Vericel (VCEL) 7 Nov 242024 Q3 Earnings call transcript

Company Profile

Participants

Eric Burns	executive
Dominick C. Colangelo	executive
Joseph Mara	executive
Ryan Zimmerman	analyst
Richard Newitter	analyst
Michael Kratky	analyst
Joshua Jennings	analyst
Caitlin Cronin	analyst
Jeffrey Cohen	analyst
Swayampakula Ramakanth	analyst

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Vericel's Third Quarter 2024 Conference Call. [Operator Instructions] I would also like to remind you that this call is being recorded for replay.

I will now turn the conference call over to Eric Burns, Vericel's Vice President of Finance and Investor Relations.

Eric Burns

Thank you, operator, and good morning, everyone.

call and President Joe our today's Officer, Chief Mara. on Colangelo; Nick Chief me are and Vericel's Executive Joining Financial Officer,

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

In forward-looking of represent as views today of our and views upon any our addition, relied statements all only subsequent date. should as not representing as be

available of website. release note short from presentation a copy financial are Relations quarter highlights and the of section our in Please Investor our a press results with that call third today's

I the turn over Nick. to will now call

Dominick C. Colangelo

$XX Eric, MACI another had revenue growth XX% The the by and and record total quarter performance quarter record guidance was This outstanding highest highlighted strong and quarter approximately which everyone. good to quarter revenue Thanks, in we generated for any the revenue of million, date. third company third Epicel quarter. revenue exceeded our morning, as of

flow growth revenue margin quarter the another also operating We continues profit delivered expansion and company's to cash growth. outpace of high significant as our

and the revenue the pediatric high indication, important two FDA the growth regulatory and for very MACI years company ahead. sustained Arthro NexoBrid achieved approval which Finally, milestones in with of the company the positions profit

and drivers the quarter. well third for become number as for as as taking surgeon, in has momentum to peer-to-peer since with MACI year increases of record another both quarter surgeons solid driver year. the key through of growth is quarter for driven extremely time together these a in a which in core remains well robust quarter The procedure launch, third growth quarter programs, programs, than level compared strong highest underlying interest the at biopsies biopsy doubled had the that by and high. this surgeon demonstrates MACI growth per of close in which achieved meaningful last biopsies, drivers, those another biopsies highs the third growth attendance year; MACI positioned the which any in MACI at was surgeons at more significant We strength in the continued to

In product of with repair administration. MACI now MACI only arthroscopic approved approval the recent Arthro, is the biologic restorative for addition, cartilage

as case performed there's both at after users few interest high Arthro our MACI Orthopedic approval, in over and first meeting well successfully and Summit MACI engagement an been a growth of a Arthro considerable important the for sustain potential MACI's in revenue early programs MACI was launch at term. and utilization indicator expand days The and as announced Arthro from September, long training the meaningfully nonusers the we MACI to the current

progress with in Turning placing at revenue its to Committee XX revenue adoption burn P&T Committee continued Burn selling completing submissions more since previously launch. Epicel revenue continue centers date, than generate dormant centers. P&T quarterly approximately to NexoBrid obtaining from significant Care. XX we Epicel's and quarter to burn was initial activity to NexoBrid approval centers highest and orders burn third

placing in P&T submissions now With the the several orders. completed NexoBrid pediatric with of pediatric than initial burn have indication centers centers place, more X/X pediatric

next be CPT AMA scheduled on go Finally, and which on code, Category X to on X posted website year. is into July X the NexoBrid recently received effect the January

beginning we including third excellent key established importantly, an had the we to and launching track MACI remain company continuing a Care, at to profit securing year, third for high XXXX substantial quarter quarter the expansion and, FDA of the drive establishing in revenue franchise in for high-growth growth objectives company, meet and second margin the MACI the approval growth. all sustaining on Burn the and and that Overall, of Arthro

to now XXXX. results over the the I'll guidance turn review remainder of provide third and our Joe call for to a of detailed quarter financial more

