Vericel Corporation
11/06/2025 | Press release | Distributed by Public on 11/06/2025 07:48
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
Vericel Corporation is a fully-integrated, commercial-stage biopharmaceutical company and a leading provider of advanced therapies for the sports medicine and severe burn care markets. Whether we are treating damaged cartilage or severe burns, we provide advanced therapies to repair serious injuries and restore lives. Our highly differentiated portfolio of cell therapy and specialty biologic products combines innovations in biology with medical technologies. We were among the first companies to achieve commercial success in the complex field of cell therapies with treatments that use tissue engineering to regenerate skin and healthy knee cartilage. We currently market two U.S. Food and Drug Administration ("FDA") approved autologous cell therapy products and one FDA-approved specialty biologic product in the U.S. MACI®is an autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. Since MACI's commercial launch, the product's FDA-approved labeling has provided for a treating surgeon to use MACI to treat a patient through an open surgical procedure. In August 2024, the FDA approved a supplemental Biologics License Application ("sBLA") expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product's approved labeling. MACI Arthro® allows surgeons to evaluate and prepare the cartilage defect site as well as deliver the MACI implant through small incisions using custom-designed arthroscopic instruments developed by the Company ("MACI Arthro instruments"). MACI Arthro became commercially available in the U.S. during the third quarter of 2024 and the Company began selling the MACI Arthro instruments at that time.
Epicel®is a permanent skin replacement Humanitarian Use Device ("HUD") indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient's total body surface area ("TBSA"). We also hold an exclusive license from MediWound Ltd. ("MediWound") for North American rights to NexoBrid®(anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, which is indicated for the removal of eschar in adult and pediatric patients with deep partial-thickness and/or full-thickness thermal burns.
Conflicts in the Middle East
In May 2019, we entered into exclusive license and supply agreements with MediWound, under which MediWound manufactures and supplies NexoBrid to the U.S. market on a unit price basis. MediWound develops and manufactures NexoBrid, in part, at its facilities in Yavne, Israel.
We continue to monitor instability and tensions in the Middle East region and we are in close communication with MediWound leadership. As of the date of this disclosure, MediWound does not anticipate a material disruption to its ongoing supply of commercial NexoBrid to the U.S. To the extent conflicts in the Middle East region were to result in damage to MediWound's facilities in Israel or inhibit travel or commercial shipments to and from Israel, MediWound's ability to continue to supply NexoBrid to the U.S. market could be disrupted. As of the date of this report, we maintain an ample supply of NexoBrid at our U.S.-based third-party logistics provider.
U.S. Trade Policy
We continue to monitor evolving trade policies, including the imposition of tariffs on foreign goods imported into the U.S., as part of our ongoing risk assessment process. We anticipate minimal impact on our business and operations from current or potential future U.S.-imposed tariffs or any retaliatory measures taken by other governments. All of our operations are located in the U.S. and 100% of our revenue is currently derived from domestic sales. The majority of our manufacturing costs are fixed costs consisting of labor and overhead required to produce MACI and Epicel at our manufacturing facility in Massachusetts. Materials to support manufacturing operations are primarily purchased from U.S. suppliers. Based on the limited costs associated with imported materials, we expect that current or future tariffs will have an insignificant impact on our cost of goods sold and gross margin moving forward. In addition, because we maintain significant safety stock of most materials, including NexoBrid finished product and the ACI-Maix collagen membrane used to manufacture MACI, we expect that the impact of current or future tariffs on our cost of goods sold and gross margin in 2025 and 2026 will be negligible.
Manufacturing
We have a cell manufacturing facility in Cambridge, Massachusetts, which is used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the "Burlington Lease") to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts. The Burlington facility is substantially complete, and we are currently utilizing the facility's office space. Once validated, the facility's manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel.
The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel. Certain raw materials utilized in NexoBrid's manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan.
Product Portfolio
Our current marketed products include two FDA-approved autologous cell therapies and one FDA-approved specialty biologic product. MACI is a third-generation autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. In connection with our MACI product, we sell MACI biopsy kits, which are used by treating surgeons to obtain a sample of cartilage tissue, which is later sent to us. If a patient decides to move forward with MACI treatment, we subsequently use the cartilage sample to manufacture a MACI implant. When an orthopedic surgeon decides to treat a patient by implanting MACI through an arthroscopic approach the surgeon may choose to use our custom MACI Arthro instruments during the procedure, which we sell by way of a separate transaction.
