Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Feb. 28, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Vericel Corp
Entity Central Index Key	0000887359
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding (in shares)		36,103,211
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 107,971,565

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash	$ 26,862	$ 22,978
Accounts receivable (net of allowance for doubtful accounts of $249 and $225, respectively)	18,270	17,093
Inventory	3,793	3,488
Other current assets	1,581	1,164
Total current assets	50,506	44,723
Property and equipment, net	4,071	3,875
Total assets	54,577	48,598
Current liabilities:
Accounts payable	5,552	6,535
Accrued expenses	5,573	4,523
Short term deferred rent	420	3
Warrant liabilities	1,014	757
Current portion of term loan credit agreement (net of deferred costs of $67 and $110, respectively)	350	779
Other	181	256
Total current liabilities	13,090	12,853
Revolving and term loan credit agreement (net of deferred costs of $196 and $293, respectively)	16,888	9,318
Long term deferred rent	2,059	1,687
Other long term debt	0	32
Total liabilities	32,037	23,890
COMMITMENTS AND CONTINGENCIES (Note 15)
Shareholders’ equity:
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 35,861 and 31,595, respectively	383,020	329,720
Warrants	397	190
Accumulated deficit	360,877	343,591
Total shareholders’ equity	22,540	24,708
Total liabilities and shareholders’ equity	54,577	48,598
Series B-2
Shareholders’ equity:
Series B-2 non-voting convertible preferred stock, no par value: shares authorized and reserved — 39; shares issued and outstanding — 0 and 12, respectively	$ 0	$ 38,389

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts	$ 249	$ 225
Current portion of revolving and term loan credit agreement, deferred costs	67	110
Noncurrent portion of revolving and term loan credit agreement, deferred costs	$ 196	$ 293
Common stock, shares authorized (in shares)	75,000	75,000
Common stock, shares issued (in shares)	35,861	31,595
Common stock, shares outstanding (in shares)	35,861	31,595
Series B-2
Convertible preferred stock, shares authorized (in shares)	39	39
Convertible preferred stock, shares reserved (in shares)	39	39
Convertible preferred stock, shares issued (in shares)	0	12
Convertible preferred stock, shares outstanding (in shares)	0	12

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Product sales, net	$ 62,760	$ 54,383	$ 51,168
Other	1,164	0	0
Total revenue	63,924	54,383	51,168
Cost of product sales	30,354	28,307	26,470
Gross profit	33,570	26,076	24,698
Research and development	12,944	15,295	18,890
Selling, general and administrative	35,610	27,388	22,479
Loss on impairment of intangible asset	0	2,638	0
Total operating expenses	48,554	45,321	41,369
Loss from operations	(14,984)	(19,245)	(16,671)
Other income (expense):
(Increase) decrease in fair value of warrants	(257)	0	324
Loss on extinguishment of debt	(860)	0	0
Interest income	14	8	36
Other (expense) income	(92)	(15)	(20)
Interest expense	(1,107)	(314)	(9)
Total other (expense) income	(2,302)	(321)	331
Net loss	$ (17,286)	$ (19,566)	$ (16,340)
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ (0.52)	$ (1.18)	$ (0.97)
Weighted average number of common shares outstanding (Basic and Diluted) (in shares)	33,355	23,093	23,760

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock	Common Stock	Treasury Stock	Warrants	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2014		12	23,786	0
Beginning balance at Dec. 31, 2014	$ 35,641	$ 38,389	$ 305,008	$ 0	$ 0	$ (71)	$ (307,685)
Increase (Decrease) in Shareholders' Equity
Net loss	(16,340)						(16,340)
Common stock exchanged for preferred stock and held in treasury shares (in shares)		1		(1,250)
Common stock exchanged for preferred stock and held in treasury shares	0	$ 3,150		$ (3,150)
Compensation expense related to stock options granted, net of forfeitures	2,747		$ 2,747
Stock option exercises (in shares)			3
Stock option exercises	11		$ 11
Foreign currency translation adjustment	71					71
Ending balance (in shares) at Dec. 31, 2015		13	23,789	(1,250)
Ending balance at Dec. 31, 2015	22,130	$ 41,539	$ 307,766	$ (3,150)	0	0	(324,025)
Increase (Decrease) in Shareholders' Equity
Net loss	(19,566)
Conversion of preferred stock for common stock (Note 9) (in shares)		(1)		1,250
Conversion of preferred stock for common stock (Note 9)	0	$ (3,150)		$ 3,150
Compensation expense related to stock options granted, net of forfeitures	2,499		$ 2,499
Issuance of common stock, net of issuance costs (in shares)			7,538
Issuance of common stock, net of issuance costs	18,868		$ 18,868
Stock option exercises (in shares)			39
Stock option exercises	120		$ 120
Shares issued under the Employee Stock Purchase Plan (in shares)			229
Shares issued under the Employee Stock Purchase Plan	467		$ 467
Foreign currency translation adjustment	0
Issuance of warrants (Note 11)	190				190
Ending balance (in shares) at Dec. 31, 2016		12	31,595	0
Ending balance at Dec. 31, 2016	24,708	$ 38,389	$ 329,720	$ 0	190	0	(343,591)
Increase (Decrease) in Shareholders' Equity
Net loss	(17,286)						(17,286)
Conversion of preferred stock for common stock (Note 9) (in shares)		(12)	1,094
Conversion of preferred stock for common stock (Note 9)	0	$ (38,389)	$ 38,389
Compensation expense related to stock options granted, net of forfeitures	2,680		$ 2,680
Issuance of common stock, net of issuance costs (in shares)			1,983
Issuance of common stock, net of issuance costs	7,188		$ 7,188
Stock option exercises (in shares)			199
Stock option exercises	608		$ 608
Shares issued under the Employee Stock Purchase Plan (in shares)			173
Shares issued under the Employee Stock Purchase Plan	425		$ 425
Foreign currency translation adjustment	0
Issuance of warrants (Note 11)	207				207
Exercise of warrants resulting in the issuance of common stock (Note 11) (in shares)			817
Exercise of warrants resulting in the issuance of common stock (Note 11)	4,010		$ 4,010
Ending balance (in shares) at Dec. 31, 2017		0	35,861	0
Ending balance at Dec. 31, 2017	$ 22,540	$ 0	$ 383,020	$ 0	$ 397	$ 0	$ (360,877)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (17,286)	$ (19,566)	$ (16,340)
Foreign currency translation	0	0	71
Comprehensive loss	$ (17,286)	$ (19,566)	$ (16,269)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities:
Net loss	$ (17,286)	$ (19,566)	$ (16,340)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	1,612	1,886	1,592
Loss on impairment of intangible asset	0	2,638	0
Stock compensation expense	2,680	2,499	2,747
Inventory provision	352	137	627
Change in fair value of warrants	257	0	(324)
Loss on extinguishment of debt	(860)	0	0
Foreign currency translation loss	37	5	67
Gain on sale of fixed assets	(115)	0	(35)
Deferred rent expense	(13)	670	0
Write down of asset retirement obligation	0	0	(268)
Changes in operating assets and liabilities:
Inventory	(657)	(2,245)	(86)
Deferred Rent	798	898	0
Accounts receivable	(1,177)	(6,174)	(2,728)
Other current assets	(261)	(701)	572
Accounts payable	(1,361)	(1,076)	1,726
Accrued expenses	1,050	920	(764)
Other non-current assets and liabilities, net	41	217	(132)
Net cash used for operating activities	(13,183)	(19,892)	(13,346)
Investing activities:
Expenditures for property, plant and equipment	(1,510)	(1,415)	(2,427)
Other	0	0	35
Net cash used for investing activities	(1,510)	(1,415)	(2,392)
Financing activities:
Net proceeds from issuance of common stock	8,220	19,455	11
Deferred financing costs	(30)	(213)	0
Proceeds from exercise of warrants (Note 11)	4,010	0	0
Borrowings under revolving and term loan credit agreements	14,793	12,710	0
Proceeds from issuance of warrants	207	190	0
Payments on term loan credit agreement	(889)	(2,400)	0
Payments on long-term debt	(7,151)	(38)	(35)
Fee on long-term debt	(583)	0	0
Net cash provided by (used in) financing activities	18,577	29,704	(24)
Net increase (decrease) in cash	3,884	8,397	(15,762)
Cash at beginning of period	22,978	14,581	30,343
Cash at end of period	26,862	22,978	14,581
Supplemental cash flow information (non-cash):
Shares exchanged between common and preferred stock	(38,389)	(3,150)	3,150
Additions to equipment in process included in accounts payable	$ 341	$ 18	$ 42

Organization	12 Months Ended
Organization	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Vericel Corporation, a Michigan corporation (the Company, Vericel, we, us or our), was incorporated in March 1989 and began employee-based operations in 1991. On May 30, 2014, Vericel completed the acquisition of certain assets and assumed certain liabilities of Sanofi, a French société anonyme (Sanofi), including all of the outstanding equity interests of Genzyme Biosurgery ApS (Genzyme Denmark or the Danish subsidiary) (now known as Vericel Denmark ApS), a wholly-owned subsidiary of Sanofi, and a portfolio of patents and patent applications of Sanofi and certain of its subsidiaries for purposes of acquiring the portion of the cell therapy and regenerative medicine business (the CTRM Business), which researches, develops, manufactures, markets and sells the MACI^® and Epicel^® products. The Company is a fully integrated, commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of innovative therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. Vericel has marketed products and developmental stage product candidates, and the Company’s goal is to become the leader in cell therapy and regenerative medicine by developing, manufacturing and marketing best-in-class therapies for patients with significant unmet medical needs. The Company operates its business primarily in the U.S. in one reportable segment — the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies to repair and regenerate damaged tissues and organs to normal structure and function. The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As of December 31, 2017, the Company has an accumulated deficit of $360.9 million and had a net loss of $17.3 million during 2017. The Company had cash of $26.9 million as of December 31, 2017. The Company expects that existing cash together with its term loan and revolving line of credit agreement with Silicon Valley Bank (SVB) and MidCap Financial Services (MidCap) (the SVB-MidCap facility), will be sufficient to support the Company's current operations through at least March 31, 2019. In connection with the SVB-MidCap facility, the Company must remain in compliance with minimum monthly net revenue covenants (determined in accordance with U.S. GAAP), measured on a trailing twelve month basis. The December 31, 2018 minimum revenue covenant is set at $63.6 million. SVB and MidCap also have the ability to call debt based on material adverse change clauses which are subjectively determinable and result in a subjective acceleration clause. If the Company's cash requirements exceed its current expectations, or if it is not in compliance with the monthly net revenue covenants or the subjective acceleration clauses are triggered under the SVB-MidCap Facility, then SVB may call the debt resulting in the Company immediately needing additional funds. As of December 31, 2017, the Company was in compliance with the minimum revenue covenant set forth in the Third Loan Modification Agreement between the Company, SVB and MidCap. The Company may seek additional funding through debt or equity financings including the at-the-market sales agreement in place with Cowen and Company, LLC. However, the Company may not be able to obtain financing on acceptable terms or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's shareholders. If the Company needs additional funds and is unable to obtain funding on a timely basis, the Company may need to significantly curtail its operations in an effort to provide sufficient funds to continue its operations, which could adversely affect its business prospects.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Vericel and its wholly-owned subsidiaries, Marrow Donation, LLC, located in San Diego, California, and Vericel Denmark ApS, in Kastrup, Demark (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. Marrow Donation, LLC and Vericel Denmark ApS ceased operations in 2015.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Actual results could differ from those estimates.

Consolidated Statement of Cash Flows

The following table presents certain supplementary cash flows information for the years ended December 31, 2017, 2016 and 2015:



	Year Ended December 31,
(In thousands)	2017		2016		2015
Interest paid (net of interest capitalized)	$	931	$	226	$	—
Income tax withholding paid	100		—		—

Inventory

Inventories are measured at the lower of cost and net realizable value. Cost is calculated based upon standard-cost which approximates costs determined on the first-in, first-out method. The Company periodically reviews its inventories for excess or obsolescence and write-down obsolete or other unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written down are charged to cost of sales.