Joseph Mara

Thanks, everyone. and morning, good Nick,

had Nick quarter excellent all ahead As a profit in third with of guidance metrics record revenue coming an referenced, margins quarter. the our for Vericel across quarter and financial

for Total to of grew fourth revenue third a was the $XX.X for and approximately $XX.X XX% quarter on for net growth increase the million the revenue year. versus full the and an third quarter in MACI million, quarter XX% XX% remain prior track year. strong

of higher guidance. $XX.X Total grafts Epicel $XX.X million due million, Burn driven the considerably per primarily our graft third to was by outperformance to Care revenue record increased in quarter order. with grew The well quarterly of XX% the ahead volume revenue

our Importantly, both based of portion voice a XX% market, share accounts a the in burn growth higher dormant and Epicel have on of basis. nearly on new care meaningful Epicel's year-to-date contributed

to continue and NexoBrid ordering regularly NexoBrid to grew centers million revenue centers the of number add quarter increases. for sequentially a as using new we $X.X

company's revenue, margin XX%, basis the of quarter, represents prior versus of quarterly gross XXXX, increase substantial gross the or which seasonally a Through of outside XXX increase year. translated highest margin record third the XXX an margin company with net an quarter. generated $XX.X of XX% growth has points our gross The points fourth basis into of significant million also of revenue expansion to profit compared

million initiatives additional for primarily commercial activities increase well in for drive and expenses a across engagement related the quarter increase The the in franchises. development Arthro, helped operating were period $XX.X due MACI million expenses physician expenses operating increased in and significant both XXXX. launch marketing that compared as Total for as same to was headcount to employee $XX.X

to the $X.X $X.X narrowed or $X.XX to Net $X.XX share compared million the loss share per million for year. quarter in or per prior

positive we net addition, XX-month rolling importantly, for on full has GAAP In and, the positive year. -- net income track on company positive income net the basis generated remain a GAAP for

than versus $XX of to increased has the drive very or year doubled XX% On basis, to million more strong bottom prior year-to-date increase $XX a continue to an as revenue, we points the XX% nearly million. XXX for line adjusted growth. Adjusted basis of quarter EBITDA EBITDA over

future Finally, generated of operating with Notably, investment the and restricted the third facility in and the manufacturing and $XXX the generation has company's strong million support range the throughout ended consistently to over no million has our company cash us our the cash $XXX investment cash year and remained investments cash, in self-fund financial debt. allowed balance the as cash in million new profile company's and growth. to quarter $XX flow completely

guidance. financial Turning to our

are revenue fourth growth, revenue XX% $XX $XXX million. of quarter $XX XX% total which to company For million or the our guidance revenue million to total implies year, maintaining we full of million to $XXX

for expectations the full strong of are fourth of respectively. margin and year to guidance, XX% terms our to we guidance financial margin XX% XX% and to quarter, profitability compared In increasing for on performance year-to-date the gross company's guidance prior adjusted XX%, the based a and EBITDA guidance

the another top our growth Overall, growth XXXX of is set as line as up expectations. margin high year significant expansion well to company be of ahead positive with profit another initial year for very and

construction to core next lower inflection CapEx early as and recent believe year, product ahead growth launches, of the sustain line our As the meaningful growth our company facility we that year. cash strong our deliver complete line in next durable to bottom new together our top and portfolio, given a the significantly in we with we positions look generation

I Nick. will call now back the turn over to

Dominick C. Colangelo

Joe. well across in move to And we XXXX date business continue. we performed expect XXXX. company momentum has Thanks, and The extremely our as to beyond, into the

as the well MACI X,XXX early with very still seeing that interest X,XXX now Arthro in arthroscopy part the we're as of our substantial incremental engagement and While MACI launch, base. previous high-volume surgeon targets surgeons we're target are both

within of performed Arthro approval, or MACI and the I was date. dozens Arthro case first cases As scheduled surgeons already days mentioned performed to of earlier, MACI have

patient very surgeon incisions, to with market may noted surgeons pain as has Importantly, offers smaller in invasive Arthur our requiring less Arthro and in postoperative potential for treatment MACI result procedure less faster been recovery option research feedback which patients. the postoperative by benefits respect overall positive a the

meaningful given we the approximately that date. opportunity utilization its significant providing potentially the to MACI a largest MACI upside with and current market, trajectory, bolster a incidents for year, impact launch MACI the growth company addressable Arthro patients MACI on ahead. the overall believe Arthro We're have representing very of the in target And pleased XX,XXX potential per high-growth segment will that years the

