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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Vericel Corporation | NASDAQ:VCEL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
2.24 | 4.49% | 52.09 | 52.09 | 52.23 | 52.1585 | 49.585 | 50.66 | 112,035 | 16:08:46 |
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Michigan
|
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94-3096597
|
|
(State or other jurisdiction of
|
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(I.R.S. employer
|
|
incorporation or organization)
|
|
identification no.)
|
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64 Sidney Street
|
|
||
Cambridge
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MA
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02139
|
|
(Address of principal executive offices, including zip code)
|
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Title of each class
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Trading Symbol(s)
|
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Name of each exchange on which registered
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Common Stock, no par value
|
|
VCEL
|
|
NASDAQ
|
Large accelerated filer
|
☐
|
Accelerated filer
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☒
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☒
|
|
|
Emerging growth company
|
☐
|
COMMON STOCK, NO PAR VALUE
|
|
44,694,512
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(Class)
|
|
Outstanding at October 31, 2019
|
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|
|
|
|
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PART I — FINANCIAL INFORMATION
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II — OTHER INFORMATION
|
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Item 1.
|
||
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Item 1A.
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||
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Item 2.
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||
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Item 3.
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Item 4.
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Item 5.
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Item 6.
|
||
|
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|
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September 30,
|
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December 31,
|
||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
36,905
|
|
|
$
|
18,286
|
|
Short-term investments
|
|
37,760
|
|
|
64,638
|
|
||
Accounts receivable (net of allowance for doubtful accounts of $643 and $514, respectively)
|
|
19,958
|
|
|
23,454
|
|
||
Inventory
|
|
6,823
|
|
|
3,558
|
|
||
Other current assets
|
|
3,272
|
|
|
2,847
|
|
||
Total current assets
|
|
104,718
|
|
|
112,783
|
|
||
Property and equipment, net
|
|
7,190
|
|
|
5,906
|
|
||
Right-of-use assets
|
|
25,619
|
|
|
—
|
|
||
Total assets
|
|
$
|
137,527
|
|
|
$
|
118,689
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
5,281
|
|
|
$
|
7,108
|
|
Accrued expenses
|
|
6,960
|
|
|
6,930
|
|
||
Current portion of operating lease liabilities
|
|
2,836
|
|
|
—
|
|
||
Other liabilities
|
|
35
|
|
|
754
|
|
||
