0001628280-22-020355 | 10-Q | XBRL Viewer

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Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2022	Jul. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-35280
Entity Registrant Name	VERICEL CORPORATION
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	94-3096597
Entity Address, Address Line One	64 Sidney Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02139
City Area Code	617
Local Phone Number	588-5555
Title of 12(b) Security	Common Stock (No par value)
Trading Symbol	VCEL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,177,974
Entity Central Index Key	0000887359
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 56,054	$ 68,330
Short-term investments	44,638	35,068
Accounts receivable (net of allowance for doubtful accounts of $40 and $40, respectively)	33,664	37,437
Inventory	15,929	13,381
Other current assets	4,809	4,246
Total current assets	155,094	158,462
Property and equipment, net	15,919	13,308
Restricted cash	6,184	211
Right-of-use assets	43,583	45,720
Long-term investments	23,718	25,687
Other long-term assets	317	317
Total assets	244,815	243,705
Current liabilities:
Accounts payable	9,684	9,016
Accrued expenses	12,133	14,045
Current portion of operating lease liabilities	3,156	2,950
Other current liabilities	41	41
Total current liabilities	25,014	26,052
Operating lease liabilities	44,964	47,147
Other long-term liabilities	21	44
Total liabilities	69,999	73,243
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity:
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding 47,141 and 46,880, respectively	575,011	553,902
Accumulated other comprehensive loss	(855)	(154)
Accumulated deficit	(399,340)	(383,286)
Total shareholders’ equity	174,816	170,462
Total liabilities and shareholders’ equity	$ 244,815	$ 243,705

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 40	$ 40
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	47,141,000	46,880,000
Common stock, shares outstanding (in shares)	47,141,000	46,880,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue, Product and Service [Extensible List]			Product [Member]
Product sales, net	$ 36,826	$ 38,680	$ 72,678	$ 72,307
Other revenue	220	839	442	1,780
Total revenue	37,046	39,519	$ 73,120	74,087
Cost, Product and Service [Extensible List]			Product [Member]
Cost of product sales	14,192	12,609	$ 26,814	24,192
Gross profit	22,854	26,910	46,306	49,895
Research and development	4,792	4,449	9,652	8,079
Selling, general and administrative	27,144	26,190	53,009	48,850
Total operating expenses	31,936	30,639	62,661	56,929
Loss from operations	(9,082)	(3,729)	(16,355)	(7,034)
Other income (expense):
Interest income	148	43	236	119
Interest expense	(20)	(1)	(38)	(2)
Other income (expense)	(9)	(27)	103	57
Total other income	119	15	301	174
Loss before income taxes	(8,963)	(3,714)	(16,054)	(6,860)
Income tax expense	0	72	0	215
Net loss	$ (8,963)	$ (3,786)	$ (16,054)	$ (7,075)
Net loss per common share:
Basic (in USD per share)	$ (0.19)	$ (0.08)	$ (0.34)	$ (0.15)
Diluted (in USD per share)	$ (0.19)	$ (0.08)	$ (0.34)	$ (0.15)
Weighted-average common shares outstanding:
Basic (in shares)	47,117	46,403	47,052	46,195
Diluted (in shares)	47,117	46,403	47,052	46,195

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (8,963)	$ (3,786)	$ (16,054)	$ (7,075)
Other comprehensive loss:
Unrealized (loss) gain on investments	(242)	24	(701)	(37)
Comprehensive loss	$ (9,205)	$ (3,762)	$ (16,755)	$ (7,112)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2020		45,804
Beginning balance at Dec. 31, 2020	$ 134,260	$ 510,061	$ 14	$ (375,815)
Increase (Decrease) in Shareholders' Equity
Net loss	(3,289)			(3,289)
Stock-based compensation expense	7,019	$ 7,019
Stock option exercises (in shares)		359
Stock option exercises	3,532	$ 3,532
Shares issued under the Employee Stock Purchase Plan (in shares)		14
Shares issued under the Employee Stock Purchase Plan	249	$ 249
Issuance of stock for restricted stock unit vesting (in shares)		76
Restricted stock withheld for employee tax remittance (in shares)		(28)
Restricted stock withheld for employee tax remittance	(1,501)	$ (1,501)
Unrealized loss on investments	(61)		(61)
Ending balance (in shares) at Mar. 31, 2021		46,225
Ending balance at Mar. 31, 2021	140,209	$ 519,360	(47)	(379,104)
Beginning balance (in shares) at Dec. 31, 2020		45,804
Beginning balance at Dec. 31, 2020	134,260	$ 510,061	14	(375,815)
Increase (Decrease) in Shareholders' Equity
Net loss	(7,075)
Unrealized loss on investments	(37)
Ending balance (in shares) at Jun. 30, 2021		46,579
Ending balance at Jun. 30, 2021	151,092	$ 534,005	(23)	(382,890)
Beginning balance (in shares) at Mar. 31, 2021		46,225
Beginning balance at Mar. 31, 2021	140,209	$ 519,360	(47)	(379,104)
Increase (Decrease) in Shareholders' Equity
Net loss	(3,786)			(3,786)
Stock-based compensation expense	10,866	$ 10,866
Stock option exercises (in shares)		330
Stock option exercises	3,531	$ 3,531
Shares issued under the Employee Stock Purchase Plan (in shares)		13
Shares issued under the Employee Stock Purchase Plan	309	$ 309
Issuance of stock for restricted stock unit vesting (in shares)		12
Restricted stock withheld for employee tax remittance (in shares)		(1)
Restricted stock withheld for employee tax remittance	(61)	$ (61)
Unrealized loss on investments	24		24
Ending balance (in shares) at Jun. 30, 2021		46,579
Ending balance at Jun. 30, 2021	151,092	$ 534,005	(23)	(382,890)
Beginning balance (in shares) at Dec. 31, 2021		46,880
Beginning balance at Dec. 31, 2021	170,462	$ 553,902	(154)	(383,286)
Increase (Decrease) in Shareholders' Equity
Net loss	(7,091)			(7,091)
Stock-based compensation expense	9,531	$ 9,531
Stock option exercises (in shares)		125
Stock option exercises	1,155	$ 1,155
Shares issued under the Employee Stock Purchase Plan (in shares)		9
Shares issued under the Employee Stock Purchase Plan	310	$ 310
Issuance of stock for restricted stock unit vesting (in shares)		108
Restricted stock withheld for employee tax remittance (in shares)		(41)
Restricted stock withheld for employee tax remittance	(1,423)	$ (1,423)
Unrealized loss on investments	(459)		(459)
Ending balance (in shares) at Mar. 31, 2022		47,081
Ending balance at Mar. 31, 2022	172,485	$ 563,475	(613)	(390,377)
Beginning balance (in shares) at Dec. 31, 2021		46,880
Beginning balance at Dec. 31, 2021	170,462	$ 553,902	(154)	(383,286)
Increase (Decrease) in Shareholders' Equity
Net loss	(16,054)
Unrealized loss on investments	(701)
Ending balance (in shares) at Jun. 30, 2022		47,141
Ending balance at Jun. 30, 2022	174,816	$ 575,011	(855)	(399,340)
Beginning balance (in shares) at Mar. 31, 2022		47,081
Beginning balance at Mar. 31, 2022	172,485	$ 563,475	(613)	(390,377)
Increase (Decrease) in Shareholders' Equity
Net loss	(8,963)			(8,963)
Stock-based compensation expense	10,808	$ 10,808
Stock option exercises (in shares)		32
Stock option exercises	428	$ 428
Shares issued under the Employee Stock Purchase Plan (in shares)		10
Shares issued under the Employee Stock Purchase Plan	318	$ 318
Issuance of stock for restricted stock unit vesting (in shares)		19
Restricted stock withheld for employee tax remittance (in shares)		(1)
Restricted stock withheld for employee tax remittance	(18)	$ (18)
Unrealized loss on investments	(242)		(242)
Ending balance (in shares) at Jun. 30, 2022		47,141
Ending balance at Jun. 30, 2022	$ 174,816	$ 575,011	$ (855)	$ (399,340)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Operating activities:
Net loss	$ (16,054)	$ (7,075)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization expense	1,928	1,506
Stock-based compensation expense	20,339	17,885
Amortization of premiums and discounts on marketable securities	302	505
Non-cash lease cost	2,155	2,325
Other	16	5
Changes in operating assets and liabilities:
Inventory	(2,548)	(3,603)
Accounts receivable	3,773	2,772
Other current assets	(563)	1,039
Accounts payable	1,152	1,356
Accrued expenses	(1,912)	(216)
Operating lease liabilities	(1,977)	(1,644)
Net cash provided by operating activities	6,611	14,855
Investing activities:
Purchases of investments	(34,948)	(30,951)
Sales and maturities of investments	26,344	32,655
Expenditures for property and equipment	(5,062)	(4,461)
Net cash used in investing activities	(13,666)	(2,757)
Financing activities:
Net proceeds from common stock issuance	2,211	7,621
Payments on employee’s behalf for taxes related to vesting of restricted stock unit awards	(1,441)	(1,562)
Other	(18)	(16)
Net cash provided by financing activities	752	6,043
Net (decrease) increase in cash, cash equivalents, and restricted cash	(6,303)	18,141
Cash, cash equivalents, and restricted cash at beginning of period	68,541	33,831
Cash, cash equivalents, and restricted cash at end of period	62,238	51,972
Supplemental disclosure of cash flow information:
Additions to property and equipment included in accounts payable	869	630
Restricted stock held for employee tax remittance included in accounts payable	0	61
Reconciliation of amounts within the condensed consolidated balance sheets:
Cash and cash equivalents	56,054	51,761
Restricted cash	6,184	211
Total cash, cash equivalents, and restricted cash at end of period	$ 62,238	$ 51,972