A the expand billion represents Ankle of MACI driver estimated expect Ankle IND of We that to half submit program. also addressable continue growth We the potential the MACI enable XXXX first initiate advance an Phase year. orthopedic for half longer-term development into to other markets. remain the second substantial a company the market to study III in to $X of MACI with would indication and in track on the clinical an

manufacturing United moving and at MACI be opportunities and meet new for The site to new regulatory initiating an the next commercialize of long-term early opportunities facility the global continue the plan begin our strategic into value we'll the MACI manufacturing the expand for and and commercial both Lastly, as OUS of creation requirements, facility outside several States. to is We're year designed potentially U.S. company provides growth in to market which evaluation flexibility requirements geographies to in company. that XXXX. we

long-term revenue a MACI our strong deliver but is combination a believe of strength XXXX, on we launch only sustained core recent company high the in the progress Overall, unique to continued beyond and other and portfolio, Arthro profitability and XXXX growth based not the of for well initiatives. positioned close also to on growth of

concludes our remarks. This prepared

questions. the your open now will call We to

Operator

And from come [Operator first Instructions] Zimmerman our BTIG. from question will Ryan

Ryan Zimmerman

expectations NexoBrid the There's Congrats go to year this more nice of a guess as NexoBrid it's normalizes and want becomes process. some with ground the product I in to getting versus quarter. through having it I on because really off a next routine decent year. start P&T the on

guidance 'XX. And not going you're I know so to give for Joe,

you kind or and into conceptually, see current rhythm MACI really whether Arthro you next talk of you where about a potentially sustainable drivers year, guess, MACI growth NexoBrid driver is a can little bit or a kind of settling kind of into not settling But accelerant when an I of the a it or see expectations. for rhythm

Joseph Mara

Yes.

we're 'XX there, maybe I'll thinking how kind a Ryan, start little a then framework bit just about kind from kind the So talk 'XX. for of about of guidance perspective and of

been we much 'XX, XX% for I And I very consistent think our we XX% on think around year of think about growth framework. a this that's year all full as kind -- year. we've for basis think in So still track MACI, on

that changed. hasn't So

that into about we year, next company haven't out pointed of the at the product thinking do year of or move we the kind the XXXX, We we I -- kind specific range. framework about say, plus yet. of in given level way we're perspective, from But at have talked as for the growth. a being of company strong expect thinking level As another we would kind of XX% about guidance

say kind kind a move similar really of is would year, I of company perspective. towards we're range to think we So where growth of more in a the about total I starting just 'XX we we framework as growing point think from kind as the started at this next think and about the a right range as as year

Nick the thinking as would extremely that per about what based thinking MACI say very and have and their franchises? of driven indicators initial a think For MACI mean strong have we surgeons strong about about, biopsies think year, been the Arthro, can of I as kind been modest throughout kind on those from on Biopsies kind the drivers, of to a core surgeon. this just feedback I But of it that year strong. Arthro, strong The leading has is MACI, kind similar across year, been rate does think MACI So by way. indicators talked just next way growth and obviously, be leading in we're probably next growth we MACI the contribution start year. about

at expectation X I to getting on think from round kind to first I point, of 'XX, just quarters launches. maybe Care, perspective, think kind I NexoBrid think out a this Burn year, our we're year the into And our of

of I has This year, an of next a each perspective. NexoBrid. kind think And more then progression year as kind from I outside typical we expect move growth perspective, at quarter probably this think Epicel point, been little a on into growth. bit from we'd continued

but year So line I very have Care probably next think Burn still growth will with company growth. in more strong the

that here. starting to then point NexoBrid, but outperform Arthro, then terms lot more of if lastly, perspective, of of centers really of kind the of -- want to But from regularly you greater kind in get Arthro a say penetration assumed, potential of the I on kind kind MACI both of the and centers. terms up at centers that down And about And it or really lead on will, out had using we've But would of in If MACI on a it faster our ahead NexoBrid we chain, NexoBrid kind come assume and similarly, segment the we certainly don't there's we're total of as 'XX. potentially to to moving it to we than comes gate NexoBrid initially may the is not Arthro going could growth impact faster. think of ourselves, the side.

