Michaela Smith

Michaela asked if dormant Epicel accounts are being reactivated due to NexoBrid and about the next stage of NexoBrid adoption, as well as for updates on the launch of MACI Arthro 2.0 instruments and planned improvements.

Answer

Nick Colangelo, Vericel's President and Chief Executive Officer, confirmed seeing more dormant Epicel accounts reactivated, noting the entire burn care team now cross-sells both products. For NexoBrid, over 70 of 90 target accounts have placed orders, with a focus on moving accounts to consistent usage. He remains optimistic and mentioned a BARDA award is a strong possibility. Regarding MACI Arthro instruments, he stated they are gathering market input for enhancements, estimating new instruments would likely be available next year at the earliest, following an 18-month or more process.

Michaela Smith asked for additional details on 7D navigation system placements and the install base in 2025, and sought clarification on the renewed strategic focus for advancing the biologics portfolio and its expected contribution.

Answer

CFO Julie Andrews reported a 30% increase in 7D placements in 2025, noting that earn-out units collectively exceeded purchase commitments by over 50%, validating the earn-out model, but did not provide specific install base numbers. President and CEO Massimo Calafiore explained that the renewed focus on biologics involves internal leadership shifts to give it a central role, acknowledging past declines due to distributor transitions. He expressed confidence in scaling the commercial network and improving execution to return US biologics performance to market pace.

Michaela Smith asked for additional color on 7D placements and the install base in 2025, and sought elaboration on the renewed strategic focus for advancing the biologics portfolio and its expected contribution over the next few years.

Answer

Julie Andrews (CFO) reported a 30% increase in 7D placements in 2025, with earn-out units exceeding purchase commitments by over 50%. Massimo Calafiore (President and CEO) explained the renewed focus on biologics involves internal leadership shifts and a commitment to scaling the commercial network and improving execution, with expectations for the U.S. biologics performance to return to market pace.

Representing Caitlin Cronin, Michaela Smith asked for more color on where the impact of the raised full-year guidance would be seen in the second half and for any updates to free cash flow expectations.

Answer

CFO Todd Koning clarified that the guidance increase would primarily be reflected in Q3 results. He reiterated the free cash flow forecast, expecting a positive $1 million to $5 million in Q3 and positive cash flow for the full year 2025, stating that the company's performance continues to give them confidence in delivering on their commitments.

Michaela Smith, on for Caitlin Cronin, asked if ATEC has plans to address the interventionalist call point, noting recent M&A activity in that space by other companies.

Answer

Executive Patrick Miles gave a definitive 'no,' stating that ATEC's business is exclusively focused on the spine surgeon. He expressed a strong conviction that expanding into the interventionalist or pain management space would be a 'huge mistake' and a distraction from the company's core mission and aligned interests with its surgeon customers and sales force.

Michaela Smith, on behalf of Caitlin Cronin, inquired about the expected business impacts from tariffs on manufacturing, supply chain costs, and the international business.

Answer

CFO Tom Adams stated that the impact is relatively immaterial as production is in the U.S. and Nicaragua. He noted a slight impact from some components procured from Mainland China, which has been factored into guidance. He quantified this impact as an approximate 0.5 percentage point headwind on the full-year gross margin.