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01/11 15:42
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance with record revenue growth and narrowed net loss, despite a slight miss in MACI's Q2 guidance. Optimistic guidance and improvements in profitability metrics, along with strategic expansions in sales force and international markets, suggest positive sentiment. The Q&A section highlights potential risks but also reinforces confidence in future growth, particularly in MACI and NexoBrid segments. Overall, the positive aspects outweigh the negatives, suggesting a likely stock price increase.
Total Revenue Increased 20% in the quarter, driven by significant revenue growth across products.
Gross Margin Expanded more than 400 basis points to 74%, attributed to substantial revenue growth.
Adjusted EBITDA Increased 112% year-over-year to over $13 million, reflecting higher profitability growth.
MACI Revenue Generated record second quarter revenue of nearly $54 million, representing 21% growth versus the prior year and 15% sequential growth versus the prior quarter. Growth driven by strong business fundamentals, expansion of the MACI surgeon base, and MACI Arthro launch.
Epicel Revenue $8.6 million, representing 11% growth versus the prior year. Growth driven by a substantial increase in biopsies and grafts.
NexoBrid Revenue $1.2 million, representing 52% growth versus the prior year. Growth attributed to an increase in hospital unit orders and ordering centers.
Operating Expenses Increased to $48.6 million from $42.6 million in 2024, primarily due to increased headcount, related employee expenses, and costs related to the new facility.
Net Loss Narrowed to $0.6 million or $0.01 per share compared to $4.7 million or $0.10 per share in the prior year, an improvement of more than $4 million.
Operating Cash Flow Generated $8.2 million, contributing to a strong balance sheet with $164 million in cash and investments and no debt.
MACI Arthro: Generated record second quarter revenue of nearly $54 million, representing 21% growth versus the prior year and 15% sequential growth. Strong biopsy and implant growth driven by surgeon training and expansion. Approximately 600 surgeons trained by July, with biopsy growth outpacing implant growth. New arthroscopic-only surgeon segment generated over 100 biopsies.
Burn Care Products: Epicel revenue rebounded with $8.6 million, representing 11% growth versus the prior year. Biopsies increased nearly 40% year-over-year, with the highest monthly biopsies on record in June. NexoBrid revenue grew 52% year-over-year to $1.2 million, with record hospital orders in June and July.
Market Expansion for MACI: Sales force expansion from 76 to approximately 100 territories to support growth. New territories to be operational by 2026. MACI ankle clinical study received FDA clearance, with plans to initiate in the second half of 2025, potentially expanding into other orthopedic markets.
Revenue and Profitability: Total revenue increased 20% in Q2 2025 to $63.2 million. Gross margin expanded by over 400 basis points to 74%. Adjusted EBITDA increased 112% to $13.4 million, representing 21% of revenue.
Cash Flow and Investments: Generated $8.2 million in operating cash flow. Ended Q2 with $164 million in cash and investments, with no debt. Commercial manufacturing for MACI in a new facility to begin in 2026.
Strategic Shifts in Burn Care: Category III temporary CPT code for NexoBrid went into effect on July 1, expected to drive increased utilization and uptake. BARDA RFP process initiated, with potential for incremental revenue in Q4 2025.
Epicel revenue impacted by canceled cases: Although Epicel revenue increased significantly during the second quarter, there was a higher ratio of canceled cases due to patient health-related issues, which impacted revenue for the quarter.
NexoBrid distributor orders decline: Orders placed by specialty distributors for NexoBrid were slightly lower than the prior quarter, impacting revenue comparison to the first quarter.
Burn Care revenue guidance adjustment: The company updated its second-half Burn Care revenue guidance to align with recent run rates, reflecting challenges in accurately predicting Epicel quarterly revenue.
Increased operating expenses: Operating expenses increased due to higher headcount, employee-related expenses, and costs associated with the new facility, including depreciation and MACI tech transfer-related activities.
Dependency on MACI Arthro surgeon training: The company's growth heavily relies on the pace and success of MACI Arthro surgeon training, which could pose a risk if training does not meet expectations or if trained surgeons do not adopt the product as anticipated.
Uncertainty in BARDA-related NexoBrid revenue: The company is not assuming additional NexoBrid revenue related to the BARDA RFP process, indicating uncertainty in securing this revenue stream.
MACI Revenue Growth: The company expects MACI full-year revenue growth in the low 20% range, with third-quarter revenue growth also in the low 20% range, approximately $54 million to $55 million for the quarter.
Burn Care Revenue Guidance: Updated second-half quarterly Burn Care revenue guidance to approximately $10 million per quarter, consistent with the second quarter revenue and average quarterly run rate in 2024. Internal expectations for Burn Care performance remain higher, with potential to outperform this updated guidance.
Profitability Metrics: For the full year, reaffirmed profitability guidance includes a gross margin of 74% and an adjusted EBITDA margin of 26%. Third-quarter gross margin and adjusted EBITDA margin are expected to be in a similar range as the second quarter.
MACI Sales Force Expansion: The company is increasing its MACI sales force from 76 territories to approximately 100 territories. New sales reps will support current territories during the fourth quarter of 2025 and move into new territories at the start of 2026. This expansion aims to support significant fourth-quarter volume and position MACI for strong performance in 2026 and beyond.
MACI Implant Volume Growth: Significant MACI implant volume growth is expected in the second half of 2025 and into 2026, supported by the MACI Arthro launch and expanded surgeon training.
NexoBrid Revenue Potential: No additional NexoBrid revenue related to the BARDA RFP process is assumed, but there is potential for incremental NexoBrid BARDA revenue in the fourth quarter of 2025.
MACI Ankle Clinical Study: The company remains on track to initiate the Phase III MACI ankle clinical study in the second half of 2025. A potential MACI ankle indication represents a substantial long-term growth driver.
Commercial Manufacturing for MACI: The company remains on track to initiate commercial manufacturing for MACI in its new facility in 2026.
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The earnings call highlights strong financial performance, with record high operating cash flow and free cash flow, along with positive trends in MACI Arthro demand and surgeon adoption. The Q&A session reveals positive analyst sentiment, with no significant insurance challenges reported. The company's MACI sales force expansion and expected profitability improvements further support a positive outlook. However, cautious guidance for Q4 and lack of specific 2026 projections slightly temper enthusiasm. Overall, the sentiment is positive, with potential for a stock price increase in the 2% to 8% range.
The earnings call shows strong financial performance with record revenue growth and narrowed net loss, despite a slight miss in MACI's Q2 guidance. Optimistic guidance and improvements in profitability metrics, along with strategic expansions in sales force and international markets, suggest positive sentiment. The Q&A section highlights potential risks but also reinforces confidence in future growth, particularly in MACI and NexoBrid segments. Overall, the positive aspects outweigh the negatives, suggesting a likely stock price increase.
The earnings call presents mixed signals: strong revenue growth and promising product developments are offset by missed EPS expectations, increased operating expenses, and revenue variability in key areas like Epicel. The Q&A section reveals some optimism, but also highlights uncertainties regarding MACI Arthro's impact and competitive pressures. The lack of a share repurchase program further tempers positive sentiment. Given these factors, the stock price is likely to remain stable, with no significant movement expected over the next two weeks.
The earnings call presents a mixed picture. Strong revenue growth and optimistic guidance for 2025 are positives. However, challenges like Epicel revenue variability, increased operating expenses, and lack of shareholder return plans are concerning. The Q&A revealed uncertainties about MACI Arthro's impact and market expansion, contributing to a neutral sentiment. Without a market cap, stock volatility cannot be precisely gauged, but the absence of significant catalysts suggests a neutral outlook in the short term.
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