Vericel (VCEL) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Business and product overview

• Focuses on advanced cell therapies and specialty biologics for sports medicine and severe burn care markets.

• MACI is the leading FDA-approved restorative cartilage repair product, recently expanded for arthroscopic delivery.

• Burn care portfolio includes NexoBrid (enzymatic eschar removal, now with pediatric indication) and Epicel (permanent skin replacement for large burns).

• All products are the only FDA-approved in their class, with significant competitive barriers and exclusivity.

Financial performance and outlook

• Achieved over 20% compounded annual revenue growth since 2017, driven by MACI and Epicel.

• Positive operating cash flow and adjusted earnings for each quarter over the past four years.

• Ended Q2 with over $150 million in cash and no debt.

• Gross margin reached 70% in Q2, with adjusted EBITDA margin expected to exceed 20% this year and targeting 30%+ in coming years.

• Profitability metrics are improving, with expectations for continued top-line and bottom-line growth.

MACI Arthro approval and growth strategy

• FDA approval for MACI Arthro enables minimally invasive procedures for 2-4 sq cm cartilage defects, addressing a third of the 60,000-patient, $3B market.

• Go-to-market strategy expands target surgeon base from 5,000 to 7,000, focusing on high-volume arthroscopists.

• Early adoption expected from existing MACI surgeons with a pool of eligible biopsies, with new users contributing over time.

• Growth drivers include expanding surgeon base, increasing biopsies per surgeon, higher conversion rates, and pricing.