Vericel Corporation operates as a fully-integrated, commercial-stage biopharmaceutical company. The company provides advanced therapies for the sports medicine and severe burn care markets.
Whether the company is treating damaged cartilage or severe burns, it provides advanced therapies to repair serious injuries and restore lives. The company’s highly differentiated portfolio of cell therapy and specialty biologic products combines innovations in biology with medical technologies. It was among...
Vericel Corporation operates as a fully-integrated, commercial-stage biopharmaceutical company. The company provides advanced therapies for the sports medicine and severe burn care markets.
Whether the company is treating damaged cartilage or severe burns, it provides advanced therapies to repair serious injuries and restore lives. The company’s highly differentiated portfolio of cell therapy and specialty biologic products combines innovations in biology with medical technologies. It was among the first companies to achieve commercial success in the complex field of cell therapies with treatments that use tissue engineering to regenerate skin and healthy knee cartilage. The company markets two U.S. Food and Drug Administration (‘FDA’) approved autologous cell therapy products and one FDA-approved specialty biologic product in the U.S. MACI is an autologous cellularized scaffold product that is indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. Since MACI’s commercial launch, the product’s the U.S. Food & Drug Administration-approved labeling has provided for a treating surgeon to use MACI to treat a patient through an open surgical procedure. In August 2024, the U.S. Food & Drug Administration approved a supplemental Biologics License Application (‘sBLA’) expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling. MACI Arthro allows surgeons to evaluate and prepare the cartilage defect site, as well as deliver the MACI implant through small incisions using custom-designed arthroscopic instruments developed by the company (‘MACI Arthro instruments’). MACI Arthro became commercially available in the United States during the third quarter of 2024, and the company began selling the MACI Arthro instruments at that time.
Epicel is a permanent skin replacement Humanitarian Use Device (‘HUD’) indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient’s total body surface area (‘TBSA’). The company also holds an exclusive license from MediWound Ltd. (‘MediWound’) for North American rights to NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, which is indicated for the removal of eschar in adult and pediatric patients with deep partial thickness and/or full thickness thermal burns.
In May 2019, the company entered into exclusive license and supply agreements with MediWound, under which MediWound manufactures and supplies NexoBrid to the U.S. market on a unit price basis. MediWound develops and manufactures NexoBrid in part, at its facilities in Yavne, Israel.
Strategy
The company’s strategies are to expand the clinical indications for which the MACI and MACI Arthro procedures are approved, and optimizing the ease of use of the MACI procedure for surgeons through continued innovation; expand the number of burn centers and surgeons consistently using Epicel; and expand the number of burn centers, hospitals, and physicians consistently using NexoBrid for the removal of eschar.
Manufacturing
On July 1, 2023, the company renewed its long-term supply agreement with Matricel GmbH (‘Matricel’) for the supply of ACI-Maix collagen membranes used in the manufacture of MACI (the ‘Matricel Supply Agreement’). In the event Matricel is unable to supply the membranes, the company may license the technology and procure the membranes from another source. The Matricel Supply Agreement provides that Matricel shall supply the ACI-Maix membranes exclusively to the company during the term of the agreement. The Matricel Supply Agreement is effective until December 31, 2030, with an option to extend its term for three additional years to December 31, 2033.
Product Portfolio
The company’s marketed products include two the U.S. Food & Drug Administration-approved autologous cell therapies and one the U.S. Food & Drug Administration-approved specialty biologic product. MACI is a third-generation 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. In connection with its MACI product, the company sells MACI biopsy kits, which are used by treating surgeons to obtain a sample of cartilage tissue, which is later sent to the company. If a patient decides to move forward with MACI treatment, the company subsequently uses the cartilage sample to manufacture a MACI implant. When an orthopedic surgeon decides to treat a patient by implanting MACI through an arthroscopic approach, the surgeon may choose to use its custom MACI Arthro instruments during the procedure, which the company sells by way of a separate transaction.
Epicel is a permanent skin replacement indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient’s TBSA. Both autologous cell therapy products are currently manufactured and marketed in the U.S. NexoBrid is a topically-administered biological orphan product containing proteolytic enzymes that is indicated for eschar removal in adult and pediatric patients with deep partial-thickness and/or full-thickness burns. The company holds exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America.