Ryan Zimmerman

of I heard could about to a Arthro Arthro after room or turning wrong got X for That's We conference helpful. in only it this. and the was at heard standing on minute. MACI a Nick, Okay. We -- OSAT be approved. week Vegas a And MACI very maybe

positive And terms a surgeon so investors -- excuse data of certainly in point me, interest. or

existing that doctors be talk the second are you you what of as get do driver you MACI seeing or seeing it is, are those are when Can you per that And your Or an expect so incremental X,XXX that from of say, you gets biopsies, as to talk now of result part base a more biopsies -- right in talk you new going? as uplift Arthro? surgeon, adoption about we physician about going? record than, customer about the

Dominick C. Colangelo

about, when X,XXX And of of current about patella of talk new femoral the X,XXX MACI of from prior that about And looks a we think have current MACI think do our targets we past, as bucket in and have segments Ryan, of kind a kind at question. plus the users for condyle. and really Arthro great obviously thanks. femoral had as we then targets. surgeons. kind or One MACI principally then we within the X,XXX Others That's adding kind broader joint those option MACI groupings, patients. patella you or

and surgeons. we And an prior kind you in have kind way. out opportunity for those segments non-MACI targets the then of so of surgeon And of the users X,XXX look that then at new

or procedures buckets. those And the X that few scheduled I actually of of surgeons MACI have all referenced have I cases either earlier, say would just Arthro we first dozen have out performed of who

So we think that's a great leading indicator.

who's on who amenable had [indiscernible], said Dr. the on website, case, low-hanging first a was of fruit had targets prior previously yet scheduled haven't that with. the our the he biopsy the that As previous certainly I've is case course, MACI was the the to we arthroscopic biopsies when that converted week announced procedure that And Obviously calls, able perform previous to did he our are approval. we arthroscopic approach.

each those So year and kind talk that can surgeons to rep talked And to -- that the of ones unconverted going about out that's the biopsies are we've as about. are of the have be pool that we for easiest. go

non-MACI also original our biopsies mentioned, actually targets then X,XXX users I taken And the have as from where we've targets. new surgeons scheduled in had But cases.

great think early we a indicator the can forward. we leading again, MACI of for as So potential that Arthro that's move have sort

Operator

next from Our Newitter question Truist comes Securities. from Richard

Richard Newitter

Congrats on on first just here, Ryan. question Maybe the up the following quarter.

missed it. Just have might I

portion you dozens market? maybe you you elaborate to the the -- were where down kind -- just You initial that to to had better What when of I you missed you have the Arthro condyle, respect sorry the what of with femoral the sorry, answering little seemingly might question. on lesion said but said I'm have if seeing when a of you would him, I'm it segment cases and see bit, rather. of answering And last it. expected in those that getting see? sizes, MACI that Is have that you the expansionary used giving or are market the [indiscernible] might were accessibility

Dominick C. Colangelo

defects. Thanks, condyles. so the the or XX,XXX prior instrument to on defects MACI that as calls, compared billion with represent And either patella centimeter for Rich. defects large femora $X where for XX,XXX or doesn't part. are didn't the kind address the patient femoral smaller Those condyle typically, Arthro mean we open of entire approach No, of common defects designed defects And the defects, square year. on larger TAM a doing those it to, the X go-to the most had but patella or mentioned surgeons have for about is procedure, MACI. procedures But didn't much I I penetration X about smaller defects, MACI a say, we

a opportunity deeper TAM. for largest the to into of us part is that penetration the get so And the

And the and of come in the where the initial instruments, course, cutters, pairs device. implant centimeter cannulas X again, X, or of Because that's, going. square then cases yes, are X they

the And seen just the open kind the we're could location. utilization. so as also broader days, of well. initial areas but in of that femoral that's the again size only knee of other condyle exactly early even But we've cases And not doing in surgeons, up course, and

Richard Newitter

Very for giving business consensus P&L? if 'XX. of to out But continuing profit opining that same guidance, know continuing in of down you I next ways refine anything official helpful. cadence comfortable year, to feel parsed maybe points great similar in 'XX we that's you're inflection out to as some we're the models -- where looks the starting do for It's want maybe 'XX. forecast are? and not the you like call and just way considerations seeing you a the It to our on the you Can revenue. And think of but kind

Joseph Mara

Rich. question, the appreciate I No, Yes.

into on of But a would I say couple things. it's to probably specifics the next get year. say would I So early too

say EBITDA, and margin of whether ahead the kind trending where you year-to-date of perspective, individual our this obviously, gross quarters, very ahead year expectations you're has or been at of a adjusted And of whether the kind getting I one, full generally margin there. at year, performance the bit look from a schedule curve So kind for of up strong. is probably our looking

