Vericel Corporation · NASDAQ:VCEL
Vericel — Investor Presentation (January 2015)
29 slides from Vericel's investor presentation, Jan 12, 2015
Slide 1: Company Presentation January 2015
Company Presentation January 2015
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements, including, without limitation, statements concerning anticipated progress, objectives and expectations regarding profitability, growth in revenue and earnings per share, cash payments, the costs and expenses as well as expected benef
Slide 3: Vericel Investment Highlights
Vericel Investment Highlights acquisition was accretive in Q2 and Q3 2014 3 Vericel Investment Highlights New Management Team • Strong track record of developing and commercializing products in the U.S. • Deep experience in restructuring and integrating acquired businesses New Business Focus • Restr
Slide 4: New Management Team with Deep Commercialization and Operations Experience
New Management Commercialization Team with Deep Experience Operations and 4 Management Team Nick Colangelo – President & CEO (March 2013) • More than 20 years of executive management and corporate development experience • Nearly a decade with Eli Lilly, including serving as Director of Strategy and
Slide 5: Acquisition of Sanofi's Cell Therapy and Regenerative Medicine Business
Acquisition of Sanofi’s Cell Therapy and Regenerative Medicine Business • Acquired Sanofi’s Cell Therapy and Regenerative Medicine business for $6.5 million • Acquired Assets: – Worldwide commercial rights to three marketed autologous cell therapy products with revenues of approximately $44 million
Slide 6: Robust Product Portfolio
Robust Product Portfolio PORTFOLIO PRODUCT PRECLINICAL PHASE 1 PHASE 2 PHASE 3 APPROVED Approved Carticel (autologous cultured chandrocyes) (US) Epicel (cultured epidemal autografts) (US)* Maci matrix applied characterized autologous cultured chandrocytes Development Maci matrix applied characterize
Slide 7: Carticel Overview
Carticel Overview Carticel is a 1st generation autologous chondrocyte implant (ACI) for the treatment of cartilage defects in the knee • First and only FDA-approved autologous cartilage repair product1 Therapeutic advantage: produces natural hyaline cartilage vs. fibrocartilage STAR study demonstrat
Slide 8: Carticel Commercial Highlights
Carticel Commercial Highlights • Net revenues of $35.2 million in 2013 • Dedicated physician customer base – Core physicians drive the majority of implants in the U.S. • Target patient population is younger and more active patients with larger cartilage defects (> 3cm2) – Ideal therapy for this pati
Slide 9: Carticel – Stable Market with Growth Potential in Arthroscopy
Carticel – Stable Market with Growth Potential in Arthroscopy ~ 1,000 Repair Specialize in Specialize in 1 Arthroscopy (2014) 30(2), 222-226. 2 Arthroscopy (1997) 13(4), 456-460. 3 OsteoArthritis and Cartilage (2006) 14(11), 1119-1125. 4 2010 American College of Surgeons Health Policy Report (ACS/HP
Slide 10: Carticel 2015 Commercial Priorities
Carticel 2015 Commercial Priorities Realigned sales territories to optimize Carticel sales potential Revised sales incentive compensation plan to drive improved Carticel profitability (based on volume and efficiency) – Assess, Confirm, Treat (ACT) program implemented to reduce biopsy-to-implant rati
Slide 11: Epicel Overview
Epicel Overview Epicel is a permanent skin replacement for full thickness burns >30% of total body surface area • Only FDA-approved autologous epidermal product available for large total body surface area (TBSA) burns Important treatment option for severe burn patients because little skin is availab
Slide 12: Epicel – Current Market Penetration
Epicel – Current Market Penetration Epicel Annual Sales2,3 1 American Burn Association, Burn Incidence Fact Sheet. http://www.ameriburn.org/resources_factsheet.php 2 American Burn Association, National Burn Repository 2014; V10. P10, Table 4. 3 Internal Epicel Sales Data 12 70 of the 1,700 Burn Beds
Slide 13: Epicel 2015 Commercial Priorities
Epicel 2015 Commercial Priorities Increased price to reflect costs allowed under the HDE regulations Increased promotional support with additional sales representatives • Revise sales incentive compensation plan to drive expanded Epicel utilization (based on number of treated patients) Rebuild the p
Slide 14: MACI Overview
MACI Overview MACI is a 3rd generation ACI for the treatment of cartilage defects in the knee • First tissue-engineered product approved as an Advanced Therapy Medicinal Product by the EC (June 2013) Therapeutic advantage: ease of use for the surgeon and reduced morbidity for the patient SUMMIT stud
Slide 15: MACI – Market Expansion Opportunity
MACI – Market Expansion Opportunity 15 MACI Efficacy of Carticel with improved delivery – Less invasive, significant reduction in surgical time – Easier delivery – Eliminates periosteal harvest; no sutures or water-tight seal – Improved post-operative course – Opportunity for first-line treatment CA