MACI
MACI is an autologous cellular scaffold product consisting of autologous cultured chondrocytes seeded onto a resorbable Type I/III porcine-derived collagen membrane. Autologous cultured chondrocytes are human-derived cells, which are obtained from a sample of the patient’s own cartilage for the manufacture of MACI. An orthopedic surgeon obtains the sample by taking a cartilage biopsy during an initial arthroscopic procedure. The company isolates the patient’s chondrocytes (the cells that produce cartilage) from the biopsy and expands those cells in a manufacturing process compliant with current Good Manufacturing Practices (‘cGMP’). The expanded cells are then uniformly seeded onto a resorbable collagen membrane using a proprietary process prior to shipment. After receipt by the surgeon, MACI is implanted into the cartilage defect(s). A key driver of ACI’s therapeutic advantage relative to other approaches, such as microfracture, is that autologous chondrocytes have the potential to produce the hyaline-like cartilage that is naturally present in the knee, rather than fibrous cartilage, which lacks the durability and wear characteristics of hyaline cartilage. Unlike Carticel, which was a cell suspension and required a membrane to be sutured in place to confine the cell suspension to the defect area, MACI consists of cells uniformly seeded on a collagen membrane, resulting in a surgery that is simpler than that involved with Carticel. Additionally, since the U.S. Food & Drug Administration approval of MACI Arthro in August 2024, a surgeon is now able to evaluate and prepare the cartilage defect site, as well as deliver the MACI implant, through small incisions using the MACI Arthro instruments. MACI is simply trimmed by the surgeon to the size of the defect, allowing for a precise fit, and fixed to the bone with an off-the-shelf surgical fibrin sealant. MACI has expanded the ACI market since MACI shares the efficacy advantages of Carticel, while being less invasive, having a shorter procedure time, and eliminating the need for periosteal harvest and suture fixation of the periosteal patch. In addition, MACI is indicated for a broader range of cartilage defects of the knee, ensures more uniform distribution of the cells in the cartilage defect, and is supported by Phase 3 clinical data demonstrating a statistically significant improvement in pain and function scores compared to microfracture.
The pivotal clinical trial supporting MACI registration in Europe and approval in the U.S., the Superiority of MACI Implant versus Microfracture Treatment in patients with symptomatic articular cartilage defects in the knee (‘SUMMIT’) trial, was completed in 2012. Analysis of this 144-patient study demonstrated at Week 104 a statistically significant greater improvement in the co-primary endpoint of pain and function for those patients treated with MACI compared to microfracture.
MACI became commercially available in the European Union (the ‘EU’) in 2001 and in Australia in 2002, prior to promulgation of regulations requiring marketing authorizations for cell therapies in those markets. MACI received marketing authorization in Europe in June 2013, by meeting the requirements of the Advanced Therapy and Medicinal Product (‘ATMP’) guidelines based on the results of the SUMMIT trial in which MACI was manufactured at, and supplied from, its Cambridge, Massachusetts site. The company suspended the marketing of MACI in Europe in September 2014, and the European manufacturing authorization for MACI expired by its terms at the end of June 2018. Australian operations and the commercialization of MACI in that country were discontinued prior to its acquisition of the product in 2014.
MACI
The company’s target audiences are orthopedic surgeons who self-identify and/or have formal specialty training in sports medicine, and a subpopulation of general orthopedic surgeons who perform a high volume of cartilage repair procedures involving the knee.
Since MACI’s commercial launch, the product’s the U.S. Food & Drug Administration-approved labeling has provided for a treating surgeon to use MACI to treat a patient through an open surgical procedure. In August 2024, the U.S. Food & Drug Administration approved a sBLA expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling, permitting the repair of single or multiple full-thickness cartilage defects of the knee up to 4 cm² in size via an arthroscopic approach. MACI Arthro provides a less invasive technique compared to the open arthrotomy approach and allows surgeons to evaluate, prepare, and treat the cartilage defect, and deliver the MACI implant, under direct arthroscopic visualization and, should the surgeon so choose, to use specialized and custom-designed instruments (the ‘MACI Arthro instruments’) through small incisions or portals. The arthroscopic delivery of MACI could increase the ease of MACI’s use for physicians and may reduce both the length of the procedure as well as procedure-induced trauma, which may result in a reduction of a patient’s post-operative pain and accelerate a patient’s recovery. MACI Arthro became commercially available in the United States during the third quarter of 2024, and the company began selling the MACI Arthro instruments at that time. As of December 31, 2024, the company had experienced strong surgeon interest in the MACI Arthro technique, and company-sponsored education and training programs concerning the arthroscopic approach are underway.
The company is also evaluating the feasibility and potential market opportunity involved in delivering MACI treatment to patients suffering from cartilage damage in the ankle. This potential lifecycle enhancement and indication expansion for MACI will require conducting an additional randomized clinical trial concerning the product’s use in the ankle, and the company is on track to initiate a MACI Ankle clinical trial beginning in 2025. If approved, MACI’s label expansion allowing its use to repair cartilage defects in the ankle will be a significant long-term growth driver for the product in the coming years.
Epicel
Epicel is a permanent skin replacement for deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of TBSA. The extent of the skin surface that the burn affects is usually referred to as a percent of TBSA. Epicel is currently the only the U.S. Food & Drug Administration-approved cultured epidermal autograft product available for large total surface area burns in both adult and pediatric patients.
