Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-35280 | |
Entity Registrant Name | VERICEL CORP | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 94-3096597 | |
Entity Address, Address Line One | 64 Sidney Street | |
Entity Address, City or Town | Cambridge | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02139 | |
City Area Code | 800 | |
Local Phone Number | 556-0311 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | VCEL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 44,694,512,000 | |
Entity Central Index Key | 0000887359 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 36,905 | $ 18,286 |
Short-term investments | 37,760 | 64,638 |
Accounts receivable (net of allowance for doubtful accounts of $643 and $514, respectively) | 19,958 | 23,454 |
Inventory | 6,823 | 3,558 |
Other current assets | 3,272 | 2,847 |
Total current assets | 104,718 | 112,783 |
Property and equipment, net | 7,190 | 5,906 |
Right-of-use assets | 25,619 | 0 |
Total assets | 137,527 | 118,689 |
Current liabilities: | ||
Accounts payable | 5,281 | 7,108 |
Accrued expenses | 6,960 | 6,930 |
Current portion of operating lease liabilities | 2,836 | 0 |
Other liabilities | 35 | 754 |
Total current liabilities | 15,112 | 14,792 |
Operating lease liabilities | 25,311 | 0 |
Other long-term liabilities | 114 | 1,666 |
Total liabilities | 40,537 | 16,458 |
COMMITMENTS AND CONTINGENCIES | ||
Shareholders’ equity: | ||
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 44,520 and 43,578, respectively | 485,141 | 471,180 |
Other comprehensive gain (loss) | 29 | (39) |
Warrants | 0 | 104 |
Accumulated deficit | (388,180) | (369,014) |
Total shareholders’ equity | 96,990 | 102,231 |
Total liabilities and shareholders’ equity | $ 137,527 | $ 118,689 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 643 | $ 514 |
Common stock, authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, issued (in shares) | 44,520,000 | 43,578,000 |
Common stock, outstanding (in shares) | 44,520,000 | 43,578,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Product sales, net | $ 30,499 | $ 22,484 | $ 78,460 | $ 59,522 |
Gross profit | 21,175 | 14,346 | 51,474 | 35,991 |
Research and development | 3,096 | 3,113 | 27,174 | 10,581 |
Selling, general and administrative | 14,982 | 12,569 | 44,761 | 35,314 |
Total operating expenses | 18,078 | 15,682 | 71,935 | 45,895 |
Income (loss) from operations | 3,097 | (1,336) | (20,461) | (9,904) |
Other income (expense): | ||||
Increase (decrease) in fair value of warrants | 0 | 420 | 0 | (2,524) |
Interest income | 385 | 307 | 1,293 | 390 |
Interest expense | (2) | (460) | (6) | (1,340) |
Other income (expense) | (10) | 0 | 8 | (1) |
Total other income (expense) | 373 | 267 | 1,295 | (3,475) |
Net income (loss) | $ 3,470 | $ (1,069) | $ (19,166) | $ (13,379) |
Earnings Per Share, Basic (in dollars per share) | $ 0.08 | $ (0.02) | $ (0.44) | $ (0.34) |
Weighted Average Number of Shares Outstanding, Basic (in shares) | 44,251 | 42,925 | 43,979 | 39,163 |
Earnings Per Share, Diluted (in dollars per share) | $ 0.07 | $ (0.02) | $ (0.44) | $ (0.34) |
Weighted Average Number of Shares Outstanding, Diluted (in shares) | 46,667 | 42,925 | 43,979 | 39,163 |
Product | ||||
Product sales, net | $ 30,499 | $ 22,484 | $ 78,460 | $ 59,522 |
Cost of product sales | $ 9,324 | $ 8,138 | $ 26,986 | $ 23,531 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 3,470 | $ (1,069) | $ (19,166) | $ (13,379) |
Other comprehensive income (loss): | ||||
Unrealized (loss) gain on investments | (9) | (18) | 29 | (18) |
Comprehensive income (loss) | $ 3,461 | $ (1,087) | $ (19,137) | $ (13,397) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Warrants Amounts | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2017 | 35,861 | ||||
Beginning balance at Dec. 31, 2017 | $ 22,540 | $ 383,020 | $ 397 | $ 0 | $ (360,877) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (7,659) | (7,659) | |||
Compensation expense related to stock options granted, net of forfeitures | 1,348 | $ 1,348 | |||
Stock option exercises (in shares) | 253 | ||||
Stock option exercises | 851 | $ 851 | |||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 28 | ||||
Shares issued under the Employee Stock Purchase Plan | 127 | $ 127 | |||
Exercise of warrants resulting in the issuance of common stock (in shares) | 360 | ||||
Exercise of warrants resulting in issuance of common stock | 1,727 | $ 1,727 | |||
Net change in warrant valuation of exercised warrants | (2,001) | $ (2,001) | |||
Ending balance (in shares) at Mar. 31, 2018 | 36,502 | ||||
Ending balance at Mar. 31, 2018 | 20,935 | $ 389,074 | 397 | 0 | (368,536) |
Beginning balance (in shares) at Dec. 31, 2017 | 35,861 | ||||
Beginning balance at Dec. 31, 2017 | 22,540 | $ 383,020 | 397 | 0 | (360,877) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (13,379) | ||||
Ending balance (in shares) at Sep. 30, 2018 | 43,170 | ||||
Ending balance at Sep. 30, 2018 | 94,475 | $ 468,447 | 302 | (18) | (374,256) |
Beginning balance (in shares) at Mar. 31, 2018 | 36,502 | ||||
Beginning balance at Mar. 31, 2018 | 20,935 | $ 389,074 | 397 | 0 | (368,536) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (4,651) | (4,651) | |||
Compensation expense related to stock options granted, net of forfeitures | 2,465 | $ 2,465 | |||
Issuance of common stock, net of issuance costs (in shares) | 5,750 | ||||
Issuance of common stock, net of issuance costs | 70,090 | $ 70,090 | |||
Stock option exercises (in shares) | 306 | ||||
Stock option exercises | 964 | $ 964 | |||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 31 | ||||
Shares issued under the Employee Stock Purchase Plan | 148 | $ 148 | |||
Exercise of warrants resulting in the issuance of common stock (in shares) | 95 | ||||
Exercise of warrants resulting in issuance of common stock | 238 | $ 333 | (95) | ||
Net change in warrant valuation of exercised warrants | (409) | $ (409) | |||
Ending balance (in shares) at Jun. 30, 2018 | 42,684 | ||||
Ending balance at Jun. 30, 2018 | 90,598 | $ 463,483 | 302 | 0 | (373,187) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (1,069) | (1,069) | |||
Compensation expense related to stock options granted, net of forfeitures | 1,932 | $ 1,932 | |||
Stock option exercises (in shares) | 305 | ||||
Stock option exercises | 952 | $ 952 | |||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 25 | ||||
Shares issued under the Employee Stock Purchase Plan | 200 | $ 200 | |||
Change in unrealized gain (loss) on investments | (18) | (18) | |||
Exercise of warrants resulting in the issuance of common stock (in shares) | 156 | ||||
Exercise of warrants resulting in issuance of common stock | 751 | $ 751 | |||
Net change in warrant valuation of exercised warrants | (1,129) | $ (1,129) | |||
Ending balance (in shares) at Sep. 30, 2018 | 43,170 | ||||
Ending balance at Sep. 30, 2018 | 94,475 | $ 468,447 | 302 | (18) | (374,256) |
Beginning balance (in shares) at Dec. 31, 2018 | 43,578 | ||||
Beginning balance at Dec. 31, 2018 | 102,231 | $ 471,180 | 104 | (39) | (369,014) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (2,844) | (2,844) | |||
Compensation expense related to stock options granted, net of forfeitures | 2,628 | $ 2,628 | |||
Stock option exercises (in shares) | 228 | ||||
Stock option exercises | 780 | $ 780 | |||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 19 | ||||
Shares issued under the Employee Stock Purchase Plan | 218 | $ 218 | |||
Change in unrealized gain (loss) on investments | 42 | 42 | |||
Ending balance (in shares) at Mar. 31, 2019 | 43,825 | ||||
Ending balance at Mar. 31, 2019 | 103,055 | $ 474,806 | 104 | 3 | (371,858) |
Beginning balance (in shares) at Dec. 31, 2018 | 43,578 | ||||
Beginning balance at Dec. 31, 2018 | 102,231 | $ 471,180 | 104 | (39) | (369,014) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (19,166) | ||||
Ending balance (in shares) at Sep. 30, 2019 | 44,520 | ||||
Ending balance at Sep. 30, 2019 | 96,990 | $ 485,141 | 0 | 29 | (388,180) |
Beginning balance (in shares) at Mar. 31, 2019 | 43,825 | ||||
Beginning balance at Mar. 31, 2019 | 103,055 | $ 474,806 | 104 | 3 | (371,858) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | (19,792) | (19,792) | |||
Compensation expense related to stock options granted, net of forfeitures | 4,183 | $ 4,183 | |||
Stock option exercises (in shares) | 227 | ||||
Stock option exercises | 850 | $ 850 | |||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 14 | ||||
Shares issued under the Employee Stock Purchase Plan | 211 | $ 211 | |||
Change in unrealized gain (loss) on investments | 35 | 35 | |||
Ending balance (in shares) at Jun. 30, 2019 | 44,066 | ||||
Ending balance at Jun. 30, 2019 | 88,542 | $ 480,050 | 104 | 38 | (391,650) |
Increase (Decrease) in Shareholders' Equity | |||||
Net loss | 3,470 | 3,470 | |||
Compensation expense related to stock options granted, net of forfeitures | 3,285 | $ 3,285 | |||
Stock option exercises (in shares) | 416 | ||||
Stock option exercises | 1,427 | $ 1,427 | |||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 18 | ||||
Shares issued under the Employee Stock Purchase Plan | 275 | $ 275 | |||
Change in unrealized gain (loss) on investments | (9) | (9) | |||
Exercise of warrants resulting in the issuance of common stock (in shares) | 20 | ||||
Exercise of warrants resulting in issuance of common stock | $ 104 | (104) | |||
Ending balance (in shares) at Sep. 30, 2019 | 44,520 | ||||
Ending balance at Sep. 30, 2019 | $ 96,990 | $ 485,141 | $ 0 | $ 29 | $ (388,180) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities: | ||
