Good morning. I'm Josh Jennings from the TD Cowen Medical Devices research team. We are on day three of the 46th Annual TD Cowen Healthcare Conference. Thanks everyone for joining this session. A big thank you to the executive team from Vericel. We have President and CEO, Nick Colangelo, Chief Financial Officer, Joe Mara. Gentlemen, thank you, guys. You know, it's easy to say that we make it easy for you 'cause we're kind of in your backyard. I know you're still sacrificing time out of your guys' busy schedule. Thanks for joining here again this year. Well, great, Josh. It's very good to be here. Thank you. Appreciate. Thanks for having us. Absolutely. Well, wanted to start off, maybe allow you to just give some brief introduction of Vericel as the company, if that's okay. Yep. ... for investors that are either here in the room or listening in, just to get a foundation and for any newbies to the story. Yep. I'm happy to do that. I guess just before I begin the formalities of, I'm sure we'll make some forward-looking statements and encourage listeners to refer to our documents on file with the SEC for further information. I'll try to be brief 'cause I know a lot of people sort of know the background of our company. Vericel is a leading provider of advanced therapies for the sports medicine and the severe burn care market. We have a portfolio of highly innovative advanced cell therapies and specialty biologics that basically repair tissue and restore function. You know, we've had this business now for about a dozen years, and we've built it into a leading med tech growth company with a pretty unique combination of both high revenue and profit growth, as well as strong cash generation. Our lead product in the sports medicine area is MACI, which is a product that uses a patient's own cells to repair damaged cartilage and restore function. We launched MACI back in 2017 for the treatment of cartilage defects of the knee, and it's become the clear leader in the category and is the only FDA-approved product in its class. We recently received approval for MACI Arthro as well, the arthroscopic delivery of MACI, which we think allows us to penetrate the largest segment in our addressable market. Really excited about MACI and sort of its trajectory over these past 10 years and as we look forward. In the burn care space, we're really focused on hospitalized burn patients, and for these patients, there's really 2 aspects to their treatment pathway. One is you have to remove the damaged tissue or eschar. That's what one of our products, NexoBrid, does. Once you debride the wound, you need to close the wound in order to promote healing, and that's where our other product, Epicel, comes into play. NexoBrid's a product we licensed. We have North American commercial rights for that product. It's an enzymatic debridement agents, that actually removes the eschar, obviously enzymatically, and it's indicated for doing so in adult and pediatric patients with large burns. Epicel is a patient, a graft product that uses a patient's own cells to then cover the wound for full- thickness, large Total Body Surface Area wounds. We're really excited to have products that are the only approved products in their classes as well that address both aspects of the treatment paradigm. Last point I'll make on the portfolio is that, you know, we have a pretty wide competitive moat. There's no like products for any of our products. We think that will remain the case for a very long time, just given the nature of MACI and Epicel as combination device biologics. There's no generic or sort of other 510(k) pathway for either devices or pharma/biotech products. As I mentioned, NexoBrid's an orphan biologic product in the U.S., so it's got 12 years of data exclusivity, seven years of market exclusivity, and really nothing else in development like it. We think it's an exceptional portfolio to build our business over the coming years. Thanks for that download. I think that exceptional portfolio comment was evident in 2025 as you guys delivered another strong year despite some skepticism in terms of you guys hitting numbers as it was back halfway due to seasonality. There is, I mean, just in terms of MACI and Epicel being regenerative medicine, cell-based biologic products on the market, I mean, we've over the years vetted many regenerative medicine clinical development programs and products and not many make it to the commercial era. I understand where you're coming from about that competitive mode and the long journey to get to the commercial era. Well, maybe we can discuss the fourth quarter results you guys recently provided an update on. You pre-announced earlier in the year, strong year, strong fourth quarter, maybe to hone in on MACI and 20% plus growth in that fourth quarter, record number of biopsies and biopsying surgeons. Just maybe review, you know, what do you think is driving such strong adoption of the technology? I think we got a little pretty good handle on it 'cause you guys have shared that with us. Maybe just to address that and, you know, what feedback are you getting from physicians, you know, and have you heard that feedback change since kind of really the big launch in 2017 on MACI? Yeah, happy to start. You know, obviously, we had a really strong close to the year overall. You know, burn care was up 25% in the fourth quarter. MACI and the company overall were up 23% for the quarter. You know, just kind of taking a step back, you know, over these past 10 years, as I mentioned, MACI's become by far the leader in the cartilage repair market, a 24% compounded annual growth rate since we launched in 2017, which is highly unusual, right? The last 3 years have been 20% or more