Epicel is produced by isolating and expanding keratinocytes, which are the predominant cell type in the epidermis or outer layer of the skin, and which are originally obtained by taking a small biopsy of a patient’s healthy skin. Epicel is an important treatment option for patients with severe burns because these patients are generally understood to need a keratinocyte-based epithelium, and, because of the severity and extent of their burns, these patients generally have very little healthy skin remaining on their bodies from which to obtain keratinocyte-based epithelium for autografting.
Epicel is a cell-based product that is regulated by the Center for Biologics Evaluation and Research (‘CBER’) of the U.S. Food & Drug Administration under medical device authorities. Epicel was designated as a HUD in 1998, and a Humanitarian Device Exemption (‘HDE’) application for the product was submitted in 1999. HUDs are devices that are intended for diseases or conditions that affect fewer than 8,000 individuals annually in the U.S., and certain HUDs are restricted by the amount which a manufacturer may charge for its use. Epicel is not price-restricted in this manner because on February 18, 2016, the U.S. Food & Drug Administration approved the company’s HDE supplement to revise the labeled indications of use for Epicel to specifically include pediatric patients, thus allowing Epicel to be sold for profit. The revised product label also now specifies that the probable benefit of Epicel, mainly related to survival, was demonstrated in two Epicel clinical experience databases and a physician-sponsored study comparing outcomes in patients with large burns treated with Epicel relative to standard care.
Each year in the U.S., more than 40,000 people are hospitalized for burns. Approximately 1,500 of these patients are treated for burns covering more than 30% TBSA, the labeled indication for Epicel. The mortality rate for this group is approximately 34%, partially due to the inability to quickly close wounds because of the lack of remaining healthy tissue from which to harvest autografts. The typical Epicel patient has suffered full-thickness burns due to a wide variety of occupational, household, or vehicular accidents. Many of the most severely burned patients are medivac transported to one of the approximately 140 specialized burn centers across the U.S. While the average acute care hospital has less than three admissions for burns annually, these specialized burn centers average over 200 admissions per year.
NexoBrid
The company’s portfolio of commercial-stage products also includes NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, for which the U.S. Food & Drug Administration 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 supplemental Biologics License Application( sBLA) expanding NexoBrid’s indication to include pediatric patients.
In treating patients with deep partial-thickness and/or full thickness burns, NexoBrid works to selectively degrade eschar over the course of approximately four hours while preserving viable tissue. NexoBrid can be administered to an area of up to 20% body surface area, in two separate applications, at the patient’s bedside through a series of steps. First, pain management, as practiced for extensive dressing changes of burn wounds, is administered, the wound is cleaned, a dressing soaked with antibacterial solution is applied to the treatment area, and a petrolatum ointment barrier is created. The NexoBrid lyophilized powder is then mixed with a gel vehicle and applied to the wound. After a film dressing is applied, NexoBrid is left in place for four hours, after which the dissolved eschar is removed by scraping it away with a sterile blunt-edged instrument.
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. NexoBrid has the potential to change the standard of care for eschar removal with respect to hospitalized burn patients and treat a significant addressable market in the U.S. With respect to NexoBrid, of the approximately 40,000 people that are hospitalized in the U.S. each year for burn-related injuries, the majority, over 30,000, have thermal burns and will likely require some level of eschar removal. NexoBrid’s FDA approval expands its burn care franchise’s total addressable market, which will permit the company to treat a significantly larger segment of hospitalized burn patients than with Epicel alone. The expansion of the company’s target addressable market supports a broader commercial footprint, and this will help drive both increased NexoBrid use, as well as increased Epicel awareness throughout the burn care space.
The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel. Certain raw materials utilized in NexoBrid’s manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan.
Pursuant to the terms of its existing license agreement, following the FDA approval of NexoBrid, MediWound transferred the BLA to Vericel. Subsequently, in August 2024, the FDA approved a supplemental BLA expanding NexoBrid’s indication to include pediatric patients.
Patents and Proprietary Rights
The company owns issued patents directed to methods of determining the presence of chondrocytes in cell cultures used to produce both MACI and Carticel, which are scheduled to expire in October 2029 in the U.S. and in April 2028 abroad. The company owns one issued patent directed to compositions and methods for repairing cartilage defects, scheduled to expire in the U.S. in February 2039. The company has one issued patent in the U.S. directed to a device related to MACI that is set to expire in November 2033, and one issued patent in the EU set to expire in November 2034. The company owns one issued patent directed to methods and devices for repairing cartilage defects via arthroscopic MACI, scheduled to expire in the U.S. in March 2043.
As a biologic, MACI is entitled to twelve years of data exclusivity until December 13, 2028, calculated from its date of approval. When these patents and data exclusivity expire, the company’s opportunity to establish or maintain product revenue could be substantially reduced.