Accounts Receivable

Accounts receivable are initially recorded at the contractual amount owed by the customer. Allowances for doubtful accounts are established when the facts and circumstances indicate that a receivable may not be collectible.

Property, Plant and Equipment

Property, plant and equipment are initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use or, in the case of assets acquired in a business combination, at fair value as at the date of the combination. After initial measurement, property, plant and equipment are carried at cost less accumulated depreciation and impairment. Repair and maintenance costs of property, plant and equipment are expensed as incurred.

The depreciable value of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life. The useful lives of property, plant and equipment are as follows:

•Equipment and computers: 3 to 5 years

•Furniture and fixtures: 5 years

•Building improvements and leasehold improvements: Shorter of the remaining life of the lease or 7 years

The costs of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations.

Intangible Assets and Other Long Lived Assets

Intangible assets are initially measured at acquisition cost, including any directly attributable costs of preparing the asset for its intended use or, in the case of assets acquired in a business combination at fair value as at the date of the combination. Identifiable intangible assets related to commercial rights are amortized on a straight line basis over their expected useful lives. Amortization of intangible assets is recognized in these financial statements under Costs of product sales.

Intangible assets and long-lived assets are assessed for potential impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss would be recognized when an asset’s fair value, determined based on undiscounted cash flows expected to be generated by the asset, is less than its carrying amount. The impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value and recognized in these financial statements. Intangible assets are carried at cost less accumulated amortization and impairment. Upon the approval of MACI in December 2016 and the replacement of Carticel with MACI, it was determined that the Carticel commercial rights intangible asset was fully impaired as of December 31, 2016 resulting in a loss on intangible asset impairment of $2.6 million. The value of the intangible assets was determined using the income approach based on projected cash flows attributed to the commercial rights.

Revenue Recognition and Net Product Sales

Revenue from sales to a customer (distributor, hospital or other party) is recognized in accordance with ASC 605, Revenue Recognition and SAB Topic 104, Revenue Recognition (ASC 605), when (i) persuasive evidence of an arrangement exists, (ii) the goods are shipped or delivered and implanted, depending on shipping terms, (iii) title and risk of loss pass to the customer and (iv) collectability is reasonably assured. Shipping and handling costs are included as a component of revenue. Revenue from sales where the patient is the customer and a third party payer (insurance company, etc.) pays all or some of the product price on the patient's behalf are accounted for under ASC 954-605, Health Care Entities - Revenue Recognition (ASC 954).

Prior to July 1, 2016, the Company sold Carticel through a distributor and followed ASC 605, Revenue Recognition and SAB Topic 104 Revenue Recognition to record revenue. This distributor purchased and took title to Carticel upon shipment of the product and assumed credit and collection risk related to the end customers. The distributor worked with the payers on behalf of patients and surgeons to ensure medical coverage and to obtain reimbursement for Carticel implantation procedures. Under this arrangement, the distributor is the Company's customer. The Company retained responsibility for shipment of the product to the surgical suite. Revenue was recorded for Carticel upon occurrence of the surgery, net of provisions for rebates and cash discounts. Such rebates and discounts were $0.5 million for the year ended December 31, 2016. There were no material rebates or cash discounts for year ended December 31, 2017. These rebates and prompt payment cash discounts were established by the Company at the time of sale, based on actual experience adjusted to reflect known changes in the factors that impact such reserves. Adjustments to these reserves had historically not been significant.

On June 30, 2016, the Company reduced the scope of the agreement with its exclusive distributor by terminating their services for a significant portion of its Carticel sales. On July 1, 2016, the Company transitioned to a direct sales model for Carticel and MACI after launch whereby the Company retained credit and collection risk from the patient as the end customer. The Company utilized a new provider, Dohmen Life Science Services, LLC (DLSS), to provide patient support services but this provider did not purchase and take title to Carticel or MACI. Under this arrangement, the patient is the Company's customer. On May 15, 2017, the Company and DLSS mutually terminated the agreement effective June 30, 2017. The Company also utilized Vital Care Inc. and its franchisees as a second provider to expand the available network of contracted third-party payers for Carticel and MACI. Under this direct sales model, the patient bears the ultimate financial responsibility for the purchase of Carticel or MACI and as such the Company recognized revenue in accordance with ASC 954-605, Health Care Entities - Revenue Recognition. The third party payer (insurance company, government, etc.) pays all or some of the product price on the patient’s behalf.

Under the direct sales model, the Company recognizes product revenues from sales of Carticel and MACI upon implantation at which time the claim is billable to patient’s insurance provider on behalf of the patient and is billed by either DLSS or Vital Care. The Company assumed counterparty risk for the third party reimbursement payment from the payer and from the patient co-pay. Prior authorization or confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of product to a patient. The Company's net product revenues are calculated by estimating expected payments for insurance, hospital or patient payments at the time it invoices and recognizes revenue. To support this direct sales model, the Company utilized DLSS to provide administrative services associated with case management and reimbursement support and to provide billing and collection services. The Company utilized Vital Care to provide similar billing and collection services for a subset of insurance payers and patients.

In April 2017, we were was notified of a contractual dispute between Vital Care and a third-party payer and as a result, during the three months ended March 31, 2017, we increased our estimated revenue allowances, reducing revenue by $2.1 million related to 2016 sales and $0.7 million related to 2017 sales to reflect the lower reimbursement that would be obtained if the claims were ultimately required to be treated as out-of-network. In July 2017, the dispute was resolved and the negotiated reimbursement resulted in our ability to initially reduce our estimated sales allowances by $1.4 million which resulted in additional revenue in the second quarter of 2017 related to sales which originated primarily in 2016. As a result of the continuing evaluation and assessment of these expected payments, our estimates for expected payments could change. Other than this adjustment the other adjustments recorded during 2017 related to our estimation under ASC 954-605, Health Care Entities - Revenue Recognition were not significant.

On May 15, 2017, the Company entered into a distribution agreement with Orsini Pharmaceutical Services, Inc. (Orsini) to appoint Orsini as a specialty pharmacy distributor of MACI to patients' physicians and other healthcare providers. The initial term of the distribution agreement will end on May 15, 2019 with the option of 2 additional two-year terms.

Other Revenue

Other revenue represents the amount of revenue recorded upon the license grant to Innovative Cellular Therapeutics CO., LTD. (ICT) discussed in note 15. The Company received $1.2 million from ICT for licenses and the technology for Carticel, MACI, Epicel and Ixmyelocel-T and related payments. The license grant and related arrangement is accounted for under the multiple-element arrangement guidance (arrangements with more than one deliverable). As a result, interpretation and judgment is required to determine the appropriate accounting for these transactions including how the arrangement consideration should be allocated among potential multiple deliverables and developing an estimate of the stand-alone selling price of each deliverable. For multiple-element arrangements, revenue is allocated to each unit of accounting based on their relative selling prices. Relative selling prices are based on management's best estimate of the selling price. As a result of the assessment of the fair value, the Company's estimates could impact the timing or amount of revenue recognition.

In accordance with the multiple element arrangement accounting, we allocated the upfront payment from ICT to the multiple deliverables which include the license, a training obligation, and product supply. Based upon our determination of the best estimate of selling price of each of these deliverables, the majority of the upfront payment was allocated to the license. The license was delivered in December of 2017 and as such revenue of $1.2 million was recorded in 2017.

Research and Development Expense

Research and development activities represent a significant part of the Company’s business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of consumers and patients. Research and development expenses are expensed as incurred.

Stock-Based Compensation

The Company’s accounting for stock-based compensation requires it to determine the fair value of common stock issued in the form of stock option awards. The Company uses the value of its common stock at the date of the grant in the calculation of the fair value of its share-based awards. The fair value of stock options held by the employees is determined using a Black-Scholes option valuation method, which is a valuation technique that is acceptable for share-based payment accounting. Key assumptions in determining fair value include volatility, risk-free interest rate, dividend yield and expected term. The assumptions used in calculating the fair value of stock options represent the Company’s best estimates, however; these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. In addition, the Company estimates the expected forfeiture rate and only recognize expense for those stock options expected to vest over the service period. The estimated forfeiture rate considers the historical experience of the Company’s stock-based awards. If the actual forfeiture rate is different from the estimate, expense is adjusted accordingly.

The Company also has an Employee Stock Purchase Plan (ESPP) which is a compensatory plan. Compensation expense is recorded based on the fair value of the purchase options at the grant date, which corresponds to the first day of each purchase period, and is amortized over the purchase period.

Comprehensive Loss

Comprehensive loss is the change in common stockholders’ equity during a period arising from any gain or loss realized related to foreign currency translation. Since 2015, when we ceased operations in Denmark, foreign currency translation has been recognized in the statement of operations. As a result there are no remaining differences between net loss and comprehensive loss for 2017 and 2016.

Income Taxes

Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company records uncertain tax positions in the financial statements only if it is more likely than not that the uncertain tax position will be sustained upon examination by the taxing authorities. The Company records interest and penalties related to uncertain tax positions in income tax expense.

Net Loss Per Share Attributable to Common Shareholders

Basic and diluted earnings (loss) per share is calculated using the two-class method. Basic earnings (loss) per share which is based on an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B preferred stock. The Series B preferred stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. The accumulated but undeclared dividends on the Series B preferred stock of $7.6 million and $6.7 million for the years ended December 31, 2016 and 2015, respectively, are treated as a reduction of earnings attributable to common shareholders. There were no undeclared dividends for the year ended December 31, 2017. Diluted earnings (loss) per share includes convertible securities or common equivalent share (stock options and warrants) in addition to the Company's common shares. Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive.

Financial Instruments

The Company’s financial instruments include receivables for which the current carrying amounts approximate market value based upon their short-term nature.

Warrants

Warrants that could be cash settled or have anti-dilution price protection provisions are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in our statement of operations in each subsequent period. Warrants that meet the requirements for equity classification are recorded at fair value with no subsequent remeasurement. In general, warrants are measured using the Black-Scholes valuation model. The methodology is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent our best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the change in estimated fair value of the warrant liability for those warrants that could be cash settled or have anti-dilution price protection provisions, could be materially different.

Recent Accounting Pronouncements	12 Months Ended
Recent Accounting Pronouncements	Dec. 31, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance requiring entities to apply a new model for recognizing revenue from contracts with customers and the reporting of principal versus agent considerations. The guidance will supersede the current revenue recognition guidance and require entities to evaluate their revenue recognition arrangements using a five step model to determine when a customer obtains control of a transferred good or service. The guidance is currently effective for annual reporting periods beginning after December 15, 2017 and may be adopted using a full or modified retrospective application. The Company has completed its assessment of the new standard and does not expect a material impact to the consolidated financial statements for the Company's performance obligations satisfied upon delivery. For transactions with multiple performance obligations, including the ICT license agreement, we are assessing the impact on the change in standard for any future obligations. The Company does not have variable pricing arrangements that are retrospective or represent a material right to its customers. The guidance becomes effective for the year beginning January 1, 2018 and the Company will adopt the guidance using the modified retrospective approach. Accounting for Leases The FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the assets and liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within 2018. The Company is currently reviewing the potential impact of adopting the new guidance. Statement of Cash Flows Presentation The FASB issued guidance to address diversity in practice with respect to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The updated guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity that occurs in practice. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the new guidance early. As a result of the adoption of this standard, in the 2017 cash flow statement we presented $0.6 million of fees paid to the lender in connection with the refinancing as a financing activity. Share-based Payment Accounting for Modifications The FASB issued clarifying guidance in amendments to the accounting for share-based payments and the application of modification accounting. The update provides clarity and reduces both diversity in practice and cost and complexity when applying modification guidance. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within 2017. The Company has adopted the new guidance for the period ended December 31, 2017 and there were no impacts to the consolidated financial statements.