Total current liabilities
|
|
15,112
|
|
|
14,792
|
|
||
Operating lease liabilities
|
|
25,311
|
|
|
—
|
|
||
Other long-term liabilities
|
|
114
|
|
|
1,666
|
|
||
Total liabilities
|
|
40,537
|
|
|
16,458
|
|
||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 44,520 and 43,578, respectively
|
|
485,141
|
|
|
471,180
|
|
||
Other comprehensive gain (loss)
|
|
29
|
|
|
(39
|
)
|
||
Warrants
|
|
—
|
|
|
104
|
|
||
Accumulated deficit
|
|
(388,180
|
)
|
|
(369,014
|
)
|
||
Total shareholders’ equity
|
|
96,990
|
|
|
102,231
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
137,527
|
|
|
$
|
118,689
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Product sales, net
|
|
$
|
30,499
|
|
|
$
|
22,484
|
|
|
$
|
78,460
|
|
|
$
|
59,522
|
|
Cost of product sales
|
|
9,324
|
|
|
8,138
|
|
|
26,986
|
|
|
23,531
|
|
||||
Gross profit
|
|
21,175
|
|
|
14,346
|
|
|
51,474
|
|
|
35,991
|
|
||||
Research and development
|
|
3,096
|
|
|
3,113
|
|
|
27,174
|
|
|
10,581
|
|
||||
Selling, general and administrative
|
|
14,982
|
|
|
12,569
|
|
|
44,761
|
|
|
35,314
|
|
||||
Total operating expenses
|
|
18,078
|
|
|
15,682
|
|
|
71,935
|
|
|
45,895
|
|
||||
Income (loss) from operations
|
|
3,097
|
|
|
(1,336
|
)
|
|
(20,461
|
)
|
|
(9,904
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||
Increase (decrease) in fair value of warrants
|
|
—
|
|
|
420
|
|
|
—
|
|
|
(2,524
|
)
|
||||
Interest income
|
|
385
|
|
|
307
|
|
|
1,293
|
|
|
390
|
|
||||
Interest expense
|
|
(2
|
)
|
|
(460
|
)
|
|
(6
|
)
|
|
(1,340
|
)
|
||||
Other income (expense)
|
|
(10
|
)
|
|
—
|
|
|
8
|
|
|
(1
|
)
|
||||
Total other income (expense)
|
|
373
|
|
|
267
|
|
|
1,295
|
|
|
(3,475
|
)
|
||||
Net income (loss)
|
|
$
|
3,470
|
|
|
$
|
(1,069
|
)
|
|
$
|
(19,166
|
)
|
|
$
|
(13,379
|
)
|
|
|
|
|
|
|
|
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|
||||||||
Net income (loss) per share (Basic)
|
|
$
|
0.08
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(0.34
|
)
|
Weighted average number of common shares outstanding (Basic)
|
|
44,251
|
|
|
42,925
|
|
|
43,979
|
|
|
39,163
|
|
||||
Net income (loss) per share (Diluted)
|
|
$
|
0.07
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(0.34
|
)
|
Weighted average number of common shares outstanding (Diluted)
|
|
46,667
|
|
|
42,925
|
|
|
43,979
|
|
|
39,163
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
|
$
|
3,470
|
|
|
$
|
(1,069
|
)
|
|
$
|
(19,166
|
)
|
|
$
|
(13,379
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Unrealized (loss) gain on investments
|
|
(9
|
)
|
|
(18
|
)
|
|
29
|
|
|
(18
|
)
|
||||
Comprehensive income (loss)
|
|
$
|
3,461
|
|
|
$
|
(1,087
|
)
|
|
$
|
(19,137
|
)
|
|
$
|
(13,397
|
)
|
|
Common Stock
|
|
Warrants Amounts
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
Shareholders’ Equity |
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||||
BALANCE, DECEMBER 31, 2018
|
43,578
|
|
|
$
|
471,180
|
|
|
$
|
104
|
|
|
$
|
(39
|
)
|
|
$
|
(369,014
|
)
|
|
$
|
102,231
|
|
||
Net loss
|
|
|
|
|
|
|
|
|
(2,844
|
)
|
|
(2,844
|
)
|
|||||||||||
Compensation expense related to stock options and restricted stock units, net of forfeitures
|
|
|
2,628
|
|
|
|
|
|
|
|
|
2,628
|
|
|||||||||||
Stock option exercises
|
228
|
|
|
780
|
|
|
|
|
|
|
|
|
780
|
|
||||||||||