Epicel is a permanent skin replacement indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient's TBSA. Both autologous cell therapy products are currently manufactured and marketed in the U.S. NexoBrid is a topically-administered biological orphan product containing proteolytic enzymes that is indicated for eschar removal in adult and pediatric patients with deep partial-thickness and/or full-thickness burns. We hold exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America. The Company operates its business primarily in the U.S. in one reportable segment - the research, product development, manufacture and distribution of cellular therapies and specialty biologics for use in the treatment of specific conditions.
MACI
MACI is a third-generation autologous chondrocyte implantation ("ACI") product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.
Our target audiences are orthopedic surgeons who self-identify and/or have formal specialty training in sports medicine, and a subpopulation of general orthopedic surgeons who perform a high volume of cartilage repair procedures involving the knee. Our MACI commercial team consists of individual sales representatives that regularly engage with our target audience. The team is divided into geographic regions and is managed by a senior sales leadership team. Most private payers have a medical policy that covers treatment with MACI with the top 30 largest commercial payers having a formal medical policy for MACI or ACI in general. With respect to private commercial payers that have not yet approved a medical policy for MACI, we often obtain approval on a case-by-case basis.
MACI consists of autologous cultured chondrocytes, which are human-derived cells that are obtained from the patient's own cartilage, and which are seeded onto resorbable Type I/III collagen membrane. Since MACI's commercial launch, the product's FDA-approved labeling has provided for a treating surgeon to use MACI to treat a patient through an open surgical procedure. In August 2024, the FDA approved a supplemental Biologics License Application ("sBLA") expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product's approved labeling, permitting the repair of single or multiple full-thickness cartilage defects of the knee up to 4 cm2in size via an arthroscopic approach. MACI Arthro provides a less invasive technique compared to the open arthrotomy approach and allows surgeons to evaluate, prepare and treat the cartilage defect, and deliver the MACI implant, under direct arthroscopic visualization and, should the surgeon so choose, to use specialized and custom-designed instruments (the "MACI Arthro instruments") through small incisions or portals. The arthroscopic delivery of MACI could increase the ease of MACI's use for physicians and may reduce both the length of the procedure as well as procedure-induced trauma, which may result in a reduction of a patient's post-operative pain and accelerate a patient's recovery. MACI Arthro became commercially available in the U.S. during the third quarter of 2024 and we began selling the MACI Arthro instruments at that time. We believe that the availability of MACI Arthro provides a significant growth opportunity for the overall MACI business. In conjunction with the launch of MACI Arthro, we have expanded our target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures.
We also are evaluating the feasibility and potential market opportunity involved in delivering MACI treatment to patients suffering from cartilage damage in the ankle. We believe that this potential lifecycle enhancement and indication expansion for MACI will require conducting an additional randomized clinical trial concerning the product's use in the ankle and we are on track to initiate a MACI Ankle clinical trial beginning in 2025. If approved, we believe MACI's label expansion allowing its use to repair cartilage defects in the ankle will be a significant long-term growth driver for the product in the coming years.
Epicel
Epicel is a permanent skin replacement for deep-dermal or full-thickness burns comprising greater than or equal to 30 percent TBSA. Epicel is regulated by the Center for Biologics Evaluation and Research ("CBER") of the FDA under medical device authorities, and is the only FDA-approved cultured epidermal autograft product available for large total surface area burns in both adult and pediatric patients. Epicel was designated as a HUD in 1998 and a Humanitarian Device Exemption ("HDE") application for the product was submitted in 1999. HUDs are devices that are intended for diseases or conditions that affect fewer than 8,000 individuals annually in the U.S., and certain HUDs are restricted by the amount which a manufacturer may charge for its use.
Epicel is not price-restricted in this manner because in 2016, the FDA approved our HDE supplement to revise the labeled indications of use for Epicel to specifically include pediatric patients, thus allowing Epicel to be sold for profit. The revised product label also now specifies that the probable benefit of Epicel, mainly related to survival, was demonstrated in two Epicel clinical experience databases and a physician-sponsored study comparing outcomes in patients with large burns treated with Epicel relative to standard care.
