Vericel Corp

Previous wording

We continue to monitor the ongoing and evolving conflicts in the Middle East region involving Israel, and we are in close communication with MediWound leadership. MediWound’s NexoBrid manufacturing operations are continuing and, as of the date of this disclosure, MediWound does not anticipate a material disruption to its ongoing supply of commercial NexoBrid to the U.S. To the extent the conflicts in the Middle East region result in damage to MediWound’s facilities in Israel or inhibit travel or commercial shipments to and from Israel, MediWound’s ability to continue to supply NexoBrid to the U.S. market could be disrupted. As of the date of this report, we maintain an ample supply of NexoBrid at our U.S.-based third-party logistics provider.

Current wording

We continue to monitor instability and tensions in the Middle East region and we are in close communication with MediWound leadership. As of the date of this disclosure, MediWound does not anticipate a material disruption to its ongoing supply of commercial NexoBrid to the U.S. To the extent conflicts in the Middle East region were to result in damage to MediWound’s facilities in Israel or inhibit travel or commercial shipments to and from Israel, MediWound’s ability to continue to supply NexoBrid to the U.S. market could be disrupted. As of the date of this report, we maintain an ample supply of NexoBrid at our U.S.-based third-party logistics provider.

Previous wording

We continue to monitor evolving trade policies, including the imposition of tariffs on foreign goods imported into the U.S., as part of our ongoing risk assessment process. We anticipate minimal impact on our business and operations from current or potential future U.S.-imposed tariffs or any retaliatory measures taken by other governments. All of our operations are located in the U.S. and 100% of our revenue in 2025, and for the next several years, is expected to be derived from domestic sales. The majority of our manufacturing costs are fixed costs consisting of labor and overhead required to produce MACI and Epicel at our manufacturing facility in Massachusetts. Materials to support manufacturing operations are primarily purchased from U.S. suppliers. Based on the limited costs associated with imported materials, we expect that current or future tariffs will have an insignificant impact on our cost of goods sold and gross margin moving forward. In addition, because we maintain significant safety stock of most materials, including NexoBrid finished product and the ACI-Maix collagen membrane used to manufacture MACI, we expect that the impact of current or future tariffs on our cost of goods sold and gross margin in 2025 and 2026 will be negligible.

Current wording

We continue to monitor evolving trade policies, including the imposition of tariffs on foreign goods imported into the U.S., as part of our ongoing risk assessment process. We anticipate minimal impact on our business and operations from current or potential future U.S.-imposed tariffs or any retaliatory measures taken by other governments. All of our operations are located in the U.S. and 100% of our revenue is currently derived from domestic sales. The majority of our manufacturing costs are fixed costs consisting of labor and overhead required to produce MACI and Epicel at our manufacturing facility in Massachusetts. Materials to support manufacturing operations are primarily purchased from U.S. suppliers. Based on the limited costs associated with imported materials, we expect that current or future tariffs will have an insignificant impact on our cost of goods sold and gross margin moving forward. In addition, because we maintain significant safety stock of most materials, including NexoBrid finished product and the ACI-Maix collagen membrane used to manufacture MACI, we expect that the impact of current or future tariffs on our cost of goods sold and gross margin in 2025 and 2026 will be negligible.

Previous wording

We have a cell manufacturing facility in Cambridge, Massachusetts, which is used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts, which has been under construction. The Burlington facility is substantially complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel.

Current wording

We have a cell manufacturing facility in Cambridge, Massachusetts, which is used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts. The Burlington facility is substantially complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel.

Previous wording

Our portfolio of commercial-stage products also includes NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, for which the FDA approved a BLA in December 2022, permitting the product’s use for the removal of eschar in adults with deep partial-thickness and/or full thickness thermal burns. Subsequently, in August 2024, the FDA approved a sBLA expanding NexoBrid’s indication to include pediatric patients.

Current wording

Our portfolio of commercial-stage products also includes NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, for which the FDA approved a BLA in December 2022, permitting the product’s use for the removal of eschar in adults with deep partial-thickness and/or full thickness thermal burns. Subsequently, in August 2024, the FDA approved an sBLA expanding NexoBrid’s indication to include pediatric patients.

