Vericel (VCEL) Q2 FY26 earnings call: guidance and Q&A

What is driving the acceleration in MACI's growth, particularly the step-up in the trailing 4-quarter growth rate? Please address price and volume contributions.

Management attributed MACI's acceleration to an increased sales force, the launch of MACI Arthro, and enhanced commercial execution. The growth is driven by strong biopsy and implant volume increases, coupled with sustained pricing power.

“it's really a combination of the fact that we increased our MACI sales force. We obviously launched MACI Arthro, which has had an impact, really spent a lot of time on the commercial excellence initiatives that have really elevated the execution of our MACI's commercial team.”

asked by Richard Newitter · answered by Dominick C. Colangelo

What gives confidence in the durability of MACI's pricing power, which contributes high single-digit to low double-digit growth annually?

MACI's unique regulatory classification as an advanced cell therapy, its significantly lower price compared to other cell/gene therapies, and its low overall spend impact on payers contribute to its strong pricing position. Market research indicates similar price increases are sustainable for several years.

“MACI is in a pretty unique position. It's regulated as a combination device biologic advanced cell therapy by the FDA. And when you look at the overall spend in any given category... the overall spend to any particular payer or system is very low compared to other areas in our space.”

asked by Richard Newitter · answered by Dominick C. Colangelo

Given the strong H1 performance, why does the H2 guidance imply a slowdown across the board?

Management stated that the H2 guidance framework is prudent and unchanged from prior. While internal expectations remain higher, the guidance reflects a conservative assumption of high teens growth for MACI and $12 million per quarter for Burn Care, including BARDA procurement.

“I would say kind of to your question, obviously, over the last 6 months to start the year and really going back to last year, we've had a number of strong quarters. And the reality is if the team continues to execute well from a MACI perspective, we have a strong pool of biopsies. The indicators are strong. We think we should be set up very well in the second half, certainly to meet our guidance and hopefully to outperform it.”

asked by John Rusch · answered by Joseph Mara

How will the company achieve its high 30s adjusted EBITDA margin target by 2029, considering current year guidance and significant expansion needed?

The company is on track for its midterm margin targets. 2026 is a transition year with investments in sales force expansion, the ankle trial, ex-U.S. spend, and new facility costs. More significant year-over-year increases in adjusted EBITDA margin are expected from 2027 onwards as these investments mature and the ankle trial winds down.

“this is a bit of a kind of transition year on the P&L where we still expect some modest expansion and to expand a little bit in H1 from a margin perspective. But I would generally say we would expect once we kind of get through '26 and into '27, we'll probably get into those more significant year-over-year increases on the adjusted EBITDA side and start to see that leverage flow through.”

asked by John Rusch · answered by Joseph Mara

What is the rationale behind the $200 million share repurchase authorization, and how does it fit with growth initiatives and M&A strategy?

The share repurchase program reflects the company's strong cash generation and financial position. It allows for opportunistic capital return to shareholders while maintaining primary capital allocation priorities: funding internal growth opportunities (e.g., new facility, sales force, MACI ankle study) and pursuing M&A. The company believes it can do both simultaneously.

“our capital allocation priorities remain the same. It's always about funding internal growth opportunities... But again, with kind of the performance of the business, our strong balance sheet, doing a share repurchase program where we can opportunistically return capital to investors, we can do both.”

asked by Ryan Zimmerman · answered by Dominick C. Colangelo

What are the expectations for reimbursement and pricing for the MACI U.K. launch in 2027, and how will it impact overall margins?

The U.K. is a strategic beachhead with strong brand recognition and a concentrated market (12-13 centers of excellence). A prior NICE review indicated acceptable pricing, and the company expects attractive reimbursement given historical context and long-term data. The U.K. launch is expected to fit well with the company's margin profile, utilizing existing manufacturing capacity and requiring minimal sales and marketing investment.

“From a commercial execution standpoint, it's a very concentrated market there with a dozen or so centers of excellence... Back in the late teens, there actually was a review of ACI technologies and a positive opinion from NICE that had pricing that was certainly -- it's lower than the U.S., but certainly acceptable for us.”

asked by Ryan Zimmerman · answered by Dominick C. Colangelo

Can you provide color on MACI Arthro adoption, particularly in patella and larger defects versus smaller condyles, and its market-expanding impact?

MACI Arthro instruments are designed for smaller femoral condyle defects (2-4 sq cm), but use has also been observed in trochlea and some smaller patella cases. Surgeons performing MACI Arthro cases demonstrate higher activity levels. Upcoming clinical data publications are expected to further support increased uptake and positive outcomes.

“the MACI Arthro instruments are designed to treat smaller femoral condyle defects, 2 to 4 square centimeter defects, and that's obviously where they are being used. As we've talked about on prior calls, we have seen use outside the femoral condyle. So in the trochlea in particular, which was a nice sort of upside and then even some patella cases as well.”

asked by Michael Kratky · answered by Dominick C. Colangelo

What is the timeline for launching next-generation MACI Arthro instruments?

The company continuously works with surgeons to develop instruments that reduce procedure time and simplify MACI Arthro. After a design freeze, expected in the next couple of quarters, it typically takes about a year for validation and approval. The next sets of instruments are likely to be launched around 2028.

“once we have a design freeze, which will happen here in the next couple of quarters, call it, it's usually another year or so after that to get through the whole validation and approval process. So I'd say probably maybe 2028 would be a good time frame to think about next sets of instruments coming out.”

asked by Caitlin Roberts · answered by Dominick C. Colangelo

Are there plans for domestic sales force expansion in H2, and what preparations are being made for the U.K. commercial launch?

No wholesale sales force expansion is planned for H2 for either Burn Care or MACI, as recent expansions are complete. Future additions will be opportunistic. For the U.K., only a handful of commercial staff will be needed due to the concentrated market, likely hired late 2026 or early 2027 for a 2027 launch.

“on the MACI side, obviously, we just completed early this year sort of the bigger sales force expansion. So I think we're pretty good. I don't have any plans for the second half of the year on either of those accounts. And I would say, as we go forward, it's kind of probably going to be more about opportunistically increasing or adding reps where necessary in different parts of the country.”

asked by Jeffrey Cohen · answered by Dominick C. Colangelo

Can you discuss NexoBrid's utilization, ordering centers, and any overlap with Epicel accounts?

Momentum is building for NexoBrid, evidenced by record revenue, ordering centers, and hospital unit sales. The company has approximately 80 cumulative ordering centers. This positive trend is expected to continue, especially in combination with the upcoming BARDA procurement.

“we're starting to feel the momentum build for NexoBrid. Obviously, we said it was a record revenue, ordering center, hospital unit sales quarter for us and that we're essentially up to about 80 ordering centers cumulatively over time since launch.”

asked by Jeffrey Cohen · answered by Dominick C. Colangelo