Concentration of Credit Risk

12 Months Ended

Dec. 31, 2017

Risks and Uncertainties [Abstract]

Concentration of Credit Risk

On May 15, 2017, the Company and DLSS mutually terminated their agreement effective June 30, 2017. On May 15, 2017, the Company entered into a distribution agreement with Orsini as a specialty pharmacy distributor of MACI and has engaged a third party services provider to provide the patient support program previously provided by DLSS and to manage patient cases for MACI. The Company’s receivables risk is now more concentrated, and the concentration of credit risk also shifted for the Company.

The Company's total revenue and accounts receivable balances were comprised of the following concentrations from its largest customers of Carticel, MACI and Epicel, as follows:



	Revenue Concentration						Accounts Receivable Concentration
	Year Ended December 31,						December 31,
	2017		2016		2015		2017		2016
Carticel and MACI	35	%	31	%	66	%	46	%	1	%
Epicel	10	%	11	%	12	%	3	%	5	%

Selected Balance Sheet Components

12 Months Ended

Dec. 31, 2017

Balance Sheet Related Disclosures [Abstract]

Selected Balance Sheet Components

Inventory

Inventory as of December 31, 2017 and 2016:



(In thousands)	2017		2016
Raw materials	$	3,532	$	3,214
Work-in-process	226		257
Finished goods	35		17
Inventory	$	3,793	$	3,488

Property and Equipment

Property and Equipment, net as of December 31, 2017 and 2016:



(In thousands)	2017			2016
Machinery and equipment	$	1,249		$	3,150
Furniture, fixtures and office equipment	872			931
Computer equipment and software	3,536			3,147
Leasehold improvements	4,213			3,332
Construction in process	822			408
	10,692			10,968
Less accumulated depreciation	(6,621		)	(7,093		)
Property and Equipment	$	4,071		$	3,875

Depreciation expense for the years ended December 31, 2017, 2016 and 2015 were $1.6 million, $1.6 million and $1.3 million, respectively.

Accrued Expenses

Accrued Expenses as of December 31, 2017 and 2016:



(In thousands)	2017		2016
Bonus	$	2,693	$	2,433
Employee related accruals	2,389		1,668
Other accrued expenses	491		422
Accrued expenses	$	5,573	$	4,523

Debt

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Debt

On December 6, 2017, we replaced the existing term loan and revolving line of credit agreement with SVB and MidCap Financial Services, or MidCap, which provide access to up to $25.0 million. The updated debt financing consists of a $15.0 million term loan which was drawn at the closing and up to $10.0 million of a revolving line of credit. The term loans are interest only (indexed to Wall Street Journal (WSJ) Prime plus 4.25%) until December 1, 2018 followed by 36 equal monthly payments of principal plus interest maturing December 6, 2021. Under the terms of the agreement, the revolving credit is limited to a borrowing base calculated using eligible accounts receivable and maturing December 6, 2021 with an interest rate indexed to WSJ Prime plus 1.25%. The Company is subject to various financial and nonfinancial covenants including but not limited to a monthly minimum net revenue covenant (determined in accordance with GAAP), measured on a trailing twelve month basis. SVB and MidCap have the ability to call debt based on material adverse change clauses which are subjectively determinable and result in a subjective acceleration clause. SVB and MidCap have a shared first priority perfected security interest in all assets of the Company other than intellectual property. As of December 31, 2017, there was an outstanding balance of $15.0 million under the term loan and $2.5 million under the revolving line of credit. The weighted average interest rate on the outstanding term and revolving credit loans as of December 31, 2017 was 8.32% in addition to a final payment of 3.6% of the term loan due upon maturity. The remaining capacity under the revolving line of credit as of December 31, 2017 was $7.5 million and we were, and continue to be, in compliance with our financial and non-financial debt covenants. Warrants were issued in conjunction with the modified debt agreement as discussed in note 11.

Annual principal payments on debt at December 31, 2017, are as follows:

໿



(in thousands)
Years Ending December 31,	Amount
2018	$	417
2019	5,000
2020	5,000
2021	7,083
2022	—
Thereafter	—
	$	17,500

In determining whether the debt replacement is to be accounted for as a debt extinguishment or a debt modification, the Company considered whether creditors remained the same or changed and whether the changes in debt terms are substantial. After performing the assessment in accordance with accounting guidance for the modification of debt arrangements, the term loan portion was determined to be accounted for as a debt extinguishment and the revolving credit agreement was considered a debt modification. As a result, the unamortized deferred financing costs, lender fees and warrant issuance costs allocated to the term loan were recognized as a loss on extinguishment of debt of $0.9 million. Fees allocated to the revolving credit agreement will be deferred over the life of the new revolving debt arrangement.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock Option and Equity Incentive Plans

The Company has historically had various stock incentive plans and agreements that provide for the issuance of nonqualified and incentive stock options as well as other equity awards. Such awards may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants. Options granted under these plans expire no later than ten years from the date of grant, and other than those granted to non-employee directors, generally become exercisable over a four year period, under a graded-vesting methodology, following the date of grant. The Company generally issues new shares upon the exercise of stock options.

The 2017 Omnibus Incentive Plan (2017 Plan) was approved by the Company's shareholders on May 3, 2017 at the annual meeting of shareholders. The 2017 Plan provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the 2017 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2017 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan and the 2009 Second Amended and Restated Omnibus Incentive Plan (Prior Plans), and no new awards have been granted under the Prior Plans. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the awards available for issuance under the 2017 Plan.

As of December 31, 2017, there were 4,427,722 shares available for future grant under the 2017 Plan.

Employee Stock Purchase Plan

Employees are able to purchase stock under the Vericel Corporation Employee Stock Purchase Plan (ESPP). The ESPP allows for the issuance of an aggregate of 1,000,000 shares of common stock of which 429,511 have been granted since the inception of the benefit in 2015. Participation in this plan is available to substantially all employees. The ESPP is a compensatory plan accounted for under the expense recognition provisions of the share-based payment accounting standards. Compensation expense is recorded based on the fair market value of the purchase options at the grant date, which corresponds to the first day of each purchase period and is amortized over the purchase period. In January 2018, employees purchased 27,506 shares resulting in proceeds from the sale of common stock of $0.1 million under the ESPP for the fourth quarter of 2017. The total share-based compensation expense for the ESPP for the years ended December 31, 2017, 2016, and 2015 was approximately $0.2 million, $0.2 million, and $0.1 million, respectively.

Service-Based Stock Options

During the year ended December 31, 2017, the Company granted 1,686,210 service-based options to purchase common stock. The exercise price of the options is the fair market value per share of common stock on the grant date, generally vest over four years (other than 105,000 non-employee options which vest over one year) and have a term of ten years. The weighted average grant-date fair value of service-based options granted during the years ended December 31, 2017, 2016, and 2015 was $1.99, $2.15 and $2.22, respectively.

The net compensation costs recorded for the service-based stock options related to employees and directors (including the impact of forfeitures) for the years ended December 31, 2017, 2016, and 2015 were $2.5 million, $2.3 million and $2.7 million, respectively.

Stock Compensation Expense

Non-cash stock-based compensation expense (employee stock purchase plan and service-based stock options) is summarized in the following table:



	Years Ended December 31,
(in thousands)	2017		2016		2015
Cost of goods sold	$	428	$	427	$	308
Research and development	506		497		555
General, selling and administrative	1,746		1,575		1,884
Total non-cash stock-based compensation expense	$	2,680	$	2,499	$	2,747

The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table.



	Year Ended December 31,
Service-Based Stock Options	2017	2016	2015
Expected dividend rate	—%	—%	—%
Expected stock price volatility	79.7 – 88.2%	78.7 – 92.2%	77.4 – 88.1%
Risk-free interest rate	1.39 – 2.3%	1.1 – 2.1%	1.5 – 2.0%
Expected life (years)	5.5 - 6.3	5.5 – 6.3	5.5 – 6.3

The following table summarizes the activity for service-based stock options for the indicated periods:



Service-Based Stock Options	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2016	3,355,692		$	4.66	8.2	$	610
Granted	1,686,210		$	2.82
Exercised	(198,564	)	$	3.06
Expired	(114,318	)	$	17.98
Forfeited	(200,594	)	$	3.32
Outstanding at December 31, 2017	4,528,426		$	3.77	8.0	$	10,776
Exercisable at December 31, 2017	2,099,655		$	4.76		$	4,618

As of December 31, 2017 there was approximately $2.9 million, of total unrecognized compensation cost related to non-vested service-based stock options granted under the 2017 Plan and the Prior Plans. As of December 31, 2017, 2,135,334 shares are expected to vest. That cost is expected to be recognized over a weighted-average period of 2.8 years.

The total intrinsic value of stock options vested for the years ended December 31, 2017, 2016, and 2015 was $0.7 million, $0.1 million and $0.1 million, respectively.

Shareholders' Equity	12 Months Ended
Shareholders' Equity	Dec. 31, 2017
Stockholders' Equity Note [Abstract]
Shareholders' Equity	Shareholders’ Equity At-the-Market Sales Agreement On October 10, 2016, the Company entered into our at-the-market sales agreement with Cowen (ATM Agreement), pursuant to which the Company may sell shares of our common stock through Cowen, as sales agent, in registered transactions from our shelf registration statement filed in June 2015, for aggregate proceeds of up to $25.0 million. Shares of common stock sold under the ATM are to be sold at market prices. The Company will pay up to 3% of the gross proceeds to Cowen as a commission. A total of 2,340,879 shares of common stock have been sold under the ATM Agreement of which 1,983,023 were sold in 2017 for proceeds of $7.2 million (net of $0.3 million in commission and issuance costs) and as of December 31, 2017 the ATM Agreement had remaining capacity of approximately $16.7 million. We currently intend to use the net proceeds for research, development, manufacturing, and general and administrative expenses, and for other general corporate purposes. Dividends No cash dividends have been declared or paid by the Company since its inception.