Net loss | $ (19,166) | $ (13,379) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization expense | 1,174 | 1,133 |
Stock compensation expense | 10,095 | 5,739 |
Change in fair value of warrants | 0 | 2,524 |
Loss on sale of fixed assets | 0 | 23 |
Foreign currency translation loss | 21 | 49 |
Amortization of premiums and discounts on marketable securities | (529) | 0 |
Non-cash lease cost | 2,011 | 0 |
Change in operating assets and liabilities: | ||
Inventory | (3,265) | 155 |
Accounts receivable | 3,496 | 2,742 |
Prepaid and other current assets | (425) | (758) |
Accounts payable | (1,895) | (1,212) |
Accrued expenses | 30 | 19 |
Operating lease liabilities | (1,804) | 0 |
Other assets and liabilities, net | (76) | (58) |
Net cash used in operating activities | (10,333) | (3,023) |
Investing activities: | ||
Purchases of short-term investments | (46,303) | (44,480) |
Maturities of short-term investments | 73,777 | 0 |
Expenditures for property, plant and equipment | (2,255) | (2,101) |
Net cash provided by (used in) investing activities | 25,219 | (46,581) |
Financing activities: | ||
Net proceeds from equity offering | 0 | 70,028 |
Net proceeds from common stock issuance due to stock option exercises | 3,762 | 3,310 |
Proceeds from exercise of warrants | 0 | 2,716 |
Other | (29) | (23) |
Net cash provided by financing activities | 3,733 | 76,031 |
Net increase in cash and cash equivalents | 18,619 | 26,427 |
Cash and cash equivalents at beginning of period | 18,286 | 26,862 |
Cash and cash equivalents at end of period | $ 36,905 | $ 53,289 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Vericel Corporation, a Michigan corporation (together with its consolidated subsidiaries referred to herein as the Company, Vericel, we, us or our), was incorporated in March 1989 and began employee-based operations in 1991. On May 30, 2014, Vericel completed the acquisition of certain assets and assumed certain liabilities of Sanofi, a French société anonyme (Sanofi), including all of the outstanding equity interests of Genzyme Biosurgery ApS (Genzyme Denmark or the Danish subsidiary) (now known as Vericel Denmark ApS), a wholly-owned subsidiary of Sanofi, and a portfolio of patents and patent applications of Sanofi and certain of its subsidiaries for purposes of acquiring the portion of the cell therapy and regenerative medicine business related to the MACI ® , Epicel ® and Carticel ® products. The Company is a fully integrated, commercial-stage biopharmaceutical company and currently markets MACI and Epicel in the U.S. and holds exclusive rights to commercialize NexoBrid ® in all countries of North America. The Company is a leader in advanced cell therapies for the sports medicine and severe burn care markets. MACI (autologous cultured chondrocytes on porcine collagen membrane) is an 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. At the end of the second quarter of 2017, the Company removed Carticel (autologous cultured chondrocytes), an earlier generation autologous chrondocyte implant (ACI) product, from the market. The Company also markets Epicel (cultured epidermal autografts), a permanent skin replacement Humanitarian Use Device (HUD) for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns greater than or equal to 30 percent of total body surface area (TBSA). In May 2019, the Company also entered into exclusive license and supply agreements with MediWound Ltd. (MediWound) to commercialize NexoBrid ® in all countries in North America. NexoBrid is a topically-administered biological product that enzymatically removes nonviable burn tissue, or eschar, in patients with deep partial and full-thickness thermal burns. NexoBrid is currently in clinical development in North America, and a U.S. Biologics License Application (BLA) currently is targeted for submission to the U.S. Food and Drug Administration (FDA) in the second quarter of 2020. The Company operates its business primarily in the U.S. in one reportable segment — the research, product development, manufacture and distribution of advanced therapies for use in the treatment of specific diseases. The accompanying condensed consolidated financial statements have been prepared on a basis, which assumes that the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As of September 30, 2019 , the Company has an accumulated deficit of $388.2 million and had net income of $3.5 million and a net loss of $19.2 million during the three and nine months ended September 30, 2019 . The Company had cash and cash equivalents of $36.9 million , and short-term investments of $37.8 million as of September 30, 2019 . The Company expects that existing cash, cash equivalents and short-term investments will be sufficient to support the Company's current operations through at least 12 months from the issuance of these financial statements. The Company may seek additional funding through debt or equity financings. However, the Company may not be able to obtain financing on acceptable terms or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's shareholders. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated balance sheet as of December 31, 2018 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying condensed consolidated financial statements as of September 30, 2019 and for the three and nine months ended September 30, 2019 are unaudited and have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in U.S. GAAP requires management to make estimates, judgments, and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary to state fairly the financial position and results of operations as of and for the periods indicated. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 , as filed with the SEC on February 26, 2019 (Annual Report). Consolidated Statement of Cash Flows The following table presents certain supplementary cash flows information for the nine months ended September 30, 2019 and 2018 : Nine Months Ended September 30, (In thousands) 2019 2018 Supplementary Cash Flows information: Warrants exercised for common stock $ 104 $ 3,538 Interest paid (net of interest capitalized) 6 1,161 Additions to equipment in process included in accounts payable 46 191 Right-of-use asset and lease liability recognized 2,338 — |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting for Leases The Financial Accounting Standards Board (FASB) issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the assets and liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018. The leasing Accounting Standard Update 2016-02 became effective for the Company on January 1, 2019 and was adopted using the modified retrospective method. See note 7 for further discussion. Measuring Credit Losses on Financial Instruments The FASB issued updated guidance on measuring credit losses on financial instruments. The guidance removes the probable loss thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities and available-for-sale debt securities with unrealized losses. Prior to the updated guidance, credit losses are recognized when it is probable that the loss has been incurred. Companies are required to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that a company expected to collect over the instrument’s contractual life. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance is effective for annual reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact to its consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue Recognition and Net Product Sales The Company recognizes product revenue from sales of MACI kits, MACI implants and Epicel grafts following the five step model in Accounting Standards Codification 606 Revenue Recognition (ASC 606). MACI Kits MACI kits are sold directly to hospitals based on contracted rates in the approved contract or sales order. The Company recognizes MACI kit revenue upon delivery of the biopsy kit at which time the customer (the facility) is in control of the kit. The kit provides the doctor the ability to biopsy a sampling of cells to provide to the Company that can be used later to manufacture the implant. The ordering of the kit does not obligate the Company to manufacture an implant nor does the receipt of the cell tissue. The customer’s order of an implant is separate from the process of ordering the kit. Therefore, the sale of the kit and any subsequent sale of an implant are distinct contracts and are accounted for separately. MACI Implants From July 1, 2017 until June 15, 2018 the Company sold MACI primarily to distributors and directly to hospitals or patients at contracted rates. Beginning on June 16, 2018, the Company contracted with a specialty pharmacy, Orsini Pharmaceutical Services, Inc. (Orsini) to distribute its MACI product in arrangements whereby the Company retains the credit and collection risk from the end customer. Since July 26, 2018, the Company has also contracted with AllCare Plus Pharmacy, Inc. (AllCare), a specialty pharmacy, in arrangements whereby the Company retains the credit and collection risk from the end customer. The Company pays both specialty pharmacies a fee for each patient to whom MACI is dispensed. Both Orsini and AllCare perform collection activities to receive payment from customers. The Company has engaged a third-party services provider to provide the patient support program to manage patient cases and to ensure complete and correct billing information is provided to the insurers and hospitals. In addition, the Company also sells MACI directly to DMS Pharmaceutical (DMS) for all military implants. The sales directly to DMS are