So as be I to of I think would as mindful just about we that. bit we want a little think XXXX, say,

going not expansion the gross of year. the said starting same next a differently, point either in margin as would to margin or EBITDA we're mean, assume year-over-year kind adjusted I I see

perspective. depreciation that's and some are for to start P&L We considerations look of But of from you the P&L we're into its essentially to margin, get expectation overall more an will our start and I XX%. That when at of next buildings say, the year. to see our was whatnot in -- gross to said, at the way of or long-term the some would play kind to mid- what of ahead those

is adjusted And I great improve see. something we can there that's we're that we an certainly EBITDA And as well. I to certainly So think upon. to perspective, from nicely tracking think continue think

we're I plus. it, targets think set and our, midrange to progress make XX% up well of call kind kind of of hit

at What expectations on the start would plus. year-over-year about would right say, for it probably for start or that the for those a -- kind at I say of updating on two, the at I but example, time gross Obviously, a basis XX%, and of margin kind of long-term we're say, we'll appropriate with, targets. to to we'll XX% year think would those the also lower probably some I is guess year. rate means on I next out to increase, continue

at time. -- that's right we'll So the update that

to profitability talked the and I'll and for as think us, just a experienced inflection as perspective on just years important we year. We one, we've say, year, of year, think last the from expect But next we broaden of well to P&L. a couple we bit net that is, to couple to obviously that a next about I positive. move I year next there's move build this dynamics as expecting be GAAP we're which other income it on

did from think and kind of year the into remarks, something I a be profile we it but next be we And that as prepared referenced will So to we over then be very that the that want And financial we self-funded will and beyond. important early will our move in behind entire primarily quarters. we facility year us. essentially, out, cash but next last point year, generation perspective, into this get few once

kind should focused very top I to metrics beyond. of 'XX will in and cash obviously line, we're the significantly generation the well think improve So addition on P&L that as -- in the as

that's So something on well. as focused say we're I'd

Operator

Partners. question Our comes next from Mike from Leerink Kratky

Michael Kratky

one and on guided portion of one, being could How MACI done implants the MACI another procedures again, that for which is outlook the you scheduled wave XXXX Maybe just the of then procedures Arthro. your two, Arthro any in both are be done overall? of, going kind uplift to that of terms just XQ And or are MACI to degree arthroscopically? see from early

Dominick C. Colangelo

Yes, jump well. and as Joe then I'll can start, in

to reasons mentioned, strong. So cases, we And doing of that had and arthroscopically as I low-hanging those we instead these amenable surgeon then obvious very mentioned, the we expected, the open. are fruit, interest them as essentially is converting for procedures had, of is sort surgeons as have arthroscopic biopsies who

most pretty we've are enthusiastic in incremental cases forward I could kind say were the about again, So likely those surgeons, Probably have of get it. seen think gone some quarter. would as you fourth that of

knew cases year. this that we would we said had doing we So end some up

in September, taken see X each that's But the we've biopsies and median to we time Arthro of convert talked that why who bigger from impact as surgeon in launch is bucket the about months. dynamics And who beyond. and said that's in MACI kind about, business. then And the given XXXX for new we consistently of is past, biopsies and the surgeons for that X,XXX all the MACI obviously, prospective had in of those

of Joe core mentioned, momentum, in lots business. the as So

right? initial surgery. less 'XX how it's invasive Arthro. seen. to get remains inflects, be to we quickly exactly have I MACI a And on think, -- as the expect enthusiasm based that obvious, We obviously, But just we It's some into and incremental, certainly,

pain, recovery talked overall that or a surgeons that's postoperative what's expect patients driving . enthusiasm. lot postoperative there's about, so recovery, the and we less of As faster and

Joseph Mara

just on of kind the Yes. And chime guide briefly in XQ and to as well.

I as think on we've talked strong I another So QX. think in quarter MACI, about

I say is think approximately a that kind year. in MACI of the start on million From the $XX on QX, year perspective, of million. kind to still kind up growth $XX the we're That of gets a right -- QX XX% to of you at set well, XX% for I'd kind that full basis. place

just on that's question, on of And that on be that's not would -- based what strong the the really typical kind leading indicators really and seasonality.

So there that's up throughout a the history the based is seen of trends kind on of uptick we've kind of kind in just in on step It MACI with not Arthro. MACI's significant QX. based

QX the really not that's So driver of guidance.

the or Epicel quarter guidance. million was following of In prior following because did -- reminder, we example, change In then on we've see. quickly -- the just pretty of our quarter much raise $X.X it Epicel round quarter Burn think And so is from first particularly the the million. framework I which the a vary it's And throughout as great on third say Epicel, typically QX. guidance to consistent performed And well Care on out been guidance on just a year. quarter, a really had Obviously, based for We quarter-to-quarter. this. quarter, revenue. our sorry, to perspective, performance second just I great it even in quarter in side, can not don't just $XX would the we one a

our It's a So that's to certainly appropriate, because of kind and to the good difficult believe Burn on holding we best framework. of side. that's example predict Care the I product approach just a continue it's think

clearly of in which in Care But QX on million Burn still very $X.X quarter, would to it's early think to predict. it, difficult probably point, the to in closer and I at call that, Epicel range. say, the was $X million I this So side, terms remains trending QX,

I it about was think $X.X million.