Preferred Stock	12 Months Ended
Preferred Stock	Dec. 31, 2017
Equity [Abstract]
Preferred Stock	Preferred Stock Shareholder Rights Plan In August 2011, the Board of Directors of the Company adopted a Shareholder Rights Plan, as set forth in the Shareholder Rights Agreement between the Company and the rights agent, the purpose of which is, among other things, to enhance the Board’s ability to protect shareholder interests and to ensure that shareholders receive fair treatment in the event any coercive takeover attempt of the Company is made in the future. The Shareholder Rights Plan could make it more difficult for a third party to acquire, or could discourage a third party from acquiring, the Company or a large block of the Company’s common stock. In March 2012, the Board approved an amendment to the Shareholder Rights Plan to enable Eastern Capital Limited and its affiliates to purchase up to 49.9% of the shares of common stock of the Company without becoming an “acquiring person” and thereby triggering the stockholder rights, with the limitations under the Shareholder Rights Plan remaining in effect for all other stockholders of the Company. In connection with the adoption of the Shareholder Rights Plan, the Board of Directors of the Company declared a dividend distribution of one preferred stock purchase right (Right) for each outstanding share of common stock to stockholders of record as of the close of business on August 15, 2011. In addition, one Right will automatically attach to each share of common stock issued between August 15, 2011 and the distribution date. As a result of the October 2013 reverse stock split, the number of Rights associated with each share of common stock was automatically proportionately adjusted so that (i) twenty rights were then associated with each outstanding share of common stock and (ii) so long as the Rights are attached to the common stock, twenty rights shall be deemed to be delivered for each share of common stock issued or transferred by the Company in the future. The Rights currently are not exercisable and are attached to and trade with the outstanding shares of common stock. Each Right entitles the registered holder of common stock to purchase from the Company a unit consisting of one ten-thousandth of a share (Unit) of Series A Junior Participating Preferred Stock, no par value per share, at a cash exercise prices of $30.00 per Unit. There are currently 45,000 shares authorized and zero issued and outstanding. Under the Shareholder Rights Plan, the Rights become exercisable if a person or group becomes an “acquiring person” by acquiring 15% or more of the outstanding shares of common stock or if a person or group commences a tender offer that would result in that person owning 15% or more of the common stock. If a person or group becomes an “acquiring person,” each holder of a Right (other than the acquiring person and its affiliates, associates and transferees) would be entitled to purchase, at the then-current exercise price, such number of shares of the Company’s preferred stock which are equivalent to shares of common stock having a value of twice the exercise price of the Right. If the Company is acquired in a merger or other business combination transaction after any such event, each holder of a Right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the Right. The Rights may be redeemed in whole, but not in part, at a price of $0.001 per Right (payable in cash, common stock or other consideration deemed appropriate by the Board of Directors) by the Board of Directors only until the earlier of (i) the time at which any person becomes an “acquiring person” or (ii) the expiration date of the Rights Agreement. Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Right will terminate and thereafter the only right of the holders of Rights will be to receive the redemption price. The Rights will expire at the close of business on August 15, 2021, unless previously redeemed or exchanged by the Company as described above. Series B Convertible Preferred Stock On March 9, 2012, the Company completed the sale of 12,308 shares of Series B-1 Non-Voting Convertible Preferred Stock (Series B-1 preferred stock) at an offering price of $3,250 per share. In addition to the Series B-1 preferred stock, which was issued at the closing, the Company also authorized Series B-2 Voting Convertible preferred Stock (Series B-2 preferred stock). The Series B-1 preferred stock and Series B-2 preferred stock collectively are referred to as the Series B preferred stock. The Series B preferred stock is convertible, at the option of the holder thereof at any time after the five year anniversary of the closing of the offering, into shares of common stock at a conversion price of $3.25 per share of common stock, at a conversion ratio of one share of preferred stock for fifty shares of common stock. On February 10, 2017, the Company sent notice to Eastern Capital Limited (Eastern), the holder of shares of the Company’s Series B-1 Non-Voting Convertible Preferred Stock or Series B-2 Voting Convertible Preferred Stock (Preferred Stock), informing Eastern of the Company's election to convert all 12,308 of the outstanding shares of Preferred Stock held by Eastern, plus 9,570 shares of Preferred Stock in accumulated but undeclared dividends thereon, into 1,093,892 shares of the Company's common stock pursuant to the terms of the Amended and Restated Certificate of Designations, Preferences and Rights of Series B-1 Non-Voting Preferred Stock and Series B-2 Voting Preferred Stock of the Company (Mandatory Conversion). After the Mandatory Conversion on March 9, 2017, no shares of Preferred Stock of the Company remain outstanding. Recent Sales of Unregistered Securities On December 18, 2015, we entered into a Securities Exchange Agreement with Stonepine Capital, LP (Stonepine), pursuant to which Stonepine exchanged an aggregate of 1,250,000 shares of our common stock for 1,250 shares of our Series A Convertible Preferred Stock (the Exchange). Upon the closing of the Exchange on December 23, 2015, we issued the Series A Convertible Preferred Stock to Stonepine without registration under the Securities Act in reliance on the example from registration contained in Section 3(a)(9) of the Securities Act. On November 22, 2016, Stonepine converted the 1,250 shares of Series A Convertible Preferred Stock for 1,250,000 shares of our Common Stock.

Net Loss Per Common Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Net Loss Per Common Share

The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method:



	Year Ended December 31,
(Amounts in thousands, except per share amounts)	2017			2016			2015
Numerator:
Net loss	$	(17,286	)	$	(19,566	)	$	(16,340	)
Less: earnings attributable to convertible preferred stock	—			7,579			6,736
Numerator of basic and diluted EPS	$	(17,286	)	$	(27,145	)	$	(23,076	)
Denominator:
Denominator for basic and diluted EPS: weighted-average common shares outstanding	33,355			23,093			23,760
Net loss per share attributable to common shareholders (basic and diluted)	$	(0.52	)	$	(1.18	)	$	(0.97	)

Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. The aggregate number of common equivalent shares (related to options, warrants, preferred stock and treasury stock) that have been excluded from the computations of diluted net loss per common share for the years ended December 31, 2017, 2016 and 2015 was 5.4 million, 5.3 million and 6.7 million, respectively.

Stock Purchase Warrants

12 Months Ended

Dec. 31, 2017

Warrants and Rights Note Disclosure [Abstract]

Stock Purchase Warrants

The Company has historically issued warrants to purchase shares of the Company’s common stock in connection with certain of its common stock offerings and in September 2016 and December 2017 (collectively the Debt Warrants) the Company issued warrants in connection with the amended debt agreement discussed in note 6. The warrants issued in August 2013 (August 2013 Warrants) include anti-dilution price protection provisions that could require cash settlement of the warrants and accordingly requiring the warrants to be recorded as liabilities of the Company at the estimated fair value at the balance sheet date, with changes in estimated fair value recorded as income or expense (non-cash) in the Company’s statement of operations in each subsequent period. The Debt Warrants meet the requirements for equity classification. The following table describes the outstanding warrants:



	August 2013 Warrants	September 2016 Warrants	December 2017 Warrants
Exercise price	$4.80	$2.48	$4.27
Expiration date	August 16, 2018	September 9, 2022	December 6, 2023
Total shares issuable on exercise	724,950	117,074	53,902

On December 7, 2017, the Company issued an additional 53,902 warrants to two holders in conjunction with the modified loan agreement described in note 6 (December 2017 Warrants). The initial valuation of the warrants issued in December 2017 was partially recorded as debt issuance costs and is being amortized over the remaining life of the loan agreement to interest expense and a portion was expensed as a loss on extinguishment of debt. The December 2017 Warrants are treated as equity instruments recorded at fair value with no subsequent remeasurement. Pursuant to the warrants, the holders may exercise their warrants for an aggregate of 53,902 shares of the Company’s common stock.

The fair value of the warrants described in the table above is measured using the Black-Scholes valuation model. Inherent in the Black-Scholes valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

The assumptions used by the Company are summarized in the following table:



August 2013 Warrants	December 31, 2017			December 31, 2016
Closing stock price	$	5.45		$	3.00
Expected dividend yield	—		%	—		%
Expected stock price volatility	63.7		%	97.9		%
Risk-free interest rate	1.65		%	1.03		%
Expected life (years)	0.62			1.62



September 2016 Warrants	September 9, 2016
Closing stock price	$	2.20
Expected dividend rate	—		%
Expected stock price volatility	89.8		%
Risk-free interest rate	1.4		%
Expected life (years)	6.00



December 2017 Warrants	December 6, 2017
Closing stock price	$	5.10
Expected dividend rate	—		%
Expected stock price volatility	86.4		%
Risk-free interest rate	2.2		%
Expected life (years)	6.00

ICT Warrants

On December 21, 2017, the Company received $5.2 million (gross of withholding tax) from Innovative Cellular Therapeutics CO., LTD. (ICT), of which $4.0 million was allocated to the purchase of a warrant for 818,424 shares of the Company's common stock based on the fair value on the date of grant and the remaining $1.2 million was allocated as consideration for the license agreement described in note 4. The fair value of the warrant was based on the closing price as of December 6, 2017 of $4.90 at an exercise price of $0.01 per share. On December 27, 2017, ICT exercised the warrant via a cashless exercise in exchange for 816,850 shares of the Company’s common stock. There were no warrants issued to ICT outstanding as of December 31, 2017.

Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company’s fair value measurements are classified and disclosed in one of the following three categories:


•	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;


•	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).

The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis:



	December 31, 2017								December 31, 2016
	Fair value measurement category								Fair value measurement category
(In thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Liabilities:
Warrant liabilities	$	1,014	$	—	$	1,014	$	—	$	757	$	—	$	757	$	—

The fair values of the warrants are measured using the Black-Scholes valuation model. See note 11 for further discussion of the significant observable inputs use to measure the warrant liabilities.

The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities:



Warrant Liabilities (In thousands)
Balance at December 31, 2015	$	757
Change in fair value	—
Balance at December 31, 2016	757
Change in fair value	257
Balance at December 31, 2017	$	1,014

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income (loss) before income taxes for U.S and non-U.S operations was as follows:



	Year Ended December 31,
	2017			2016			2015
U.S. loss	$	(17,066	)	$	(19,302	)	$	(16,235	)
Non U.S. loss	(220		)	(264		)	(105		)
	$	(17,286	)	$	(19,566	)	$	(16,340	)

A reconciliation of income taxes computed using the federal statutory rate to the taxes reported in the consolidated statements of operations is as follows:



	Year Ended December 31,
(In thousands)	2017			2016			2015
Loss before income taxes	$	(17,286	)	$	(19,566	)	$	(16,340	)
Federal statutory rate	34		%	34		%	34		%
Taxes computed at federal statutory rate	(5,877		)	(6,652		)	(5,556		)
State taxes (net of federal benefit)	(1,106		)	(1,016		)	(392		)
Warrants	—			—			(118		)
Nondeductible stock compensation	563			549			543
Federal and State Rate Change	11,749			(614		)	—
Other	116			56			57
Adjustment to prior year filed returns	—			—			(5,203		)
Change in valuation allowance	(5,445		)	7,677			10,669
Reported income taxes	$	—		$	—		$	—

Deferred tax assets consist of the following:



	Year Ended December 31,
(In thousands)	2017			2016
Net operating loss carryforwards	$	10,487		$	10,343
Employee benefits and stock compensation	2,128			2,896
Research and development costs	8,275			13,659
Fixed assets	508			700
Inventory reserve	2,568			1,898
Other, net	282			196
Total deferred tax assets	24,248			29,692
Valuation allowance	(24,248		)	(29,692		)
Net deferred tax assets	$	—		$	—

As of December 31, 2017, the Company’s U.S. federal and state tax net operating loss carryforwards available to offset future profits, after considering the annual Section 382 limit described below, are $42.7 million and $24.4 million, respectively. These net operating loss carryforwards will expire between 2018 and 2037. The projected annual limitation on the use of the net operating losses that existed prior to September 17, 2014 as a result of our change in control in 2014 per Section 382 of the Internal Revenue Code is $0.8 million. As a result, a significant portion of the net operating losses and tax credit carryforwards will expire prior to their utilization, regardless of the level of future profitability.

In accordance with the accounting guidance for income taxes, the Company estimated whether recoverability of its deferred tax assets is “more likely than not,” based on forecasts of taxable income in the related tax jurisdictions. In this estimate, the Company uses historical results, projected future operating results based upon approved business plans, eligible carry forward periods, tax planning opportunities and other relevant considerations. Based on these factors, including historical losses incurred by the Company, a full valuation allowance for the deferred tax assets, including the deferred tax assets for the aforementioned net operating losses and credits, has been provided since they are not more likely than not to be realized. If the Company achieves profitability, these deferred tax assets may be available to offset future income taxes. The change in the valuation allowance was a decrease of $5.4 million and increase of $7.7 million for the years ended December 31, 2017 and 2016, respectively.

The Company assesses uncertain tax positions in accordance with the guidance for accounting for uncertain tax positions. This pronouncement prescribes a recognition threshold and measurement methodology for recording within the financial statements uncertain tax positions taken, or expected to be taken, in the Company’s income tax returns. To the extent the uncertain tax positions do not meet the “more likely than not” threshold, the Company has derecognized such positions. To the extent the uncertain tax positions meet the “more likely than not” threshold, the Company has measured and recorded the highest probable benefit, and have established appropriate reserves for benefits that exceed the amount likely to be sustained upon examination. The Company currently has not recorded any uncertain tax positions and does not anticipate that the unrecognized tax benefits will significantly increase or decrease within the next twelve months.

The Company files U.S. federal, Arkansas, Arizona, Colorado, Florida, Illinois, Massachusetts, Michigan, Tennessee and Texas income tax returns. Due to the Company’s net operating loss carryforwards, Federal income tax returns from incorporation are still subject to examination. Michigan tax returns for the year ended December 31, 2013 and forward are subject to examination. Massachusetts tax returns for the year ended December 31, 2015 and forward are subject to examination.