Organization	6 Months Ended
Organization	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Vericel Corporation, a Michigan corporation (together with its consolidated subsidiaries referred to herein as the Company, or Vericel), was incorporated in March 1989 and began employee-based operations in 1991. The Company is a fully-integrated, commercial-stage biopharmaceutical company and is a leader in advanced therapies for the sports medicine and severe burn care markets. Vericel currently markets two cell therapy products in the U.S., MACI® (autologous cultured chondrocytes on porcine collagen membrane) and Epicel® (cultured epidermal autografts). MACI is an autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. Epicel is a permanent skin replacement for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of total body surface area (“TBSA”). The Company also holds an exclusive license from MediWound Ltd. (“MediWound”) for North American rights to NexoBrid®, a registration-stage biological orphan product designed for the debridement of severe thermal burns. The Company operates its business primarily in the U.S. in one reportable segment — the research, product development, manufacture and distribution of cellular therapies for use in the treatment of specific diseases. COVID-19 The ongoing pandemic caused by the spread of a novel strain of coronavirus (“COVID-19”) has created significant disruptions to the U.S. and global economy and has contributed to significant volatility in financial markets. The global impact of the outbreak has fluctuated since early 2020. At times, many state, local and national governments – including those in Massachusetts and Michigan, where the Company’s operations are located – have responded by issuing, extending and supplementing orders requiring quarantines, restrictions on travel, and the mandatory closure of certain non-essential businesses, among other actions. Because Vericel is deemed an essential business, the Company has been exempted from government orders requiring the closure of workplaces and the cessation of business operations. The vast majority of these restrictions have since been rescinded throughout most of the U.S. Notwithstanding being an essential business, the Company’s business and operations at times have been adversely impacted by the ongoing effects of the COVID-19 pandemic. For example, as a result of periodic restrictions placed on the performance of elective surgical procedures, Vericel experienced a significant increase in cancellations of scheduled MACI procedures as well as a slowdown in new MACI orders during March and April of 2020. The widespread suspension of surgical procedures impacted the Company’s business and operations during the first and second quarters of 2020. The level and degree of restriction on elective surgeries, on the ability of patients to seek treatment and on U.S. business operations generally fluctuated throughout 2020 as COVID-19 infection rates rose and fell during the summer months and into the autumn. By the first quarter of 2021, the pandemic’s effects on the Company’s MACI business had largely dissipated. During the summer of 2021, however, the pandemic’s direct and ancillary effects again began to cause some disruption to the Company’s MACI business. Following the cessation of COVID-19-related travel restrictions in many parts of the U.S. and the availability of vaccinations in May and June 2021, some MACI patients postponed or delayed treatment. Further, surges of new COVID-19 cases during the second half of 2021 caused by the spread of the “Delta” and “Omicron” variants again caused disruptions to health care networks including restrictions on the performance of elective procedures, the availability of physicians and/or their treatment prioritizations, the level of healthcare facility staffing and, in some instances, the willingness or ability of patients to seek treatment. Consequently, and notwithstanding the widespread distribution of vaccines, these factors contributed to a slowdown of MACI procedures during the third and fourth quarters of 2021 and during the first and second quarters of 2022. Although hospitals are now better prepared for subsequent surges in COVID-19 patients, the risk remains that regional or local restrictions could again be placed on the performance of elective surgical procedures if the number of COVID-19 infections in the U.S. were to rise, or if new or existing COVID-19 variants render current vaccine treatments ineffective. Because Epicel is used almost exclusively in an emergent setting by burn centers and surgeons throughout the country, Epicel revenue and procedure volumes have been less affected by the pandemic. Nevertheless, the number of large burns and burn admissions can be affected by restrictions on human activity resulting from more severe government lockdown orders. At the outset of the pandemic, the Company put in place a comprehensive workplace protection plan, which instituted protective measures in response to COVID-19. Vericel’s workplace protection plan has closely followed guidance issued by the Centers for Disease Control and Prevention (“CDC”) and has complied with applicable federal and state law. To date, Vericel has been successful in sustaining its operations and providing MACI and Epicel to patients in need. The Company continues to review its policies and procedures regularly, including its workplace protection plan, as the pandemic evolves and the Company may take additional actions to the extent required. The Company continues to manufacture MACI and Epicel and is maintaining a significant safety stock of all key raw materials. Vericel does not expect that current supply chain interruptions will impact its ongoing manufacturing operations. With respect to customer delivery, MACI final product has an established shelf life of six (6) days and an established shipping shelf life of three (3) days. Currently, MACI is picked up by courier and shipped by commercial air or ground transportation to customer surgical sites. Epicel final product has an established shelf life of 48 hours and is hand carried to customer hospitals by courier. Transportation is primarily by commercial or charter airline. Although the Company has not experienced material shipping delays, significant disruption of air travel could result in the inability to deliver MACI or Epicel final products to customer sites within appropriate timeframes, which could further adversely impact the Company’s business. At this time, the Company is not aware of COVID-19 related impacts on its distributors, operations or third-party service providers’ ability to manage patient cases. The Company believes it is possible that it could experience variable business impacts, should a new resurgence of COVID-19 infections occur in the future. The Conflict in Ukraine The current conflict between Russia and Ukraine and the related sanctions and other penalties imposed by countries across the globe against Russia are creating substantial uncertainty in the global economy and resulting in heightened inflation and supply chain disruptions. While the Company does not have operations in Russia or Ukraine and does not have exposure to distributors, or third-party service providers in Russia or Ukraine, it is unable to predict the impact that these actions will have on the global economy or on its financial condition, results of operations, and cash flows as of the date of these unaudited condensed consolidated financial statements. Liquidity The accompanying condensed 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 the satisfaction of liabilities and commitments in the normal course of business. As of June 30, 2022, the Company had an accumulated deficit of $399.3 million and had a net loss of $16.1 million during the six months ended June 30, 2022. The Company had cash and cash equivalents of $56.1 million and investments of $68.4 million as of June 30, 2022. The Company expects that cash from the sales of its products and existing cash, cash equivalents and investments will be sufficient to support the Company’s current operations through at least 12 months from the issuance of these condensed consolidated financial statements. The effects of the COVID-19 pandemic continue to evolve, however. To the extent the U.S. experiences a worsening in COVID-19 infections or the emergence of additional virus variants that result in more serious disease or limit the effectiveness of existing vaccines, subsequent healthcare measures – to include the postponement or cessation of elective and other surgical procedures – may cause the Company to experience a reduction in business and resulting revenue. This, consequently, may result in irrecoverable losses of customers and significantly impact the Company’s long-term liquidity, potentially requiring the Company to engage in layoffs, furloughs and/or reductions in salaries. The Company also may need to access additional capital; however, the Company may not be able to obtain financing on acceptable terms or at all, particularly in light of the impact of COVID-19 on the global economy and financial markets. The terms of any financing may adversely affect the holdings or the rights of the Company’s shareholders.