Slide 16: SUMMIT Study – MACI Significantly Better Than Microfracture at Year 2
SUMMIT Study – MACI Significantly Better Than Microfracture at Year 2 SUMMIT (Demonstrate the Superiority of MACI Implant to Microfracture Treatment) Study 1 The American Journal of Sports Medicine (2014) 42(6), 1384-1394. 16 Improvement in Score (Estimated Mean) KOOS Pain and Function Endpoints at
Slide 17: Strategic Actions Immediately Initiated to Drive the Acquired Business to Profitability
Strategic Actions Immediately Initiated to Drive the Acquired Business to Profitability • Temporarily suspended sales of MACI in Europe and discontinued manufacturing in Denmark – – – MACI sales in Europe represented 1% of revenues in 2014 Cambridge facility to manufacture MACI for select European c
Slide 18: Manufacturing Efficiencies/Cost Reduction Initiatives
Manufacturing Efficiencies/Cost Reduction Initiatives Further Improve Gross Margins and Profitability to Extended Carticel biopsy shelf-life Enhanced Carticel culture media • Multiple Carticel and Epicel process development projects underway designed to – – – Reduce costs Enhance process efficiencie
Slide 19: Ixmyelocel-T is a Highly Differentiated Multicellular Therapy
lxmyelocei-T is a Highly Differentiated Multicellular IL-10 I IL-Ira I MIP-Icx Extracellular Matrix Remodeling VEGF I Adiponectin I bFGF Extracellular Uptake of Oxidized LDL Expanded populations of M2-like macrophages and MSCs have multiple biological activities that promote tissue repair and regene
Slide 20: Ixmyelocel-T for the Treatment of Advanced Heart Failure Due to Ischemic DCM
Ixmyelocel-T for the Treatment of Advanced Heart Failure Due to Ischemic DCM Rx therapy Revascularization > < LVAD Transplantation Sources: Heidenreich et al. Circulation 2011;123:933-944; Health Research International; America Heart Association 20 Ixmyelocel-T is the only therapy with an orphan des
Slide 21: Fewer Ischemic DCM Patients Treated with Ixmyelocel-T Experienced a MACE
Fewer Ischemic DCM Patients Treated with Ixmyelocel-MACE1 T Experienced a • Statistically significant improvements also were observed in NYHA class and six-minute walk distance 1 Circulation Research (2014) 10.1161/CIRCRESAHA.115.304554 21 IMPACT-DCM (6 Months) Catheter-DCM (1 Year) Both Studies Con
Slide 22: ixCELL-DCM Clinical Study Phase 2b
ixCELL-DCM Clinical Study Phase 2b ixCELL-DCM Study Design • Diagnosis of ischemic DCM according to WHO criteria 22 Objectives •To evaluate the efficacy, safety and tolerability of ixmyelocel-T compared to placebo in patients with heart failure due to ischemic DCM Patients •Males and females, age 30
Slide 23: Strong Financial Position
Strong Financial Position • Closed $40.25 million financing in September 2014 – – Participation by leading institutional healthcare investors Use of proceeds • • Support commercialization of our marketed products Fund the continued development of MACI in the U.S. and the Phase 2b ixCELL-DCM clinical
Slide 24: Q3 2014 Financial Results
Q3 2014 Financial Results 24 The acquired business generated a positive contribution of $1.4 million for the third quarter, excluding restructuring charges and losses from Denmark Contribution from acquired business — Non-GAAP2014 Net loss – GAAP - for the three months ended September 30, 2014$(6,91
Slide 25: New Business Attracted Strong Institutional Shareholder Base
New Business Attracted Strong Institutional Shareholder Base (> 50% Ownership) Source: NASDAQ Online (January 9, 2015) 25 Holder Position % Common Stock Outstanding Consonance Capital Management 2,352,940 9.89% Great Point Partners 2,170,000 9.12% Stonepine Capital Management 1,700,000 7.15% Visium
Slide 26: Several Value-Creating Commercial and Clinical Milestones Over the Coming Quarters
Several Value-Creating Commercial and Clinical Milestones Over the Coming Quarters Excluding restructuring charges, Increasing cash flow from Publish Phase 2a Complete Patient 26 201420152016 U.S. Commercial Operations Quarterly U.S. Operating Results Carticel and Epicel business accretiveCarticel a
Slide 27: Vericel Investment Highlights
Vericel Investment Highlights acquisition was accretive in Q2 and Q3 2014 27 Vericel Investment Highlights New Management Team • Strong track record of developing and commercializing products in the U.S. • Deep experience in restructuring and integrating acquired businesses New Business Focus • Rest
Slide 28: Appendix
Appendix 2 VERICEL
Slide 29: Vericel Capitalization Table
Vericel Capitalization Table 1 The preferred stock will accrue 478,492 common share equivalent dividends through 2017 at which point Vericel can force conversion of the preferred stock to common stock. 29 2 Excludes the 235,077 common share equivalent dividends accrued but not issued. Capitalization