On December 22, 2017 the Tax Cuts and Jobs Act (Tax Act) was enacted. The Tax Act contains significant changes to corporate taxation, including the reduction of the corporate tax rate from 35 percent to 21 percent, increased deductions for capital spending, limitations on interest expense deductions, implementation of a territorial tax system, and imposition of a tax on deemed repatriated earnings of foreign subsidiaries. The Company remeasured the deferred taxes based on the enacted rate of 21 percent which resulted in an increase to tax expense of $11.7 million.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Licenses, Royalties and Collaborative Agreements

Matricel — In October 2015, the Company signed a long-term supply agreement with Matricel GmbH for the ACI-Maix collagen membrane used in the manufacture of MACI. Matricel supplied ACI-Maix membranes used in the production of MACI when it was previously marketed outside the U.S. by Genzyme Corporation, a Sanofi company. Under the agreement, the Company has committed to purchase annually approximately $0.6 million per year. The agreement is effective until December 31, 2022 and contains a 5-year renewal option by the Company and an additional 5-year automatic renewal, unless otherwise terminated.

Manufacture, Supply and Other Agreements — The Company has entered into various agreements relating to the manufacture of its products and the supply of certain components. If the manufacturing or supply agreements expire or are otherwise terminated, the Company may not be able to identify and obtain ancillary materials that are necessary to develop its products and such expiration and termination could have a material effect on the Company’s business.

ICT License Agreement— On May 10, 2017, the Company announced that it has entered into a License Agreement (License Agreement) with Innovative Cellular Therapeutics CO., LTD. (ICT), a leading cell therapy company and developer of CAR-T cell therapy for cancer treatment, for the development and distribution of the Company's product portfolio in Greater China, South Korea, Singapore, and other countries in Asia. On December 21, 2017, the Company received $5.2 million (gross of withholding tax), of which $4.0 million was allocated to the warrant based on the fair value on the date of grant as described in note 11 and the remaining $1.2 million was allocated as consideration for the license agreement and recognized in 2017 under multiple deliverable accounting guidance. ICT acquired an exclusive license to certain patent rights, know-how and intellectual property relating to Carticel, MACI, ixmyelocel-T, and Epicel. The initiation of the technology transfer, the license grants in the License Agreement and the warrant purchase were contingent upon the Company’s receipt of the upfront payment. The Company is eligible to receive approximately $8.0 million in development and commercial milestones. ICT has also agreed to pay tiered royalties to the Company equal to a percentage of net sales of each Licensed Product in the low double digits for the commercial life of the applicable Licensed Product. ICT will be responsible for funding the development of the programs and manufacturing of the products for commercialization in China and the rest of the territory.

Contractual Obligations

The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. In March 2016, the Company amended its current lease in Cambridge to extend the terms until February 2022. Under the amendment, the landlord will contribute approximately $2.0 million toward the cost of tenant improvements. The contribution toward the cost of tenant improvements is recorded as deferred rent on the Company's consolidated balance sheet and is amortized to our consolidated statement of operations as reductions to rent expense over the lease term. Through December 31, 2017, the Company has recorded a tenant improvement of $1.7 million. In addition to the property leases, the Company also leases an offsite warehouse, various vehicles and computer equipment.

Future minimum payments related to our operating and capital leases, and contractual obligations including interest on outstanding term loans are as follows:



			Payments Due by Period
Contractual Obligations	Total		2018		2019		2020		2021		2022		More than 5 Years
Operating leases	$	19,336	$	4,878	$	4,564	$	4,575	$	4,558	$	761	$	—
Purchase commitments	3,055		713		608		578		578		578		—
Capital leases	$	92	$	80	$	6	$	2	$	2	$	2	$	—
Total	22,483		5,671		5,178		5,155		5,138		1,341		—

Rent expense for the years ended December 31, 2017, 2016 and 2015, was $5.6 million, $4.8 million and $4.9 million, respectively.

Supplementary Quarterly Financial Information (unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Supplementary Quarterly Financial Information (unaudited)

Quarterly earnings per share amounts may not sum to the totals for each of the years, since quarterly computations are based on weighted average common shares outstanding during each quarter.



In thousands, except per share data)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
2017
Revenues	$	9,361		$	16,953		$	14,260		$	23,350		$	63,924
Gross profit	2,252			9,283			7,074			14,961			33,570
Loss from operations	(9,623		)	(2,521		)	(4,031		)	1,191			(14,984		)
Net (loss) profit	(9,778		)	(2,388		)	(5,407		)	287			(17,286		)
Net (loss) profit per share (Basic and Diluted)	(0.31		)	(0.07		)	(0.16		)	0.01			(0.52		)

2016
Revenues	$	14,108		$	12,823		$	10,929		$	16,523		$	54,383
Gross profit (loss)	7,548			5,523			4,073			8,932			26,076
Loss from operations	(1,992		)	(4,984		)	(6,380		)	(5,889		)	(19,245		)
Net loss	(3,650		)	(3,044		)	(6,675		)	(6,197		)	(19,566		)
Net loss per share (Basic and Diluted)	(0.24		)	(0.22		)	(0.38		)	(0.34		)	(1.18		)

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2017
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Vericel and its wholly-owned subsidiaries, Marrow Donation, LLC, located in San Diego, California, and Vericel Denmark ApS, in Kastrup, Demark (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. Marrow Donation, LLC and Vericel Denmark ApS ceased operations in 2015.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Actual results could differ from those estimates.
Inventory	Inventory Inventories are measured at the lower of cost and net realizable value. Cost is calculated based upon standard-cost which approximates costs determined on the first-in, first-out method. The Company periodically reviews its inventories for excess or obsolescence and write-down obsolete or other unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written down are charged to cost of sales.
Accounts Receivable	Accounts Receivable Accounts receivable are initially recorded at the contractual amount owed by the customer. Allowances for doubtful accounts are established when the facts and circumstances indicate that a receivable may not be collectible.
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment are initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use or, in the case of assets acquired in a business combination, at fair value as at the date of the combination. After initial measurement, property, plant and equipment are carried at cost less accumulated depreciation and impairment. Repair and maintenance costs of property, plant and equipment are expensed as incurred. The depreciable value of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life. The useful lives of property, plant and equipment are as follows: •Equipment and computers: 3 to 5 years •Furniture and fixtures: 5 years •Building improvements and leasehold improvements: Shorter of the remaining life of the lease or 7 years The costs of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations.
Intangible Assets and Other Long Lived Assets	Intangible Assets and Other Long Lived Assets Intangible assets are initially measured at acquisition cost, including any directly attributable costs of preparing the asset for its intended use or, in the case of assets acquired in a business combination at fair value as at the date of the combination. Identifiable intangible assets related to commercial rights are amortized on a straight line basis over their expected useful lives. Amortization of intangible assets is recognized in these financial statements under Costs of product sales. Intangible assets and long-lived assets are assessed for potential impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss would be recognized when an asset’s fair value, determined based on undiscounted cash flows expected to be generated by the asset, is less than its carrying amount. The impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value and recognized in these financial statements. Intangible assets are carried at cost less accumulated amortization and impairment.
Revenue Recognition and Net Product Sales	Revenue Recognition and Net Product Sales Revenue from sales to a customer (distributor, hospital or other party) is recognized in accordance with ASC 605, Revenue Recognition and SAB Topic 104, Revenue Recognition (ASC 605), when (i) persuasive evidence of an arrangement exists, (ii) the goods are shipped or delivered and implanted, depending on shipping terms, (iii) title and risk of loss pass to the customer and (iv) collectability is reasonably assured. Shipping and handling costs are included as a component of revenue. Revenue from sales where the patient is the customer and a third party payer (insurance company, etc.) pays all or some of the product price on the patient's behalf are accounted for under ASC 954-605, Health Care Entities - Revenue Recognition (ASC 954). Prior to July 1, 2016, the Company sold Carticel through a distributor and followed ASC 605, Revenue Recognition and SAB Topic 104 Revenue Recognition to record revenue. This distributor purchased and took title to Carticel upon shipment of the product and assumed credit and collection risk related to the end customers. The distributor worked with the payers on behalf of patients and surgeons to ensure medical coverage and to obtain reimbursement for Carticel implantation procedures. Under this arrangement, the distributor is the Company's customer. The Company retained responsibility for shipment of the product to the surgical suite. Revenue was recorded for Carticel upon occurrence of the surgery, net of provisions for rebates and cash discounts. Such rebates and discounts were $0.5 million for the year ended December 31, 2016. There were no material rebates or cash discounts for year ended December 31, 2017. These rebates and prompt payment cash discounts were established by the Company at the time of sale, based on actual experience adjusted to reflect known changes in the factors that impact such reserves. Adjustments to these reserves had historically not been significant. On June 30, 2016, the Company reduced the scope of the agreement with its exclusive distributor by terminating their services for a significant portion of its Carticel sales. On July 1, 2016, the Company transitioned to a direct sales model for Carticel and MACI after launch whereby the Company retained credit and collection risk from the patient as the end customer. The Company utilized a new provider, Dohmen Life Science Services, LLC (DLSS), to provide patient support services but this provider did not purchase and take title to Carticel or MACI. Under this arrangement, the patient is the Company's customer. On May 15, 2017, the Company and DLSS mutually terminated the agreement effective June 30, 2017. The Company also utilized Vital Care Inc. and its franchisees as a second provider to expand the available network of contracted third-party payers for Carticel and MACI. Under this direct sales model, the patient bears the ultimate financial responsibility for the purchase of Carticel or MACI and as such the Company recognized revenue in accordance with ASC 954-605, Health Care Entities - Revenue Recognition. The third party payer (insurance company, government, etc.) pays all or some of the product price on the patient’s behalf. Under the direct sales model, the Company recognizes product revenues from sales of Carticel and MACI upon implantation at which time the claim is billable to patient’s insurance provider on behalf of the patient and is billed by either DLSS or Vital Care. The Company assumed counterparty risk for the third party reimbursement payment from the payer and from the patient co-pay. Prior authorization or confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of product to a patient. The Company's net product revenues are calculated by estimating expected payments for insurance, hospital or patient payments at the time it invoices and recognizes revenue. To support this direct sales model, the Company utilized DLSS to provide administrative services associated with case management and reimbursement support and to provide billing and collection services. The Company utilized Vital Care to provide similar billing and collection services for a subset of insurance payers and patients. In April 2017, we were was notified of a contractual dispute between Vital Care and a third-party payer and as a result, during the three months ended March 31, 2017, we increased our estimated revenue allowances, reducing revenue by $2.1 million related to 2016 sales and $0.7 million related to 2017 sales to reflect the lower reimbursement that would be obtained if the claims were ultimately required to be treated as out-of-network. In July 2017, the dispute was resolved and the negotiated reimbursement resulted in our ability to initially reduce our estimated sales allowances by $1.4 million which resulted in additional revenue in the second quarter of 2017 related to sales which originated primarily in 2016. As a result of the continuing evaluation and assessment of these expected payments, our estimates for expected payments could change. Other than this adjustment the other adjustments recorded during 2017 related to our estimation under ASC 954-605, Health Care Entities - Revenue Recognition were not significant. On May 15, 2017, the Company entered into a distribution agreement with Orsini Pharmaceutical Services, Inc. (Orsini) to appoint Orsini as a specialty pharmacy distributor of MACI to patients' physicians and other healthcare providers. The initial term of the distribution agreement will end on May 15, 2019 with the option of 2 additional two-year terms. Other Revenue Other revenue represents the amount of revenue recorded upon the license grant to Innovative Cellular Therapeutics CO., LTD. (ICT) discussed in note 15. The Company received $1.2 million from ICT for licenses and the technology for Carticel, MACI, Epicel and Ixmyelocel-T and related payments. The license grant and related arrangement is accounted for under the multiple-element arrangement guidance (arrangements with more than one deliverable). As a result, interpretation and judgment is required to determine the appropriate accounting for these transactions including how the arrangement consideration should be allocated among potential multiple deliverables and developing an estimate of the stand-alone selling price of each deliverable. For multiple-element arrangements, revenue is allocated to each unit of accounting based on their relative selling prices. Relative selling prices are based on management's best estimate of the selling price. As a result of the assessment of the fair value, the Company's estimates could impact the timing or amount of revenue recognition. In accordance with the multiple element arrangement accounting, we allocated the upfront payment from ICT to the multiple deliverables which include the license, a training obligation, and product supply. Based upon our determination of the best estimate of selling price of each of these deliverables, the majority of the upfront payment was allocated to the license.
Research and Development Expense	Research and Development Expense Research and development activities represent a significant part of the Company’s business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of consumers and patients. Research and development expenses are expensed as incurred.
Stock-Based Compensation	Stock-Based Compensation The Company’s accounting for stock-based compensation requires it to determine the fair value of common stock issued in the form of stock option awards. The Company uses the value of its common stock at the date of the grant in the calculation of the fair value of its share-based awards. The fair value of stock options held by the employees is determined using a Black-Scholes option valuation method, which is a valuation technique that is acceptable for share-based payment accounting. Key assumptions in determining fair value include volatility, risk-free interest rate, dividend yield and expected term. The assumptions used in calculating the fair value of stock options represent the Company’s best estimates, however; these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. In addition, the Company estimates the expected forfeiture rate and only recognize expense for those stock options expected to vest over the service period. The estimated forfeiture rate considers the historical experience of the Company’s stock-based awards. If the actual forfeiture rate is different from the estimate, expense is adjusted accordingly. The Company also has an Employee Stock Purchase Plan (ESPP) which is a compensatory plan. Compensation expense is recorded based on the fair value of the purchase options at the grant date, which corresponds to the first day of each purchase period, and is amortized over the purchase period.
Comprehensive Loss	Comprehensive Loss Comprehensive loss is the change in common stockholders’ equity during a period arising from any gain or loss realized related to foreign currency translation. Since 2015, when we ceased operations in Denmark, foreign currency translation has been recognized in the statement of operations.
Income Taxes	Income Taxes Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records uncertain tax positions in the financial statements only if it is more likely than not that the uncertain tax position will be sustained upon examination by the taxing authorities. The Company records interest and penalties related to uncertain tax positions in income tax expense.
Net Loss Per Share Attributable to Common Shareholders	Net Loss Per Share Attributable to Common Shareholders Basic and diluted earnings (loss) per share is calculated using the two-class method. Basic earnings (loss) per share which is based on an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B preferred stock. The Series B preferred stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. The accumulated but undeclared dividends on the Series B preferred stock of $7.6 million and $6.7 million for the years ended December 31, 2016 and 2015, respectively, are treated as a reduction of earnings attributable to common shareholders. There were no undeclared dividends for the year ended December 31, 2017. Diluted earnings (loss) per share includes convertible securities or common equivalent share (stock options and warrants) in addition to the Company's common shares. Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive.
Financial Instruments	Financial Instruments The Company’s financial instruments include receivables for which the current carrying amounts approximate market value based upon their short-term nature.
Warrants	Warrants Warrants that could be cash settled or have anti-dilution price protection provisions are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in our statement of operations in each subsequent period. Warrants that meet the requirements for equity classification are recorded at fair value with no subsequent remeasurement. In general, warrants are measured using the Black-Scholes valuation model. The methodology is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent our best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the change in estimated fair value of the warrant liability for those warrants that could be cash settled or have anti-dilution price protection provisions, could be materially different.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance requiring entities to apply a new model for recognizing revenue from contracts with customers and the reporting of principal versus agent considerations. The guidance will supersede the current revenue recognition guidance and require entities to evaluate their revenue recognition arrangements using a five step model to determine when a customer obtains control of a transferred good or service. The guidance is currently effective for annual reporting periods beginning after December 15, 2017 and may be adopted using a full or modified retrospective application. The Company has completed its assessment of the new standard and does not expect a material impact to the consolidated financial statements for the Company's performance obligations satisfied upon delivery. For transactions with multiple performance obligations, including the ICT license agreement, we are assessing the impact on the change in standard for any future obligations. The Company does not have variable pricing arrangements that are retrospective or represent a material right to its customers. The guidance becomes effective for the year beginning January 1, 2018 and the Company will adopt the guidance using the modified retrospective approach. Accounting for Leases The FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the assets and liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within 2018. The Company is currently reviewing the potential impact of adopting the new guidance. Statement of Cash Flows Presentation The FASB issued guidance to address diversity in practice with respect to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The updated guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity that occurs in practice. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the new guidance early. As a result of the adoption of this standard, in the 2017 cash flow statement we presented $0.6 million of fees paid to the lender in connection with the refinancing as a financing activity. Share-based Payment Accounting for Modifications The FASB issued clarifying guidance in amendments to the accounting for share-based payments and the application of modification accounting. The update provides clarity and reduces both diversity in practice and cost and complexity when applying modification guidance. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within 2017. The Company has adopted the new guidance for the period ended December 31, 2017 and there were no impacts to the consolidated financial statements.

