Ladies and gentlemen, thank you for standing by. Welcome to the Vericel second quarter 2022 conference call. At this time, all participants are in listen only mode. I would also like to remind you that this call is being recorded for rep lay. I will now turn the conference call over to Eric Burns, Vericel's Head of Financial Planning and Analysis and Investor Relations. Please go ahead. Thank you operator, and good morning everyone. Welcome to Vericel's second quarter 2022 conference call to discuss our financial results and business highlights. Before we begin, let me remind you on today's call we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Please note that a copy of our financial results press release and a short presentation with highlights from today's call are available on the investor relations section of our website. I am joined on this call by Vericel's President and Chief Executive Officer, Nick Colangelo, and our Chief Financial Officer, Joe Mara. I will now turn the call over to Nick. Thank you, Eric, and good morning everyone. I'll begin today's call with a discussion of our second quarter financial and business highlights and our expectations for the remainder of the year, then turn the call over to Joe for a more detailed review of our financial performance in 2022 financial guidance before opening the call to Q&A. We generated total revenue of $37 million in the second quarter and approximately $3 million of adjusted EBITDA and operating cash flow, marking the eighth consecutive quarter of sustained profitability and positive cash flow for the company. MACI had a very strong quarter as we generated revenue of $28.6 million, representing the highest quarterly revenue outside of the seasonally high fourth quarter since the launch of MACI. MACI revenue grew 8% compared to the second quarter of 2021, and sequential revenue growth was more than 10% compared to the first quarter of 2022. Importantly, MACI continued to outperform the overall cartilage repair procedure market, and we remain on track to generate our expected double-digit growth in surgeons taking MACI biopsies this year as our sales team continues to expand the MACI customer base. MACI's also off to a strong start in the third quarter, and as Joe will discuss in further detail, we expect to see an inflection in MACI performance in the second half of the year with continued strong quarterly revenue progression and significantly higher quarterly growth rates compared to the same periods in 2021. Based on our results to date and MACI's continued momentum, we expect MACI growth to accelerate through the remainder of the year, translating to growth in the mid to high 20% range in the third quarter and mid to high 30% range in the fourth quarter versus the same periods in 2021. Accordingly, we're maintaining our full year revenue guidance for MACI as it resumes its high growth trajectory. MACI adoption also continues to be supported through medical education and publications. Data from a recently published MACI study in the journal Cartilage was featured in Orthopedics Today, showing the expansion of knee cartilage defects and the formation of new high-grade lesions in patients as time between a MACI biopsy and implantation increases, highlighting the importance of treating patients in a timely manner. Finally, we remain on track for planned meetings with the FDA later this year to discuss our MACI arthroscopic and MACI ankle development programs, initiatives that we believe will support sustained growth in the years ahead. Turning to our burn care franchise. We reported Epicel revenue of $8.2 million for the second quarter, which was below our most recent quarterly run rate. As we've discussed previously, even though quarterly baseline revenue for Epicel is significantly higher than pre-2021 periods, there'll continue to be inherent volatility in quarterly revenue given the small patient population and the concentrated number of burn centers treating these patients. We have seen solid underlying fundamentals for Epicel in the first half of the year as the number of burn centers taking biopsies and treating patients with Epicel was consistent with the significantly higher burn center penetration seen in the same period last year, which included the highest Epicel volume and revenue quarter ever in Q2 2021. However, we did see fewer biopsies in patients treated with Epicel in the second quarter and a lower average burn size for treated patients compared to recent trends. This clearly impacted our quarterly results, although again, quarterly revenue of over $8 million is significantly above pre-2021 quarterly run rates. We also continue to support the expanded utilization of Epicel through medical education and important publications. We recently announced the publication of results in the Journal of Burn Care & Research, a leading peer-reviewed journal from a retrospective study conducted by the Burn and Reconstructive Centers of America, which showed a 90% survival rate for patients with large posterior burns treated with Epicel. These burns presented a treatment challenge in that the posterior surface bears the major portion of body weight, and this first-of-its-kind study highlights the potential for improved outcomes using Epicel for patients with significant posterior burns. Turning to NexoBrid, we're very pleased to announce this morning that the NexoBrid BLA resubmission has been accepted for review by the FDA with a PDUFA date of January 1, 2023. Our cross-functional teams, in conjunction with their colleagues at MediWound, worked