Basis of Presentation	6 Months Ended
Basis of Presentation	Jun. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements of Vericel are unaudited and have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expenses. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary to state fairly the financial position and results of operations as of and for the periods indicated. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expenses. The full extent to which the COVID-19 pandemic will continue to directly or indirectly impact the Company’s business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning the COVID-19 pandemic and the actions taken to continue to contain or treat COVID-19, as well as the economic impact on its customers. The Company has made estimates of the impact of the COVID-19 pandemic within these financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates. As of June 30, 2022, the Company has not recorded impairments to investments, inventory, other current assets or long-lived assets as a result of the COVID-19 pandemic. The condensed consolidated balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date, but does not include all the information and notes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 24, 2022 (“Annual Report”). Recent Accounting Pronouncements No new accounting standards were adopted during the quarter ended June 30, 2022.

Revenue

6 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

Revenue

Revenue Recognition and Net Product Sales

The Company recognizes product revenue from sales of MACI biopsy kits, MACI implants, Epicel grafts and other sources following the five-step model in Accounting Standards Codification 606, Revenue Recognition.

MACI Biopsy Kits

MACI biopsy kits are sold directly to hospitals and ambulatory surgical centers based on contracted rates in an approved contract or sales order. The Company recognizes MACI kit revenue upon delivery of the biopsy kit, at which time the customer (the facility) is in control of the kit. The kit is used by the doctor to provide a sample of cartilage tissue to the Company, which can later be used to manufacture a MACI implant. The ordering of the kit does not obligate the Company to manufacture an implant nor does the receipt of the cartilage tissue by the Company from the customer following biopsy. The customer’s order of an implant is separate from the process of ordering the biopsy kit. Therefore, the sale of the biopsy kit and any subsequent sale of an implant are distinct contracts and are accounted for separately.

MACI Implants

The Company contracts with two specialty pharmacies, Orsini Pharmaceutical Services, Inc. (“Orsini”) and AllCare Plus Pharmacy, Inc. (“AllCare”) to distribute MACI in a manner in which the Company retains the credit and collection risk from the end customer. The Company pays both specialty pharmacies a fee for each patient to whom MACI is dispensed. Both Orsini and AllCare perform collection activities to collect payment from customers. The Company engages a third party to provide services in connection with a patient support program to manage patient cases and to ensure complete and correct billing information is provided to the insurers and hospitals. In addition, the Company also sells MACI directly to DMS Pharmaceutical Group, Inc.(“DMS”) for patients treated at military treatment facilities. The sales directly to DMS are made at a contracted rate.

Prior authorization and 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 recognizes product revenue from sales of all MACI implants upon delivery at which time the customer obtains control of the implant and the claim is billable. The total consideration which the Company expects to collect in exchange for MACI implants (the “Transaction Price”) may be fixed or variable. Direct sales to hospitals or distributors are recorded at a contracted price, and there are typically no forms of variable consideration.

When the Company sells MACI, the patient is responsible for payment; however, the Company is typically reimbursed by a third-party insurer or government payer, subject to a patient co-pay amount. Reimbursements from third-party insurers and government payers vary by patient and payer and are based on either contracted rates, publicly available rates, fee schedules or past payer precedents. Net product revenue is recognized net of estimated contractual allowances, which considers historical collection experience from both the payer and patient, denial rates and the terms of the Company’s contractual arrangements. The Company estimates expected collections for these transactions using the portfolio approach. The Company records a reduction to revenue at the time of sale for its estimate of the amount of consideration that will not be collected. In addition, potential credit risk exposure has been evaluated for the Company’s accounts receivable in accordance with ASC 326, Financial Instruments -

Credit Losses. The Company assesses risk and determines a loss percentage by pooling account receivables based on similar risk characteristics. The loss percentage is calculated through the use of forecasts that are based on current and historical economic and financial information. This loss percentage was applied to the accounts receivables as of June 30, 2022. The total allowance for uncollectible consideration as of June 30, 2022 and December 31, 2021 was $6.7 million and $7.0 million, respectively. Changes to the estimate of the amount of consideration that will not be collected could have a material impact on the revenue recognized. A 50 basis points change to the estimated uncollectible percentage could result in an approximately $0.3 million decrease or increase in the revenue recognized for the six months ended June 30, 2022.

Changes in estimates of the Transaction Price are recorded through revenue in the period in which such change occurs. Changes in estimates related to prior periods are shown in the Revenue by Product and Customer table below and relate primarily to changes in the initial expected reimbursement or collection expectation upon completion of the billing claims process for MACI implants that occurred in a prior year. During the three months ended June 30, 2022, the Company recorded changes in estimates for MACI implants that occurred in a prior year of approximately $1.4 million, related to claims billed through a third-party insurer as a result of finalization of the billing claims processes.

Epicel

The Company sells Epicel directly to hospitals and burn centers based on contracted rates stated in an approved contract or purchase order. Similar to MACI, there is no obligation to manufacture Epicel grafts upon receipt of a skin biopsy, and Vericel has no contractual right to receive payment until the product is delivered to the hospital. The Company recognizes product revenue from sales of Epicel upon delivery to the hospital, at which time the customer is in control of the Epicel grafts and the claim is billable to the hospital.

NexoBrid

The Company entered into exclusive license and supply agreements with MediWound in May 2019, under which MediWound will manufacture and supply NexoBrid on a unit price basis, which may be increased pursuant to the terms of the agreements. The U.S. Biomedical Advanced Research and Development Authority (“BARDA”) has committed to procure NexoBrid from MediWound and, as of June 30, 2022, the Company did not hold a direct contract or distribution agreement with BARDA, or take title to the product. The Company recognizes revenue based on a percentage of gross profits for sales of NexoBrid to BARDA upon delivery, at which time BARDA is in control of the product.