sold at a contracted rate. Prior authorization and confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of product to a patient. The Company recognizes product revenues from sales of all MACI implants upon delivery at which time the customer obtains control of the implant and the claim is billable. The total consideration which the Company expects to collect in exchange for MACI implants (the transaction price) may be fixed or variable. Direct sales to hospitals or distributors are recorded at a contracted price, and other than customary prompt pay discounts, there are typically no forms of variable consideration. When the Company sells MACI, the patient is responsible for payment, however, the Company is typically reimbursed by a third-party insurer or government payer, subject to a patient co-pay amount. Reimbursements from third-party insurers and government payers vary by patient and payer and are based on either contracted rates, publicly available rates, government fee schedules or past payer precedents. Net product revenues recognized consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from the transaction. The Company estimates the amount of consideration it expects to receive for these transactions using the portfolio approach. These estimates include the impact of contractual allowances, which considers historical collection experience from both the payer and patient, denial rates and the terms of the Company’s contractual arrangements. The Company records a reduction to revenue at the time of sale for its estimate of the amount of consideration that will not be collected. The allowance for uncollectible consideration was $4.2 million as of September 30, 2019 and $2.0 million at December 31, 2018. Changes in estimates of the transaction price are recorded through revenue in the period in which such change occurs. Changes in estimates related to prior period sales resulted in a $0.7 million and $0.4 million increase to revenue for the three and nine months ended September 30, 2019, respectively and an increase to revenue of $0.1 million and a decrease to revenue of $0.3 million for the three and nine months ended September 30, 2018, respectively. Epicel The Company sells Epicel directly to hospitals based on contracted rates stated in the approved contract or purchase order. Similar to MACI, there is no obligation to manufacture skin grafts upon receipt of a skin biopsy, and Vericel has no contractual right to receive payment until the product is delivered to the hospital. The Company recognizes product revenues from sales of Epicel upon delivery to the hospital at which time the customer is in control of the skin grafts and the claim is billable to the hospital. Revenue by Product and Customer The following table and description below reflect the products from which the Company generated its revenue: Three Months Ended September 30, Nine Months Ended September 30, Net revenue by product (in thousands) 2019 2018 2019 2018 MACI implants and kits Implants based on contracted rates sold to or through a specialty pharmacy (a) $ 11,779 $ 11,102 $ 34,555 $ 26,257 Implants subject to third-party reimbursement sold through a specialty pharmacy (b) 4,030 1,612 10,584 5,468 Implants sold direct based on contracted rates (c) 3,039 2,632 9,715 8,715 Implants sold direct subject to third-party reimbursement (d) 573 490 1,176 1,070 Biopsy kits - direct bill 533 488 1,632 1,392 Change in estimates related to prior periods 656 125 353 (273 ) Epicel Direct bill (hospital) 9,889 6,035 20,445 16,893 Total revenue $ 30,499 $ 22,484 $ 78,460 $ 59,522 (a) Represents implants sold through Orsini or AllCare in which such specialty pharmacy has entered into a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy's direct contract. Also represents sales directly to DMS based on a contracted rate. Prior to June 15, 2018, the sales to Orsini represented here were based on a fixed transfer price under the distribution model. (b) Represents implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history. (c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. (d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third-party reimbursement from an underlying insurance provider. Concentration of Credit Risk Prior to June 16, 2018 the company sold MACI primarily to its distributor Orsini at a fixed transfer price. Beginning June 16, 2018, the Company started retaining the credit and collection risk from the end customer on implants resulting in a decrease in risk concentration. The Company sells Epicel directly to hospitals and not through a distributor. The Company's total revenue and accounts receivable balances were comprised of the following concentrations from its largest customer of MACI and Epicel based on customers whose revenue or accounts receivable concentration is greater than 10% in any of the periods disclosed below and are as follows: Revenue Concentration Accounts Receivable Concentration Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, 2019 2018 2019 2018 2019 2018 MACI — % — % — % 24 % — % 2 % Epicel 10 % 5 % 9 % 9 % 6 % 4 % |
Selected Balance Sheet Componen
Selected Balance Sheet Components | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Components | Selected Balance Sheet Components Inventory as of September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 Raw materials $ 5,730 $ 2,872 Work-in-process 976 638 Finished goods 117 48 Inventory $ 6,823 $ 3,558 Property and equipment, net as of September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 Machinery and equipment $ 2,577 $ 1,536 Furniture, fixtures and office equipment 775 775 Computer equipment and software 6,007 3,712 Leasehold improvements 4,631 4,587 Construction in process 1,716 2,801 Financing right-of-use lease 157 — Total property and equipment, gross 15,863 13,411 Less: Accumulated depreciation (8,673 ) (7,505 ) $ 7,190 $ 5,906 Depreciation expense for the three and nine months ended September 30, 2019 was $0.4 million and $1.2 million and $0.3 million and $1.1 million for the same period in 2018. Accrued expenses as of September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 Bonus related compensation $ 3,426 $ 5,161 Employee related accruals 2,546 1,559 Other accrued expenses 988 210 $ 6,960 $ 6,930 |
Stock Purchase Warrants
Stock Purchase Warrants | 9 Months Ended |
Sep. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Stock Purchase Warrants | Stock Purchase Warrants The Company has historically issued warrants to purchase shares of the Company’s common stock in connection with certain of its common stock offerings. The fair value of the warrants as of December 31, 2018 were initially measured using the Black-Scholes valuation model. Inherent in the Black-Scholes valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock-based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero . During the nine months ended September 30, 2019 , the Company issued 19,808 shares of common stock upon the exercise of warrants with an exercise price of $4.27 per share. There are no outstanding warrants as of September 30, 2019 . |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also leases offsite warehouse space, vehicles and computer equipment. The Company adopted the new leasing standards using the modified retrospective transition approach, as of January 1, 2019, with no restatement of prior periods. As a result of adoption, no cumulative adjustment to retained earnings occurred. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. Certain of the Company’s lease agreements include lease payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under previous lease guidance, were recognized as right to use assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet and for the nine months ended September 30, 2019 , lease expense of less than $0.1 million was recorded related to short-term leases for both the three and nine months ended September 30, 2019 . Adoption of ASU 2016-02 resulted in the recording of additional right-of-use assets and lease liabilities of approximately $ 25.6 million and $27.8 million , respectively, as of January 1, 2019. There was an immaterial impact on the Company's consolidated net earnings and cash flows upon adoption. The contribution toward the cost of tenant improvements is recorded as a reduction of the operating lease assets and reclassed from deferred rent to lease operating assets. For the three and nine months ended September 30, 2019 , the Company recognized $1.4 million and $4.0 million of operating lease expense and less than $0.1 million of financing lease expense, respectively. For the three and nine months ending September 30, 2018 (as reported under the prior leasing guidance) the Company recognized $1.3 million and $3.9 million of operating lease expense and less than $0.1 million of financing lease expense, respectively. The Company's leases contain non-lease components and activities that do not transfer a good or service to the Company. The Company elected not to combine lease and non-lease components and therefore non-lease costs were not included in the net lease assets or lease liabilities. Total leased assets and liabilities as reassessed under the updated guidance and classified on the balance sheet, as of September 30, 2019 are as follows: (In thousands) Classification September 30, 2019 Assets Operating Right-of-use assets $ 25,619 Finance Property and equipment, net 157 $ 25,776 Liabilities Current Operating Current portion of operating lease liabilities $ 2,836 Finance Other liabilities 35 $ 2,871 