Surgeon adoption, biopsy growth, and burn care recovery fuel raised margin outlook and strong Q2 forecast
Vericel Corporation (NASDAQ: VCEL) posted strong first quarter 2025 results, driven by continued momentum in its MACI® franchise and a rebound in its burn care business. Total revenue reached $52.6 million, up from $51.3 million in the prior year, led by 15% year-over-year growth in MACI sales to $46.3 million. The company reaffirmed full-year revenue guidance and raised profitability expectations for 2025.
MACI, an autologous cell therapy for knee cartilage repair, continues to show broad adoption, especially with the rollout of MACI Arthro™, which enables less invasive, arthroscopic administration. Vericel has now trained approximately 400 MACI Arthro surgeons and reported a 30% year-to-date increase in biopsies among this group. While the conversion from biopsy to implant typically takes 4–6 months, management expects an accelerating contribution from MACI Arthro in the second half of 2025.
Vericel’s burn care franchise generated $6.3 million in Q1 revenue, led by Epicel and NexoBrid. Epicel, a permanent skin replacement indicated for patients with severe burns covering at least 30% of total body surface area, saw lower revenue in the quarter due to canceled cases and patient health issues. NexoBrid, a topical biologic that removes burn eschar without surgery, delivered sequential and year-over-year growth. The company reported the highest number of Epicel biopsies since 2023 and noted a strong start to Q2 with graft volume already surpassing Q1 levels.
Gross margin held steady at 69% despite product mix headwinds. Operating expenses increased to $49.1 million, reflecting headcount growth and costs associated with the company’s new facility. Vericel ended the quarter with $162 million in cash and no debt, and generated $6.6 million in operating cash flow.
The company now expects full-year gross margin of 74% and adjusted EBITDA margin of 26%, up from prior guidance. Second-quarter revenue is expected to grow 22%–25%, with gross margin in the low 70% range.
Analyst Update: H.C. Wainwright Reiterates Buy, Sees Strong MACI Tailwinds
H.C. Wainwright reiterated its Buy rating and $60 price target following the results. The firm highlighted Vericel’s expanding MACI biopsy base, robust uptake among Arthro-trained surgeons, and potential for additional growth from trochlea defect treatment. While near-term Epicel revenue was softer, analysts expect a recovery in Q2 and continued growth for the burn care franchise. The MACI Ankle Phase 3 trial, expected to begin later this year, could provide longer-term upside.
On the Call: Management Confirms Strong MACI Pipeline and Sales Force Expansion
CEO Nick Colangelo emphasized the potential for MACI Arthro to expand usage beyond the traditional femoral condyle segment, particularly into underpenetrated trochlea defects. He noted that MACI Arthro-trained surgeons are generating incremental biopsies, which are expected to drive second-half revenue and future implant growth. CFO Joe Mara confirmed plans to expand the MACI sales force in the second half of 2025 to meet rising demand and support continued growth into 2026. Management also addressed tariff concerns, stating that Vericel’s U.S.-based manufacturing footprint and supply chain planning should limit any financial impact through 2026.
Vericel remains well-positioned to deliver high-margin growth in both the orthopedic and burn care markets, with near-term execution and long-term pipeline milestones on track.
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