Revenue by Product and Customer

The following table and descriptions below show the products from which the Company generated its revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
Revenue by product (in thousands)	2022		2021		2022		2021
MACI implants and kits
Implants based on contracted rates sold through a specialty pharmacy (a)	$	15,714	$	17,972	$	31,009	$	31,200
Implants subject to third party reimbursement sold through a specialty pharmacy (b)	4,295		3,502		7,803		7,917
Implants sold direct based on contracted rates (c)	5,756		4,487		11,390		8,954
Implants sold direct subject to third-party reimbursement (d)	570		405		1,441		1,255
Biopsy kits - direct bill	545		551		1,066		1,070
Change in estimates related to prior periods (e)	1,733		(392)		1,898		(74)
Total MACI implants and kits	28,613		26,525		54,607		50,322
Epicel
Direct bill (hospital)	8,213		12,155		18,071		21,985

NexoBrid revenue (f)	220		839		442		1,780
Total revenue	$	37,046	$	39,519	$	73,120	$	74,087

(a) Represents implants sold through Orsini and AllCare whereby such specialty pharmacies have a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy’s direct contracts.

(b) Represents implants sold through Orsini or AllCare whereby such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history.

(c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. Also represents direct sales under a contract to specialty distributor DMS.

(d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third-party reimbursement from an underlying insurance provider.

(e) Primarily represents changes in estimates related to implants sold through Orsini or AllCare, and relate primarily to changes to the initial expected reimbursement or collection expectation upon completion of the billing claims process. The change in estimates is a result of additional information, changes in collection expectations or actual cash collections received in the current period.

(f) Represents revenue based on a percentage of gross profits for sales of NexoBrid to BARDA, pursuant to the license agreement between the Company and MediWound (see note 10).

Concentration of Credit Risk

The Company’s total revenue concentration from an Epicel customer for the three and six months ended June 30, 2022 was 6% and 7%, respectively, and 11% and 12%, respectively, for the same periods in 2021. For the Company’s total accounts receivable balances, there were no customers as of June 30, 2022 or December 31, 2021, with a concentration greater than 10%.

Selected Balance Sheet Components

6 Months Ended

Jun. 30, 2022

Balance Sheet Related Disclosures [Abstract]

Selected Balance Sheet Components

Inventory

Inventory as of June 30, 2022 and December 31, 2021:


(In thousands)	June 30, 2022		December 31, 2021
Raw materials	$	15,175	$	12,676
Work-in-process	683		644
Finished goods	71		61
Total inventory	$	15,929	$	13,381

Property and Equipment

Property and Equipment, net as of June 30, 2022 and December 31, 2021:


(In thousands)	June 30, 2022		December 31, 2021
Machinery and equipment	$	4,615	$	4,522
Furniture, fixtures and office equipment	1,710		1,551
Computer equipment and software	8,112		7,769
Leasehold improvements	13,134		10,617
Construction in process	4,543		3,097
Financing right-of-use lease	55		74
Total property and equipment, gross	32,169		27,630
Less accumulated depreciation	(16,250)		(14,322)
Total property and equipment, net	$	15,919	$	13,308

Depreciation expense for the three and six months ended June 30, 2022 was $1.1 million and $1.9 million, respectively, and $0.7 million and $1.5 million, respectively, for the same periods in 2021.

Accrued Expenses

Accrued Expenses as of June 30, 2022 and December 31, 2021 are as follows:


(In thousands)	June 30, 2022		December 31, 2021
Bonus related compensation	$	3,942	$	6,305
Employee related accruals	3,555		3,616
Insurance reimbursement-related liabilities	4,585		3,973
Other accrued expenses	51		151
Total accrued expenses	$	12,133	$	14,045

Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Ann Arbor facility includes office space, and the Cambridge facilities include clean rooms, laboratories for MACI and Epicel manufacturing, and office space. The Company also leases offsite warehouse space, vehicles and computer equipment.

On January 28, 2022, the Company entered into a lease agreement (the “Burlington Lease”) to lease approximately 126,000 square feet of to-be-constructed manufacturing, laboratory and office space in Burlington, Massachusetts (the “Premises”). Once constructed, the Premises will serve as the Company’s new corporate headquarters and primary manufacturing facility.

The term of the Burlington Lease is currently expected to begin in 2023, 12 months following the landlord’s commencement of construction of the core and shell of the building in which the Premises are located (the “Commencement Date”).

The Company’s obligation to pay rent for the Premises will begin on the earlier of: 13 months from the Commencement Date; or the date on which the Company first occupies the Premises to conduct operations (the “Rent Commencement Date”). The initial term of the Lease is 144 months following the Rent Commencement Date. The Company has a one-time option to extend the term of the Lease for an additional 10 years, exercisable under certain conditions and at a market rate determined in accordance with the Burlington Lease.

The annual base rent of the Burlington Lease is initially $57 per square foot per year, subject to annual increases of 2.5%. Monthly contractual payments are expected to range from $0.6 million to $0.8 million. Additionally, the Company is responsible for reimbursing the landlord for the Company’s share of the Premises’ property taxes and certain other operating expenses. The Burlington Lease also provides for a tenant improvement allowance from the landlord in an amount equal to $200 per square foot of the Premises, or approximately $25.1 million in total, towards the design and construction of certain tenant improvements made to the Premises, subject to the terms set forth in the Burlington Lease.

The Company is not involved in the initial construction of the core and shell of the building and will record the lease liability and right-of-use asset on its condensed consolidated balance sheet, when the construction is substantially completed and it obtains control of the Premises, which is currently expected to be on or around the Commencement Date.

In January 2022, in connection with the execution of the Burlington Lease, the Company issued a letter of credit collateralized by cash deposits of approximately $6.0 million. Such letter of credit shall be reduced to approximately $4.2 million and $1.8 million at the conclusion of the third and sixth lease years, respectively, provided certain conditions set forth in the Burlington Lease are satisfied.

For the three and six months ended June 30, 2022 and 2021, lease expense of less than $0.1 million was recorded related to short-term leases. For the three and six months ended June 30, 2022, the Company recognized $1.7 million and $3.5 million, respectively, of operating lease expense and $1.8 million and $3.7 million, respectively, for the same periods in 2021. For the three and six months ended June 30, 2022 and 2021, the Company recognized less than $0.1 million of financing lease expense.

Operating and finance lease assets and liabilities are as follows:


(In thousands)	Classification	June 30, 2022		December 31, 2021
Assets
Operating	Right-of-use assets	$	43,583	$	45,720
Finance	Property and equipment, net	55		73
Total leased assets		$	43,638	$	45,793
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	3,156	$	2,950
Finance	Other current liabilities	41		41

Non-current
Operating	Operating lease liabilities	44,964		47,147
Finance	Other long-term liabilities	21		44
Total leased liabilities		$	48,182	$	50,182

Leases

Operating and finance lease assets and liabilities are as follows:


(In thousands)	Classification	June 30, 2022		December 31, 2021
Assets
Operating	Right-of-use assets	$	43,583	$	45,720
Finance	Property and equipment, net	55		73
Total leased assets		$	43,638	$	45,793
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	3,156	$	2,950
Finance	Other current liabilities	41		41

Non-current
Operating	Operating lease liabilities	44,964		47,147
Finance	Other long-term liabilities	21		44
Total leased liabilities		$	48,182	$	50,182

Stock-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based CompensationThe 2022 Omnibus Incentive Plan (“2022 Plan”) was approved on April 27, 2022, and 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 2022 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2022 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan, the 2009 Second Amended and Restated Omnibus Incentive Plan, the 2017 Omnibus Incentive Plan, and the Amended and Restated 2019 Omnibus Incentive Plan (“Prior Plans”), and no new grants have been granted under the Prior Plans after approval of the 2022 Plan. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the 2022 Plan.