Concentration of Credit Risk (Tables)

12 Months Ended

Dec. 31, 2017

Risks and Uncertainties [Abstract]

Schedules of concentration of risk

The Company's total revenue and accounts receivable balances were comprised of the following concentrations from its largest customers of Carticel, MACI and Epicel, as follows:



	Revenue Concentration						Accounts Receivable Concentration
	Year Ended December 31,						December 31,
	2017		2016		2015		2017		2016
Carticel and MACI	35	%	31	%	66	%	46	%	1	%
Epicel	10	%	11	%	12	%	3	%	5	%

Selected Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2017

Balance Sheet Related Disclosures [Abstract]

Schedule of inventory

Inventory as of December 31, 2017 and 2016:



(In thousands)	2017		2016
Raw materials	$	3,532	$	3,214
Work-in-process	226		257
Finished goods	35		17
Inventory	$	3,793	$	3,488

Schedule of property and equipment, net

Property and Equipment, net as of December 31, 2017 and 2016:



(In thousands)	2017			2016
Machinery and equipment	$	1,249		$	3,150
Furniture, fixtures and office equipment	872			931
Computer equipment and software	3,536			3,147
Leasehold improvements	4,213			3,332
Construction in process	822			408
	10,692			10,968
Less accumulated depreciation	(6,621		)	(7,093		)
Property and Equipment	$	4,071		$	3,875

Schedule of accrued expenses

Accrued Expenses as of December 31, 2017 and 2016:



(In thousands)	2017		2016
Bonus	$	2,693	$	2,433
Employee related accruals	2,389		1,668
Other accrued expenses	491		422
Accrued expenses	$	5,573	$	4,523

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of non-cash stock-based compensation expense

Non-cash stock-based compensation expense (employee stock purchase plan and service-based stock options) is summarized in the following table:



	Years Ended December 31,
(in thousands)	2017		2016		2015
Cost of goods sold	$	428	$	427	$	308
Research and development	506		497		555
General, selling and administrative	1,746		1,575		1,884
Total non-cash stock-based compensation expense	$	2,680	$	2,499	$	2,747

Schedule of weighted average assumptions used to estimate fair value of each service-based stock option grant



	Year Ended December 31,
Service-Based Stock Options	2017	2016	2015
Expected dividend rate	—%	—%	—%
Expected stock price volatility	79.7 – 88.2%	78.7 – 92.2%	77.4 – 88.1%
Risk-free interest rate	1.39 – 2.3%	1.1 – 2.1%	1.5 – 2.0%
Expected life (years)	5.5 - 6.3	5.5 – 6.3	5.5 – 6.3

Summary of activity for service-based stock options

The following table summarizes the activity for service-based stock options for the indicated periods:



Service-Based Stock Options	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2016	3,355,692		$	4.66	8.2	$	610
Granted	1,686,210		$	2.82
Exercised	(198,564	)	$	3.06
Expired	(114,318	)	$	17.98
Forfeited	(200,594	)	$	3.32
Outstanding at December 31, 2017	4,528,426		$	3.77	8.0	$	10,776
Exercisable at December 31, 2017	2,099,655		$	4.76		$	4,618

Net Loss Per Common Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Schedule of net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method

The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method:



	Year Ended December 31,
(Amounts in thousands, except per share amounts)	2017			2016			2015
Numerator:
Net loss	$	(17,286	)	$	(19,566	)	$	(16,340	)
Less: earnings attributable to convertible preferred stock	—			7,579			6,736
Numerator of basic and diluted EPS	$	(17,286	)	$	(27,145	)	$	(23,076	)
Denominator:
Denominator for basic and diluted EPS: weighted-average common shares outstanding	33,355			23,093			23,760
Net loss per share attributable to common shareholders (basic and diluted)	$	(0.52	)	$	(1.18	)	$	(0.97	)

Stock Purchase Warrants (Tables)

12 Months Ended

Dec. 31, 2017

Warrants and Rights Note Disclosure [Abstract]

Schedule of warrants outstanding

The following table describes the outstanding warrants:



	August 2013 Warrants	September 2016 Warrants	December 2017 Warrants
Exercise price	$4.80	$2.48	$4.27
Expiration date	August 16, 2018	September 9, 2022	December 6, 2023
Total shares issuable on exercise	724,950	117,074	53,902

Schedule of assumptions used in calculating estimated fair value of warrants

The assumptions used by the Company are summarized in the following table:



August 2013 Warrants	December 31, 2017			December 31, 2016
Closing stock price	$	5.45		$	3.00
Expected dividend yield	—		%	—		%
Expected stock price volatility	63.7		%	97.9		%
Risk-free interest rate	1.65		%	1.03		%
Expected life (years)	0.62			1.62



September 2016 Warrants	September 9, 2016
Closing stock price	$	2.20
Expected dividend rate	—		%
Expected stock price volatility	89.8		%
Risk-free interest rate	1.4		%
Expected life (years)	6.00



December 2017 Warrants	December 6, 2017
Closing stock price	$	5.10
Expected dividend rate	—		%
Expected stock price volatility	86.4		%
Risk-free interest rate	2.2		%
Expected life (years)	6.00

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Summary of valuation of the Company's investments and financial instruments that are measured at fair value on a recurring basis

The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis:



	December 31, 2017								December 31, 2016
	Fair value measurement category								Fair value measurement category
(In thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Liabilities:
Warrant liabilities	$	1,014	$	—	$	1,014	$	—	$	757	$	—	$	757	$	—

Summary of change in estimated fair values of warrant liabilities

The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities:



Warrant Liabilities (In thousands)
Balance at December 31, 2015	$	757
Change in fair value	—
Balance at December 31, 2016	757
Change in fair value	257
Balance at December 31, 2017	$	1,014

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Summary of income (loss) before income taxes for U.S. and non-U.S. operations

Income (loss) before income taxes for U.S and non-U.S operations was as follows:



	Year Ended December 31,
	2017			2016			2015
U.S. loss	$	(17,066	)	$	(19,302	)	$	(16,235	)
Non U.S. loss	(220		)	(264		)	(105		)
	$	(17,286	)	$	(19,566	)	$	(16,340	)

Schedule of reconciliation of income taxes computed using the federal statutory rate to the taxes reported in consolidated statements of operations

A reconciliation of income taxes computed using the federal statutory rate to the taxes reported in the consolidated statements of operations is as follows:



	Year Ended December 31,
(In thousands)	2017			2016			2015
Loss before income taxes	$	(17,286	)	$	(19,566	)	$	(16,340	)
Federal statutory rate	34		%	34		%	34		%
Taxes computed at federal statutory rate	(5,877		)	(6,652		)	(5,556		)
State taxes (net of federal benefit)	(1,106		)	(1,016		)	(392		)
Warrants	—			—			(118		)
Nondeductible stock compensation	563			549			543
Federal and State Rate Change	11,749			(614		)	—
Other	116			56			57
Adjustment to prior year filed returns	—			—			(5,203		)
Change in valuation allowance	(5,445		)	7,677			10,669
Reported income taxes	$	—		$	—		$	—

Schedule of deferred tax assets

Deferred tax assets consist of the following:



	Year Ended December 31,
(In thousands)	2017			2016
Net operating loss carryforwards	$	10,487		$	10,343
Employee benefits and stock compensation	2,128			2,896
Research and development costs	8,275			13,659
Fixed assets	508			700
Inventory reserve	2,568			1,898
Other, net	282			196
Total deferred tax assets	24,248			29,692
Valuation allowance	(24,248		)	(29,692		)
Net deferred tax assets	$	—		$	—

Supplementary Quarterly Financial Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial information



In thousands, except per share data)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
2017
Revenues	$	9,361		$	16,953		$	14,260		$	23,350		$	63,924
Gross profit	2,252			9,283			7,074			14,961			33,570
Loss from operations	(9,623		)	(2,521		)	(4,031		)	1,191			(14,984		)
Net (loss) profit	(9,778		)	(2,388		)	(5,407		)	287			(17,286		)
Net (loss) profit per share (Basic and Diluted)	(0.31		)	(0.07		)	(0.16		)	0.01			(0.52		)

2016
Revenues	$	14,108		$	12,823		$	10,929		$	16,523		$	54,383
Gross profit (loss)	7,548			5,523			4,073			8,932			26,076
Loss from operations	(1,992		)	(4,984		)	(6,380		)	(5,889		)	(19,245		)
Net loss	(3,650		)	(3,044		)	(6,675		)	(6,197		)	(19,566		)
Net loss per share (Basic and Diluted)	(0.24		)	(0.22		)	(0.38		)	(0.34		)	(1.18		)

Organization (Details) $ in Thousands	3 Months Ended								12 Months Ended
Organization (Details) $ in Thousands	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) segment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2014 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments \| segment									1
Accumulated deficit	$ 360,877				$ 343,591				$ 360,877	$ 343,591
Net loss	(287)	$ 5,407	$ 2,388	$ 9,778	6,197	$ 6,675	$ 3,044	$ 3,650	17,286	19,566	$ 16,340
Cash	$ 26,862				$ 22,978				$ 26,862	$ 22,978	$ 14,581		$ 30,343
Scenario, Forecast \| SVB and MidCap \| Debt financing agreement
Business Acquisition [Line Items]
Minimum revenue covenant												$ 63,600

Summary of Significant Accounting Policies - Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Interest paid (net of interest capitalized)	$ 931	$ 226	$ 0
Income tax withholding paid	$ 100	$ 0	$ 0

Summary of Significant Accounting Policies (Details) - USD ($)		3 Months Ended		12 Months Ended
	Dec. 21, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment
Loss on impairment of intangible asset				$ 0	$ 2,638,000	$ 0
ICT
Property, Plant and Equipment
Proceeds from license fees received	$ 1,200,000
Valuation Allowances And Reserves Period, Related To 2016 \| Allowance for Receivable from Insurance Provider
Property, Plant and Equipment
Increase in estimated revenue allowances			$ 2,100,000
Valuation Allowances And Reserves Period, Related To 2017 \| Allowance for Receivable from Insurance Provider
Property, Plant and Equipment
Increase in estimated revenue allowances			$ 700,000
Valuation Allowances And Reserves Period, Related To 2017 \| Allowance for Receivable from Insurance Provider \| Disputes
Property, Plant and Equipment
Reduction in estimated sales allowance		$ 1,400,000
Carticel
Property, Plant and Equipment
Provision for rebates and cash discounts				$ 0	$ 500,000
Equipment and computers \| Minimum
Property, Plant and Equipment
Useful lives				3 years
Equipment and computers \| Maximum
Property, Plant and Equipment
Useful lives				5 years
Furniture and fixtures
Property, Plant and Equipment
Useful lives				5 years
Building improvements and leasehold improvements \| Maximum
Property, Plant and Equipment
Useful lives				7 years

Concentration of Credit Risk (Details) - Customer concentration	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Carticel and MACI \| Revenue Concentration
CONCENTRATION
Concentration risk	35.00%	31.00%	66.00%
Carticel and MACI \| Accounts Receivable Concentration
CONCENTRATION
Concentration risk	46.00%	1.00%
Epicel \| Revenue Concentration
CONCENTRATION
Concentration risk	10.00%	11.00%	12.00%
Epicel \| Accounts Receivable Concentration
CONCENTRATION
Concentration risk	3.00%	5.00%

Selected Balance Sheet Components (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Inventory:
Raw materials	$ 3,532	$ 3,214
Work-in-process	226	257
Finished goods	35	17
Inventory	$ 3,793	$ 3,488

Selected Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and equipment, net:
Total property and equipment, gross	$ 10,692	$ 10,968
Accumulated depreciation	(6,621)	(7,093)
Property and Equipment	4,071	3,875
Depreciation expense	1,600	1,600	$ 1,300
Machinery and equipment
Property and equipment, net:
Total property and equipment, gross	1,249	3,150
Furniture, fixtures and office equipment
Property and equipment, net:
Total property and equipment, gross	872	931
Computer equipment and software
Property and equipment, net:
Total property and equipment, gross	3,536	3,147
Leasehold improvements
Property and equipment, net:
Total property and equipment, gross	4,213	3,332
Construction in process
Property and equipment, net:
Total property and equipment, gross	$ 822	$ 408

Selected Balance Sheet Components - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accrued expenses
Bonus	$ 2,693	$ 2,433
Employee related accruals	2,389	1,668
Other accrued expenses	491	422
Accrued expenses	$ 5,573	$ 4,523

Debt (Details)		12 Months Ended
Debt (Details)	Dec. 06, 2017 USD ($) installment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt		$ 860,000	$ 0	$ 0
SVB and MidCap
Debt Instrument [Line Items]
Weighted average interest rate		8.32%
Final interest payment due upon maturity		3.60%
SVB and MidCap \| Debt financing agreement
Debt Instrument [Line Items]
Maximum borrowing capacity (up to)	$ 25,000,000.0
SVB and MidCap \| Debt financing agreement \| Revolving credit facility \| Line of credit
Debt Instrument [Line Items]
Revolving line of credit, borrowing capacity (up to)	10,000,000.0
Line of credit, current		$ 2,500,000
Remaining borrowing capacity		7,500,000
SVB and MidCap \| Term loan
Debt Instrument [Line Items]
Debt instrument, face amount	$ 15,000,000.0
Short-term bank loans and notes payable		$ 15,000,000
SVB and MidCap \| Term loan \| Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate	4.25%
Number of installments \| installment	36
SVB and MidCap \| Term loan \| Prime Rate \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.25%

Debt - Principal Repayments (Details) - SVB and MidCap - Revolving credit facility - Line of credit - Debt financing agreement	Dec. 31, 2017 USD ($)
Line of Credit Facility [Line Items]
2018	$ 417
2019	5,000
2020	5,000
2021	7,083
2022	0
Thereafter	0
Total principal payments on debt	$ 17,500

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended			36 Months Ended
	Jan. 31, 2017	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Stock-Based Compensation
Shares issued under the Employee Stock Purchase Plan (in shares)			$ 425	$ 467
2004, 2001, 1992, and 2009 Plans
Stock-Based Compensation
Awards available for future grant under the Plan (in shares)		0	0			0
2017 Plan
Stock-Based Compensation
Awards available for future grant under the Plan (in shares)		4,427,722	4,427,722			4,427,722
Service-based stock options
Stock-Based Compensation
Vesting period			4 years
Stock-based compensation expense			$ 2,500	$ 2,300	$ 2,700
Weighted average grant-date fair value (in dollars per share)			$ 1.99	$ 2.15	$ 2.22
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected dividend rate			0.00%	0.00%	0.00%
Options
Exercisable at the end of the period (in shares)		2,099,655	2,099,655			2,099,655
Outstanding at the beginning of the period (in shares)	3,355,692		3,355,692
Granted (in shares)			1,686,210
Exercised (in shares)			(198,564)
Expired (in shares)			(114,318)
Forfeited (in shares)			(200,594)
Outstanding at the end of the period (in shares)		4,528,426	4,528,426	3,355,692		4,528,426
Weighted Average Exercise Price
Exercisable at the end of the period (in dollars per share)		$ 4.76	$ 4.76			$ 4.76
Outstanding at the beginning of the period (in dollars per share)	$ 4.66		4.66
Granted (in dollars per share)			2.82
Exercised (in dollars per share)			3.06
Expired (in dollars per share)			17.98
Forfeited or expired (in dollars per share)			3.32
Outstanding at the end of the period (in dollars per share)		$ 3.77	$ 3.77	$ 4.66		$ 3.77
Weighted Average Remaining Contractual Term
Outstanding			8 years	8 years 2 months 12 days
Aggregate Intrinsic Value
Outstanding		$ 10,776	$ 10,776	$ 610		$ 10,776
Exercised
Exercisable at end of period		4,618	4,618			4,618
Additional disclosures
Total unrecognized compensation cost		$ 2,900	$ 2,900			$ 2,900
Expected to vest (in shares)		2,135,334	2,135,334			2,135,334
Weighted average period over which unrecognized compensation is expected to be recognized			2 years 9 months
Total intrinsic value of options vested			$ 700	$ 100	$ 100
Service-based stock options \| Minimum
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected stock price volatility			79.70%	78.70%	77.40%
Risk-free interest rate			1.39%	1.10%	1.50%
Expected life			5 years 6 months	5 years	5 years 6 months
Service-based stock options \| Maximum
Stock-Based Compensation
Expiration period			10 years
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected stock price volatility			88.20%	92.20%	88.10%
Risk-free interest rate			2.30%	2.10%	2.00%
Expected life			6 years 3 months 18 days	6 years 3 months 18 days	6 years 3 months 18 days
Service-based stock options \| Non-employee
Stock-Based Compensation
Expiration period			10 years
Vesting period			1 year
Options
Granted (in shares)			105,000
Employee stock
Stock-Based Compensation
Common stock available for issuance (in shares)		1,000,000	1,000,000			1,000,000
Common stock granted since inception (in shares)						429,511
Shares purchased during period (in shares)	27,506
Shares issued under the Employee Stock Purchase Plan (in shares)		$ 100
Stock-based compensation expense			$ 200	$ 200	$ 100

Stock-Based Compensation - Non-cash Stock Compensation Expense (Details) - Employee stock purchase plan and service-based stock options - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total non-cash stock-based compensation expense	$ 2,680	$ 2,499	$ 2,747
Cost of goods sold
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total non-cash stock-based compensation expense	428	427	308
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total non-cash stock-based compensation expense	506	497	555
General, selling and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total non-cash stock-based compensation expense	$ 1,746	$ 1,575	$ 1,884

Shareholders' Equity (Details) - Cowen and Company, LLC - USD ($)		12 Months Ended	15 Months Ended
	Oct. 10, 2016	Dec. 31, 2017	Dec. 31, 2017
Shareholders' Equity
ATM Agreement, maximum aggregate proceeds	$ 25,000,000.0
ATM Agreement, proceeds from issuance of common stock		$ 7,200,000
Commission and issuance cost		300,000
Amount of net capacity remaining on the ATM Agreement		$ 16,700,000	$ 16,700,000
Common Stock
Shareholders' Equity
ATM Agreement, shares issued (in shares)		1,983,023	2,340,879
Maximum
Shareholders' Equity
Percentage of gross proceeds payable as commission (up to)	3.00%

Preferred Stock (Details)		1 Months Ended		12 Months Ended
Preferred Stock (Details)	Aug. 15, 2011 right	Oct. 31, 2013 right	Mar. 31, 2012	Dec. 31, 2017 $ / shares shares
Shareholder Rights Plan
Number of rights for each outstanding share of common stock (in rights) \| right	1	20
Additional number of rights per common share (in rights) \| right	1
Number of rights deemed to be delivered for each share of common stock issued or transferred (in rights) \| right		20
Series A Junior Participating Cumulative Preferred Stock
Shareholder Rights Plan
Exercise price per share (in dollars per share) \| $ / shares				$ 30.00
Preferred stock, shares authorized (in shares) \| shares				45,000
Preferred stock, shares issued (in shares) \| shares				0
Preferred stock, shares outstanding (in shares) \| shares				0
Multiple of the value of common stock acquired (after conversion from preferred) to the exercise price of stock purchase right in the event of an acquiring person event				2
Multiple of the value of common stock acquired to the exercise price of stock purchase right in the event of a merger of the entity				2
Redemption price per right (in dollars per right) \| $ / shares				$ 0.001
Minimum \| Series A Junior Participating Cumulative Preferred Stock
Shareholder Rights Plan
Percentage of common stock to be acquired for rights to be exercisable by an individual or group				15.00%
Percentage of common stock to be owned for rights to be exercisable by an individual or group commencing a tender offer				15.00%
Eastern Capital Limited and its affiliates \| Maximum
Shareholder Rights Plan
Percentage of common stock approved to be purchased			49.90%

