Vericel (NASDAQ:VCEL) reported record second-quarter revenue and raised its full-year outlook, citing continued growth in its MACI cartilage repair franchise and Burn Care business, along with improved profitability and cash generation.
Total revenue rose 22% from a year earlier to $77.5 million, exceeding the company’s quarterly guidance. Chief Executive Officer Nick Colangelo said the result reflected “substantial growth” in both MACI and Burn Care. Vericel reported GAAP net income of $2.2 million, operating cash flow of $16.2 million and free cash flow of $14.3 million during the quarter.
MACI Revenue Reaches Record Level
MACI revenue increased 23% year over year to a record $65.5 million in the second quarter. The company said the franchise has now recorded growth of 20% or more for five consecutive quarters.
Colangelo attributed the growth to a larger MACI sales force, commercial-excellence initiatives, deeper penetration within existing surgeon practices and expanded use of the MACI Arthro procedure. The company reported double-digit growth in both biopsies and implants, as well as record second-quarter levels for biopsies, implants and participating surgeons.
Chief Financial Officer Joe Mara said MACI’s performance reflected strong biopsy growth that contributed to the treatment pipeline, double-digit implant growth and pricing. Colangelo said the company expects MACI to remain a growth story driven by both volume and pricing.
MACI Arthro is designed for smaller femoral condyle defects, generally in the two-to-four square centimeter range, though Vericel has also seen use in the trochlea and some patella cases, according to Colangelo. The company is focusing on moving trained surgeons into performing MACI Arthro procedures, as surgeons who have completed cases have shown higher activity and conversion rates, he said.
Vericel continues to train surgeons on MACI Arthro and expects additional clinical data to support adoption. Colangelo said an initial U.S. publication has been accepted and is expected to address shorter-term outcomes, including faster return to full weight bearing, range of motion and postoperative pain. The company is also developing next-generation instruments, with a potential introduction around 2028 after design, validation and approval work.
Burn Care Growth Led by Epicel and NexoBrid
Burn Care revenue rose 22% to approximately $12 million, one of the franchise’s highest quarterly revenue totals to date. Epicel generated $10.4 million in quarterly revenue, while first-half Epicel revenue exceeded $21 million, representing the product’s second-highest six-month revenue total since launch.
NexoBrid revenue exceeded $1.5 million, its highest quarterly level since launch and an increase of more than 30% from both the prior-year period and the preceding quarter. Colangelo said NexoBrid recorded its highest levels of revenue, ordering centers and hospital unit sales to date.
The company said it has reached about 80 cumulative NexoBrid ordering centers since launch and is seeing more consistent orders. Vericel also expects to begin procurement activity tied to its BARDA award early in the third quarter. Third-quarter Burn Care guidance includes approximately $3 million of BARDA procurement revenue.
Guidance Raised, Margin Outlook Maintained
Vericel increased its 2026 total revenue guidance to $330 million to $340 million, representing growth of about 19% to 23%. The company raised its MACI revenue outlook to $284 million to $290 million, from prior guidance of $282 million to $288 million. Burn Care revenue guidance increased to $46 million to $50 million, from $44 million to $48 million previously.
- Total third-quarter revenue is expected to be approximately $76.5 million to $78.5 million.
- Third-quarter MACI revenue is expected to be about $65.5 million at the midpoint, implying high-teens growth year over year.
- Third-quarter Burn Care revenue is expected to be approximately $12 million at the midpoint.
- Full-year gross margin guidance remains approximately 75%.
- Full-year adjusted EBITDA margin guidance remains approximately 27%.
Second-quarter gross margin was 73%, while adjusted EBITDA margin was 19%, both above the company’s guidance. Mara said 2026 includes investments in the sales force, the MACI ankle study, international expansion and the company’s new facility. He said Vericel expects more meaningful year-over-year adjusted EBITDA margin expansion beginning in 2027.
International Plans and Share Repurchase Authorization
Vericel submitted a marketing authorization application for MACI in the United Kingdom during the second quarter. If approved, the company expects a potential U.K. launch in 2027. Colangelo described the U.K. as a concentrated market with roughly a dozen centers of excellence treating cartilage injuries and said MACI retains brand recognition and surgeon support in the region.
The company expects to seek a single technology assessment through the U.K.’s National Institute for Health and Care Excellence, or NICE. Colangelo said prior NICE review of autologous chondrocyte implantation technologies resulted in pricing that was below U.S. levels but acceptable to the company. Mara said the expected commercial investment for the U.K. launch would not be substantial and should fit well with Vericel’s margin profile.
Vericel also began enrolling patients in its MACI ankle MASCOT study during the second quarter.
Separately, the board authorized a $200 million share repurchase program, the company’s first such authorization. Colangelo said the program does not change Vericel’s capital-allocation priorities, which include funding internal growth initiatives and evaluating business-development opportunities. He said the company intends to use the authorization to opportunistically return capital to shareholders while maintaining investment in its operating plan and potential acquisitions.
About Vericel (NASDAQ:VCEL)
Vericel Corporation is a biotechnology company specializing in the development, manufacturing and commercialization of cell-based therapies for patients with severe diseases and conditions. The company’s expertise lies in regenerative medicine, where it harnesses the power of autologous cell processing to create products designed to restore function and promote healing in damaged tissues.
Vericel currently markets two FDA-approved therapies. MACI® (autologous cultured chondrocytes on porcine collagen membrane) is indicated for the repair of symptomatic cartilage defects of the knee in adult patients.