Shares issued under the Employee Stock Purchase Plan
|
19
|
|
|
218
|
|
|
|
|
|
|
|
|
218
|
|
||||||||||
Change in unrealized gain (loss) on investments
|
|
|
|
|
|
|
42
|
|
|
|
|
42
|
|
|||||||||||
BALANCE, MARCH 31, 2019
|
43,825
|
|
|
$
|
474,806
|
|
|
$
|
104
|
|
|
$
|
3
|
|
|
$
|
(371,858
|
)
|
|
$
|
103,055
|
|
||
Net loss
|
|
|
|
|
|
|
|
|
(19,792
|
)
|
|
(19,792
|
)
|
|||||||||||
Compensation expense related to stock options and restricted stock units, net of forfeitures
|
|
|
4,183
|
|
|
|
|
|
|
|
|
|
|
4,183
|
|
|||||||||
Stock option exercises
|
227
|
|
|
850
|
|
|
|
|
|
|
|
|
850
|
|
||||||||||
Shares issued under the Employee Stock Purchase Plan
|
14
|
|
|
211
|
|
|
|
|
|
|
|
|
211
|
|
||||||||||
Change in unrealized gain (loss) on investments
|
|
|
|
|
|
|
35
|
|
|
|
|
|
35
|
|
||||||||||
BALANCE, JUNE 30, 2019
|
44,066
|
|
|
$
|
480,050
|
|
|
$
|
104
|
|
|
$
|
38
|
|
|
$
|
(391,650
|
)
|
|
$
|
88,542
|
|
||
Net income
|
|
|
|
|
|
|
|
|
3,470
|
|
|
3,470
|
|
|||||||||||
Compensation expense related to stock options granted, net of forfeitures
|
|
|
3,285
|
|
|
|
|
|
|
|
|
3,285
|
|
|||||||||||
Stock option exercises
|
416
|
|
|
1,427
|
|
|
|
|
|
|
|
|
1,427
|
|
||||||||||
Shares issued under the Employee Stock Purchase Plan
|
18
|
|
|
275
|
|
|
|
|
|
|
|
|
275
|
|
||||||||||
Change in unrealized gain (loss) on investments
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
(9
|
)
|
|||||||||||
Exercise of warrants resulting in issuance of common stock
|
20
|
|
|
104
|
|
|
(104
|
)
|
—
|
|
|
—
|
|
|
|
—
|
|
|||||||
BALANCE, SEPTEMBER 30, 2019
|
44,520
|
|
|
$
|
485,141
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
(388,180
|
)
|
|
$
|
96,990
|
|
|
|
Common Stock
|
|
Warrants Amounts
|
|
Accumulated Other Comprehensive Income
|
|
Accumulated Deficit
|
|
Total
Shareholders’ Equity |
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
BALANCE, DECEMBER 31, 2017
|
|
35,861
|
|
|
$
|
383,020
|
|
|
$
|
397
|
|
|
$
|
—
|
|
|
$
|
(360,877
|
)
|
|
$
|
22,540
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
(7,659
|
)
|
|
(7,659
|
)
|
|||||||||
Compensation expense related to stock options granted, net of forfeitures
|
|
|
|
1,348
|
|
|
|
|
|
|
|
|
1,348
|
|
|||||||||
Stock option exercises
|
|
253
|
|
|
851
|
|
|
|
|
|
|
|
|
851
|
|
||||||||
Shares issued under the Employee Stock Purchase Plan
|
|
28
|
|
|
127
|
|
|
|
|
|
|
|
|
127
|
|
||||||||
Exercise of warrants resulting in the issuance of common stock
|
|
360
|
|
|
1,727
|
|
|
|
|
|
|
|
|
1,727
|
|
||||||||
Net change in warrant valuation of exercised warrants
|
|
|
|
2,001
|
|
|
|
|
|
|
|
|
2,001
|
|
|||||||||
BALANCE, MARCH 31, 2018
|
|
36,502
|
|
|
$
|
389,074
|
|
|
$
|
397
|
|
|
$
|
—
|
|
|
$
|
(368,536
|
)
|
|
$
|
20,935
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
(4,651
|
)
|
|
(4,651
|
)
|
|||||||||
Compensation expense related to stock options granted, net of forfeitures
|
|
|
|
2,465
|
|
|
|
|
|
|
|
|
2,465
|
|
|||||||||
Issuance of common stock, net of issuance costs
|
|
5,750
|
|
|
70,090
|
|
|
|
|
|
|
|
|
70,090
|
|
||||||||
Stock option exercises
|
|
306
|
|
|
964
|
|
|
|
|
|
|
|
|
964
|
|
||||||||
Shares issued under the Employee Stock Purchase Plan
|
|
31
|
|
|
148
|
|
|
|
|
|
|
|
|
148
|
|
||||||||