extremely diligently to address the FDA's feedback with a high quality and timely resubmission, which met our target timeline. We're very pleased to have completed this important milestone, and we continue to believe that NexoBrid, if approved, has the potential to become a new standard of care for eschar removal for patients with severe burns in a meaningful part of our overall business. Finally, I'd like to highlight that we recently issued our inaugural ESG report, which reflects our commitment to incorporating these important principles across all of our business activities. We'll continue to identify opportunities to broaden our positive impact and build upon our ESG performance in the years ahead as we remain focused on how we can better serve all of our stakeholders, including our patients, customers, employees, investors in the communities in which we operate. In summary, after a solid start to the year, we're maintaining our total revenue, MACI revenue, and adjusted EBITDA guidance for the full year as the entire Vericel team is focused on delivering continued strong commercial and financial results in the second half of the year while preparing for a potential NexoBrid launch in the first half of 2023. I'll now turn the call over to Joe to provide additional details regarding our second quarter results and financial guidance. Thanks, Nick, and good morning, everyone. Starting with our Q2 results. Total net revenue for the quarter was $37 million and was comprised of $28.6 million of MACI revenue, $8.2 million of Epicel revenue, and $0.2 million of revenue related to the procurement of NexoBrid by BARDA for emergency response preparedness. MACI had a strong quarter with 8% revenue growth versus the prior year and also improved sequentially with 10% growth versus the first quarter. For Epicel, it is important to note that the prior year revenue of $12.2 million represented the highest quarterly revenue of any quarter to date, resulting in a difficult year-over-year comparison. As Nick referenced with Epicel, there is inherent volatility on quarterly volume due to the burn patient population and treatment dynamics. Gross profit for the quarter was $22.9 million or 62% of net revenue, compared to 68% in the second quarter of 2021. Our gross margin was lower than prior year due to lower BARDA revenue, which is 100% gross margin, P&L geographic cost movement as SG&A is no longer absorbing the costs from our current Cambridge manufacturing facility, and these costs have moved to cost of goods sold, as well as higher Epicel-related costs. For Epicel, we have expanded our manufacturing headcount over the last year to support the significant product growth. We also had a higher mix of smaller burns, which translate into an overall higher cost per unit, and both of these factors also contributed to the year-over-year change. Importantly, we expect a typical gross margin increase in the second half of the year with our anticipated revenue growth in the third and the fourth quarters. Total operating expenses for the quarter were $31.9 million, compared to $30.6 million for the same period in 2021. Net loss for the quarter was $9 million or $0.19 per share, compared to a net loss of $3.8 million or $0.08 per share for the second quarter of 2021. Non-GAAP adjusted EBITDA for the quarter was $2.8 million, and we generated $3.1 million of operating cash flow, representing our eighth consecutive quarter with positive adjusted EBITDA and operating cash flow. We ended Q2 with approximately $131 million in cash, restricted cash and investment and no debt. In addition, we recently entered into a $150 million revolving credit facility with a syndicate of banks led by JP Morgan that significantly increases our strategic flexibility to pursue organic and inorganic growth opportunities using non-dilutive capital. Turning to our financial guidance. After two strong quarters of performance to start the year and momentum accelerating into Q3, MACI is well-positioned to return to its high-growth profile, and we are maintaining our full-year MACI revenue guidance of $132 million-$141 million. In terms of MACI quarterly revenue phasing, as Nick mentioned, our orders for Q3 have been strong to start the quarter, and we anticipate a higher than typical step-up versus the second quarter, with Q3 sequential MACI revenue growth expected to be in the mid- to high-single digits versus Q2. This would imply a year-over-year growth in the mid- to high-20% range for Q3 MACI revenue versus last year. Moving to Epicel. After a lower than anticipated second quarter, Epicel is now trending below our original expectations for the year. We expect third quarter revenue to be at a similar run rate to what we saw in the first half of the year with a step-up in the fourth quarter. Overall, we are maintaining our total revenue guidance of $178 million-$189 million for the full year. For the full year, we expect gross margin of approximately 69%, a slight reduction from the prior full year guidance of approximately 70%. However, we now also expect lower operating expenses for the full year of approximately $130 million-$132 million versus our original guidance of $134 million-$137 million. Which will offset the slight reduction to gross margin. Accordingly, we still anticipate a full-year adjusted EBITDA margin of approximately 21%. This concludes our prepared remarks. We will now open the call to your questions. Thank you. If you would like to ask a question, you will need to press star one one on your telephone keypad. Our first question is from the line