Preferred Stock - Series B Convertible Preferred Stock (Details) - $ / shares				12 Months Ended
	Mar. 09, 2017	Feb. 10, 2017	Mar. 09, 2012	Dec. 31, 2017	Mar. 10, 2017
Series B Convertible Preferred Stock
Shares issued upon conversion (in shares)	0
Series B voting convertible preferred stock
Series B Convertible Preferred Stock
Period of closing of offering after which shares are convertible				5 years
Conversion price per share (in dollars per share)				$ 3.25
Conversion ratio, the number of shares of common stock received per share of convertible preferred stock (in shares)				50
Series B-1 non-voting convertible preferred stock
Series B Convertible Preferred Stock
Number of common shares sold (in shares)			12,308
Offering price per share (in dollars per share)			$ 3,250
Preferred Class A and Class B
Series B Convertible Preferred Stock
Shares converted (in shares)		12,308
Accumulated shares but undeclared dividends (in shares)					9,570
Common Stock
Series B Convertible Preferred Stock
Shares issued upon conversion (in shares)		1,093,892

Preferred Stock - Recent Sales of Unregistered Securities (Details) - shares	Mar. 09, 2017	Nov. 22, 2016	Dec. 18, 2015
Shareholders' Equity
Shares issued upon conversion (in shares)	0
Common Stock
Shareholders' Equity
Shares converted (in shares)		1,250,000	1,250,000
Series A Convertible Preferred Stock
Shareholders' Equity
Shares issued upon conversion (in shares)		1,250	1,250

Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net loss	$ 287	$ (5,407)	$ (2,388)	$ (9,778)	$ (6,197)	$ (6,675)	$ (3,044)	$ (3,650)	$ (17,286)	$ (19,566)	$ (16,340)
Less: earnings attributable to convertible preferred stock									0	7,579	6,736
Numerator of basic and diluted EPS									$ (17,286)	$ (27,145)	$ (23,076)
Denominator for basic and diluted EPS:
Weighted-average common shares outstanding (in shares)									33,355	23,093	23,760
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ 0.01	$ (0.16)	$ (0.07)	$ (0.31)	$ (0.34)	$ (0.38)	$ (0.22)	$ (0.24)	$ (0.52)	$ (1.18)	$ (0.97)
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from computations of diluted net loss per common share (in shares)									5,400	5,300	6,700

Stock Purchase Warrants (Details) $ / shares in Units, $ in Thousands						12 Months Ended
	Dec. 27, 2017 shares	Dec. 21, 2017 USD ($) shares	Dec. 07, 2017 holder shares	Dec. 06, 2017 $ / shares	Sep. 09, 2016 $ / shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) $ / shares	Dec. 31, 2015 USD ($)
Assumptions used in calculating the estimated fair value of the warrants
Proceeds from issuance of warrants \| $						$ 207	$ 190	$ 0
ICT
Assumptions used in calculating the estimated fair value of the warrants
Proceeds from license fees received and issuance of warrants \| $		$ 5,200
Proceeds from license fees received \| $		$ 1,200
August 2013 Warrants
Stock Purchase Warrants
Exercise price (in dollars per share)						$ 4.80
Number of shares issuable on exercise (in shares) \| shares						724,950
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)						$ 5.45	$ 3
Expected dividend rate						0.00%	0.00%
Expected stock price volatility						63.70%	97.90%
Risk-free interest rate						1.65%	1.03%
Expected life						7 months 13 days	1 year 7 months 12 days
September 2016 Warrants
Stock Purchase Warrants
Exercise price (in dollars per share)						$ 2.48
Number of shares issuable on exercise (in shares) \| shares						117,074
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)					$ 2.20
Expected dividend rate					0.00%
Expected stock price volatility					89.80%
Risk-free interest rate					1.40%
Expected life					6 years
December 2017 Warrants
Stock Purchase Warrants
Exercise price (in dollars per share)						$ 4.27
Number of shares issuable on exercise (in shares) \| shares						53,902
Warrants issued (in shares) \| shares			53,902
Number of holders \| holder			2
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)				$ 5.10
Expected dividend rate				0.00%
Expected stock price volatility				86.40%
Risk-free interest rate				2.20%
Expected life				6 years
Warrants Issued December 21, 2017 \| ICT
Stock Purchase Warrants
Exercise price (in dollars per share)				$ 0.01
Number of shares issuable on exercise (in shares) \| shares		818,424
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)				$ 4.90
Proceeds from issuance of warrants \| $		$ 4,000
Exercise of warrants resulting in the issuance of common stock (in shares) \| shares	816,850
Warrants outstanding (in shares) \| shares						0

Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Liabilities that are measured at fair value on a recurring basis
Warrant liabilities	$ 757	$ 757
Change in the estimated fair value of warrant liabilities
Balance at the beginning of the period	757
Change in fair value	257	0	$ (324)
Balance at the end of the period	1,014	757
Recurring
Liabilities that are measured at fair value on a recurring basis
Warrant liabilities	757	757	757
Change in the estimated fair value of warrant liabilities
Balance at the beginning of the period	757	757
Change in fair value	257	0
Balance at the end of the period	1,014	757	$ 757
Recurring \| Level 1
Liabilities that are measured at fair value on a recurring basis
Warrant liabilities	0	0
Change in the estimated fair value of warrant liabilities
Balance at the beginning of the period	0
Balance at the end of the period	0	0
Recurring \| Level 2
Liabilities that are measured at fair value on a recurring basis
Warrant liabilities	757	757
Change in the estimated fair value of warrant liabilities
Balance at the beginning of the period	757
Balance at the end of the period	1,014	757
Recurring \| Level 3
Liabilities that are measured at fair value on a recurring basis
Warrant liabilities	0	0
Change in the estimated fair value of warrant liabilities
Balance at the beginning of the period	0
Balance at the end of the period	$ 0	$ 0

Income Taxes - Components of Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating Loss Carryforwards [Line Items]
Loss before income taxes	$ (17,286)	$ (19,566)	$ (16,340)
U.S. loss
Operating Loss Carryforwards [Line Items]
Loss before income taxes	(17,066)	(19,302)	(16,235)
Non U.S. loss
Operating Loss Carryforwards [Line Items]
Loss before income taxes	$ (220)	$ (264)	$ (105)

Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of income taxes computed using the federal statutory rate to the taxes reported in consolidated statements of operations
Loss before income taxes	$ 17,286	$ 19,566	$ 16,340
Federal statutory rate	34.00%	34.00%	34.00%
Taxes computed at federal statutory rate	$ (5,877)	$ (6,652)	$ (5,556)
State taxes (net of federal benefit)	(1,106)	(1,016)	(392)
Warrants	0	0	(118)
Nondeductible stock compensation	563	549	543
Federal and State Rate Change	11,749	(614)	0
Other	116	56	57
Adjustment to prior year filed returns	0	0	(5,203)
Change in valuation allowance	(5,445)	7,677	10,669
Reported income taxes	0	0	$ 0
Deferred tax assets
Net operating loss carryforwards	10,487	10,343
Employee benefits and stock compensation	2,128	2,896
Research and development costs	8,275	13,659
Fixed assets	508	700
Inventory reserve	2,568	1,898
Other, net	282	196
Total deferred tax assets	24,248	29,692
Valuation allowance	(24,248)	(29,692)
Net deferred tax assets	$ 0	$ 0

Income Taxes - Narrative (Details) - USD ($) $ in Millions		12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Millions	Dec. 22, 2017	Dec. 31, 2017	Dec. 31, 2016	Sep. 16, 2014
Operating Loss Carryforwards [Line Items]
Projected annual limitation on the use of the net operating losses that existed prior to September 17, 2014				$ 0.8
Increase (decrease) in valuation allowance		$ (5.4)	$ 7.7
Tax Cuts and Jobs Act of 2017, incomplete accounting, change in tax rate, deferred tax asset, provisional income tax expense	$ 11.7
Federal \| Internal Revenue Service
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards		42.7
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards		$ 24.4

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Dec. 21, 2017	Oct. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	May 10, 2017	Mar. 31, 2016
Licenses, Royalties and Collaborative Agreements and Commitments
Purchase obligation, due in second year		$ 600	$ 608
Purchase obligation, renewal option, term		5 years
Purchase obligation, automatic renewal, term		5 years
Proceeds from issuance of warrants			207	$ 190	$ 0
Landlord contributions toward tenant improvements							$ 2,000
Tenant improvements			1,700
Rent expense			$ 5,600	$ 4,800	$ 4,900
ICT
Licenses, Royalties and Collaborative Agreements and Commitments
Proceeds from license fees received and issuance of warrants	$ 5,200
Proceeds from license fees received	$ 1,200
License agreement, contingent consideration, asset						$ 8,000

Commitments and Contingencies - Future Minimum Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Oct. 31, 2015
Operating leases
Total	$ 19,336
2018	4,878
2019	4,564
2020	4,575
2021	4,558
2022	761
More than 5 Years	0
Purchase commitments
Total	3,055
2018	713
2019	608	$ 600
2020	578
2021	578
2022	578
More than 5 Years	0
Capital leases
Total	92
2018	80
2019	6
2020	2
2021	2
2022	2
More than 5 years	0
Operating and capital leases and purchase commitments
Total operating and capital leases and purchase commitments	22,483
2018	5,671
2019	5,178
2020	5,155
2021	5,138
2022	1,341
More than 5 Years	$ 0

Supplementary Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 23,350	$ 14,260	$ 16,953	$ 9,361	$ 16,523	$ 10,929	$ 12,823	$ 14,108	$ 63,924	$ 54,383	$ 51,168
Gross profit (loss)	14,961	7,074	9,283	2,252	8,932	4,073	5,523	7,548	33,570	26,076	24,698
Loss from operations	1,191	(4,031)	(2,521)	(9,623)	(5,889)	(6,380)	(4,984)	(1,992)	(14,984)	(19,245)	(16,671)
Net loss	$ 287	$ (5,407)	$ (2,388)	$ (9,778)	$ (6,197)	$ (6,675)	$ (3,044)	$ (3,650)	$ (17,286)	$ (19,566)	$ (16,340)
Net (loss) profit per share (Basic and Diluted) (in dollars per share)	$ 0.01	$ (0.16)	$ (0.07)	$ (0.31)	$ (0.34)	$ (0.38)	$ (0.22)	$ (0.24)	$ (0.52)	$ (1.18)	$ (0.97)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Statement of Stockholders' Equity [Abstract]
Issuance of stock, issuance cost	$ 311	$ 1,653

Employee Savings Plan	12 Months Ended
Employee Savings Plan	Dec. 31, 2017
Retirement Benefits [Abstract]
Employee Savings Plan	Employee Savings Plan The Company has a 401(k) savings plan that allows participating employees to contribute a portion of their salary, subject to annual limits and minimum qualifications. The Board may, at its sole discretion, approve Company matching contributions to the plan. The Company made contributions of $0.6 million, $0.6 million and $0.5 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Summary of Significant Accounting Policies - Undeclared Dividends (Details) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Series B voting convertible preferred stock
Net Loss Per Share Attributable to Common Shareholders
Accumulated undeclared dividends	$ 7.6	$ 6.7

Employee Savings Plan (Details) - USD ($) $ in Millions	12 Months Ended
Employee Savings Plan (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Retirement Benefits [Abstract]
Contributions made under 401(k) savings plan	$ 0.6	$ 0.6	$ 0.5