Previous wording

Total revenue increase for the six months ended June 30, 2025, compared to the same period in 2024, was driven primarily by MACI volume and price growth and NexoBrid volume growth, partially offset by lower Epicel volume.

Current wording

Total revenue increase for the three and nine months ended September 30, 2025, compared to the same periods in 2024, was driven primarily by MACI volume and price growth and NexoBrid volume growth, partially offset by lower Epicel volume.

Previous wording

Gross profit increase for the three and six months ended June 30, 2025, compared to the same periods in 2024, was driven by MACI revenue growth, combined with our primarily fixed manufacturing cost structure which consists mainly of labor and facility costs.

Current wording

Gross profit increase for the three and nine months ended September 30, 2025, compared to the same periods in 2024, was driven by MACI revenue growth, combined with our primarily fixed manufacturing cost structure which consists mainly of labor and facility costs.

Previous wording

Research and development expenses increased for the six months ended June 30, 2025, compared to the same period in 2024. The increase is primarily due to higher headcount and employee expenses, offset by MACI Arthro project costs in 2024.

Current wording

Research and development expenses increased for the three and nine months ended September 30, 2025, compared to the same periods in 2024. The increase is primarily due to higher headcount and employee expenses, partially offset by MACI Arthro project costs in 2024.

Previous wording

Selling, general and administrative expenses for the six months ended June 30, 2025 were $83.7 million, compared to $69.7 million for the same period in 2024. The increase in selling, general and administrative expenses was primarily due to higher headcount and employee expenses, including stock compensation, an increase in marketing programs and sales activity, and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.

Current wording

Selling, general and administrative expenses for the three months ended September 30, 2025 were $39.8 million, compared to $38.0 million for the same period in 2024. The increase in selling, general and administrative expenses is primarily due to higher headcount and employee expenses and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2025 were $41.9 million, compared to $35.3 million for the same period in 2024. The increase in selling, general and administrative expenses was primarily due to higher headcount and employee expenses, including stock compensation, an increase in marketing programs and sales activity, and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2025 were $123.5 million, compared to $107.7 million for the same period in 2024. The increase in selling, general and administrative expenses is primarily due to higher headcount and employee expenses, including stock compensation, an increase in marketing programs and sales activity, and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.

Previous wording

The increase in total other income for the three and six months ended June 30, 2025, compared to the same periods in 2024 was due to an increase in interest income, which was primarily due to fluctuations in the rates of return on our investments in various marketable debt securities and money market funds.

Current wording

The increase in total other income for the three and nine months ended September 30, 2025, compared to the same periods in 2024 was due to an increase in interest income, which was primarily due to fluctuations in the rates of return on our investments in various marketable debt securities and money market funds.

Previous wording

The increase in stock-based compensation expense for the three and six months ended June 30, 2025, compared to the same periods in 2024, was due primarily to fluctuations in stock prices and the mix of service-based options and restricted stock units, which impacts the fair value of the options and restricted stock units awarded and the expense recognized in the period.

Current wording

The decrease in stock-based compensation expense for the three months ended September 30, 2025, compared to the same period in 2024, was due primarily to fluctuations in stock prices and the mix of service-based options and restricted stock units, which impacts the fair value of the options and restricted stock units awarded and the expense recognized in the period.

Previous wording

Our cash, cash equivalents and restricted cash totaled $80.5 million, short-term investments totaled $36.3 million and long-term investments totaled $47.4 million as of June 30, 2025. The $14.8 million of cash provided by operations during the six months ended June 30, 2025 was primarily the result of non-cash charges of $21.6 million related to stock-based compensation expense, $5.5 million in depreciation and amortization expense and $2.7 million of operating lease amortization, partially offset by a net loss of $11.8 million and a net decrease of $4.0 million related to movements in our working capital accounts. The overall decrease in cash from our working capital accounts was primarily driven by an increase in accounts receivable due to higher sales volume, as well as a decrease in accounts payable and accrued expenses due to timing of payments.