Burn point around Care would trending QX. that to $X to in million So

strong So kind up as our and framework very of Care think side. year, $XX QX million MACI side closing set the for the and about million a think $X is we But on we're the on close. we Burn

Of course, to there that's but the we some think start. right be place could variability,

Michael Kratky

color helpful Yes. Understood. Super there.

So engagement XXXX that follow-up. been had really you and definitely in I the you expect expect that, beyond? that helped there? additional could is a positive of a has appreciate kind launch that. be that And Epicel one more surprise. trend quick do NexoBrid you drive Do durable Maybe

Dominick C. Colangelo

since meaningful great it's up been that's activities said growth year. when yes, now burn from and with even to or for centers. And definitely ramped And probably selling contribution first Yes, getting year new that NexoBrid itself we last in were Epicel a NexoBrid the meaningful pull-through as as either question. contributor, the dormant we've seen a much NexoBrid

reps both And and last XXXX. of products continue number all that are expect burn expand as our will them of that both I side that so we on selling think move into care earnings we mentioned ensure to probably call we And had realigned the now. on the earlier

NexoBrid are the overlay had when we that accounts reps recall, on the a we because group the kind launched first requirements where an in you long-term on NexoBrid training our of pretty steep, Epicel just, of point, that of the some both If the calling kind implemented we selling vision all reps would, have with quarter. products. NexoBrid were we at third configuration just that new And

be as for And will been the mean, close cross-selling on short, to story help XX% opportunities move Epicel guidance I obviously, based up will we year. continue Joe yes, forward. just we expect mentioned, the the it's even And it so to great. long that really

Epicel. So performance strong for good,

Operator

Josh Our next Cowen. question from will from TD Jennings come

Joshua Jennings

a any MACI into and is and that bank? taken femoral headed you kind congratulations how And approval? mean, seeing -- that prior assumption. referenced with through MACI could condyle first that ask my But sense been pent-up some you looks Nick one of were Joe, the demand you like on about of procedures. There another had biopsy the kind of strong biopsy wanted I the biopsies as in flow demand of what Arthro pent-up bank, of just that to approval was quarter. the to I biopsy

Dominick C. Colangelo

Yes.

have the and involved we we've XXX-ish on human the I did in voice factor the surgeons, call, FDA. in talked a instruments the labs of So either about our the to sort that roughly of study and submission last in believe this development surgeons of number we're of following the the customer design

it, there this. in surgeons So who clearly, call had participated were XXX-ish

We expect, the who of of And those biopsies. and forms transmittal were so early it. have size you'd location procedures some also familiar the from with biopsy the coming are as with obviously

and location, on in size which have be they and patients an So that the MACI converted we about a for discussion to were essentially not with the reps yet had for it again and to based surgeons could our were appropriate XXXX arm administration, would taken biopsies able amenable arthroscopic Arthro.

say, obviously that not promote I we though, So the Arthro would approach approved. couldn't it was -- until it's

So to lot was it, the to. discussions kind wasn't those of a we out got there you approach. they're with about towards moving really go It the of once approval of or ahead whole have surgeons the armed as approval, then referred discussions and

Joshua Jennings

Arthro And incremental And instrumentation an how in about price pricing us within increases of kind MACI from revenues that, XXXX. remind on MACI update and to Excellent. think cases. get just the to wanted those in just

Sorry multipart here. for the question

and and maintain kind -- about ask hunting commercial that you're well to current wanted just just thrust [indiscernible]. there's feel that accounts and new make surgeons X,XXX arthroscopic high-volume arthroscopic also review the of to equipped attack farming -- those sure camp new positioned of to I But orthopedic these guys to to your that you to just

Dominick C. Colangelo

Yes.

do a year, as kind the MACI start pricing. XXXX well. mid- We and that price just each of to general I'll with high expect take typically we'll to increase single-digit in So