growth for MACI. You know, we definitely saw a strong finish to the year for MACI. It grew 25% in the third quarter, 23% in the fourth quarter, 24% for the second half of the year, great strength there. You know, I think over the years, you know, MACI really, as you know, it replaced our predecessor product called Carticel, which was a great product. There's 20-year outcome data with it. I mean, it's very strong clinically, but it was a technically demanding, highly invasive surgery. As you often see in med tech, it's a tried-and-true playbook of when you make something less invasive, you get broader adoption, and that's really what's happened with MACI over the past decade. So it's kind of a combination, these attributes of it's got unsurpassed clinical data. It's the only product, as you just alluded to, that's actually demonstrated superiority versus microfracture in a randomized controlled clinical study. So that's where it all starts with a really broad label, which means it's applicable to a very large number of patients. Because it's, you know, an easier surgery to do, we put the cells on a membrane. You just cut the membrane to the size of the defect, you glue it in with fibrin glue. It's a much faster, less invasive, simpler surgery. We've expanded the surgeon base pretty dramatically over the years. That because it's less invasive, it's a shorter rehab, and recovery time for patients, and then it has a really strong pricing and reimbursement profile. MACI's reimbursed under a J-code. We have to get prior approvals. The prior approval success rate's over 95% in 2025 and over the years. I think that just demonstrates, as we mentioned on our third quarter call, sort of the clinical utility that's recognized by hospitals, payers, surgeons, and patients. That's really sort of what has fueled that growth for MACI over the past 10 years. The core momentum in the business is still there. Fantastic. May we just sticking on fourth quarter and the gross margin and EBITDA performance, super strong. I mean, what does it, what does it show, your team just in terms of, or maybe it instills more confidence in terms of your kind of LRP or long-range plan targets on margin and just the profitability profile of this business as we move into these out years here? I have a follow-up on the FDA approval of your new manufacturing facility that was just announced today. Joe, I'll hand it over to you. Yeah, I mean, happy to speak. You know, as Nick talked about, I mean, really, kind of fueling the growth has obviously been MACI over the last few, you know, number of years and, you know, we expect that to continue. If you think about the profile of the company, there's really three layers to it. It sort of starts with that really strong top-line growth, and I think we've continued to demonstrate that over the last few years and, you know, we expect that to continue moving forward. You know, from a profitability perspective, if you go back, you know, probably two or three years, we talked about an inflection in our profitability profile and in our growth there. I think we've really seen that, you know, particularly from a margin perspective over the last, you know, two or three years. You know, to your kind of point and question, Josh, you know, if you look at the fourth quarter in particular, you know, our gross margins, you know, were well into the high 70s at 79% for the business. You know, our EBITDA was at 40% for the fourth quarter. You know, those tend to be pretty good markers as you kind of think about where the company's going from a mid or a long-range perspective. If you look at our longer range targets, you know, we've talked about being in the kind of mid 70%, sorry, the high 70% range on the gross margin side, and we're already in the mid 70% range really in the last couple of years on a full- year basis. Then, you know, from an EBITDA perspective, you know, I think we did 26% on a full- year basis. Expect that to tick up this year despite some significant investments from a growth perspective. We've added to our sales force, as we've talked about. We are ramping up the ankle trial, you know, as that kind of ramps and, you know, that provides a nice opportunity for us, you know, for the long term. There's some additional manufacturing costs as we're now in our new facility that was announced this morning that was FDA approved for manufacturing. All that's kinda, you know, part of the baseline this year, but we feel like we're very much on track, you know, to continue to improve our profitability margins. You know, we've been GAAP profitable each of the last two years as well. The last point there that, you know, just in terms of kind of the profile of the company is really the cash generation profile. You know, if you look back over the last few years, we've self-funded this new facility that was roughly $100 million. We are now through that. We actually increased our cash balance while we did that over the last few years, and now we are, you know, fully complete in that process. If you kinda look at our, you know, operating cash flow or free cash flow potential now with, you know, much lower CapEx, you know, really expect our cash generation to inflect as well as we move forward the next few years. Excellent. Just to circle back on the new manufacturing facility headquarters up in Burlington, that FDA approval today. I think you've laid this out just in terms of some of the impact to gross margin as you ramp up in that facility. What are the remaining risks as you kinda transfer manufacturing over there? I mean, my understanding is you guys I mean, nothing's risk-free, but you guys de-risked this process significantly. Maybe just give us a refresher