Current wording

Our cash, cash equivalents and restricted cash totaled $100.4 million, short-term investments totaled $35.0 million and long-term investments totaled $49.7 million as of September 30, 2025. The $36.9 million of cash provided by operations during the nine months ended September 30, 2025 was primarily the result of non-cash charges of $30.3 million related to stock-based compensation expense, $8.5 million in depreciation and amortization expense and $4.0 million of operating lease amortization, partially offset by a net loss of $6.7 million and a net increase of $0.1 million related to movements in our working capital accounts. The overall increase in cash from our working capital accounts was primarily driven by an increase in accounts payable due to timing of payments, partially offset by payments on operating leases and a decrease in accrued expenses due to timing of payments.

Previous wording

Our cash, cash equivalents and restricted cash totaled $75.9 million, short-term investments totaled $52.2 million and long-term investments totaled $26.1 million as of June 30, 2024. The $25.7 million of cash provided by operations during the six months ended June 30, 2024 was primarily the result of non-cash charges of $19.4 million related to stock-based compensation expense, $3.5 million of operating lease amortization and $2.7 million in depreciation and amortization expense, offset by a net loss of $8.5 million and a net increase of $8.9 million related to movements in our working capital accounts. The overall increase in cash from our working capital accounts was primarily driven by a decrease in accounts receivable due to cash collections and receipts of tenant improvement allowances which exceeded payments on operating leases amortization, offset by a decrease in accrued expenses due to timing of payments and an increase in inventory primarily related to supporting NexoBrid commercial availability.

Current wording

Our cash, cash equivalents and restricted cash totaled $70.4 million, short-term investments totaled $48.1 million and long-term investments totaled $32.9 million as of September 30, 2024. The $35.9 million of cash provided by operations during the nine months ended September 30, 2024 was primarily the result of non-cash charges of $28.6 million related to stock-based compensation expense, $5.1 million of operating lease amortization and $4.0 million in depreciation and amortization expense, offset by a net loss of $9.4 million and a net increase of $7.8 million related to movements in our working capital accounts. The overall increase in cash from our working capital accounts was primarily driven by a decrease in accounts receivable due to cash collections and receipts of tenant improvement allowances which exceeded payments on operating leases amortization, offset by a decrease in accounts payable and accrued expenses due to timing of payments and an increase in inventory primarily related to supporting NexoBrid commercial availability.

Previous wording

Net cash used in investing activities during the six months ended June 30, 2025 was the result of $22.3 million of property and equipment purchases primarily for construction in process related to the Burlington Lease and $29.0 million in investment purchases, partially offset by $27.2 million of investment sales and maturities.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2025 was the result of $43.5 million in investment purchases and $25.0 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $40.9 million of investment sales and maturities.

Previous wording

Net cash used in investing activities during the six months ended June 30, 2024 was the result of $35.7 million in investment purchases and $30.8 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $23.3 million of investment sales and maturities.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2024 was the result of $52.6 million in investment purchases and $50.2 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $38.4 million of investment sales and maturities.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2025 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $11.2 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $6.3 million.

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2025 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $12.7 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $6.6 million.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2024 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $11.5 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $5.0 million.

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2024 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $17.3 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $5.3 million.

Previous wording

There have been no material changes to our critical accounting policies and estimates in the six months ended June 30, 2025. For further information, refer to our summary of significant accounting policies and estimates in our Annual Report on Form 10-K filed for the year ended December 31, 2024.

Current wording

There have been no material changes to our critical accounting policies and estimates in the nine months ended September 30, 2025. For further information, refer to our summary of significant accounting policies and estimates in our Annual Report on Form 10-K filed for the year ended December 31, 2024.