In do -- those instruments, terms MACI instruments. disposable Arthro are of the we

have open that then process of an disposable instruments it, the Arthro have implant basically sell to an these that we cases. are unlike provide to we the kind to procedure,where So MACI cetera, actually in surgeons et we we surgeons sterilize and that the kit

for for include you'll previously item we pales the what will the in in instruments kits for the a And now yes, that so we as code biopsy But sort in of it generate well. as Again, see cases. the MACI the there for instrument MACI charging our XX-Q was the line kind to of Arthro also revenue kind compared as comparison. reimbursement are J MACI, of

Joseph Mara

last piece, of... equipment I terms just was think in the Nick,

Dominick C. Colangelo

yes. Oh,

planning piece sort of other last the do refresher next force the a definitely early kind we of So sales is are year -- to sizing. of on that so

kind recall basically we in -- of XXXX. the of year, each sales size the might increased you MACI's As pre-COVID force postlaunch

we XX and So engaged we did And territories. associates for from we it went pretty assessment, 'XX. in actually that's XXXX, 'XX 'XX, comprehensive did and to roughly when and a XX then

this a intervening was And big that served in well us pretty expansion. it period. date to has So

playbook you And kind run mentioned kind of territories. us. that I've on reason very in added of year reach territory revenue MACI volume each refreshing appropriate the of up the went terms sure the help the up for in very mentioned did as expanded Rep in in be that have, we per to sales development But this larger volume we representatives We've we those was we have we'll actually of the expanding force. with to and same is -- again, We for mentioned, territories. interest year which frequency we're seeing that based productivity that the the kind some before, often again of end productive if kind make of And rep. Arthro.

when playbook that. so And we there's a do we follow

early force, of to and in increase want then rolling we'll year. to do we we'll sales next the So And do the back the year extent into of sort the half next that evaluation XXXX.

Operator

from Canaccord. Cronin come Caitlin question will our And from next

Caitlin Cronin

great quarter. Congrats a on

with about from you MACI penetration you just to Or this reach the a surgeon noted, as longer larger a is penetration I Arthro, XX% there? that base. increasing reaching guess you can term? So there you're have base, limit with do the targeting with if of you think that base, your again number you're previous after kind

Dominick C. Colangelo

that got Well, data, expansion I time. we've said reported to that we've biopsy on about that X,XXX just targets. data the XX% in to The we of had by One year. Cumulatively, prior year the at had that is, I than original last surgeons that guess. mentioned XXXX greater increased about surgeons we particular larger XXXX, kind X,XXX it was in points, two X,XXX we

XX% more. rate course surgeons. into penetration over now with we're And of that So we were year And expanded approaching we last again, of X,XXX to we were X,XXX year, the kind XX%. this and then around expanding

that run get rate. in as year. XX% where penetration. you penetration cumulatively, than never kind dynamic more as said, any will we the we continue to rapidly, a particular But said, we'll see I relatively of would of think, to expect to typically sort And we've get I kind And the of experiment it's terminal

the we several for be over as dynamic. the company years. same So of mentioned, growth next continue biopsy will growth surgeons to important an kind the And in we've expect driver

Caitlin Cronin

And then turning to Great. Epicel. just

now reengaging products? With with the many are dormant accounts actively using many how reactivated the how Epicel, burn centers and have

Dominick C. Colangelo

see the the typically that's -- past kind centers, year kind And to kind don't of will obviously. centers the smaller And often, not you're patients. in routinely of be burn catastrophic necessarily a we an subset accredited of said XXX of routinely kind even Epicel center, done, some in is because have a patients treat larger there's if Well, treat transferred that ones patients. the of -- it's or that burn of burn those these the

end ultimately in of burn would have said can we've up So any because to get the past, those in all issues I centers that you'd Routinely, because end XX XX the patient of patients. we or year, XX being biopsies not XX from centers patients roughly the health up treated given treating think to expiry.

but we I there's yet, forward. as move that's to markedly think that don't opportunity obviously So changed do

Operator

Our next Jeffrey question Thalmann Co. from Cohen Ladenburg comes & from

Jeffrey Cohen

strong quarter. congrats and Joe, Nick a on

from question end. one our Just

the lesson learning of talk for are there. far as out well. about then in upon Arthro instrumentation or play as about MACI Ankle for as perhaps that and you how curve doctors may could What the And learned? talk training If finding you future out the