of Ryan Zimmerman of BTIG. Please go ahead. Thank you. Thanks for taking our questions, and good morning. Maybe to start with the guidance, for a little bit, Nick and Joe, appreciate the commentary and the color, in terms of the pacing. A few questions around that, though. I mean, if I think about kind of the pacing dynamics that we saw in the first half of this year on Epicel, it implies, you know, obviously around $9 million for third quarter. I guess, you know, how are you thinking about and your comfort level with the implied step-up in the fourth quarter? Because, you know, assuming MACI guidance is the same, there's not much expected, you know, BARDA revenue. It would suggest that, you know, Epicel guidance previously of $45.5 million-$47.5 million is unchanged for the year. Maybe to get your thoughts around why, you know, you can step up and hit that number in the fourth quarter. Then I have a couple follow-ups. Thank you. Yeah. Good morning, Ryan. This is Joe. I'll start. Thanks for the question, and maybe Nick will chime in as well. Maybe just to talk kind of about the full year guidance and start broad and then kind of hit Epicel. You know, first off, you know, we are maintaining our full year guidance of, in total of $178-$189. As we talked about, we're also maintaining our MACI revenue range for the full year as well. You know, as we kind of think about the products, I would say, you know, to your point, I mean, MACI is on track from a full year perspective. I think the midpoint is probably still a good kind of estimate in terms of, you know, where, how we're thinking about MACI for the full year. You know, I think on Epicel, to your point, I think what we're thinking now is kind of given the start of the year, it's more likely Epicel will be kind of flattish to last year or in the low $40 million versus our original guidance. So when you add kind of that midpoint of MACI, you know, the lower estimate on Epicel as well as the BARDA revenue, it really points you more to the lower end of the range. You know, in terms of Epicel, you know, phasing, kind of hit that, and then I'll kind of turn it over to Nick. You know, we do expect a similar quarter based on our run rates in Q3, call it $9 million plus, and a step up in the fourth quarter, but kind of more in that, you know, call it $12 million-$13 million dollar range, which would get us into the low $40s. Yeah. I think that captures it, Joe, so appreciate that. Ryan, maybe just a little bit on sort of the market dynamics as we've seen in Epicel performance. You know, as I mentioned during my remarks, you know, the underlying fundamentals in terms of burn center penetration as measured in Epicel biopsies that we receive from centers and then centers treating patients remained in the first half of the year pretty strong and comparable to what we saw last year, which was a big step up compared to prior years. That being said, based on, you know, sort of, diagnosis codes that we're able to access and so on, it's clear that at least for the larger burns, 30% plus, that, you know, there were lesser or a decline in those burns in the first quarter and then particularly in the second quarter. You know, again, the one thing, as we've always said, is that even operating at a higher baseline level of revenue, it does, you know, there's obviously inherent volatility, given the small patient population, and we just saw that in the first half of the year. Okay. That's very helpful, guys. Then just two follows for me. I wanna take a swing at 2023 a little bit and just, you know, the MACI growth you have kind of in that low 20% range for this year. You know, you'll let some others ask about the pacing, but, you know, are you comfortable with kind of that 20% longer term growth rate on MACI, as we think about 2023 and beyond and the durability of that? Then, you know, the second question, off of that is just, you know, I saw the 8-K last night. I think all of us saw the 8-K. You mentioned it today about the line of credit for $150 million. You know, has your thinking around product life cycle or strategy changed at all given, you know, given this credit line and how you think about that in the context of both MACI as well as maybe, you know, inorganic M&A? Appreciate your comments. Thanks for taking the questions. Thanks, Ryan. You know, maybe I'll start this one again, and Nick can chime in as well. You know, on the first question, you know, it's pretty early to be thinking and talking about 2023 specifically on MACI. But I think kind of to the broad question, you know, as we think about MACI, and just kind of the overall healthcare environment, et cetera, you know, continuing to hopefully improve and open up, you know, we do see MACI still kind of in that long-term growth profile, you know, kind of in that range. I think that is, you know, how we're seeing it kind of over the long term. Again, we haven't talked about, you know, 2023 specifically. In terms of kind of the line of credit, you know, I'll start. I would say, you know, I think this is an important tool for the company. You know, it's non-dilutive capital, kind of lower cost, you know, lower than the cost of equity, et cetera. You know, we're certainly pleased to kind of have this as a tool for us. You know, I think it's, you know, strategically, I think it just gives us kind of a nice degree of flexibility, particularly over the next few years, as we're also, you know, investing in a new building and, you know, we wanna be, you know, mindful of kind of maintaining the long-term growth, you know, whether