Exercise of warrants resulting in the issuance of common stock
|
|
95
|
|
|
333
|
|
|
(95
|
)
|
|
|
|
|
|
238
|
|
|||||||
Net change in warrant valuation of exercised warrants
|
|
|
|
409
|
|
|
|
|
|
|
|
|
409
|
|
|||||||||
BALANCE, JUNE 30, 2018
|
|
42,684
|
|
|
$
|
463,483
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
(373,187
|
)
|
|
$
|
90,598
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
(1,069
|
)
|
|
(1,069
|
)
|
|||||||||
Compensation expense related to stock options granted, net of forfeitures
|
|
|
|
1,932
|
|
|
|
|
|
|
|
|
1,932
|
|
|||||||||
Stock option exercises
|
|
305
|
|
|
952
|
|
|
|
|
|
|
|
|
952
|
|
||||||||
Shares issued under the Employee Stock Purchase Plan
|
|
25
|
|
|
200
|
|
|
|
|
|
|
|
|
200
|
|
||||||||
Exercise of warrants resulting in the issuance of common stock
|
|
156
|
|
|
751
|
|
|
|
|
|
|
|
|
751
|
|
||||||||
Net change in warrant valuation of exercised warrants
|
|
|
|
1,129
|
|
|
|
|
|
|
|
|
1,129
|
|
|||||||||
Change in unrealized gain (loss) on investments
|
|
|
|
|
|
|
|
(18
|
)
|
|
|
|
(18
|
)
|
|||||||||
BALANCE, SEPTEMBER 30, 2018
|
|
43,170
|
|
|
$
|
468,447
|
|
|
$
|
302
|
|
|
$
|
(18
|
)
|
|
$
|
(374,256
|
)
|
|
$
|
94,475
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Operating activities:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(19,166
|
)
|
|
$
|
(13,379
|
)
|
Adjustments to reconcile net loss to net cash used for operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization expense
|
|
1,174
|
|
|
1,133
|
|
||
Stock compensation expense
|
|
10,095
|
|
|
5,739
|
|
||
Change in fair value of warrants
|
|
—
|
|
|
2,524
|
|
||
Loss on sale of fixed assets
|
|
—
|
|
|
23
|
|
||
Foreign currency translation loss
|
|
21
|
|
|
49
|
|
||
Amortization of premiums and discounts on marketable securities
|
|
(529
|
)
|
|
—
|
|
||
Non-cash lease cost
|
|
2,011
|
|
|
—
|
|
||
Change in operating assets and liabilities:
|
|
|
|
|
|
|
||
Inventory
|
|
(3,265
|
)
|
|
155
|
|
||
Accounts receivable
|
|
3,496
|
|
|
2,742
|
|
||
Prepaid and other current assets
|
|
(425
|
)
|
|
(758
|
)
|
||
Accounts payable
|
|
(1,895
|
)
|
|
(1,212
|
)
|
||
Accrued expenses
|
|
30
|
|
|
19
|
|
||
Operating lease liabilities
|
|
(1,804
|
)
|
|
—
|
|
||
Other assets and liabilities, net
|
|
(76
|
)
|
|
(58
|
)
|
||
Net cash used in operating activities
|
|
(10,333
|
)
|
|
(3,023
|
)
|
||
Investing activities:
|
|
|
|
|
|
|
||
Purchases of short-term investments
|
|
(46,303
|
)
|
|
(44,480
|
)
|
||
Maturities of short-term investments
|
|
73,777
|
|
|
—
|
|
||
Expenditures for property, plant and equipment
|
|
(2,255
|
)
|
|
(2,101
|
)
|
||
Net cash provided by (used in) investing activities
|
|
25,219
|
|
|
(46,581
|
)
|
||
Financing activities:
|
|
|
|
|
|
|
||
Net proceeds from equity offering
|
|
—
|
|
|
70,028
|
|
||
Net proceeds from common stock issuance due to stock option exercises
|
|
3,762
|
|
|
3,310
|
|
||
Proceeds from exercise of warrants
|
|
—
|
|
|
2,716
|
|
||
Other
|
|
(29
|
)
|
|
(23
|
)
|
||
Net cash provided by financing activities
|
|
3,733
|
|
|
76,031
|
|
||
Net increase in cash and cash equivalents
|
|
18,619
|
|
|
26,427
|
|
||
Cash and cash equivalents at beginning of period
|
|
18,286
|
|
|
26,862
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
36,905
|
|
|
$
|
53,289
|
|
1.