NexoBrid
Our portfolio of commercial-stage products also includes NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, for which the FDA approved a BLA in December 2022, permitting the product's use for the removal of eschar in adults with deep partial-thickness and/or full thickness thermal burns. Subsequently, in August 2024, the FDA approved an sBLA expanding NexoBrid's indication to include pediatric patients.
NexoBrid is approved in the European Union ("EU") and other international markets and has been designated as an orphan biologic in the U.S., EU and other international markets. NexoBrid has the potential to change the standard of care for eschar removal with respect to hospitalized burn patients and treat a significant addressable market in the U.S. With respect to NexoBrid, of the approximately 40,000 people that are hospitalized in the U.S. each year for burn-related injuries, the majority, over 30,000, have thermal burns and will likely require some level of eschar removal. NexoBrid's FDA approval expands our burn care franchise's total addressable market, which will permit us to treat a significantly larger segment of hospitalized burn patients than with Epicel alone. The expansion of our target addressable market supports a broader commercial footprint, and we believe that this may help drive both increased NexoBrid use as well as increased Epicel awareness throughout the burn care space. Both our Epicel and NexoBrid products are serviced by our burn care field force, which consists of individual sales and clinical representatives that regularly engage with our target audience. The team is divided into geographical regions and is managed by a senior sales leadership team.
In May 2019, we entered into exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America. The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel. Certain raw materials utilized in NexoBrid's manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan.
Results of Operations
The following is a summary of our condensed consolidated results of operations:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | Change $ | Change % | 2025 | 2024 | Change $ | Change % | ||||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 67,503 | $ | 57,905 | $ | 9,598 | 16.6 | % | $ | 183,341 | $ | 161,848 | $ | 21,493 | 13.3 | % | ||||||||||||||||||||||||||||||||||
| Cost of product sales | 17,918 | 16,252 | 1,666 | 10.3 | % | 50,870 | 48,240 | 2,630 | 5.5 | % | ||||||||||||||||||||||||||||||||||||||||
| Gross profit | 49,585 | 41,653 | 7,932 | 19.0 | % | 132,471 | 113,608 | 18,863 | 16.6 | % | ||||||||||||||||||||||||||||||||||||||||
| Research and development | 6,318 | 6,093 | 225 | 3.7 | % | 20,310 | 19,874 | 436 | 2.2 | % | ||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 39,817 | 38,025 | 1,792 | 4.7 | % | 123,532 | 107,694 | 15,838 | 14.7 | % | ||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 46,135 | 44,118 | 2,017 | 4.6 | % | 143,842 | 127,568 | 16,274 | 12.8 | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | 3,450 | (2,465) | 5,915 | (240.0) | % | (11,371) | (13,960) | 2,589 | (18.5) | % | ||||||||||||||||||||||||||||||||||||||||
| Total other income | 1,624 | 1,564 | 60 | 3.8 | % | 4,646 | 4,515 | 131 | 2.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 5,074 | $ | (901) | $ | 5,975 | (663.2) | % | $ | (6,725) | $ | (9,445) | $ | 2,720 | (28.8) | % | ||||||||||||||||||||||||||||||||||
Comparison of the Periods Ended September 30, 2025 and 2024
Total Revenue
Revenue by product is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | Change $ | Change % | 2025 | 2024 | Change $ | Change % | ||||||||||||||||||||||||||||||||||||||||||
| MACI | $ | 55,662 | $ | 44,656 | $ | 11,006 | 24.6 | % | $ | 155,416 | $ | 128,973 | $ | 26,443 | 20.5 | % | ||||||||||||||||||||||||||||||||||
| Epicel | 10,375 | 12,184 | (1,809) | (14.8) | % | 23,954 | 30,606 | (6,652) | (21.7) | % | ||||||||||||||||||||||||||||||||||||||||
| NexoBrid | 1,466 | 1,065 | 401 | 37.7 | % | 3,971 | 2,269 | 1,702 | 75.0 | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 67,503 | $ | 57,905 | $ | 9,598 | 16.6 | % | $ | 183,341 | $ | 161,848 | $ | 21,493 | 13.3 | % | ||||||||||||||||||||||||||||||||||
Total revenue increase for the three and nine months ended September 30, 2025, compared to the same periods in 2024, was driven primarily by MACI volume and price growth and NexoBrid volume growth, partially offset by lower Epicel volume.