Non-current Operating Operating lease liabilities $ 25,311 Finance Other long-term liabilities 114 $ 25,425 Cash paid for amounts included in the measurement of the Company's operating lease liabilities was $3.6 million for the nine months ended September 30, 2019 . Maturity of lease liabilities as of September 30, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 1,324 $ — $ 1,324 2020 5,336 41 5,377 2021 5,255 41 5,296 2022 5,309 41 5,350 2023 5,292 41 5,333 2024 5,302 — 5,302 Thereafter 11,269 — 11,269 Total lease payments 39,087 164 39,251 Less: Interest (10,940 ) (15 ) (10,955 ) Present value of lease liabilities $ 28,147 $ 149 $ 28,296 An explicit rate is not provided for some of the Company's leases, therefore the Company uses a mix of incremental borrowing rate based on the information available at commencement date, as well as implicit and explicit rates in determining the present value of lease payments. The Company has options to renew lease terms for facilities and other assets. The exercise of lease renewal options is generally at the Company's sole discretion. The Company evaluates renewal and termination options at the lease commencement date to determine if it is reasonably certain to exercise the option on the basis of economic factors. For certain leases, the Company's exercise of the renewal option was determined to be probable and the renewal period was accordingly included in the lease term and related calculations. Lease terms and discount rates as of September 30, 2019 are as follows: September 30, 2019 Weighted average remaining lease term (years) Operating leases 7.07 Finance leases 3.75 Weighted average discount rate Operating leases 9.46 % Finance leases 5.00 % Future minimum payments related to operating and capital leases, as reflected under the prior guidance, for the fiscal year ended December 31, 2018 , are as follows with no changes from prior disclosure: (In thousands) Total 2019 2020 2021 2022 2023 More than 5 years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Capital leases 205 41 41 41 41 41 — Total $ 15,591 $ 4,920 $ 4,760 $ 4,795 $ 1,007 $ 109 $ — |
Leases | Leases The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also leases offsite warehouse space, vehicles and computer equipment. The Company adopted the new leasing standards using the modified retrospective transition approach, as of January 1, 2019, with no restatement of prior periods. As a result of adoption, no cumulative adjustment to retained earnings occurred. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. Certain of the Company’s lease agreements include lease payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under previous lease guidance, were recognized as right to use assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet and for the nine months ended September 30, 2019 , lease expense of less than $0.1 million was recorded related to short-term leases for both the three and nine months ended September 30, 2019 . Adoption of ASU 2016-02 resulted in the recording of additional right-of-use assets and lease liabilities of approximately $ 25.6 million and $27.8 million , respectively, as of January 1, 2019. There was an immaterial impact on the Company's consolidated net earnings and cash flows upon adoption. The contribution toward the cost of tenant improvements is recorded as a reduction of the operating lease assets and reclassed from deferred rent to lease operating assets. For the three and nine months ended September 30, 2019 , the Company recognized $1.4 million and $4.0 million of operating lease expense and less than $0.1 million of financing lease expense, respectively. For the three and nine months ending September 30, 2018 (as reported under the prior leasing guidance) the Company recognized $1.3 million and $3.9 million of operating lease expense and less than $0.1 million of financing lease expense, respectively. The Company's leases contain non-lease components and activities that do not transfer a good or service to the Company. The Company elected not to combine lease and non-lease components and therefore non-lease costs were not included in the net lease assets or lease liabilities. Total leased assets and liabilities as reassessed under the updated guidance and classified on the balance sheet, as of September 30, 2019 are as follows: (In thousands) Classification September 30, 2019 Assets Operating Right-of-use assets $ 25,619 Finance Property and equipment, net 157 $ 25,776 Liabilities Current Operating Current portion of operating lease liabilities $ 2,836 Finance Other liabilities 35 $ 2,871 Non-current Operating Operating lease liabilities $ 25,311 Finance Other long-term liabilities 114 $ 25,425 Cash paid for amounts included in the measurement of the Company's operating lease liabilities was $3.6 million for the nine months ended September 30, 2019 . Maturity of lease liabilities as of September 30, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 1,324 $ — $ 1,324 2020 5,336 41 5,377 2021 5,255 41 5,296 2022 5,309 41 5,350 2023 5,292 41 5,333 2024 5,302 — 5,302 Thereafter 11,269 — 11,269 Total lease payments 39,087 164 39,251 Less: Interest (10,940 ) (15 ) (10,955 ) Present value of lease liabilities $ 28,147 $ 149 $ 28,296 An explicit rate is not provided for some of the Company's leases, therefore the Company uses a mix of incremental borrowing rate based on the information available at commencement date, as well as implicit and explicit rates in determining the present value of lease payments. The Company has options to renew lease terms for facilities and other assets. The exercise of lease renewal options is generally at the Company's sole discretion. The Company evaluates renewal and termination options at the lease commencement date to determine if it is reasonably certain to exercise the option on the basis of economic factors. For certain leases, the Company's exercise of the renewal option was determined to be probable and the renewal period was accordingly included in the lease term and related calculations. Lease terms and discount rates as of September 30, 2019 are as follows: September 30, 2019 Weighted average remaining lease term (years) Operating leases 7.07 Finance leases 3.75 Weighted average discount rate Operating leases 9.46 % Finance leases 5.00 % Future minimum payments related to operating and capital leases, as reflected under the prior guidance, for the fiscal year ended December 31, 2018 , are as follows with no changes from prior disclosure: (In thousands) Total 2019 2020 2021 2022 2023 More than 5 years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Capital leases 205 41 41 41 41 41 — Total $ 15,591 $ 4,920 $ 4,760 $ 4,795 $ 1,007 $ 109 $ — |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock Option, Restricted Stock Units and Equity Incentive Plans The Company has historically had various stock incentive plans and agreements that provide for the issuance of nonqualified and incentive stock options as well as other equity awards. Such awards may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants. Options and restricted stock units granted to employees and non-employees under these plans expire no later than ten years from the date of grant and generally become exercisable over a four year period, under a graded-vesting methodology for stock options and annually on the anniversary grant date for restricted stock units, following the date of grant. The Company generally issues new shares upon the exercise of stock options or vesting of restricted stock units. For certain non-employee consultants, stock option awards continue to vest post-termination. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The options were valued as of the adoption date of July 1, 2018. The 2019 Omnibus Incentive Plan (2019 Plan) was approved on May 1, 2019 and provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the 2019 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2019 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan, the 2009 Second Amended and Restated Omnibus Incentive Plan and the 2017 Omnibus Incentive Plan (Prior Plans), and no new awards have been granted under the Prior Plans after approval. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the 2019 Plan. As of September 30, 2019 , there were 3,605,081 shares available for future grant under the 2019 Plan. Employee Stock Purchase Plan Employees are able to purchase stock under the Vericel Corporation Employee Stock Purchase Plan (ESPP). The ESPP allows for the issuance of an aggregate of 1,000,000 shares of common stock of which 576,723 have been issued since the inception of the plan in 2015. Participation in this plan is available to substantially all employees. The ESPP is a compensatory plan accounted for under the expense recognition provisions of the share-based payment accounting standards. Compensation expense is recorded based on the fair market value of the purchase options at the grant date, which corresponds to the first day of each purchase period and is amortized over the purchase period. On October 1, 2019, employees purchased 17,746 shares resulting in proceeds from the sale of common stock of $0.2 million under the ESPP. Service-Based Stock Options During the three and nine months ended September 30, 2019 , the Company granted 111,600 and 1,750,110 service-based options to purchase common stock. The options have an exercise price equal to the fair market value per share of common stock on the grant date, generally vest over four years (other than non-employee director options which vest over one year) and have a term of ten years . The Company issues new shares upon the exercise of stock options. The weighted average grant-date fair value of service-based options granted under the 2017 Omnibus Incentive Plan and 2019 Plan for the three and nine month periods ended September 30, 2019 was $13.28 and $12.77 , respectively and $10.90 and $9.62 , respectively, for the same periods in 2018. Restricted Stock Units During the nine months ended September 30, 2019 , the Company granted 186,922 service-based restricted stock units. The restricted stock units vest annually over four years in equal installments commencing on the first anniversary of the grant date (other than non-employee director options which vest over one year from the grant date). The Company issues new shares upon the vesting of restricted stock units. Restricted stock awards are recorded at fair value at the date of grant, which is based on the closing share price on the grant date. Compensation expense is recorded for restricted stock units that are expected to vest based on their fair value at grant date and is amortized over the expected vesting period. The weighted average grant-date fair value of restricted stock units awarded for the nine months ended September 30, 2019 was $17.71 . The total grant-date fair value of restricted stock units granted in the nine months ended September 30, 2019 was $3.3 million. No restricted stock units were granted in 2018. Stock Compensation Expense Non-cash stock-based compensation expense (employee stock purchase plan, service-based stock options and restricted stock units) included in cost of goods sold, research and development expenses and selling, general and administrative expenses is summarized in the following table: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Cost of goods sold $ 543 $ 284 $ 1,519 $ 820 Research and development 583 365 1,993 1,282 Selling, general and administrative 2,159 1,283 6,583 3,637 Total non-cash stock-based compensation expense $ 3,285 $ 1,932 $ 10,095 $ 5,739 The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table. Nine Months Ended September 30, Service-Based Stock Options 2019 2018 Expected dividend rate — % — % Expected stock price volatility 79.5-85.5% 82.3-88.3% Risk-free interest rate 1.4-2.7% 2.4-2.9% Expected life (years) 5.3-6.3 5.3-6.3 |
Cash Equivalents and Investment
Cash Equivalents and Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash Equivalents and Investments | Cash Equivalents and Investments Marketable debt securities are classified as available-for-sale and carried at fair value in the accompanying consolidated balance sheets on a settlement date basis. The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of September 30, 2019 and December 31, 2018: September 30, 2019 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 19,431 $ — $ — $ 19,431 Commercial paper 13,018 — — 13,018 Corporate notes 13,549 19 — 13,568 U.S. government securities 6,986 6 — 6,992 U.S. asset-backed securities 4,178 4 — 4,182 $ 57,162 $ 29 $ — $ 57,191 Classified as: Cash equivalents $ 19,431 Short-term investments 37,760 $ 57,191 December 31, 2018 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 5,838 $ — $ — $ 5,838 Repurchase agreements 5,000 — — 5,000 Commercial paper 30,710 — — 30,710 Corporate notes 13,168 — (24 ) 13,144 U.S. government securities 10,167 — (1 ) 10,166 U.S. asset-backed securities 10,632 — (14 ) 10,618 $ 75,515 $ — $ (39 ) $ 75,476 Classified as: Cash equivalents $ 10,838 Short-term investments 64,638 $ 75,476 At December 31, 2018, the Company invested $5.0 million in overnight repurchase agreement securities classified as cash equivalents on the balance sheet. As of September 30, 2019 , no amounts were invested in overnight repurchase agreements. There were no marketable securities that the Company considers to be other-than-temporarily impaired as of September 30, 2019 . The Company's investment strategy is to buy short-duration marketable securities with a high credit rating. As of September 30, 2019 , all marketable securities held by the Company had remaining contractual maturities of one year or less. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is “other than temporary,” including the Company's intention to sell and, if so, mark the investment to market through a charge to our consolidated statements of operations. There have been no impairments of the Company’s assets measured and carried at fair value during the nine months ended September 30, 2019 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s fair value measurements are classified and disclosed in one of the following three categories: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and • Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). There was no movement between Level 1 and Level 2 or between Level 2 and Level 3 from December 31, 2018 to September 30, 2019 . Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The commercial paper, corporate notes, government securities and asset-backed securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis: September 30, 2019 December 31, 2018 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 19,431 $ 19,431 $ — $ — $ 5,838 $ 5,838 $ — $ — Repurchase agreements — — — — 5,000 — 5,000 — Commercial paper 13,018 — 13,018 — 30,710 — 30,710 — Corporate notes 13,568 — 13,568 — 13,144 — 13,144 — U.S. government securities 6,992 — 6,992 — 10,166 — 10,166 — U.S. asset-backed securities 4,182 — 4,182 — 10,618 — 10,618 — $ 57,191 $ 19,431 $ 37,760 $ — $ 75,476 $ 5,838 $ 69,638 $ — |
Net Earnings (Loss) Per Common
Net Earnings (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Earnings (Loss) Per Common Share | Net Earnings (Loss) Per Common Share Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adding the dilutive potential common shares to the weighted average number of common shares that were outstanding during the period. For purposes of the diluted earnings per share calculation, outstanding stock options and restricted stock units are considered common stock equivalents, using the treasury stock method. The following reflects the net income (loss) attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the treasury class method: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in thousands except per share amounts) 2019 2018 2019 2018 Numerator: Net income (loss) $ 3,470 $ (1,069 ) $ (19,166 ) $ (13,379 ) Denominator: Weighted-average common shares outstanding (basic) 44,251 42,925 43,979 39,163 Weighted-average shares outstanding (diluted) 46,667 42,925 43,979 39,163 Net income (loss) per share attributable to common shareholders (basic) $ 0.08 $ (0.02 ) $ (0.44 ) $ (0.34 ) Net income (loss) per share attributable to common shareholders (diluted) $ 0.07 $ (0.02 ) $ (0.44 ) $ (0.34 ) Anti-dilutive shares excluded from the calculation of diluted earnings per share (a) : Stock options 1,619 5,196 5,116 5,196 Restricted stock unit awards — — 159 — Warrants — 112 — 112 (a) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. |
Nexobrid License and Supply Agr
Nexobrid License and Supply Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Nexobrid License Agreement | NexoBrid License and Supply Agreements On May 6, 2019, the Company entered into exclusive license and supply agreements with MediWound Ltd. (MediWound) to commercialize NexoBrid ® and any improvements to Nexobrid in all countries of North America. NexoBrid is a topically-administered biological product that enzymatically removes nonviable burn tissue, or eschar, in patients with deep partial and full-thickness thermal burns. NexoBrid is currently in clinical development in North America, and pursuant to the terms of the license agreement, MediWound will continue to conduct all clinical activities described in the development plan to support the BLA filing with the United States Food and Drug Administration under the supervision of a Central Steering Committee comprised of members of each party. In May 2019, the Company paid MediWound $17.5 million in consideration of the license. The $17.5 million upfront payment was recorded to research and development expense in the nine months ended September 30, 2019 as the license is for registration-stage product rights and is considered in process research and development. The Company is also obligated to pay MediWound $7.5 million upon U.S. regulatory approval of the BLA for NexoBrid and up to $125 million contingent upon meeting certain sales milestones. The first sales milestone of $7.5 million would be triggered when annual net sales of NexoBrid or improvements to it in North America exceed $75 million . The Company also will pay MediWound tiered royalties on net sales ranging from high single-digit to low double-digit percentages, subject to customary reductions. The U.S. Biomedical Advanced Research and Development Authority (BARDA) has committed to procure NexoBrid, and the Company will pay a percentage of gross profits to MediWound on initial committed amounts and a royalty on any additional BARDA purchases of NexoBrid beyond the initial committed amount. The Company also entered into a supply agreement with MediWound under which MediWound will manufacture NexoBrid for the Company on a unit price basis which may be increased based on a published index. MediWound is obligated to supply the Company with NexoBrid for sale in North America on an exclusive basis for the first five years of the term of the supply agreement. After the exclusivity period or upon supply failure, the Company will be permitted to establish an alternate source of supply. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. The Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also pays for use of an offsite warehouse space and leases various vehicles and computer equipment. In March 2016, the Company amended its current lease in Cambridge to, among other provisions, extend the term until February 2022. Under the amendment, the landlord will contribute approximately $2.0 million toward the cost of tenant improvements. The contribution toward the cost of tenant improvements is recorded as part of the operating lease assets under the new leasing guidance described below, on the Company's condensed consolidated balance sheet. As of September 30, 2019 , the Company has recorded $2.0 million of leasehold improvements funded by the tenant improvement allowance . The Company adopted the updated leasing guidance as described in note 7, as of January 1, 2019. Upon adoption all operating lease commitments with a lease term greater than 12 months that were previously assessed under previous lease guidance, were recognized as right to use assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense is recorded on a straight-line basis over the lease term. The Company's purchase commitments consist of minimum purchase amounts of materials used in the Company's cell manufacturing process to manufacture its marketed cell therapy products. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Accounting for Leases | Accounting for Leases The Financial Accounting Standards Board (FASB) issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the assets and liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018. The leasing Accounting Standard Update 2016-02 became effective for the Company on January 1, 2019 and was adopted using the modified retrospective method. See note 7 for further discussion. |
Measuring Credit Losses on Financial Instruments | Measuring Credit Losses on Financial Instruments The FASB issued updated guidance on measuring credit losses on financial instruments. The guidance removes the probable loss thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities and available-for-sale debt securities with unrealized losses. Prior to the updated guidance, credit losses are recognized when it is probable that the loss has been incurred. Companies are required to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that a company expected to collect over the instrument’s contractual life. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance is effective for annual reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact to its consolidated financial statements. |
Basis of Presentation - (Tables
Basis of Presentation - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation [Abstract] | |
Schedule of cash flow, supplemental disclosures | The following table presents certain supplementary cash flows information for the nine months ended September 30, 2019 and 2018 : Nine Months Ended September 30, (In thousands) 2019 2018 Supplementary Cash Flows information: Warrants exercised for common stock $ 104 $ 3,538 Interest paid (net of interest capitalized) 6 1,161 Additions to equipment in process included in accounts payable 46 191 Right-of-use asset and lease liability recognized 2,338 — |
Revenue - (Tables)
Revenue - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by product and customer | The following table and description below reflect the products from which the Company generated its revenue: Three Months Ended September 30, Nine Months Ended September 30, Net revenue by product (in thousands) 2019 2018 2019 2018 MACI implants and kits Implants based on contracted rates sold to or through a specialty pharmacy (a) $ 11,779 $ 11,102 $ 34,555 $ 26,257 Implants subject to third-party reimbursement sold through a specialty pharmacy (b) 4,030 1,612 10,584 5,468 Implants sold direct based on contracted rates (c) 3,039 2,632 9,715 8,715 Implants sold direct subject to third-party reimbursement (d) 573 490 1,176 1,070 Biopsy kits - direct bill 533 488 1,632 1,392 Change in estimates related to prior periods 656 125 353 (273 ) Epicel Direct bill (hospital) 9,889 6,035 20,445 16,893 Total revenue $ 30,499 $ 22,484 $ 78,460 $ 59,522 (a) Represents implants sold through Orsini or AllCare in which such specialty pharmacy has entered into a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacy's direct contract. Also represents sales directly to DMS based on a contracted rate. Prior to June 15, 2018, the sales to Orsini represented here were based on a fixed transfer price under the distribution model. (b) Represents implants sold through Orsini or AllCare in which such specialty pharmacy does not have a direct contract with the underlying payer. The amount of reimbursement is established based on a payer or state fee schedule and/or payer history. (c) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. (d) Represents implants sold directly from the Company to the facility based on a contract and known price agreed upon prior to the surgery date. The payment terms are subject to third-party reimbursement from an underlying insurance provider. |
Schedules of concentration of risk | The Company's total revenue and accounts receivable balances were comprised of the following concentrations from its largest customer of MACI and Epicel based on customers whose revenue or accounts receivable concentration is greater than 10% in any of the periods disclosed below and are as follows: Revenue Concentration Accounts Receivable Concentration Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, 2019 2018 2019 2018 2019 2018 MACI — % — % — % 24 % — % 2 % Epicel 10 % 5 % 9 % 9 % 6 % 4 % |
Selected Balance Sheet Compon_2
Selected Balance Sheet Components - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventory | Inventory as of September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 Raw materials $ 5,730 $ 2,872 Work-in-process 976 638 Finished goods 117 48 Inventory $ 6,823 $ 3,558 |
Schedule of property and equipment, net | Property and equipment, net as of September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 Machinery and equipment $ 2,577 $ 1,536 Furniture, fixtures and office equipment 775 775 Computer equipment and software 6,007 3,712 Leasehold improvements 4,631 4,587 Construction in process 1,716 2,801 Financing right-of-use lease 157 — Total property and equipment, gross 15,863 13,411 Less: Accumulated depreciation (8,673 ) (7,505 ) $ 7,190 $ 5,906 Depreciation expense for the three and nine months ended September 30, 2019 was $0.4 million and $1.2 million and $0.3 million and $1.1 million for the same period in 2018. |
Schedule of accounts payable and accrued expenses | Accrued expenses as of September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 Bonus related compensation $ 3,426 $ 5,161 Employee related accruals 2,546 1,559 Other accrued expenses 988 210 $ 6,960 $ 6,930 |
Leases - (Tables)
Leases - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Assets And Liabilities | Total leased assets and liabilities as reassessed under the updated guidance and classified on the balance sheet, as of September 30, 2019 are as follows: (In thousands) Classification September 30, 2019 Assets Operating Right-of-use assets $ 25,619 Finance Property and equipment, net 157 $ 25,776 Liabilities Current Operating Current portion of operating lease liabilities $ 2,836 Finance Other liabilities 35 $ 2,871 Non-current Operating Operating lease liabilities $ 25,311 Finance Other long-term liabilities 114 $ 25,425 |
Maturity of lease liabilities | Maturity of lease liabilities as of September 30, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 1,324 $ — $ 1,324 2020 5,336 41 5,377 2021 5,255 41 5,296 2022 5,309 41 5,350 2023 5,292 41 5,333 2024 5,302 — 5,302 Thereafter 11,269 — 11,269 Total lease payments 39,087 164 39,251 Less: Interest (10,940 ) (15 ) (10,955 ) Present value of lease liabilities $ 28,147 $ 149 $ 28,296 |
Maturity of lease liabilities | Maturity of lease liabilities as of September 30, 2019 are as follows: (In thousands) Operating Leases Finance Leases Total 2019 $ 1,324 $ — $ 1,324 2020 5,336 41 5,377 2021 5,255 41 5,296 2022 5,309 41 5,350 2023 5,292 41 5,333 2024 5,302 — 5,302 Thereafter 11,269 — 11,269 Total lease payments 39,087 164 39,251 Less: Interest (10,940 ) (15 ) (10,955 ) Present value of lease liabilities $ 28,147 $ 149 $ 28,296 |
Lease term and discount rate | Lease terms and discount rates as of September 30, 2019 are as follows: September 30, 2019 Weighted average remaining lease term (years) Operating leases 7.07 Finance leases 3.75 Weighted average discount rate Operating leases 9.46 % Finance leases 5.00 % |
Schedule Of Future Minimum Rental Payments For Operating And Capital Leases | Future minimum payments related to operating and capital leases, as reflected under the prior guidance, for the fiscal year ended December 31, 2018 , are as follows with no changes from prior disclosure: (In thousands) Total 2019 2020 2021 2022 2023 More than 5 years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Capital leases 205 41 41 41 41 41 — Total $ 15,591 $ 4,920 $ 4,760 $ 4,795 $ 1,007 $ 109 $ — |
Stock-based Compensation - (Tab