that's potentially business development or, you know, some additional life cycle management or other organic opportunities. That's kind of strategically how we're thinking about it. Yeah. I guess I would just echo the comments. We certainly remain confident in MACI's performance in the years ahead. I think, Ryan, we start from a strong position, cash position of $130+ million with no debt. We'd like to have these tools available to us. We have the ATM, although we haven't used it. It's there if we find ourselves if that presents an opportunity for us based on business development deals. The line of credit falls into that same category. Our perspective on that hasn't changed. I think, you know, we've always said that we certainly can fund our lifecycle management initiatives through our existing cash and operating cash flow, given the profile and the strong profitability profile of the company. You know, as we think about potentially larger things to do down the line, just great to have these tools in place. Thanks for taking my question. Okay. Thanks, Ryan. Thank you. Our next question is from the line of Sam Brodovsky of Truist. Your question please. Hi, thanks for taking our question. First one on me, for me in terms of looking at the sequential growth in 3Q for MACI. If you could talk about, you know, we've heard from other companies, June a little bit slower and July persisting in a little bit of a slower environment on elective procedures. Is that what you're seeing? Then if you can kind of just let us know what gives you confidence in that sequential growth into 3Q. Yeah. Well, I'll start, Sam, and thanks for the question. You know, obviously in our remarks and, you know, we referenced that our performance to date and continued momentum, you know, gives us a lot of confidence about accelerating growth for MACI, both in the third and fourth quarter. You know, I think that speaks for itself. Yeah. Just to echo that. Nick, maybe. Go ahead, sorry. Just maybe to put a fine point on it. Is that more of the confidence in terms of you're seeing more biopsies or are we starting to see higher conversion of biopsies into actual procedures? Is that how you're seeing it? Well, you know, at the end of the day for us, you know, implants are the revenue-generating metric that we focus on, right? You know, I'd say certainly in the first half of the year, we didn't see sort of a meaningful change or a material change in conversion rates. You know, in our guidance for the rest of the year, and Joe can, you know, expand on this, you know, does incorporate, you know, a little bit of an improvement there, but, you know, and particularly at the high end of the range. You know, it's basically what we're seeing around sort of implants, implant scheduling and so on that gives us the confidence moving forward. Yeah. No, I would just add, I think Nick kind of hit the key points in terms of the drivers. You know, again, I think what we talked about was kind of in that mid- to high-single-digit quarter-over-quarter growth, which gets you into the mid- to high twenties on a year-over-year basis. You know, it's kind of in that $30 million-plus range for the quarter. I think Nick talked about the drivers, so leave it there. Thanks. Yeah. That's helpful. Just to kind of extrapolate off that to 4Q, just some back-of-the-envelope math, looks like probably the assumption should be similar sequential growth from 3Q - 4Q that we saw in 2019. Is that the right way to think about it? Yeah. I mean, broadly speaking, and I think we've been consistent with this, really, you know, throughout the year, you know, in terms of as you think about kind of the mix of revenue or seasonality on MACI, you know, we talked about kind of strong Q2, where we think Q3 is trending toward. Then as you think about kind of the second half of the year or you think about Q4, et cetera, you know, we think we'll still see that kind of typical 40-60 split from H1 to H2, and that's actually been really consistent kind of in the pre-COVID years, you know, around 60% in the back half. Even if you factor in the last couple of years, you know, which have obviously varied based on COVID, it still points you to, you know, an average of roughly 60%. I think in general, Q4 is also pretty consistent, you know, I'd say in kind of that low $50 million range. If you kind of do the math on the midpoint, and the, you know, step up kind of similar kind of in the 60s to some of the earlier years. I think 2019 is a good comp that we pointed to, so that's. I think that's a fair comp. Great. Thanks for taking the questions. Thank you. Our next question is from the line of Jeffrey Cohen of Ladenburg Thalmann. Go ahead, please. Hi, Nick and Joe. How are you? Morning. Hey, Jeff. A couple questions from our end. I guess firstly, could you talk a little bit about your gross margin commentary and your modest OPEX reduction down to $130-$132 at least as it relates to the back half and confidence that you have on the margin end of things? Yeah, you know, thanks for the question. You know, I think starting with gross margin, you know, I think in general, you know, we try to think about this over the longer term. There can certainly be some kind of variability, you know, across quarters, et cetera. You know, on a full year basis, you know, we still see this kind of trending, you know, in the high sixties, 69% for the full year is our guidance. You know, we can look at kind of run rates per quarter and kind of see where they are year to date versus last year, et cetera. You know, I think it's largely, you