|
Organization
|
2.
|
Basis of Presentation
|
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Supplementary Cash Flows information:
|
|
|
|
|
||||
Warrants exercised for common stock
|
|
$
|
104
|
|
|
$
|
3,538
|
|
Interest paid (net of interest capitalized)
|
|
6
|
|
|
1,161
|
|
||
Additions to equipment in process included in accounts payable
|
|
46
|
|
|
191
|
|
||
Right-of-use asset and lease liability recognized
|
|
2,338
|
|
|
—
|
|
3.
|
Recent Accounting Pronouncements
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Net revenue by product (in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
MACI implants and kits
|
|
|
|
|
|
|
|
|
||||||||
Implants based on contracted rates sold to or through a specialty pharmacy (a)
|
|
$
|
11,779
|
|
|
$
|
11,102
|
|
|
$
|
34,555
|
|
|
$
|
26,257
|
|
Implants subject to third-party reimbursement sold through a specialty pharmacy (b)
|
|
4,030
|
|
|
1,612
|
|
|
10,584
|
|
|
5,468
|
|
||||
Implants sold direct based on contracted rates (c)
|
|
3,039
|
|
|
2,632
|
|
|
9,715
|
|
|
8,715
|
|
||||
Implants sold direct subject to third-party reimbursement (d)
|
|
573
|
|
|
490
|
|
|
1,176
|
|
|
1,070
|
|
||||
Biopsy kits - direct bill
|
|
533
|
|
|
488
|
|
|
1,632
|
|
|
1,392
|
|
||||
Change in estimates related to prior periods
|
|
656
|
|
|
125
|
|
|
353
|
|
|
(273
|
)
|
||||
Epicel
|
|
|
|
|
|
|
|
|
||||||||
Direct bill (hospital)
|
|
9,889
|
|
|
6,035
|
|
|
20,445
|
|
|
16,893
|
|
||||
Total revenue
|
|
$
|
30,499
|
|
|
$
|
22,484
|
|
|
$
|
78,460
|
|
|
$
|
59,522
|
|
|
|
|
|
|
|
|
|
|
||||||||
(a) Represents implants sold through Orsini or AllCare in which such specialty pharmacy has entered into a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy's direct contract. Also represents sales directly to DMS based on a contracted rate. Prior to June 15, 2018, the sales to Orsini represented here were based on a fixed transfer price under the distribution model.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
(b) Represents implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
(c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
(d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third-party reimbursement from an underlying insurance provider.
|
|
Revenue Concentration
|
|
Accounts Receivable Concentration
|
||||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
September 30,
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
MACI
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
24
|
%
|
|
—
|
%
|
|
2
|
%
|
Epicel
|
10
|
%
|
|
5
|
%
|
|
9
|
%
|
|
9
|
%
|
|
6
|
%
|
|
4
|
%
|
5.
|
Selected Balance Sheet Components
|
(In thousands)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
$
|
5,730
|
|
|
$
|
2,872
|
|
Work-in-process
|
976
|
|
|
638
|
|
||
Finished goods
|
117
|
|
|
48
|
|
||
Inventory
|
$
|
6,823
|
|
|
$
|
3,558
|
|
(In thousands)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Machinery and equipment
|
$
|
2,577
|
|
|
$
|
1,536
|
|
Furniture, fixtures and office equipment
|
775
|
|
|
775
|
|
||
Computer equipment and software
|
6,007
|
|
|
3,712
|
|
||
Leasehold improvements
|
4,631
|
|
|
4,587
|
|
||
Construction in process
|
1,716
|
|
|
2,801
|
|
||
Financing right-of-use lease
|
157
|
|
|
—
|
|
||
Total property and equipment, gross
|
15,863
|
|
|
13,411
|
|
||
Less: Accumulated depreciation
|
(8,673
|
)
|
|
(7,505
|
)
|
||
|
$
|
7,190
|
|
|
$
|
5,906
|
|
(In thousands)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Bonus related compensation
|
$
|
3,426
|
|
|
$
|
5,161
|
|
Employee related accruals
|
2,546
|
|
|
1,559
|
|
||
Other accrued expenses
|
988
|
|
|
210
|
|
||
|
$
|
6,960
|
|
|
$
|
6,930
|
|
6.