Previous wording

This report, including the documents incorporated by reference herein, contains certain statements that describe our management’s beliefs concerning future business conditions, plans and prospects, growth opportunities and the outlook for our business based upon information currently available. Such statements are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Wherever possible, we have identified these forward-looking statements by words such as “will,” “may,” “anticipates,” “believes,” “intends,” “estimates,” “expects,” “plans,” “projects,” “trends,” “opportunity,” “current,” “intention,” “position,” “assume,” “potential,” “outlook,” “remain,” “continue,” “maintain,” “sustain,” “seek,” “target,” “achieve,” “continuing,” “ongoing,” and similar words or phrases, or future or conditional verbs such as “would,” “should,” “could,” “may,” or similar expressions. Among the factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, uncertainties associated with our expectations regarding future revenue, growth in revenue, market penetration for MACI®, MACI Arthro™, Epicel®, and NexoBrid®, growth in profit, gross margins and operating margins, the ability to continue to scale our manufacturing operations to meet the demand for our cell therapy products, including the timely qualification of a new manufacturing facility in Burlington, Massachusetts, the ability to sustain profitability, contributions to adjusted EBITDA, the expected target surgeon audience, potential fluctuations in sales and volumes and our results of operations over the course of the year, timing and conduct of clinical trial and product development activities, timing and likelihood of the FDA’s potential approval of the use of MACI to treat cartilage defects in the ankle, the estimate of the commercial growth potential of our products and product candidates, competitive developments, changes in third-party coverage and reimbursement, including recent and future healthcare reform measures and private payor initiatives, surgeon adoption of MACI Arthro, physician and burn center adoption of NexoBrid, labor strikes, supply chain disruptions or other events or factors that might affect our ability to manufacture MACI or Epicel or affect MediWound’s ability to manufacture and supply sufficient quantities of NexoBrid to meet customer demand, including but not limited to the ongoing and evolving conflicts in the Middle East region involving Israel, negative impacts on the global economy and capital markets resulting from the conflict in Ukraine and the ongoing and evolving Middle East conflicts, including those associated with potential further involvement by the U.S., changes in trade policies and regulations…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This report, including the documents incorporated by reference herein, contains certain statements that describe our management’s beliefs concerning future business conditions, plans and prospects, growth opportunities and the outlook for our business based upon information currently available. Such statements are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Wherever possible, we have identified these forward-looking statements by words such as “will,” “may,” “anticipates,” “believes,” “intends,” “estimates,” “expects,” “plans,” “projects,” “trends,” “opportunity,” “current,” “intention,” “position,” “assume,” “potential,” “outlook,” “remain,” “continue,” “maintain,” “sustain,” “seek,” “target,” “achieve,” “continuing,” “ongoing,” and similar words or phrases, or future or conditional verbs such as “would,” “should,” “could,” “may,” or similar expressions. Among the factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, uncertainties associated with our expectations regarding future revenue, growth in revenue, market penetration for MACI®, MACI Arthro®, Epicel®, and NexoBrid®, growth in profit, gross margins and operating margins, the ability to continue to scale our manufacturing operations to meet the demand for our cell therapy products, including the timely qualification of a new manufacturing facility in Burlington, Massachusetts, the ability to sustain profitability, contributions to adjusted EBITDA, the expected target surgeon audience, potential fluctuations in sales and volumes and our results of operations over the course of the year, timing and conduct of clinical trial and product development activities, timing and likelihood of the FDA’s potential approval of the use of MACI to treat cartilage defects in the ankle, the estimate of the commercial growth potential of our products and product candidates, competitive developments, changes in third-party coverage and reimbursement, including recent and future healthcare reform measures and private payor initiatives, surgeon adoption of MACI Arthro, physician and burn center adoption of NexoBrid, labor strikes, supply chain disruptions or other events or factors that might affect our ability to manufacture MACI or Epicel or affect MediWound’s ability to manufacture and supply sufficient quantities of NexoBrid to meet customer demand, including but not limited to conflicts in the Middle East region involving Israel, negative impacts on the global economy and capital markets resulting from the conflict in Ukraine and Middle East conflicts, including those associated with potential further involvement by the U.S., changes in trade policies and regulations, including the potential for increases or changes…

Excerpt shortened here; the source contains the full paragraph.