Stock-based Compensation - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of non-cash stock-based compensation expense | Non-cash stock-based compensation expense (employee stock purchase plan, service-based stock options and restricted stock units) included in cost of goods sold, research and development expenses and selling, general and administrative expenses is summarized in the following table: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Cost of goods sold $ 543 $ 284 $ 1,519 $ 820 Research and development 583 365 1,993 1,282 Selling, general and administrative 2,159 1,283 6,583 3,637 Total non-cash stock-based compensation expense $ 3,285 $ 1,932 $ 10,095 $ 5,739 |
Schedule of weighted average assumptions used to estimate fair value of each service-based stock option grant | The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table. Nine Months Ended September 30, Service-Based Stock Options 2019 2018 Expected dividend rate — % — % Expected stock price volatility 79.5-85.5% 82.3-88.3% Risk-free interest rate 1.4-2.7% 2.4-2.9% Expected life (years) 5.3-6.3 5.3-6.3 |
Cash Equivalents and Investme_2
Cash Equivalents and Investments - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of fair value of securities, not including cash | The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of September 30, 2019 and December 31, 2018: September 30, 2019 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 19,431 $ — $ — $ 19,431 Commercial paper 13,018 — — 13,018 Corporate notes 13,549 19 — 13,568 U.S. government securities 6,986 6 — 6,992 U.S. asset-backed securities 4,178 4 — 4,182 $ 57,162 $ 29 $ — $ 57,191 Classified as: Cash equivalents $ 19,431 Short-term investments 37,760 $ 57,191 December 31, 2018 Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 5,838 $ — $ — $ 5,838 Repurchase agreements 5,000 — — 5,000 Commercial paper 30,710 — — 30,710 Corporate notes 13,168 — (24 ) 13,144 U.S. government securities 10,167 — (1 ) 10,166 U.S. asset-backed securities 10,632 — (14 ) 10,618 $ 75,515 $ — $ (39 ) $ 75,476 Classified as: Cash equivalents $ 10,838 Short-term investments 64,638 $ 75,476 |
Fair Value Measurements - (Tabl
Fair Value Measurements - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of valuation of the Company's investments and financial instruments that are measured at fair value on a recurring basis | The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis: September 30, 2019 December 31, 2018 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 19,431 $ 19,431 $ — $ — $ 5,838 $ 5,838 $ — $ — Repurchase agreements — — — — 5,000 — 5,000 — Commercial paper 13,018 — 13,018 — 30,710 — 30,710 — Corporate notes 13,568 — 13,568 — 13,144 — 13,144 — U.S. government securities 6,992 — 6,992 — 10,166 — 10,166 — U.S. asset-backed securities 4,182 — 4,182 — 10,618 — 10,618 — $ 57,191 $ 19,431 $ 37,760 $ — $ 75,476 $ 5,838 $ 69,638 $ — |
Net Earnings (Loss) Per Commo_2
Net Earnings (Loss) Per Common Share - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method | The following reflects the net income (loss) attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the treasury class method: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in thousands except per share amounts) 2019 2018 2019 2018 Numerator: Net income (loss) $ 3,470 $ (1,069 ) $ (19,166 ) $ (13,379 ) Denominator: Weighted-average common shares outstanding (basic) 44,251 42,925 43,979 39,163 Weighted-average shares outstanding (diluted) 46,667 42,925 43,979 39,163 Net income (loss) per share attributable to common shareholders (basic) $ 0.08 $ (0.02 ) $ (0.44 ) $ (0.34 ) Net income (loss) per share attributable to common shareholders (diluted) $ 0.07 $ (0.02 ) $ (0.44 ) $ (0.34 ) Anti-dilutive shares excluded from the calculation of diluted earnings per share (a) : Stock options 1,619 5,196 5,116 5,196 Restricted stock unit awards — — 159 — Warrants — 112 — 112 (a) Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. |
Organization - Narrative (Detai
Organization - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Number of reportable segments | segment | 1 | ||||||||
Accumulated deficit | $ 388,180 | $ 388,180 | $ 369,014 | ||||||
Net income (loss) | 3,470 | $ (19,792) | $ (2,844) | $ (1,069) | $ (4,651) | $ (7,659) | (19,166) | $ (13,379) | |
Cash and cash equivalents | 36,905 | 36,905 | 18,286 | ||||||
Short-term investments | $ 37,760 | $ 37,760 | $ 64,638 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Basis of Presentation [Abstract] | ||
Warrants exercised for common stock | $ 104 | $ 3,538 |
Interest paid (net of interest capitalized) | 6 | 1,161 |
Additions to equipment in process included in accounts payable | 46 | 191 |
Right-of-use asset and lease liability recognized | $ 2,338 | $ 0 |
Revenue - Revenue by product an
Revenue - Revenue by product and customer (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | $ 30,499 | $ 22,484 | $ 78,460 | $ 59,522 |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | (273) | |||
Implants | Contracted rate | Third party distributor | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | 11,779 | 11,102 | 34,555 | 26,257 |
Implants | Contracted rate | Provider or Facility | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | 3,039 | 2,632 | 9,715 | 8,715 |
Implants | Time-and-materials Contract | Third party distributor | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | 4,030 | 1,612 | 10,584 | 5,468 |
Implants | Time-and-materials Contract | Time-and-materials Contract | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | 573 | 490 | 1,176 | 1,070 |
Biopsy kits | Direct bill | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | 533 | 488 | 1,632 | 1,392 |
Epicel | Direct bill | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales, net | $ 9,889 | $ 6,035 | $ 20,445 | $ 16,893 |
Revenue - Concentration of Cred
Revenue - Concentration of Credit Risk (Details) - Customer concentration | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
MACI | Revenue Concentration | |||||
CONCENTRATION | |||||
Concentration risk | 0.00% | 0.00% | 0.00% | 24.00% | |
MACI | Accounts Receivable Concentration | |||||
CONCENTRATION | |||||
Concentration risk | 0.00% | 2.00% | |||
Epicel | Revenue Concentration | |||||
CONCENTRATION | |||||
Concentration risk | 10.00% | 5.00% | 9.00% | 9.00% | |
Epicel | Accounts Receivable Concentration | |||||
CONCENTRATION | |||||
Concentration risk | 6.00% | 4.00% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||||
Allowance for doubtful accounts | $ 4,200 | $ 4,200 | $ 2,000 | ||
Prior period sales | $ 656 | $ 125 | $ 353 | $ (300) |
Selected Balance Sheet Compon_3
Selected Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory: | ||
Raw materials | $ 5,730 | $ 2,872 |
Work-in-process | 976 | 638 |
Finished goods | 117 | 48 |
Inventory | $ 6,823 | $ 3,558 |
Selected Balance Sheet Compon_4
Selected Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and equipment, net: | |||||
Total property and equipment, gross | $ 15,863 | $ 15,863 | $ 13,411 | ||
Financing right-of-use lease | 157 | 157 | 0 | ||
Less: Accumulated depreciation | (8,673) | (8,673) | (7,505) | ||
Total, net | 7,190 | 7,190 | 5,906 | ||
Depreciation and amortization | 400 | $ 300 | 1,200 | $ 1,100 | |
Machinery and equipment | |||||
Property and equipment, net: | |||||
Total property and equipment, gross | 2,577 | 2,577 | 1,536 | ||
Furniture, fixtures and office equipment | |||||
Property and equipment, net: | |||||
Total property and equipment, gross | 775 | 775 | 775 | ||
Computer equipment and software | |||||
Property and equipment, net: | |||||
Total property and equipment, gross | 6,007 | 6,007 | 3,712 | ||
Leasehold improvements | |||||
Property and equipment, net: | |||||
Total property and equipment, gross | 4,631 | 4,631 | 4,587 | ||
Construction in process | |||||
Property and equipment, net: | |||||
Total property and equipment, gross | $ 1,716 | $ 1,716 | $ 2,801 |
Selected Balance Sheet Compon_5
Selected Balance Sheet Components - Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts payable and accrued expenses: | ||
Bonus related compensation | $ 3,426 | $ 5,161 |
Employee related accruals | 2,546 | 1,559 |
Other accrued expenses | 988 | 210 |
Total | $ 6,960 | $ 6,930 |
Stock Purchase Warrants - Narra
Stock Purchase Warrants - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Stock Purchase Warrants | |
Exercise price | $ / shares | $ 4.27 |
Expected rate | |
Stock Purchase Warrants | |
Measurement input | 0 |
Warrants Amounts | |
Stock Purchase Warrants | |
Shares issued | shares | 19,808 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Leases [Abstract] | |||||
Short-term lease cost | $ 100 | $ 100 | $ 100 | ||
Net Lease Assets | 25,776 | 25,776 | $ 25,600 | ||
Lease Liability | 28,296 | 28,296 | $ 27,800 | ||
Operating Lease Expense | 1,400 | $ 1,300 | 4,000 | $ 3,900 | |
Finance lease expense | $ 100 | $ 100 | |||
Measurement of Lease Liability | $ 3,600 |
Leases - Assets And Liabilities
Leases - Assets And Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
ASSETS | |||
Right-of-use assets | $ 25,619 | $ 0 | |
Finance | 157 | 0 | |
Right Of Use Asset | 25,776 | $ 25,600 | |
Current liabilities: | |||
Operating | 2,836 | 0 | |
Finance | 35 | ||
Lease Liability Current | 2,871 | ||
Non-current | |||
Operating | 25,311 | $ 0 | |
Finance | 114 | ||
Lease Liability Noncurrent | $ 25,425 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Operating Leases | ||
2019 | $ 1,324 | |
2020 | 5,336 | |
2021 | 5,255 | |
2022 | 5,309 | |
2023 | 5,292 | |
2024 | 5,302 | |
Thereafter | 11,269 | |
Total lease payments | 39,087 | |
Less: Interest | (10,940) | |
Present value of lease liabilities | 28,147 | |
Finance Leases | ||
2019 | 0 | |
2020 | 41 | |
2021 | 41 | |
2022 | 41 | |
2023 | 41 | |
2024 | 0 | |
Thereafter | 0 | |
Total lease payments | 164 | |
Less: Interest | (15) | |