|
Stock Purchase Warrants
|
7.
|
Leases
|
(In thousands)
|
|
Classification
|
|
September 30, 2019
|
||
Assets
|
|
|
|
|
||
Operating
|
|
Right-of-use assets
|
|
$
|
25,619
|
|
Finance
|
|
Property and equipment, net
|
|
157
|
|
|
|
|
|
|
$
|
25,776
|
|
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating
|
|
Current portion of operating lease liabilities
|
|
$
|
2,836
|
|
Finance
|
|
Other liabilities
|
|
35
|
|
|
|
|
|
|
$
|
2,871
|
|
Non-current
|
|
|
|
|
||
Operating
|
|
Operating lease liabilities
|
|
$
|
25,311
|
|
Finance
|
|
Other long-term liabilities
|
|
114
|
|
|
|
|
|
|
$
|
25,425
|
|
|
|
September 30, 2019
|
|
Weighted average remaining lease term (years)
|
|
|
|
Operating leases
|
|
7.07
|
|
Finance leases
|
|
3.75
|
|
Weighted average discount rate
|
|
|
|
Operating leases
|
|
9.46
|
%
|
Finance leases
|
|
5.00
|
%
|
(In thousands)
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
More than 5 years
|
||||||||||||||
Operating leases
|
|
$
|
15,386
|
|
|
$
|
4,879
|
|
|
$
|
4,719
|
|
|
$
|
4,754
|
|
|
$
|
966
|
|
|
$
|
68
|
|
|
$
|
—
|
|
Capital leases
|
|
205
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|
—
|
|
|||||||
Total
|
|
$
|
15,591
|
|
|
$
|
4,920
|
|
|
$
|
4,760
|
|
|
$
|
4,795
|
|
|
$
|
1,007
|
|
|
$
|
109
|
|
|
$
|
—
|
|
8.
|
Stock-based Compensation
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of goods sold
|
|
$
|
543
|
|
|
$
|
284
|
|
|
$
|
1,519
|
|
|
$
|
820
|
|
Research and development
|
|
583
|
|
|
365
|
|
|
1,993
|
|
|
1,282
|
|
||||
Selling, general and administrative
|
|
2,159
|
|
|
1,283
|
|
|
6,583
|
|
|
3,637
|
|
||||
Total non-cash stock-based compensation expense
|
|
$
|
3,285
|
|
|
$
|
1,932
|
|
|
$
|
10,095
|
|
|
$
|
5,739
|
|
|
|
Nine Months Ended September 30,
|
||||
Service-Based Stock Options
|
|
2019
|
|
2018
|
||
Expected dividend rate
|
|
—
|
%
|
|
—
|
%
|
Expected stock price volatility
|
|
79.5-85.5%
|
|
|
82.3-88.3%
|
|
Risk-free interest rate
|
|
1.4-2.7%
|
|
|
2.4-2.9%
|
|
Expected life (years)
|
|
5.3-6.3
|
|
|
5.3-6.3
|
|
|
|
|
|
|
|
|
|
|
9.
