Vericel Still Hot?

Shares of Vericel Corporation (VCEL) have gained an impressive 200% year-to-date, way ahead of the mere 0.9% returned by iShares Nasdaq Biotechnology ETF (IBB) for the same period.

Vericel, formerly known as Aastrom Biosciences Inc., is focused on developing advanced cell therapies for the sports medicine and severe burn care markets.

The Company currently markets two FDA approved autologous cell therapy products – MACI, 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, and Epicel, a permanent skin replacement Humanitarian Use Device (HUD), for the treatment of patients with deep-dermal or full-thickness burns.

Vericel has grown its revenue over the years, thanks to continued momentum in MACI and Epicel uptake.

Here’s a quick look at the Company’s top line and bottom line results for the last 5 years.

Metrics 2013 2014 2015 2016 2017
Revenue $19,000 $28.79Mln $51.16Mln $54.38Mln $63.92Mln
Net Loss $15.62Mln $19.92Mln $16.34Mln $19.56Mln $17.28Mln
Loss per share $6.95 $2.23 $0.97 $1.18 $0.52

The Company had a strong start to 2018 with significant revenue growth for both MACI and Epicel, and there seems to be no let-up in the same.

Revenue for the nine months ended September 30, 2018, rose to $59.52 million from $40.57 million in the comparable year-ago period. The net loss for the first nine months of 2018 narrowed to $13.37 million or $0.34 per share from $17.57 million or $0.54 per share in the year-earlier period.

Vericel has plans to increase the MACI sales force by 20%, increasing from 40 to 48 representatives in 2019.

Based on the strength of its year-to-date performance, and the continued momentum in MACI uptake, the Company has raised its full year 2018 revenue outlook to a range of $87 million to $90 million, up from its prior revenue guidance range of $80 million to $83 million.

Vericel has 1 investigational product – Ixmyelocel-T, a unique patient-specific multicellular therapy derived from an adult patient’s own bone marrow, for the treatment of advanced heart failure due to dilated cardiomyopathy.

A phase IIb trial with Ixmyelocel-T was successfully completed in February 2015. However, the Company currently has no plans to initiate or fund a phase III trial on its own unless funded by a partner.

The Company ended September 30, 2018 with cash of $97.8 million.

We alerted our premium subscribers to VCEL on January 4, 2016, when it was trading around $2.54. (Report titled “Will It Win Investors’ Hearts?”).

The stock touched an all-time of $17.26 in intraday trading yesterday (Nov.6, 2018) before closing at $16.65.

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