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| Statement |
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| MACI revenue of $164.8 million for the full year was above our guidance range, growing 25% versus the prior year |
| The company executed exceptionally well in 2023 and delivered outstanding financial and business results in the fourth quarter, generating top-tier revenue growth and even higher profitability growth |
| Like if you look at Q4 last year that was really strong in the adjusted EBITDA line pull-through and gross margin, both Q4 and full year kind of that 80% range |
| The company also reached an inflection point with respect to our profitability profile, with bottomline profitability growing at twice the rate of our topline revenue growth as adjusted EBITDA increased 40% to $34 million and we generated over $35 million of operating cash flow, ending the year with approximately $153 million in cash and investments and no debt |
| The company also had a very strong close to the year, as we generated record total revenue of $65 million in the fourth quarter, an increase of 23% over the prior year |
| Our strong fourth quarter performance was driven by record quarterly MACI revenue of nearly $7 million -- $57 million, which was above the high end of our guidance range and represented more than 50% sequential growth over the third quarter and 22% growth over the fourth quarter of 2022, marking the sixth straight quarter of 20%-plus growth for MACI |
| This outstanding MACI revenue performance was driven by strong underlying business fundamentals, as we had the highest number of MACI implants -- implanting surgeons, surgeons taking biopsies and biopsies in any quarter since launch |
| We also generated very strong growth in the burn care franchise, as fourth quarter revenue grew 31% over the prior year |
| Our topline revenue performance drove significant margin expansion and profit growth in the fourth quarter, as we generated gross margin of 75% and adjusted EBITDA margin of 34%, with adjusted EBITDA growing 50% to over $22 million and net income for the quarter more than doubling to $13 million |
| As we look forward to 2024 and beyond, we expect that continued high revenue growth will drive further expansion of our margins and enhancement of our profitability metrics |
| From a commercial perspective, MACI sustained growth has been driven by continued expansion of our surgeon customer base, as we had another year of double-digit growth in surgeons taking biopsies in 2023 |
| The expansion of our surgeon base and the corresponding growth in biopsies has fueled MACI ‘s success and helped drive sales rep productivity to its highest level ever at $2.2 million per rep in 2023 |
| Our commercial team continues to execute high-quality peer-to-peer programs to help drive surgeon uptake and we had our highest number of programs to-date in the fourth quarter, demonstrating that interest in MACI continues to grow |
| In addition, MACI’s positive long-term clinical outcomes were highlighted in a prospective study published in the American Journal of Sports Medicine last week |
| So, yeah, we’re feeling pretty good about it |
| The study also showed excellent long-term outcomes for MACI patients treated for both patellofemoral and femoral condyle defects, which is the focus of our MACI Arthro program |
| Based on the strength of MACI’s clinical outcomes, topline revenue performance and its underlying growth drivers, our core MACI business remains very well-positioned for continued strong growth in 2024 and the years ahead |
| So, we think that combination is going to be very powerful for us as we move forward |
| In addition, we would also anticipate continued strong revenue growth in 2025 with a full year of arthroscopic masonry and further acceleration of NexoBrid usage, as well as continued expansion in our key profitability metrics |
| In total, this guidance points to continued high revenue growth in 2024 with further enhancement of our top-tier profitability profile |
| We expect another year of growth for MACI -- another year of strong growth for MACI, and as a starting point, we expect full year revenue growth in the high-teens percentage range, with biopsy surgeon growth, biopsy growth and an increase in price continuing to serve as the key MACI growth drivers |
| We’re very excited about the anticipated launch of MACI Arthro later this year, as we believe it represents another significant growth opportunity for MACI and a key value driver for our business moving forward |
| With MACI on track for another strong year, Epicel benefiting from a high share -- higher share of voice and NexoBrid early in its launch phase, we have multiple paths to our 20%-plus total revenue guidance for the year |
| Turning to our burn care franchise, we also saw strength in the underlying business fundamentals for Epicel in the fourth quarter, as we had the highest number of Epicel biopsies in the quarter since 2021 and that momentum has carried into 2024 with a strong start to the year |
| We continue to see positive pull-through for Epicel from our expanded burn care sales team, which further supports our belief that Epicel will benefit from a larger commercial footprint and higher share of voice in the burn care market |
| In addition, the company has now consistently generated positive adjusted EBITDA each quarter for more than three years and continues to convert adjusted EBITDA into strong cash flow |
| Importantly, our adjusted EBITDA growth of 40% for the full year is double our topline revenue growth of 20% and our adjusted EBITDA growth of 50% in the fourth quarter is more than double our revenue growth of 23%, as our results continue to demonstrate very strong P&L leverage and a top-tier profitability profile |
| Most importantly, however, the clinical outcomes for the initial patients treated with NexoBrid and the feedback from burn surgeons treating those patients has been very positive, which serves as a great signal for the long-term potential of NexoBrid as we look to change the standard of care for eschar removal for patients with severe burns |
| For the quarter, growth profit was $48.5 million or 75% of net revenue, which also increased by 200 basis points versus last year and represents the highest gross margin for the company in any quarter to-date |
| So, overall, we’re very pleased with the strong surgeon interest in NexoBrid, our progress in market access activities and onboarding burn centers, the excellent clinical outcomes and positive feedback from surgeons treating patients, and the clear impact that our broader burn care portfolio and expanded sales team is having on Epicel |
| Statement |
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| So as you think about call low double-digit growth on Epicel, and again, that’s one scenario within our guidance and burn care there can be shifts along the franchise products, but the one I referenced, I mean, that’s below where we were last year |
| With the delay last year, there was an interruption to sort of the onboarding process for many centers when the product did become available |
| So, in that scenario, NexoBrid would be in that $7 million to $8 million range, and clearly, NexoBrid, obviously, very early in the launch, it’s still difficult to predict the absolute number, let alone the quarterly numbers, we have not given any specific guidance to-date on 2024 and that’s still difficult, obviously, a few a month and a few weeks in the launch or a quarter rather than a few weeks in the launch |
| So it’s certainly reasonable to expect, I think, low double digits, which would be lower than last year and lower than pre-COVID years from relative to the exit rate on Epicel |
| The -- we had some dynamics with respect to our largest customer that have now been resolved at their facility, not Epicel related, but other issues |
| There’s no doubt about that |
| It had an impact starting kind of the middle of last year, as we talked about on earlier calls and it continues to have an impact |
| While our performance on these metrics was strong, as we mentioned on our call, the manufacturing-related delay in 2023 and the resulting uncertainty around the ultimate timing of product availability did cause a number of burn centers to defer or delay NexoBrid training and P&T committee approval processes, which in addition to the typical administrative hurdles at hospitals, impacts ordering patterns and the timing of use and uptake at many of these centers |
| It’s really not that significant |
| I think Joe referenced it in the prepared remarks that historically and pre-COVID, I mean, things got a little more variable during COVID, obviously |
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