|
Cash Equivalents and Investments
|
|
|
September 30, 2019
|
||||||||||||||
|
|
|
|
Gross Unrealized
|
|
|
||||||||||
(In thousands)
|
|
Amortized Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
Money market funds
|
|
$
|
19,431
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,431
|
|
Commercial paper
|
|
13,018
|
|
|
—
|
|
|
—
|
|
|
13,018
|
|
||||
Corporate notes
|
|
13,549
|
|
|
19
|
|
|
—
|
|
|
13,568
|
|
||||
U.S. government securities
|
|
6,986
|
|
|
6
|
|
|
—
|
|
|
6,992
|
|
||||
U.S. asset-backed securities
|
|
4,178
|
|
|
4
|
|
|
—
|
|
|
4,182
|
|
||||
|
|
$
|
57,162
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
57,191
|
|
Classified as:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
$
|
19,431
|
|
||||||
Short-term investments
|
|
|
|
|
|
|
|
37,760
|
|
|||||||
|
|
|
|
|
|
$
|
57,191
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
|
|
Gross Unrealized
|
|
|
||||||||||
(In thousands)
|
|
Amortized Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
Money market funds
|
|
$
|
5,838
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,838
|
|
Repurchase agreements
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
||||
Commercial paper
|
|
30,710
|
|
|
—
|
|
|
—
|
|
|
30,710
|
|
||||
Corporate notes
|
|
13,168
|
|
|
—
|
|
|
(24
|
)
|
|
13,144
|
|
||||
U.S. government securities
|
|
10,167
|
|
|
—
|
|
|
(1
|
)
|
|
10,166
|
|
||||
U.S. asset-backed securities
|
|
10,632
|
|
|
—
|
|
|
(14
|
)
|
|
10,618
|
|
||||
|
|
$
|
75,515
|
|
|
$
|
—
|
|
|
$
|
(39
|
)
|
|
$
|
75,476
|
|
Classified as:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
$
|
10,838
|
|
||||||
Short-term investments
|
|
|
|
|
|
|
|
64,638
|
|
|||||||
|
|
|
|
|
|
$
|
75,476
|
|
10.
|
Fair Value Measurements
|
•
|
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
|
•
|
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
|
|
|
Fair value measurement category
|
|
|
|
Fair value measurement category
|
||||||||||||||||||||||||
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
|
$
|
19,431
|
|
|
$
|
19,431
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,838
|
|
|
$
|
5,838
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Repurchase agreements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
||||||||
Commercial paper
|
|
13,018
|
|
|
—
|
|
|
13,018
|
|
|
—
|
|
|
30,710
|
|
|
—
|
|
|
30,710
|
|
|
—
|
|
||||||||
Corporate notes
|
|
13,568
|
|
|
—
|
|
|
13,568
|
|
|
—
|
|
|
13,144
|
|
|
—
|
|
|
13,144
|
|
|
—
|
|
||||||||
U.S. government securities
|
|
6,992
|
|
|
—
|
|
|
6,992
|
|
|
—
|
|
|
10,166
|
|
|
—
|
|
|
10,166
|
|
|
—
|
|
||||||||
U.S. asset-backed securities
|
|
4,182
|
|
|
—
|
|
|
4,182
|
|
|
—
|
|
|
10,618
|
|
|
—
|
|
|
10,618
|
|
|
—
|
|
||||||||
|
|
$
|
57,191
|
|
|
$
|
19,431
|
|
|
$
|
37,760
|
|
|
$
|
—
|
|
|
$
|
75,476
|
|
|
$
|
5,838
|
|
|
$
|
69,638
|
|
|
$
|
—
|
|
11.