Dominick C. Colangelo

Yes. Jeff. Well, thanks,

case we MACI online online. training procedures, the the open MACI And materials. submitted As is was often submission, for Arthro done with training the

procedures, who they are surgeons, of if both arthroscopic lot with the for MACI they training additional do to. want don't a really any are which and experienced So those don't really to have

it's you So of a bottleneck through. like to work have not sort

the did only appreciated of in the comments remote Now do, the it of we Orthopaedic demonstration, like kind in center. because I was the standing middle of course and of the we Summit, really at

had also we But labs training there.

cadaver do Arthro. So surgeons labs could and practice doing and come MACI

will often, that. do so surgeons And

for have of cadaver Friday knee that on then We down. into before surgery. and scheduled they examples case the train Tuesday, a go was the the they rep goes

We first practice knee model. Mardi cadaver that to can surgeon surgeons, do the went an that, to on a a also train their on we've procedure. provide where And in of knee [ being they model but had -- have example model we ] the models they not can the used before

surgeons are online cadaver their training, the train the model first procedure. ways they before ] we're [ the Mardi using So do can that

Jeffrey Cohen

would And it. expect follow Ankle? similar to for you Got that a pathway

Dominick C. Colangelo

obviously, for second In now, to the next study. MACI of currently kind Right on study We the FDA administration? instruments in in of -- getting half that developed with and terms have don't the IND prepared submit an we're start working year. of the arthroscopic

could administration for ends as course MACI of the the Certainly, of they're kind that clinical playbook same our treating be something the sort that of follow if administration over a we that up a of study traditional preferred cartilage being will defects now. it So route procedure. Ankle anchor is

Operator

will from Our come HCW. Ramakanth from Swayampakula question next

Swayampakula Ramakanth

Most This have of [indiscernible] H.C. from ore questions been answered. my Wainwright.

Just quick question, a high level.

the can early? how be margin, thinking just going bit So a we about And a start little is market, that Arthro long-term as the trying happen gain to to in here? especially from this as going of Or understand we get Arthro gains synergies operating should on adoption.

Joseph Mara

I R.K., on that one. Yes. is why don't so this Joe. start

of essentially I real right? significant think So field kind territories a built-in I advantage number already, no of change this of the of the with as 'XX same is to think here we the kind outlook start. have into about beyond, we kind think synergy to and Arthro force, is

As kind make right have Nick frequency, of -- the a said, look we take kind cetera. and et and we'll reach sure we're of

margin from Arthro nothing really there's from of P&L But case. a really an perspective versus open there's an kind significantly perspective, different

degree So revenue. talked as of there's we actually some about,

additional side. when are bit -- a of pretty some minor a there's top cost the sold physicians instruments. contribution There goods when So They're line the purchase costs. they in are of

think kind where perspective. wouldn't of going impacting I we're this But a from of P&L

outlook. But with again, Arthro, and small of having think of add that we're of up think -- I I kind line total the will think, the impact to relative kind kind I implant. revenue to It's is and helpful. support that number be of material. well should a don't to our the to long-term top cost hugely set the

Operator

Ryan our come And Zimmerman from will last BTIG. from question

Ryan Zimmerman

follow-up. any for impact hurricanes don't heard there either from procedures, implied guidance. on shortages is quick I the contribution or continuous irrigation I anything a just if there particularly Is quarter just IV Sorry, MACI think used that are or cases? fourth those the impacting the

Dominick C. Colangelo

Thanks, Yes. Ryan.

an -- or surgeries perspective, date procedure, -- procedure any seen especially something et date. MACI are low the from IV impact. ACLs, monitoring we obviously, it's A cuff we Kind So cetera. rotator of to pretty compared haven't so is fluid things open industry a implant and like to to

So that. seen really we haven't

over that that they're in case and than use case. there's side. manage short a of we're trying more one an cases impact In an to date, a to converted little of to hospitals Arthro any really could Sure. seeing not be be are implant And there open all case? Could Arthro at on it? supply fluid kind we'll But case, the open the

Operator

from no And closing turn you. further Thank back like am over conference I'd showing for to remarks. phone the line. any I questions Nick our to Colangelo

Dominick C. Colangelo

to I deliver strong We great a momentum wanted continue your company. to questions Okay. your third the year for had the and a continued thanks just into again with interest and We're high-growth finish in quarter. Well, to our say XXXX. excited

great look So providing updates on have and a call. further to forward next we day. again, Thanks our

Operator

you conference. all have Everyone, in today's for program, participating day. Thank may and wonderful you does conclude disconnect. This a the

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