Seasonality
Sales of MACI implants have historically experienced a level of seasonality throughout the year. In the last five years through 2024, MACI sales volumes from the first through the fourth quarter on average represented 21% (20%-22% range), 22% (16%-24% range), 23% (21%-26% range) and 34% (33%-38% range) respectively, of total annual volumes. Historically, MACI orders are normally stronger in the fourth quarter due to several factors including the satisfaction by patients of insurance deductible limits and the time of year patients prefer to start rehabilitation. Due to the low incidence and variable occurrence of severe burns, Epicel revenue has inherent variability from quarter-to-quarter and does not exhibit significant seasonality. U.S. sales of NexoBrid began September of 2023, and as such we are still relatively early in its commercial launch, but we do not expect NexoBrid revenue to experience significant seasonality given its emergent use in treating severe burns.
Gross Profit
Gross profit increase for the three and nine months ended September 30, 2025, compared to the same periods in 2024, was driven by MACI revenue growth, combined with our primarily fixed manufacturing cost structure which consists mainly of labor and facility costs.
Research and Development Expenses
The following table summarizes research and development expenses, which include materials, professional fees and an allocation of employee-related salary and fringe benefit costs for our research and development projects:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | Change $ | Change % | 2025 | 2024 | Change $ | Change % | ||||||||||||||||||||||||||||||||||||||||||
| MACI | $ | 4,146 | $ | 4,345 | $ | (199) | (4.6) | % | $ | 13,112 | $ | 14,635 | $ | (1,523) | (10.4) | % | ||||||||||||||||||||||||||||||||||
| Epicel | 1,309 | 1,138 | 171 | 15.0 | % | 4,207 | 3,463 | 744 | 21.5 | % | ||||||||||||||||||||||||||||||||||||||||
| NexoBrid | 863 | 610 | 253 | 41.5 | % | 2,991 | 1,776 | 1,215 | 68.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Total research and development expenses | $ | 6,318 | $ | 6,093 | $ | 225 | 3.7 | % | $ | 20,310 | $ | 19,874 | $ | 436 | 2.2 | % | ||||||||||||||||||||||||||||||||||
Research and development expenses increased for the three and nine months ended September 30, 2025, compared to the same periods in 2024. The increase is primarily due to higher headcount and employee expenses, partially offset by MACI Arthro project costs in 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended September 30, 2025 were $39.8 million, compared to $38.0 million for the same period in 2024. The increase in selling, general and administrative expenses is primarily due to higher headcount and employee expenses and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.
Selling, general and administrative expenses for the nine months ended September 30, 2025 were $123.5 million, compared to $107.7 million for the same period in 2024. The increase in selling, general and administrative expenses is primarily due to higher headcount and employee expenses, including stock compensation, an increase in marketing programs and sales activity, and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.
Total Other Income
The increase in total other income for the three and nine months ended September 30, 2025, compared to the same periods in 2024 was due to an increase in interest income, which was primarily due to fluctuations in the rates of return on our investments in various marketable debt securities and money market funds.
Stock-based Compensation Expense
Non-cash stock-based compensation expense is summarized in the following table:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | Change $ | Change % | 2025 | 2024 | Change $ | Change % | ||||||||||||||||||||||||||||||||||||||||||
| Cost of product sales | $ | 1,029 | $ | 762 | $ | 267 | 35.0 | % | $ | 3,279 | $ | 2,914 | $ | 365 | 12.5 | % | ||||||||||||||||||||||||||||||||||
| Research and development | 1,015 | 1,095 | (80) | (7.3) | % | 3,650 | 3,281 | 369 | 11.2 | % | ||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 6,655 | 7,367 | (712) | (9.7) | % | 23,415 | 22,383 | 1,032 | 4.6 | % | ||||||||||||||||||||||||||||||||||||||||
| Total non-cash stock-based compensation expense | $ | 8,699 | $ | 9,224 | $ | (525) | (5.7) | % | $ | 30,344 | $ | 28,578 | $ | 1,766 | 6.2 | % | ||||||||||||||||||||||||||||||||||
The decrease in stock-based compensation expense for the three months ended September 30, 2025, compared to the same period in 2024, was due primarily to fluctuations in stock prices and the mix of service-based options and restricted stock units, which impacts the fair value of the options and restricted stock units awarded and the expense recognized in the period.