|
Net Earnings (Loss) Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total revenues
|
|
$
|
30,499
|
|
|
$
|
22,484
|
|
|
$
|
78,460
|
|
|
$
|
59,522
|
|
Cost of product sales
|
|
9,324
|
|
|
8,138
|
|
|
26,986
|
|
|
23,531
|
|
||||
Gross profit
|
|
21,175
|
|
|
14,346
|
|
|
51,474
|
|
|
35,991
|
|
||||
Total operating expenses
|
|
18,078
|
|
|
15,682
|
|
|
71,935
|
|
|
45,895
|
|
||||
Income (loss) from operations
|
|
3,097
|
|
|
(1,336
|
)
|
|
(20,461
|
)
|
|
(9,904
|
)
|
||||
Other income (expense)
|
|
373
|
|
|
267
|
|
|
1,295
|
|
|
(3,475
|
)
|
||||
Net income (loss)
|
|
$
|
3,470
|
|
|
$
|
(1,069
|
)
|
|
$
|
(19,166
|
)
|
|
$
|
(13,379
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Revenue by product (in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
MACI
|
|
$
|
20,610
|
|
|
$
|
16,449
|
|
|
$
|
58,015
|
|
|
$
|
42,629
|
|
Epicel
|
|
9,889
|
|
|
6,035
|
|
|
20,445
|
|
|
16,893
|
|
||||
Total Revenue
|
|
$
|
30,499
|
|
|
$
|
22,484
|
|
|
$
|
78,460
|
|
|
$
|
59,522
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gross profit
|
|
$
|
21,175
|
|
|
$
|
14,346
|
|
|
$
|
51,474
|
|
|
$
|
35,991
|
|
Gross profit %
|
|
69
|
%
|
|
64
|
%
|
|
66
|
%
|
|
60
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Research and development costs
|
|
$
|
3,096
|
|
|
$
|
3,113
|
|
|
$
|
27,174
|
|
|
$
|
10,581
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Dilated Cardiomyopathy
|
|
$
|
2
|
|
|
$
|
153
|
|
|
$
|
32
|
|
|
$
|
1,119
|
|
MACI
|
|
1,804
|
|
|
2,095
|
|
|
6,165
|
|
|
7,169
|
|
||||
Epicel
|
|
875
|
|
|
865
|
|
|
2,813
|
|
|
2,293
|
|
||||
NexoBrid
|
|
415
|
|
|
—
|
|
|
18,164
|
|
|
—
|
|
||||
Total research and development costs
|
|
$
|
3,096
|
|
|
$
|
3,113
|
|
|
$
|
27,174
|
|
|
$
|
10,581
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Selling, general and administrative costs
|
|
$
|
14,982
|
|
|
$
|
12,569
|
|
|
$
|
44,761
|
|
|
$
|
35,314
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Increase in fair value of warrants
|
|
$
|
—
|
|
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
(2,524
|
)
|
Other income (expense)
|
|
(10
|
)
|
|
—
|
|
|
8
|
|
|
(1
|
)
|
||||
Net interest income (expense)
|
|
383
|
|
|
(153
|
)
|
|
1,287
|
|
|
(950
|
)
|
||||
Total other income (expense)
|
|
$
|
373
|
|
|
$
|
267
|
|
|
$
|
1,295
|
|
|
$
|
(3,475
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of goods sold
|
|
$
|
543
|
|
|
$
|
284
|
|
|
$
|
1,519
|
|
|
$
|
820
|
|
Research and development
|
|
583
|
|
|
365
|
|
|
1,993
|
|
|
1,282
|
|
||||
Selling, general and administrative
|
|
2,159
|
|
|
1,283
|
|
|
6,583
|
|
|
3,637
|
|
||||
Total non-cash stock-based compensation expense
|
|
$
|
3,285
|
|
|
$
|
1,932
|
|
|
$
|
10,095
|
|
|
$
|
5,739
|
|
Exhibit No.
|
|
Description
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.INS**
|
|
|
|
|
|
101.SCH**
|
|
|
|
|
|
101.CAL**
|
|
|
|
|
|
101.LAB**
|
|
|
|
|
|
101.PRE**
|
|
|
|
|
|
101 DEF**
|
|
|
VERICEL CORPORATION
|
|
|
|
|
|
/s/ DOMINICK C. COLANGELO
|
|
Dominick C. Colangelo
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ GERARD MICHEL
|
|
Gerard Michel
|
|
Chief Financial Officer and Vice President, Corporate Development
|
|
(Principal Financial Officer)
|
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