Present value of lease liabilities | 149 | |
2019 | 1,324 | |
2020 | 5,377 | |
2021 | 5,296 | |
2022 | 5,350 | |
2023 | 5,333 | |
2024 | 5,302 | |
Thereafter | 11,269 | |
Total lease payments | 39,251 | |
Less: Interest | (10,955) | |
Present value of lease liabilities | $ 28,296 | $ 27,800 |
Leases - Lease term and discoun
Leases - Lease term and discount rate (Details) | Sep. 30, 2019 |
Leases [Abstract] | |
Operating Lease Term (in years) | 7 years 25 days |
Finance Lease Term (in years) | 3 years 9 months |
Operating Lease Discount Rate ( as a percent ) | 9.46% |
Finance Lease Discount Rate ( as a percent ) | 5.00% |
Leases - Schedule Prior To Adop
Leases - Schedule Prior To Adoption (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating leases | |
Total | $ 15,386 |
2019 | 4,879 |
2020 | 4,719 |
2021 | 4,754 |
2022 | 966 |
2023 | 68 |
More than 5 years | 0 |
Capital leases | |
Total | 205 |
2019 | 41 |
2020 | 41 |
2021 | 41 |
2022 | 41 |
2023 | 41 |
More than 5 years | 0 |
Operating And Capital Leases [Abstract] | |
Total | 15,591 |
2019 | 4,920 |
2020 | 4,760 |
2021 | 4,795 |
2022 | 1,007 |
2023 | 109 |
More than 5 years | $ 0 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 |
Stock-Based Compensation | ||||||||||
Shares issued under the Employee Stock Purchase Plan | $ 275 | $ 211 | $ 218 | $ 200 | $ 148 | $ 127 | ||||
2004, 2001, 1992, and 2009 Plans | ||||||||||
Stock-Based Compensation | ||||||||||
Number of shares available for grant (in shares) | 0 | 0 | ||||||||
2017 Plan | ||||||||||
Stock-Based Compensation | ||||||||||
Number of shares available for grant (in shares) | 3,605,081 | 3,605,081 | ||||||||
Service-Based Stock Options | ||||||||||
Stock-Based Compensation | ||||||||||
Expiration period | 10 years | |||||||||
Granted (in shares) | 111,600 | 1,750,110 | ||||||||
Vesting period | 4 years | |||||||||
Grant date fair value (in dollars per share) | $ 13.28 | $ 10.90 | $ 12.77 | $ 9.62 | ||||||
Restricted stock units, grant-date fair value | $ 3,300 | |||||||||
Service-Based Stock Options | Maximum | ||||||||||
Stock-Based Compensation | ||||||||||
Expiration period | 10 years | |||||||||
Service-Based Stock Options | Minimum | ||||||||||
Stock-Based Compensation | ||||||||||
Vesting period | 4 years | |||||||||
Director options | ||||||||||
Stock-Based Compensation | ||||||||||
Vesting period | 1 year | |||||||||
Employee Stock | ||||||||||
Stock-Based Compensation | ||||||||||
Employee Stock Purchase Plan, number of shares authorized (in shares) | 1,000,000 | 1,000,000 | ||||||||
Employee Stock Purchase Plan, grants since inception (in shares) | 576,723 | |||||||||
Restricted Stock Units (RSUs) | ||||||||||
Stock-Based Compensation | ||||||||||
Granted (in shares) | 186,922 | 0 | ||||||||
Grant date fair value (in dollars per share) | $ 17.71 | |||||||||
Subsequent Event | Employee Stock | ||||||||||
Stock-Based Compensation | ||||||||||
Shares issued under the Employee Stock Purchase Plan ( in shares ) | 17,746 | |||||||||
Shares issued under the Employee Stock Purchase Plan | $ 200 |
Stock-based Compensation - Non-
Stock-based Compensation - Non-cash Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Non-cash stock-based compensation expense | $ 3,285 | $ 1,932 | $ 10,095 | $ 5,739 |
Cost of goods sold | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Non-cash stock-based compensation expense | 543 | 284 | 1,519 | 820 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Non-cash stock-based compensation expense | 583 | 365 | 1,993 | 1,282 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Non-cash stock-based compensation expense | $ 2,159 | $ 1,283 | $ 6,583 | $ 3,637 |
Stock-based Compensation - Weig
Stock-based Compensation - Weighted average assumptions used to estimate fair value (Details) - Service-Based Stock Options | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Stock-Based Compensation | ||
Expected dividend rate | 0.00% | 0.00% |
Minimum | ||
Stock-Based Compensation | ||
Expected stock price volatility | 79.50% | 82.30% |
Risk-free interest rate | 1.40% | 2.40% |
Expected life | 5 years 3 months 18 days | 5 years 3 months 18 days |
Maximum | ||
Stock-Based Compensation | ||
Expected stock price volatility | 85.50% | 88.30% |
Risk-free interest rate | 2.70% | 2.90% |
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days |
Cash Equivalents and Investme_3
Cash Equivalents and Investments - Schedule of Fair Value of Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 57,162 | $ 75,515 |
Gains | 29 | 0 |
Losses | 0 | (39) |
Fair Value | 57,191 | 75,476 |
Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 19,431 | 10,838 |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 37,760 | 64,638 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 19,431 | 5,838 |
Gains | 0 | 0 |
Losses | 0 | 0 |
Fair Value | 19,431 | 5,838 |
Repurchase agreements | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,000 | |
Gains | 0 | |
Losses | 0 | |
Fair Value | 5,000 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,018 | 30,710 |
Gains | 0 | 0 |
Losses | 0 | 0 |
Fair Value | 13,018 | 30,710 |
Corporate notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,549 | 13,168 |
Gains | 19 | 0 |
Losses | 0 | (24) |
Fair Value | 13,568 | 13,144 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,986 | 10,167 |
Gains | 6 | 0 |
Losses | 0 | (1) |
Fair Value | 6,992 | 10,166 |
U.S. asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,178 | 10,632 |
Gains | 4 | 0 |
Losses | 0 | (14) |
Fair Value | $ 4,182 | $ 10,618 |
Cash Equivalents and Investme_4
Cash Equivalents and Investments - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Repurchase agreements | |
Debt Securities, Available-for-sale [Line Items] | |
Payments to acquire investment funds and securities | $ 5 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Assets, fair value | $ 57,191 | $ 75,476 |
Level 1 | ||
Assets: | ||
Assets, fair value | 19,431 | 5,838 |
Level 2 | ||
Assets: | ||
Assets, fair value | 37,760 | 69,638 |
Level 3 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Money market funds | ||
Assets: | ||
Assets, fair value | 19,431 | 5,838 |
Money market funds | Level 1 | ||
Assets: | ||
Assets, fair value | 19,431 | 5,838 |
Money market funds | Level 2 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Money market funds | Level 3 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Repurchase agreements | ||
Assets: | ||
Assets, fair value | 0 | 5,000 |
Repurchase agreements | Level 1 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Repurchase agreements | Level 2 | ||
Assets: | ||
Assets, fair value | 0 | 5,000 |
Repurchase agreements | Level 3 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Commercial paper | ||
Assets: | ||
Assets, fair value | 13,018 | 30,710 |
Commercial paper | Level 1 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Commercial paper | Level 2 | ||
Assets: | ||
Assets, fair value | 13,018 | 30,710 |
Commercial paper | Level 3 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Corporate notes | ||
Assets: | ||
Assets, fair value | 13,568 | 13,144 |
Corporate notes | Level 1 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
Corporate notes | Level 2 | ||
Assets: | ||
Assets, fair value | 13,568 | 13,144 |
Corporate notes | Level 3 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
U.S. government securities | ||
Assets: | ||
Assets, fair value | 6,992 | 10,166 |
U.S. government securities | Level 1 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
U.S. government securities | Level 2 | ||
Assets: | ||
Assets, fair value | 6,992 | 10,166 |
U.S. government securities | Level 3 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
U.S. asset-backed securities | ||
Assets: | ||
Assets, fair value | 4,182 | 10,618 |
U.S. asset-backed securities | Level 1 | ||
Assets: | ||
Assets, fair value | 0 | 0 |
U.S. asset-backed securities | Level 2 | ||
Assets: | ||
Assets, fair value | 4,182 | 10,618 |
U.S. asset-backed securities | Level 3 | ||
Assets: | ||
Assets, fair value | $ 0 | $ 0 |
Net Earnings (Loss) Per Commo_3
Net Earnings (Loss) Per Common Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income (loss) | $ 3,470 | $ (19,792) | $ (2,844) | $ (1,069) | $ (4,651) | $ (7,659) | $ (19,166) | $ (13,379) |
Denominator: | ||||||||
Weighted Average Number of Shares Outstanding, Basic (in shares) | 44,251 | 42,925 | 43,979 | 39,163 | ||||
Weighted Average Number of Shares Outstanding, Diluted (in shares) | 46,667 | 42,925 | 43,979 | 39,163 | ||||
Earnings Per Share, Basic (in dollars per share) | $ 0.08 | $ (0.02) | $ (0.44) | $ (0.34) | ||||
Earnings Per Share, Diluted (in dollars per share) | $ 0.07 | $ (0.02) | $ (0.44) | $ (0.34) | ||||
Options | ||||||||
Denominator: | ||||||||
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares) | 1,619 | 5,196 | 5,116 | 5,196 | ||||
Restricted Stock | ||||||||
Denominator: | ||||||||
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares) | 159 | |||||||
Warrants Amounts | ||||||||
Denominator: | ||||||||
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) excluded from diluted net loss per common share (in shares) | 112 | 112 |
Nexobrid License and Supply A_2
Nexobrid License and Supply Agreements - Narrative (Details) - MediWound Ltd | May 31, 2019USD ($) |
Related Party Transaction [Line Items] | |
Payable | $ 17,500,000 |
Contingent Consideration | 7,500,000 |
Max contingent consideration | 125,000,000 |
Sales Initial Milestone | $ 75,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Incentive from Lessor | $ 2 |
Deferred rent asset | $ 2 |