Stock Compensation Expense

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Cost of product sales	$	1,035	$	1,287	$	2,153	$	2,199
Research and development	1,520		1,234		2,870		2,096
Selling, general and administrative	8,253		8,345		15,316		13,590
Total non-cash stock-based compensation expense	$	10,808	$	10,866	$	20,339	$	17,885

Service-Based Stock Options

During the three and six months ended June 30, 2022, the Company granted service-based options to purchase common stock of 170,060 and 1,163,649, respectively, and 136,117 and 1,474,072, respectively, for the same periods in 2021. The weighted-average grant-date fair value of service-based options granted during the three and six months ended June 30, 2022 was $19.25 and $20.74 per option, respectively, and $39.31 and $32.69, respectively, for the same periods in 2021.

Restricted Stock Units

During the three and six months ended June 30, 2022, the Company granted 39,746 and 382,768 restricted stock units, respectively, and 26,941 and 241,054, respectively, for the same periods in 2021. The weighted-average grant-date fair value of restricted stock units granted during the three and six months ended June 30, 2022 was $31.94 and $34.65 per unit, respectively, and $61.37 and $51.99, respectively, for the same periods in 2021.

Investments

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investments

Marketable debt securities held by the Company are classified as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities, and carried at fair value in the accompanying condensed consolidated balance sheets on a settlement date basis. The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of June 30, 2022 and December 31, 2021:


	June 30, 2022
			Gross Unrealized						Estimated Fair Value
(In thousands)	Amortized Cost		Gains		Losses		Credit Losses
Commercial paper	$	15,784	$	—	$	(76)	$	—	$	15,708
Corporate notes	53,428		—		(780)		—		52,648
	$	69,212	$	—	$	(856)	$	—	$	68,356
Classified as:
Short-term investments									$	44,638
Long-term investments									23,718
									$	68,356


	December 31, 2021
			Gross Unrealized						Estimated Fair Value
(In thousands)	Amortized Cost		Gains		Losses		Credit Losses
Commercial paper	$	10,243	$	—	$	(12)	$	—	$	10,231
Corporate notes	50,666		—		(142)		—		50,524
	$	60,909	$	—	$	(154)	$	—	$	60,755
Classified as:
Short-term investments									$	35,068
Long-term investments									25,687
									$	60,755

As of June 30, 2022 and December 31, 2021, all marketable securities held by the Company had remaining contractual maturities of three years or less. There have been no impairments of the Company’s assets measured and carried at fair value during the three and six months ended June 30, 2022 and 2021.

Fair Value Measurements

6 Months Ended

Jun. 30, 2022

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).

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The commercial paper and corporate notes are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. There were no transfers into or out of Level 3 from December 31, 2021 to June 30, 2022.

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


	June 30, 2022								December 31, 2021
			Fair Value Measurement Category								Fair Value Measurement Category
(In thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	1,135	$	1,135	$	—	$	—	$	1,258	$	1,258	$	—	$	—
Commercial paper (a)	15,708		—		15,708		—		18,229		—		18,229		—
Corporate notes	52,648		—		52,648		—		50,524		—		50,524		—
	$	69,491	$	1,135	$	68,356	$	—	$	70,011	$	1,258	$	68,753	$	—

(a) Approximately $8.0 million of commercial paper had an original maturity of 90 days or less and was recorded as a cash equivalent as of December 31, 2021.

The fair values of the cash equivalents and marketable securities are based on observable market prices. The Company’s accounts receivables, accounts payable and accrued expenses are valued at cost which approximates fair value.

- 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

Net Loss Per Common Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Common Share

A summary of net loss per common share is presented below:


	Three Months Ended June 30,				Six months ended June 30,
(Amounts in thousands, except per share amounts)	2022		2021		2022		2021
Net loss	$	(8,963)	$	(3,786)	$	(16,054)	$	(7,075)

Basic weighted-average common shares outstanding	47,117		46,403		47,052		46,195
Effect of dilutive stock options and restricted stock units	—		—		—		—
Diluted weighted-average common shares outstanding	47,117		46,403		47,052		46,195

Basic loss per common share	$	(0.19)	$	(0.08)	$	(0.34)	$	(0.15)
Diluted loss per common share	$	(0.19)	$	(0.08)	$	(0.34)	$	(0.15)

Anti-dilutive shares excluded from diluted net loss per common share:
Stock options	6,586		5,960		6,586		5,960
Restricted stock units	636		413		636		413

NexoBrid License and Supply Agreements	6 Months Ended
NexoBrid License and Supply Agreements	Jun. 30, 2022
Related Party Transactions [Abstract]
NexoBrid License and Supply Agreements	NexoBrid License and Supply Agreements On May 6, 2019, the Company entered into exclusive license and supply agreements with MediWound to commercialize NexoBrid and any improvements to NexoBrid in North America. NexoBrid is a topically-administered biological product that enzymatically removes nonviable burn tissue, or eschar, in patients with deep partial and full-thickness thermal burns. On June 29, 2021, the Company announced that MediWound had received a complete response letter (“CRL”) from the U.S. Food & Drug Administration (“FDA”) with respect to a biologics license application (“BLA”), which MediWound had previously submitted to the FDA seeking marketing approval for the product in the U.S. As part of the CRL, the FDA communicated to MediWound that it had completed its review of the BLA, as amended, and had determined that it could not approve the BLA in its then form. The Company has continued to work with MediWound, BARDA and the FDA to address the issues identified in the CRL. On July 1, 2022, the Company and MediWound submitted a BLA resubmission to the FDA to address the issues identified by the FDA in the CRL. Subsequently, the FDA informed the Company that it has accepted the resubmission for review and has established a Prescription Drug User Fee Act (“PDUFA”) date for completing that review of January 1, 2023. Pursuant to the terms of the license agreement, if the BLA is approved, MediWound will transfer the BLA to Vericel and Vericel will market NexoBrid in the U.S. Both MediWound and Vericel, under the supervision of a Central Steering Committee comprised of members of both companies will continue to guide the development of NexoBrid in North America (the “Central Steering Committee”). NexoBrid is approved in the European Union (“EU”) and other international markets and has been designated as an orphan biologic in the U.S., EU and other international markets. In May 2019, the Company paid MediWound $17.5 million in consideration for the license, which was recorded as research and development expense during 2019. The Company is also obligated to pay MediWound $7.5 million, which is contingent upon U.S. regulatory approval of the BLA for NexoBrid and up to $125.0 million contingent upon meeting certain sales milestones. The first sales milestone of $7.5 million would be triggered when annual net sales of NexoBrid or improvements to it in North America exceed $75.0 million. As of June 30, 2022, the milestone payments are not yet probable and therefore, not recorded as a liability. The Company also will pay MediWound tiered royalties on net sales ranging from mid-high single-digit to mid-teen percentages, subject to customary reductions. The Company also entered into a supply agreement with MediWound under which MediWound will manufacture NexoBrid for the Company on a unit price basis which may be increased based on a published index. MediWound is obligated to supply the Company with NexoBrid for sale in North America on an exclusive basis for the first five years of the term of the supply agreement. After the exclusivity period or upon supply failure, the Company will be permitted to establish an alternate source of supply. BARDA has committed to procure NexoBrid directly from MediWound under an emergency use authorization, and under such commitment the Company will receive a percentage of gross profit for sales directly to BARDA. If BARDA procures NexoBrid directly from Vericel, the Company will pay a percentage of gross profits to MediWound on initial committed amounts and a royalty on any additional BARDA purchases of NexoBrid beyond the initial committed amount. As of June 30, 2022, the Company does not hold a direct contract or distribution agreement with BARDA.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies From time to time, the Company could be a party to various legal proceedings arising in the ordinary course of business. The costs and outcome of litigation, regulatory, investigatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to the Company and could have a material adverse effect on the Company’s results of operations or financial condition. In addition, intellectual property disputes often have a risk of injunctive relief which, if imposed against the Company, could materially and adversely affect its financial condition or results of operations. If a matter is both probable to result in material liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible material loss or range of loss. If such loss is not probable or cannot be reasonably estimated, a liability is not recorded in its condensed consolidated financial statements. As of June 30, 2022, the Company had no material ongoing litigation in which the Company was a party or any material ongoing regulatory or other proceedings and had no knowledge of any investigations by government or regulatory authorities in which the Company is a target that could have a material adverse effect on its current business.

