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Vericel Reports First-Quarter 2017 Financial ResultsCAMBRIDGE, Mass., May 10, 2017 (GLOBE NEWSWIRE) -- Vericel Corporation (NASDAQ:VCEL), a leading developer of autologous expanded cell therapies for the treatment of patients with serious diseases and conditions, today reported financial results for the first quarter ended March 31, 2017. Total net revenues for the quarter ended March 31, 2017 were approximately $9.4 million, net of a $2.8 million revenue reserve related to an unresolved contractual dispute between one of the Company’s pharmacy providers and a payer. Net revenue included approximately $5.0 million of Carticel® (autologous cultured chondrocytes) and MACI® (autologous cultured chondrocytes on porcine collage membrane) net revenues and approximately $4.4 million of Epicel® (cultured epidermal autografts) net revenues, compared to $8.8 million of Carticel revenues and $5.3 million of Epicel revenues, respectively, in the first quarter of 2016. Carticel and MACI net revenues reflect a change in estimate for revenue reserves of $2.1 million related to 2016 sales and $0.7 million related to 2017 sales. The company engages pharmacies to contract with insurance providers and recently received notification of a dispute between one contracted pharmacy and a payer. Since the company retains credit and collection risk from the end customer, we revised our estimate by assuming cases processed by that pharmacy will be paid at a lower out-of-network rate. The earlier estimates were based on claims being paid on an in-network basis consistent with the actual payment history and the pharmacy’s interpretation of its contract with the payer. Gross profit for the quarter ended March 31, 2017 was $2.3 million, or 24% of net revenues, compared to $7.5 million, or 54% of net product revenues, for the first quarter of 2016. Research and development expenses for the quarters ended March 31, 2017 and March 31, 2016 were $3.5 million. Clinical trial expenses for the ixCELL-DCM clinical trial and research and development expenses related to Epicel were consistent for both periods. Research and development expenses related to Carticel decreased, offset by an increase in research and development expenses related to MACI. Selling, general and administrative expenses for the quarter ended March 31, 2017 were $8.4 million compared to $6.0 million for the same period in 2016. The increase in SG&A expenses is primarily due to an increase in consulting expenses of $0.8 million for marketing initiatives related to the launch of MACI, an increase in personnel costs of $0.8 million primarily related to an increase in the MACI sales force, costs associated with reimbursement and patient support services for Carticel and MACI of $0.5 million, and an increase in professional fees of $0.3 million. Loss from operations for the quarter ended March 31, 2017 was $9.6 million, compared to $2.0 million for the first quarter of 2016. Material non-cash items impacting the operating loss for the quarter included $0.5 million of stock-based compensation expense and $0.4 million in depreciation expense. Other expense for the quarter ended March 31, 2017 was $0.2 million compared to $1.7 million for the same period in 2016. The change in other expense for the quarter is primarily due to the change in the fair value of warrants in the first quarter of 2017 compared to the same period in 2016. Vericel’s net loss for the quarter ended March 31, 2017 was $9.8 million, or $0.31 per share, compared to a net loss of $3.7 million, or $0.24 per share, for the same period in 2016. As of March 31, 2017, the company had $19.8 million in cash compared to $23.0 million in cash at December 31, 2016. Recent Business Highlights
“The first quarter of 2017 was challenging due to a number of factors, but we are very pleased with the customer response to MACI,” said Nick Colangelo, president and CEO of Vericel. “Moreover, while our focus remains on our core commercial business, we are very pleased with to have received the RMAT designation for ixmyelocel-T and to have signed the license agreement with ICT, which we believe have the potential to create shareholder value moving forward.” Conference Call Information If you are unable to participate in the live call, the webcast will be available at http://investors.vcel.com/events.cfm until May 14, 2018. A replay of the call will also be available until 11:00 am (EST) on May 14, 2017 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406. The conference ID is 11385924. About Vericel Corporation Epicel®, Carticel®, and MACI® are registered trademarks of Vericel Corporation. © 2017 Vericel Corporation. All rights reserved. This document contains forward-looking statements, including, without limitation, statements concerning anticipated progress, objectives and expectations regarding the commercial potential of our products and growth in revenues, intended product development, clinical activity timing, regulatory progress, and objectives and expectations regarding our company described herein, all of which involve certain risks and uncertainties. These statements are often, but are not always, made through the use of words or phrases such as "anticipates," "intends," "estimates," "plans," "expects," "we believe," "we intend," and similar words or phrases, or future or conditional verbs such as "will," "would," "should," "potential," "could," "may," or similar expressions. Actual results may differ significantly from the expectations contained in the forward-looking statements. Among the factors that may result in differences are the inherent uncertainties associated with competitive developments, clinical trial and product development activities, regulatory approval requirements, estimating the commercial growth potential of our products and product candidates and growth in revenues and improvement in costs, market demand for our products, our ability to secure consistent reimbursement for our products, and our ability to supply or meet customer demand for our products. These and other significant factors are discussed in greater detail in Vericel's Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission ("SEC") on March 13, 2017, Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements reflect management's current views and Vericel does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this release except as required by law.
CONTACT: Chad Rubin The Trout Group [email protected] (646) 378-2947 or Lee Stern The Trout Group [email protected] (646) 378-2922 |