know, tracking as anticipated. I talked about a few of the drivers. We do have a load of lower BARDA revenue, some P&L geography we talked about related to kind of the manufacturing facility here. You know, Epicel costs were a bit higher because we had a lot of some of those smaller burns, and we are seeing some, you know, as anticipated, material cost increases, et cetera. Although again, those are largely as anticipated. Some of our outside vendor spend is a little bit higher. I think an important point as well, though, as you kinda think about the cadence of the year is, you know, we typically see more significant mix of our revenue and significant revenue growth from H1 to H2. Really, aside from 2021, if you look at those years, you see that across all those years. You also typically see a kind of progression throughout the year on gross margin. That's what kind of we're anticipating again this year and what we've seen historically. You know, on a full year basis, you know, pretty close to kinda where we anticipated to start the year, but, you know, a bit lower. I think to your point, you know, a little bit, I think what's helping on a full year P&L perspective is on the OPEX side, you know, I think we're managing our expenses well. We have lowered the guidance by a few million there. You know, I think we're just being more efficient in our overall spend. Having said that, our, you know, our key initiatives across the business are still on track. you know, we're mindful of the total P&L and feel like between kind of the two line items there is, you know, an offset there as we think about the total P&L for the year. Okay, got it. Secondly for us, can you talk a little bit about NexoBrid from a commercial standpoint from your end, how you're perhaps making some preparations into a commercial launch early next year as far as your sales and clinical organization in the U.S.? Thank you. Yeah, thanks, Jeff. I'll take that one. You know, obviously with an established PDUFA date now, we have resumed our commercial pre-launch activities and, you know, that also includes medical affairs in terms of, you know, continued education, the next protocol, expanded access protocol and so on. So all those activities are ongoing. And you know, at this point, based on the information we have, you know, we certainly expect a first half commercial launch, assuming things stayed on track. You know, again, we feel like we certainly submitted a high quality and timely resubmission that addressed the questions raised by the FDA. I'd say one thing we'll keep our eyes on are sort of inspection schedules. As we mentioned previously, we certainly expect that the FDA will want to inspect the sites in Taiwan and Israel, you know, that's the one piece of it that's sort of out of our control. At this point, again, we're planning for a first half commercial launch. You know, given sort of as we've talked about previously, you know, the P&T process and so on, you know, we'd expect that schedule sort of commercial revenues to begin sometime in the second quarter next year. Perfect. That does it for us. Thanks for taking the questions. Okay, thanks, Jeff. Our next question is from the line of Arthur He of HCW. Your question please. Hi, good morning, Nick and Joe. This is Arthur He in for RK. I just had a quick question regarding MACI. Could you guys give us some color on the metrics on the biopsy growth for MACI during the quarter? Yeah. I mean, you know, we haven't talked specifically, you know, about kind of the biopsy growth, you know, specifically. I guess, you know, what I would say is, you know, in general, I would say, you know, where last year, you know, we had significant kind of delta between kinda how biopsies were growing and kind of the revenue range, et cetera. You know, broadly speaking, I would say, you know, as we think about this year, I think they've generally kind of been more in sync. You know, if you kinda look at where the revenue growth, I think it gives you a good sense of kind of in general, where the biopsies are trending as well. Gotcha. Thanks. Regarding the backlog of the MACI, how is that looking like for the quarter and what's your expectation for the second half of the year? Yeah. I would say, you know, when we think about kind of, I would say, you know, the first half of the year on MACI, the results to date and really even the back half, you know, I'd say, you know, this is certainly something we're still focused on in terms of that backlog from a kind of commercial perspective, et cetera. You know, we haven't seen. I wouldn't say it's a significant contributor to the results to date. As you think about kind of the back half, you know, we're not seeing that as a significant contributor in the back half either. You know, if for example, our conversion rate kind of meaningfully improves, et cetera, you know, that could potentially, you know, be due to the backlog. Again, at this point, you know, we're not assuming that's a meaningful contributor. Gotcha. Thanks. Really appreciate that. Thank you for taking my question. Thank you. Now, I would like to turn the conference back to Nick Colangelo for closing remarks. Okay. Well, thank you everyone. We appreciate you joining us today and for your questions. I think we certainly believe the company remains on track to deliver another year of strong financial and operating results, and we look forward to updating you on our progress on our next call. Thanks again and have a great day. This concludes today's conference call. Thank you for participating. You may disconnect.