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On July 29, 2022, the Company, as borrower, entered into a $150 million five-year senior secured revolving credit agreement by and among the Company, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent (the “Revolving Credit Agreement”). The Revolving Credit Agreement includes a $15 million sub-facility for the issuance of letters of credit. Amounts available under the Revolving Credit Agreement are for the working capital needs and other general corporate purposes of the Company. Outstanding borrowings under the Revolving Credit Agreement bear interest, with pricing based from time to time at the Company’s election at (i) SOFR plus 0.10% plus a spread ranging from 1.25% to 2.50% as determined by the Company’s total net leverage ratio (as defined in the Revolving Credit Agreement) or (ii) the alternative base rate (as defined in the Revolving Credit Agreement) plus a spread ranging from 0.25% to 1.50% as determined by the Company’s total net leverage ratio. The Revolving Credit Agreement also includes a commitment fee, which ranges from 0.20% to 0.25% as determined by the Company’s total net leverage ratio.

Basis of Presentation (Policies)	6 Months Ended
Basis of Presentation (Policies)	Jun. 30, 2022
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements No new accounting standards were adopted during the quarter ended June 30, 2022.

Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

Disaggregation of revenue

The following table and descriptions below show the products from which the Company generated its revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
Revenue by product (in thousands)	2022		2021		2022		2021
MACI implants and kits
Implants based on contracted rates sold through a specialty pharmacy (a)	$	15,714	$	17,972	$	31,009	$	31,200
Implants subject to third party reimbursement sold through a specialty pharmacy (b)	4,295		3,502		7,803		7,917
Implants sold direct based on contracted rates (c)	5,756		4,487		11,390		8,954
Implants sold direct subject to third-party reimbursement (d)	570		405		1,441		1,255
Biopsy kits - direct bill	545		551		1,066		1,070
Change in estimates related to prior periods (e)	1,733		(392)		1,898		(74)
Total MACI implants and kits	28,613		26,525		54,607		50,322
Epicel
Direct bill (hospital)	8,213		12,155		18,071		21,985

NexoBrid revenue (f)	220		839		442		1,780
Total revenue	$	37,046	$	39,519	$	73,120	$	74,087

(a) Represents implants sold through Orsini and AllCare whereby such specialty pharmacies have a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy’s direct contracts.

(b) Represents implants sold through Orsini or AllCare whereby such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history.

(c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. Also represents direct sales under a contract to specialty distributor DMS.

(d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third-party reimbursement from an underlying insurance provider.

(e) Primarily represents changes in estimates related to implants sold through Orsini or AllCare, and relate primarily to changes to the initial expected reimbursement or collection expectation upon completion of the billing claims process. The change in estimates is a result of additional information, changes in collection expectations or actual cash collections received in the current period.

(f) Represents revenue based on a percentage of gross profits for sales of NexoBrid to BARDA, pursuant to the license agreement between the Company and MediWound (see note 10).

Selected Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2022

Balance Sheet Related Disclosures [Abstract]

Schedule of inventory

Inventory as of June 30, 2022 and December 31, 2021:


(In thousands)	June 30, 2022		December 31, 2021
Raw materials	$	15,175	$	12,676
Work-in-process	683		644
Finished goods	71		61
Total inventory	$	15,929	$	13,381

Schedule of property and equipment, net

Property and Equipment, net as of June 30, 2022 and December 31, 2021:


(In thousands)	June 30, 2022		December 31, 2021
Machinery and equipment	$	4,615	$	4,522
Furniture, fixtures and office equipment	1,710		1,551
Computer equipment and software	8,112		7,769
Leasehold improvements	13,134		10,617
Construction in process	4,543		3,097
Financing right-of-use lease	55		74
Total property and equipment, gross	32,169		27,630
Less accumulated depreciation	(16,250)		(14,322)
Total property and equipment, net	$	15,919	$	13,308

Schedule of accrued expenses

Accrued Expenses as of June 30, 2022 and December 31, 2021 are as follows:


(In thousands)	June 30, 2022		December 31, 2021
Bonus related compensation	$	3,942	$	6,305
Employee related accruals	3,555		3,616
Insurance reimbursement-related liabilities	4,585		3,973
Other accrued expenses	51		151
Total accrued expenses	$	12,133	$	14,045

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Assets and Liabilities

Operating and finance lease assets and liabilities are as follows:


(In thousands)	Classification	June 30, 2022		December 31, 2021
Assets
Operating	Right-of-use assets	$	43,583	$	45,720
Finance	Property and equipment, net	55		73
Total leased assets		$	43,638	$	45,793
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	3,156	$	2,950
Finance	Other current liabilities	41		41

Non-current
Operating	Operating lease liabilities	44,964		47,147
Finance	Other long-term liabilities	21		44
Total leased liabilities		$	48,182	$	50,182

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of non-cash stock-based compensation expense

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Cost of product sales	$	1,035	$	1,287	$	2,153	$	2,199
Research and development	1,520		1,234		2,870		2,096
Selling, general and administrative	8,253		8,345		15,316		13,590
Total non-cash stock-based compensation expense	$	10,808	$	10,866	$	20,339	$	17,885

Investments (Tables)

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of fair value of securities, not including cash

The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of June 30, 2022 and December 31, 2021:


	June 30, 2022
			Gross Unrealized						Estimated Fair Value
(In thousands)	Amortized Cost		Gains		Losses		Credit Losses
Commercial paper	$	15,784	$	—	$	(76)	$	—	$	15,708
Corporate notes	53,428		—		(780)		—		52,648
	$	69,212	$	—	$	(856)	$	—	$	68,356
Classified as:
Short-term investments									$	44,638
Long-term investments									23,718
									$	68,356


	December 31, 2021
			Gross Unrealized						Estimated Fair Value
(In thousands)	Amortized Cost		Gains		Losses		Credit Losses
Commercial paper	$	10,243	$	—	$	(12)	$	—	$	10,231
Corporate notes	50,666		—		(142)		—		50,524
	$	60,909	$	—	$	(154)	$	—	$	60,755
Classified as:
Short-term investments									$	35,068
Long-term investments									25,687
									$	60,755

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

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:


	June 30, 2022								December 31, 2021
			Fair Value Measurement Category								Fair Value Measurement Category
(In thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	1,135	$	1,135	$	—	$	—	$	1,258	$	1,258	$	—	$	—
Commercial paper (a)	15,708		—		15,708		—		18,229		—		18,229		—
Corporate notes	52,648		—		52,648		—		50,524		—		50,524		—
	$	69,491	$	1,135	$	68,356	$	—	$	70,011	$	1,258	$	68,753	$	—

(a) Approximately $8.0 million of commercial paper had an original maturity of 90 days or less and was recorded as a cash equivalent as of December 31, 2021.