The increase in stock-based compensation expense for the nine months ended September 30, 2025, compared to the same period in 2024, was due primarily to fluctuations in stock prices and the mix of service-based options and restricted stock units, which impacts the fair value of the options and restricted stock units awarded and the expense recognized in the period.
Liquidity and Capital Resources
Cash Flows
The following table summarizes our sources and uses of cash for each of the periods presented:
| Nine Months Ended September 30, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Net cash provided by operating activities | $ | 36,896 | $ | 35,921 | ||||||||||
| Net cash used in investing activities | (27,547) | (64,383) | ||||||||||||
| Net cash provided by financing activities | 6,005 | 11,946 | ||||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | $ | 15,354 | $ | (16,516) | ||||||||||
Net Cash Provided by Operating Activities
Our cash, cash equivalents and restricted cash totaled $100.4 million, short-term investments totaled $35.0 million and long-term investments totaled $49.7 million as of September 30, 2025. The $36.9 million of cash provided by operations during the nine months ended September 30, 2025 was primarily the result of non-cash charges of $30.3 million related to stock-based compensation expense, $8.5 million in depreciation and amortization expense and $4.0 million of operating lease amortization, partially offset by a net loss of $6.7 million and a net increase of $0.1 million related to movements in our working capital accounts. The overall increase in cash from our working capital accounts was primarily driven by an increase in accounts payable due to timing of payments, partially offset by payments on operating leases and a decrease in accrued expenses due to timing of payments.
Our cash, cash equivalents and restricted cash totaled $70.4 million, short-term investments totaled $48.1 million and long-term investments totaled $32.9 million as of September 30, 2024. The $35.9 million of cash provided by operations during the nine months ended September 30, 2024 was primarily the result of non-cash charges of $28.6 million related to stock-based compensation expense, $5.1 million of operating lease amortization and $4.0 million in depreciation and amortization expense, offset by a net loss of $9.4 million and a net increase of $7.8 million related to movements in our working capital accounts. The overall increase in cash from our working capital accounts was primarily driven by a decrease in accounts receivable due to cash collections and receipts of tenant improvement allowances which exceeded payments on operating leases amortization, offset by a decrease in accounts payable and accrued expenses due to timing of payments and an increase in inventory primarily related to supporting NexoBrid commercial availability.
Net Cash Used In Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2025 was the result of $43.5 million in investment purchases and $25.0 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $40.9 million of investment sales and maturities.
Net cash used in investing activities during the nine months ended September 30, 2024 was the result of $52.6 million in investment purchases and $50.2 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $38.4 million of investment sales and maturities.
Net Cash Provided by Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2025 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of$12.7 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $6.6 million.
Net cash provided by financing activities during the nine months ended September 30, 2024 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $17.3 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $5.3 million.
Liquidity
Since our acquisition of MACI and Epicel in 2014, our primary focus has been to invest in our existing commercial business with the goal of growing revenue. We have raised significant funds in order to advance and complete our product development and product life-cycle management programs and to market and commercialize our products, including NexoBrid. To date, we have financed our operations primarily through cash received through MACI, Epicel and NexoBrid sales, debt, and public and private sales of our equity securities. In the future, we may finance our operations through sales of equity securities, revolver borrowings or other debt financings, in addition to cash generated from operations.
We believe that our current cash on hand, cash equivalents, investments, and available borrowing capacity will be sufficient to support our current operations through at least 12 months from the issuance of the condensed consolidated financial statements included in this report. Our actual cash requirements may differ from projections and will depend on many factors, including the level and pace of future research and development efforts, the scope and results of ongoing and potential clinical trials, the costs involved in filing, prosecuting and enforcing patents, the need for additional manufacturing capacity, competing technological and market developments, global macroeconomic conditions, costs associated with possible acquisitions or development of complementary business activities, and the cost to market our products.
As of September 30, 2025, we were not party to any off-balance sheet arrangements.
