forward. some that's access to began once we're market development moving see brand them again then completion. activities through

timing You we little potentially just issues. are these a expect can just gate the but timing that bit

were of we're going so already And that to majority initiatives the with underway. the forward move

Joe Mara

Yes.

well call, support of launch And burn are as care Epicel that we're number growth to will add Nick potential about of the of with expansion the we launch said which the to ongoing. going really as the then NexoBrid. of in preparations Just course, as as team talked still the forward a

there could pieces expenses but side, materially impact for sales year. of expect marketing I be and to wouldn't move that the So some to certainly our the around operating that on

Kevin DeGeeter

lastly Then me. study? NexoBrid most you update for the procedures or of the metric Either next think an to regard you surgeons and number bring expanded patient you've whatever or provide study in access been with here. to able Can to just relevant access gain is Great.

Nick Colangelo

Yes.

was which at time. patients pediatric right study NexoBrid the US. XXX that sites in study. XX about, in at to The the up of, sort pediatric talked previously And can we patients was in to now is the So treating up enrollment ongoing the program initially that next study be closed itself and treated

the to the amended So was increase up XXX patients. sites actually up to and XX then to protocol of number

right -- of been where number balance we starting COVID to impacts the And over mid-XXs low are currently in sites somewhere studies ahead this of on. sites of that we're in terms have weren't to the so time probably hope study. increase that approval. There in of there's the and to continue But new engaged so that

And so patients. continue we enroll to

that more the continue of, number the want, of up We the have to have execution is which maximum We sort product. surgeons so experienced with to patients, and the really steady plenty approval we of enroll room right? study of important centers to

Kevin DeGeeter

Congratulations good. in very terrific quarter a That’s all on progress. and really

Nick Colangelo

Thanks, Kevin.

Joe Mara

you. Thank

Operator

from Zimmerman is question of BTIG. line next Your Instructions] [Operator Ryan the of

open. is line Your

Ryan Zimmerman

The NexoBrid date, payment $X.X excuse of there's a me. from milestone follow-up the and One PDUFA believe approval me I million.

provisions Thank the million payment to $XXX you then the at question have MediWound And given on I in is, doesn't that OpEx open-ended second contemplate the assume Joe, you. milestone to timing? So payment? guidance, potentially if that agreement modify what that do with all

Joe Mara

the I'll Yes. part. take first

OpEx $XXX of of actually was milestone And million. the million again, is unchanged. $XXX not So that that part

impact the would cash of our different second where but question And repeat year. there's then Ryan? the you maybe certainly So accounting some can P&L part flow, not the this

Ryan Zimmerman

Well million on amount have delay provisions million the MediWound, timing dictate may payment the whether certain provisions become something it's milestone to $X.X that with that a and have point at a the in pay company? any based Yes. the that does million or just may to contract struck based on whatever you the you $X.X potential $X.X or

Nick Colangelo

typical are There And like Ryan. scale of payments think that. don't Yes, no timing. really provisions to that's those kind with I

So never as Joe was different in OpEx just accounting that one mentioned, included treatment. has number it because

is change product And make the approved, -- no we'll payment. the $X.X million when that So there.

Ryan Zimmerman

call. Okay. Thanks for the taking

Joe Mara

Ryan. Thanks, Great.

Nick Colangelo

Thanks.

Operator

the Colangelo will questions, no Seeing call turn Nick back for over I now closing remarks. to additional

Nick Colangelo

even our execute quarter our focused to for long-term and we including in more value therapies providing first the shareholders. patients stakeholders continuing strategy, the and operator and on for in to process for on growth patients to dedication well and employees their patients our questions of extremely Okay. remain work interest we continued thank to I serve. in thanks creating all Thank to need wanted everyone your significant executed hard and and also the company all you Vericel. your continued our of in The

a So thanks again day. and have great

Operator

that, with today's concludes call. Thank conference this attending. for And you

You may now disconnect.

Vericel (VCEL) 6 May 212021 Q1 Earnings call transcript