Net Loss Per Common Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Summary of net loss per common share

A summary of net loss per common share is presented below:


	Three Months Ended June 30,				Six months ended June 30,
(Amounts in thousands, except per share amounts)	2022		2021		2022		2021
Net loss	$	(8,963)	$	(3,786)	$	(16,054)	$	(7,075)

Basic weighted-average common shares outstanding	47,117		46,403		47,052		46,195
Effect of dilutive stock options and restricted stock units	—		—		—		—
Diluted weighted-average common shares outstanding	47,117		46,403		47,052		46,195

Basic loss per common share	$	(0.19)	$	(0.08)	$	(0.34)	$	(0.15)
Diluted loss per common share	$	(0.19)	$	(0.08)	$	(0.34)	$	(0.15)

Anti-dilutive shares excluded from diluted net loss per common share:
Stock options	6,586		5,960		6,586		5,960
Restricted stock units	636		413		636		413

Organization (Details) $ in Thousands	3 Months Ended				6 Months Ended
Organization (Details) $ in Thousands	Jun. 30, 2022 USD ($) product	Mar. 31, 2022 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Jun. 30, 2022 USD ($) product segment	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of therapy products \| product	2				2
Number of reportable segments \| segment					1
Accumulated deficit	$ 399,340				$ 399,340		$ 383,286
Net loss	8,963	$ 7,091	$ 3,786	$ 3,289	16,054	$ 7,075
Cash and cash equivalents	56,054		$ 51,761		56,054	$ 51,761	$ 68,330
Short term investments	$ 68,400				$ 68,400

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Revenue - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended
Revenue - Narrative (Details) $ in Thousands	Jun. 30, 2022 USD ($) pharmacy	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) pharmacy	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Disaggregation of Revenue [Line Items]
Number of specialty pharmacies \| pharmacy	2		2
Allowance for doubtful accounts	$ 6,700		$ 6,700		$ 7,000
Change in estimate of uncollectible (percent)			0.50%
Change in revenue recognized due to 0.5% change in uncollectible percentage			$ 300
Product sales, net	36,826	$ 38,680	72,678	$ 72,307
Implants \| Time-and-materials contract \| Time-and-materials contract
Disaggregation of Revenue [Line Items]
Product sales, net	570	$ 405	$ 1,441	$ 1,255
Change in estimates related to prior periods \| Implants \| Time-and-materials contract \| Time-and-materials contract
Disaggregation of Revenue [Line Items]
Product sales, net	$ 1,400

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Product sales, net	$ 36,826	$ 38,680	$ 72,678	$ 72,307
Other revenue	220	839	442	1,780
Total revenue	37,046	39,519	73,120	74,087
Accounting Standards Update 2014-09 \| Change in estimates related to prior periods
Disaggregation of Revenue [Line Items]
Product sales, net	1,733	(392)	1,898	(74)
MACI implants Aad kits
Disaggregation of Revenue [Line Items]
Product sales, net	28,613	26,525	54,607	50,322
Through Intermediary \| Implants \| Contract rate
Disaggregation of Revenue [Line Items]
Product sales, net	15,714	17,972	31,009	31,200
Through Intermediary \| Implants \| Time-and-materials contract
Disaggregation of Revenue [Line Items]
Product sales, net	4,295	3,502	7,803	7,917
Time-and-materials contract \| Implants \| Time-and-materials contract
Disaggregation of Revenue [Line Items]
Product sales, net	570	405	1,441	1,255
Time-and-materials contract \| Implants \| Time-and-materials contract \| Change in estimates related to prior periods
Disaggregation of Revenue [Line Items]
Product sales, net	1,400
Provider or Facility \| Implants \| Contract rate
Disaggregation of Revenue [Line Items]
Product sales, net	5,756	4,487	11,390	8,954
Provider or Facility \| NexoBid revenue
Disaggregation of Revenue [Line Items]
Other revenue	220	839	442	1,780
Directly to consumer \| Biopsy kits
Disaggregation of Revenue [Line Items]
Product sales, net	545	551	1,066	1,070
Directly to consumer \| Epicel
Disaggregation of Revenue [Line Items]
Product sales, net	$ 8,213	$ 12,155	$ 18,071	$ 21,985

Revenue - Schedules of concentration of risk (Details)	3 Months Ended		6 Months Ended
Revenue - Schedules of concentration of risk (Details)	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue Concentration \| Customer concentration \| Epicel
Product Information [Line Items]
Concentration risk (as a percent)	6.00%	11.00%	7.00%	12.00%

Selected Balance Sheet Components - Schedule of inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventory:
Raw materials	$ 15,175	$ 12,676
Work-in-process	683	644
Finished goods	71	61
Total inventory	$ 15,929	$ 13,381

Selected Balance Sheet Components - Schedule of property and equipment, net (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property and equipment, net:
Financing right-of-use lease	$ 55	$ 74
Total property and equipment, gross	32,169	27,630
Less accumulated depreciation	(16,250)	(14,322)
Total property and equipment, net	15,919	13,308
Machinery and equipment
Property and equipment, net:
Total property and equipment, gross	4,615	4,522
Furniture, fixtures and office equipment
Property and equipment, net:
Total property and equipment, gross	1,710	1,551
Computer equipment and software
Property and equipment, net:
Total property and equipment, gross	8,112	7,769
Leasehold improvements
Property and equipment, net:
Total property and equipment, gross	13,134	10,617
Construction in process
Property and equipment, net:
Total property and equipment, gross	$ 4,543	$ 3,097

Selected Balance Sheet Components - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Balance Sheet Related Disclosures [Abstract]
Depreciation and amortization expense	$ 1,100	$ 700	$ 1,928	$ 1,506

Selected Balance Sheet Components - Schedule of accrued expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Accrued expenses
Bonus related compensation	$ 3,942	$ 6,305
Employee related accruals	3,555	3,616
Insurance reimbursement-related liabilities	4,585	3,973
Other accrued expenses	51	151
Total accrued expenses	$ 12,133	$ 14,045

Leases - Narrative (Details) ft² in Thousands, $ in Millions		1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 28, 2022 USD ($) ft² renewal_option $ / ft²	Jan. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)
Lessee, Lease, Description [Line Items]
Short-term lease costs (less than)			$ 0.1	$ 0.1	$ 0.1	$ 0.1
Operating lease expense			1.7	1.8	3.5	3.7
Finance lease expense (less than)			$ 0.1	$ 0.1	$ 0.1	$ 0.1
25 Network Drive, Burlington, Massachusetts
Lessee, Lease, Description [Line Items]
Area of real estate property \| ft²	126
Lease comment, grace period	12 months
Rent start date, term	13 months
Term of contract	144 months
Number of renewal options \| renewal_option	1
Lease option to extend term	10 years
Annual lease per square foot \| $ / ft²	57
Annual lease increase limit, percentage	2.50%
Tenant improvement allowance per square foot \| $ / ft²	200
Tenant improvement allowance	$ 25.1
Letter of credit cash deposit		$ 6.0
Letter of credit cash deposit lease year three		4.2
Letter Of Credit Cash Deposit Lease Year Six		$ 1.8
Minimum \| 25 Network Drive, Burlington, Massachusetts
Lessee, Lease, Description [Line Items]
Contractual lease payments	0.6
Maximum \| 25 Network Drive, Burlington, Massachusetts
Lessee, Lease, Description [Line Items]
Contractual lease payments	$ 0.8