Sources of Capital
On July 29, 2022, we entered into a $150.0 million five-year senior secured revolving credit agreement by and among the Company, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent (the "Revolving Credit Agreement"). We have no immediate plans to borrow under the Revolving Credit Agreement, but we may use the facility for working capital needs and other general corporate purposes. As of September 30, 2025, there are no outstanding borrowings under the Revolving Credit Agreement, and we are in compliance with all applicable covenant
requirements. See Note 8, "Revolving Credit Agreement" in the accompanying condensed consolidated financial statements for further details.
Contractual Obligations and Commitments
The disclosure of our contractual obligations and commitments is set forth in the heading "Management's Discussion and Analysis of Financial Conditions and Results of Operations - Contractual Obligations" in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no other material changes, outside of the ordinary course of business, to our contractual obligations and commitments since December 31, 2024.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, expenses, and related disclosures. Actual results may differ materially from these estimates under different assumptions and conditions.
There have been no material changes to our critical accounting policies and estimates in the nine months ended September 30, 2025. For further information, refer to our summary of significant accounting policies and estimates in our Annual Report on Form 10-K filed for the year ended December 31, 2024.
Cautionary Note Regarding Forward-Looking Statements
This report, including the documents incorporated by reference herein, contains certain statements that describe our management's beliefs concerning future business conditions, plans and prospects, growth opportunities and the outlook for our business based upon information currently available. Such statements are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Wherever possible, we have identified these forward-looking statements by words such as "will," "may," "anticipates," "believes," "intends," "estimates," "expects," "plans," "projects," "trends," "opportunity," "current," "intention," "position," "assume," "potential," "outlook," "remain," "continue," "maintain," "sustain," "seek," "target," "achieve," "continuing," "ongoing," and similar words or phrases, or future or conditional verbs such as "would," "should," "could," "may," or similar expressions. Among the factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, uncertainties associated with our expectations regarding future revenue, growth in revenue, market penetration for MACI®, MACI Arthro®, Epicel®, and NexoBrid®, growth in profit, gross margins and operating margins, the ability to continue to scale our manufacturing operations to meet the demand for our cell therapy products, including the timely qualification of a new manufacturing facility in Burlington, Massachusetts, the ability to sustain profitability, contributions to adjusted EBITDA, the expected target surgeon audience, potential fluctuations in sales and volumes and our results of operations over the course of the year, timing and conduct of clinical trial and product development activities, timing and likelihood of the FDA's potential approval of the use of MACI to treat cartilage defects in the ankle, the estimate of the commercial growth potential of our products and product candidates, competitive developments, changes in third-party coverage and reimbursement, including recent and future healthcare reform measures and private payor initiatives, surgeon adoption of MACI Arthro, physician and burn center adoption of NexoBrid, labor strikes, supply chain disruptions or other events or factors that might affect our ability to manufacture MACI or Epicel or affect MediWound's ability to manufacture and supply sufficient quantities of NexoBrid to meet customer demand, including but not limited to conflicts in the Middle East region involving Israel, negative impacts on the global economy and capital markets resulting from the conflict in Ukraine and Middle East conflicts, including those associated with potential further involvement by the U.S., changes in trade policies and regulations, including the potential for increases or changes in duties, current and potentially new tariffs or quotas, lingering effects of adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, changes in governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued inflationary pressures, the impact from future regulatory, judicial and legislative changes to our industry or to the broader business landscape, including those included in the One Big Beautiful Bill Act, a U.S. government shutdown or gridlock, global geopolitical tensions and potential future impacts on our business or the economy generally stemming from a public health emergency. These forward-looking statements are based upon assumptions our management believes are reasonable. Such forward-looking statements are subject to risks and uncertainties, which could cause our actual results, performance and achievements to differ materially from those expressed in, or implied by, these statements, including, among others, the risks and uncertainties listed in our Annual Report on Form 10-K under "Part I, Item 1A. Risk Factors" and on our subsequent reports filed with the SEC.
Because our forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different and any or all of our forward-looking statements may turn out to be wrong. Forward-looking statements speak only as of the date made and can be affected by assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in our discussion in our Annual Report on Form 10-K will be important in determining future results. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. Consequently, we cannot assure you that our expectations or forecasts expressed in such forward-looking statements will be achieved. Except as required by law, we undertake no obligation to publicly update any of our forward-looking or other statements, whether as a result of new information, future events, or otherwise.
Vericel Corporation published this content on November 06, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 06, 2025 at 13:48 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]