Since 2019, the company has held exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America. The company will need to continue to comply with the terms of such agreements in order to maintain its rights to such patents as it further commercializes NexoBrid in 2025.
The company also owns a broadly filed trademark portfolio with registrations for MACI and Epicel, as well as additional registrations and applications for various marks related to those two products. MediWound has additionally registered trademarks with respect to NexoBrid, which the company has licensed as part of its License Agreement with MediWound.
Sales and Marketing
MACI, Epicel, and NexoBrid are specialty products with focused physician and institutional call points. The company has two sales teams, one dedicated to MACI and a Burn Care team focused on both Epicel and NexoBrid. The company’s MACI commercial team is divided into geographic regions and consists of sales representatives that regularly engage with its target audience and who are managed by a senior sales leadership team. In conjunction with the launch of MACI Arthro, the company has expanded its target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures.
Most private payers have a medical policy that covers treatment with MACI, with the top 30 largest commercial payers having a formal medical policy for MACI or ACI in general. Even for private payers that have not yet approved a medical policy for MACI, for medically appropriate cases, the company often obtains approval on a case-by-case basis.
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 it retains the credit and collection risk from the end customer. The company pays each specialty pharmacy a fee in each instance when it dispenses MACI for use in treating a patient. Both Orsini and AllCare perform collection activities to collect payment from customers. In addition, the company sells MACI directly to hospitals pursuant to an agreed-upon purchase order and to a distributor, DMS Pharmaceutical Group, Inc. (‘DMS’), at a contracted rate for the treatment of patients at military facilities throughout the U.S. The company engages a third-party contractor to provide services in connection with a patient support program to manage patient cases and to ensure that complete and accurate billing information is provided to insurers and hospitals.
Following the approval and commercial launch of NexoBrid, the company has expanded the burn care commercial team to include both account management and clinical specialist professionals. The burn care commercial team is divided into geographic regions and consists of sales representatives that regularly engage with its target audience and who are managed by a senior sales leadership team. There are approximately 140 burn centers in the U.S., and a subset of these institutions regularly treat patients suffering from large TBSA burns. The company sells Epicel directly to hospitals and burn centers based on contracted rates stated in an approved contract or an applicable purchase order with the hospital. The company sells NexoBrid to specialty distributors. These customers subsequently resell NexoBrid to hospitals and burn centers.
Government Regulation
In the U.S., in addition to meeting FDA regulations, the company is also subject to other federal laws, such as the Occupational Safety and Health Act and the Environmental Protection Act, as well as certain state laws.
Epicel was approved by FDA’s Center for Devices and Radiological Health (‘CDRH’) as an HDE medical device in 2007, but is regulated by Center for Biologics Evaluation and Research (CBER) under the same medical device regulations. MACI, approved in 2016, is regulated by CBER as a combination cell therapy/device product and required an approved BLA to be marketed in the U.S. Significant changes to already approved products additionally require a supplemental BLA to be approved before such changes to products may be marketed in the U.S. In August 2024, the FDA approved a supplemental BLA expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling. NexoBrid is regulated by FDA’s Center for Drug Evaluation and Research (‘CDER’) as a botanical protein biologic, and the BLA associated with it was approved by the FDA on December 28, 2022, paving the way for marketing and commercialization. Subsequently, in August 2024, the FDA approved a supplemental BLA expanding NexoBrid’s indication to include pediatric patients. Commercial production of these products needs to occur in FDA-registered facilities in compliance with current Good Manufacturing Practices (cGMP) requirements for biologics.
The Federal Food, Drug, and Cosmetic Act (‘FFDCA’), the Public Health Service Act (‘PHSA’), and other federal and state statutes and regulations govern the research, testing, manufacture, safety, labeling, storage, record-keeping, approval, distribution, use, adverse event reporting, and advertising and promotion of its products.
MACI is the only FDA-approved ACI product on the market in the U.S. The company is aware of one other ACI product in development in the U.S. for the treatment of articular cartilage defects of the knee. Aesculap Biologics completed enrollment in its Phase 3 clinical trial for NOVOCART 3D in the U.S. in 2023. It was subsequently announced in June of 2024 that the NOVOCART assets had been acquired by Octane Medical Group.
MACI and NexoBrid are regulated by the FDA as biologics.
In the U.S., the company is subject to complex laws and regulations pertaining to healthcare ‘fraud and abuse,’ including, but not limited to, the federal Anti-Kickback Statute, the federal False Claims Act, and other state and federal laws and regulations.
Research and Development
The company’s research and development expenses for the year ended December 31, 2024, were $24.8 million.
History
The company was founded in 1989. The company, a Michigan corporation, was incorporated in 1989. It was formerly known as Aastrom Biosciences, Inc. and changed its name to Vericel Corporation in 2014.