Leases - Assets And Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Assets
Operating	$ 43,583	$ 45,720
Finance	55	73
Total leased assets	43,638	45,793
Current
Operating	3,156	2,950
Finance	41	41
Non-current
Operating	44,964	47,147
Finance	21	44
Total leased liabilities	$ 48,182	$ 50,182
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property and equipment, net	Property and equipment, net
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other current liabilities	Other current liabilities
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other long-term liabilities	Other long-term liabilities

Stock-Based Compensation - Expense (Details) - Employee stock purchase plan and service-based stock options - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	$ 10,808	$ 10,866	$ 20,339	$ 17,885
Cost of product sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	1,035	1,287	2,153	2,199
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	1,520	1,234	2,870	2,096
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total non-cash stock-based compensation expense	$ 8,253	$ 8,345	$ 15,316	$ 13,590

Stock-Based Compensation - Narrative (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stock options
Stock-Based Compensation
Granted (in shares)	170,060	136,117	1,163,649	1,474,072
Weighted average grant-date fair value (in dollars per share)	$ 19.25	$ 39.31	$ 20.74	$ 32.69
Restricted stock units
Stock-Based Compensation
Restricted stock units granted (shares)	39,746	26,941	382,768	241,054
Weighted-average grant date fair value (in dollars per share)	$ 31.94	$ 61.37	$ 34.65	$ 51.99

Investments (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
Investments (Details) - USD ($)	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Marketable Securities [Line Items]
Amortized Cost	$ 69,212,000		$ 69,212,000		$ 60,909,000
Gains	0		0		0
Losses	(856,000)		(856,000)		(154,000)
Credit Losses	0		0		0
Estimated Fair Value	68,356,000		$ 68,356,000		$ 60,755,000
Remaining contractual maturity period			3 years		3 years
Impairments of assets	0	$ 0	$ 0	$ 0
Short-term investments
Marketable Securities [Line Items]
Estimated Fair Value	44,638,000		44,638,000		$ 35,068,000
Long-term investments
Marketable Securities [Line Items]
Estimated Fair Value	23,718,000		23,718,000		25,687,000
Commercial paper
Marketable Securities [Line Items]
Amortized Cost	15,784,000		15,784,000		10,243,000
Gains	0		0		0
Losses	(76,000)		(76,000)		(12,000)
Credit Losses	0		0		0
Estimated Fair Value	15,708,000		15,708,000		10,231,000
Corporate notes
Marketable Securities [Line Items]
Amortized Cost	53,428,000		53,428,000		50,666,000
Gains	0		0		0
Losses	(780,000)		(780,000)		(142,000)
Credit Losses	0		0		0
Estimated Fair Value	$ 52,648,000		$ 52,648,000		$ 50,524,000

Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	$ 68,356	$ 60,755
Recurring
Liabilities that are measured at fair value on a recurring basis
Assets, fair value	69,491	70,011
Recurring \| Level 1
Liabilities that are measured at fair value on a recurring basis
Assets, fair value	1,135	1,258
Recurring \| Level 2
Liabilities that are measured at fair value on a recurring basis
Assets, fair value	68,356	68,753
Recurring \| Level 3
Liabilities that are measured at fair value on a recurring basis
Assets, fair value	0	0
Recurring \| Commercial paper
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	15,708	18,229
Recurring \| Commercial paper \| Cash and Cash Equivalents
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value		8,000
Recurring \| Commercial paper \| Level 1
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Recurring \| Commercial paper \| Level 2
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	15,708	18,229
Recurring \| Commercial paper \| Level 3
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Recurring \| Corporate notes
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	52,648	50,524
Recurring \| Corporate notes \| Level 1
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Recurring \| Corporate notes \| Level 2
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	52,648	50,524
Recurring \| Corporate notes \| Level 3
Liabilities that are measured at fair value on a recurring basis
Debt securities, fair value	0	0
Recurring \| Money market funds
Liabilities that are measured at fair value on a recurring basis
Money market funds	1,135	1,258
Recurring \| Money market funds \| Level 1
Liabilities that are measured at fair value on a recurring basis
Money market funds	1,135	1,258
Recurring \| Money market funds \| Level 2
Liabilities that are measured at fair value on a recurring basis
Money market funds	0	0
Recurring \| Money market funds \| Level 3
Liabilities that are measured at fair value on a recurring basis
Money market funds	$ 0	$ 0

Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Net Income (Loss) Attributable to Parent [Abstract]
Net loss	$ (8,963)	$ (7,091)	$ (3,786)	$ (3,289)	$ (16,054)	$ (7,075)
Basic weighted-average common shares outstanding (in shares)	47,117		46,403		47,052	46,195
Diluted weighted-average common shares outstanding (in shares)	47,117		46,403		47,052	46,195
Basic loss per common share (in USD per share)	$ (0.19)		$ (0.08)		$ (0.34)	$ (0.15)
Diluted loss per common share (in USD per share)	$ (0.19)		$ (0.08)		$ (0.34)	$ (0.15)
Stock options
Anti-dilutive shares excluded from diluted net loss per common share:
Anti-dilutive shares excluded from diluted net loss per common share (in shares)	6,586		5,960		6,586	5,960
Restricted stock units
Net Income (Loss) Attributable to Parent [Abstract]
Effect of dilutive stock options and restricted stock units	0		0		0	0
Anti-dilutive shares excluded from diluted net loss per common share:
Anti-dilutive shares excluded from diluted net loss per common share (in shares)	636		413		636	413

NexoBrid License and Supply Agreements (Details) - MediWound Ltd $ in Millions	1 Months Ended
	May 31, 2019 USD ($)
Related Party Transaction [Line Items]
Consideration payment for license	$ 17.5
Contingent consideration	7.5
Max contingent consideration	125.0
Sales Initial milestone	$ 75.0
Term of supply agreement	5 years

Subsequent Events (Details) - Subsequent event - Line of Credit	Jul. 29, 2022 USD ($)
Revolving Credit Facility
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 150,000,000
Debt instrument, term	5 years
Revolving Credit Facility \| SOFR
Subsequent Event [Line Items]
Basis spread on variable rate (in percent)	0.10%
Revolving Credit Facility \| Minimum
Subsequent Event [Line Items]
Line of credit facility, commitment fee (in percent)	0.20%
Revolving Credit Facility \| Minimum \| SOFR
Subsequent Event [Line Items]
Basis spread on variable rate (in percent)	1.25%
Revolving Credit Facility \| Minimum \| Base Rate
Subsequent Event [Line Items]
Basis spread on variable rate (in percent)	0.25%
Revolving Credit Facility \| Maximum
Subsequent Event [Line Items]
Line of credit facility, commitment fee (in percent)	0.25%
Revolving Credit Facility \| Maximum \| SOFR
Subsequent Event [Line Items]
Basis spread on variable rate (in percent)	2.50%
Revolving Credit Facility \| Maximum \| Base Rate
Subsequent Event [Line Items]
Basis spread on variable rate (in percent)	1.50%
Letter of Credit
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 15,000,000