on what's left and what are the risks as you're ramping up and scaling in this new facility? Yeah. You know, I think our operations team has and regulatory team have demonstrated over years just kind of flawless execution in the approvals we've achieved and sort of operationally. You know, we've been operating, you know, with both MACI and Epicel in what is essentially a 35-year-old or more facility that we acquired when we bought the business. Really the risks were, you know, in the facility, you know, when you have a single clean room for each product, a single air handler, all those things, and the nature of our business is that we're manufacturing 365 days a year. It's not like you can build, you know, a big finished goods inventory and then take down a clean room and do maintenance or whatever. You've had to sort of do it on the fly and, you know, our team has done, you know, just an excellent job on that. Then even getting the facility sort of built and completed on time and on budget and then approved, you know, in sort of on the timelines that we expected, that doesn't happen all the time in our industry, as you well know. Our team has done a great job. The risks, you know, obviously we mitigate a lot of those risks going forward because we have multiple clean rooms, other kinds of things that will allow us to really. It's a state-of-the-art facility. It's, you know, the best in the world in terms of cell therapy manufacturing. There's really not risks around the facility. It's more about how we're gonna transition up from Cambridge to that facility. You know, it's the team has a plan in place. Essentially, we'll start taking the biopsies that start coming in. We'll process up in Burlington. When those turn into implants, we'll just manufacture there, and at some point, we'll start moving sort of the stored biopsies up as well. We segregate those for risk mitigation purposes, so you move one batch up, and then it'll just sort of be standard manufacturing as we go forward. We'll be through the whole transition, you know, sort of by the end of the year. Great. I think you've laid this out already, Joe, just the impact to this transition impacting margins all baked into guidance. What is baked in the guidance for gross margins as you guys are going through this process? Yeah. On a full- year basis, again, you know, we did about 74% gross margin last year. We said around 75% this year. You know, that fully contemplates, you know, it's really you have multiple facilities now kind of in use. You know, there are some costs that are kind of moving from our operating expenses into our cost of goods sold. There's a piece of that. You know, as some of our, you know, other kind of pieces of a building, things like, you know, the equipment and whatnot come online, you know, those will start to filter into the cost. You can kind of think of that as, you know, that's baked into our, call it 74%, you know, growing to 75% this year, that's all contemplated within the guidance. Great. Wanted to just circle back and focus on MACI again, I'm just thinking about 2026. I think the guidance for MACI revenues that range, I think bracketed consensus, it suggests you can deliver 20%-ish growth again this year. Momentum is in play. Mm-hmm. ... in 1 Q. You're, you know, I think it's stronger growth in 1Q 2026 versus 1 Q 2025. Sorry for the long lead in here. Basically what I'm trying to get at is thinking about 2026 versus 2025, more surgeons trained on MACI Arthro. You've got MACI Arthro, I'd say in more full launch mode. Mm-hmm. You have more experience with MACI Arthro. You have access to more cartilage, knee cartilage lesions. maybe just talk about where you guys stand here today, 2026, with the MACI franchise and what's that's giving you the confidence that, you know, that 20%-ish growth is achievable. Yeah. you know, in 2025, as you alluded to, it was kind of the first full- year that MACI Arthro was on the market, it was approved late in 2024. As we entered 2025, you know, the first step is to train surgeons on the MACI Arthro technique. We entered last year with about 150 trained surgeons. We exited the year with around 900, you know, a six-fold increase in terms of the MACI Arthro trained surgeons. Importantly, what we saw throughout the year, and again, we saw the growth rate accelerate in terms of MACI revenue in the back half of the year, is that the surgeons that were trained on MACI Arthro had higher biopsy and implant growth rates than those that weren't trained. That those surgeons that moved on and did a MACI Arthro case had higher biopsy and implant growth rates still, and their conversion rate was higher than average. You saw the perfect dynamic that you would want to see in terms of MACI Arthro's impact on MACI. Taking a step back, the whole idea there is that MACI's always been sort of a go-to product for patella or back of the kneecap cases or large defects, just the nature of the product, the simplicity of, again, having the cells on the membrane that you cut to size and glue in place, just, you know, sort of enabled MACI to sort of establish that position. In the smaller femoral condyle defects, so the end of the thigh bone, you know, there were other options, MACI had business there, but skewed more towards bigger defects. But what MACI Arthroscopic does is, again, it's the only biologic restorative cartilage repair product that's approved for arthroscopic administration. It's 2 to 4 square centimeters, so the smaller ones, it's a less invasive procedure, which as you'd expect, and we're seeing early indications of that through data, is that you have faster postoperative recovery, less postoperative pain, you know, better range of motion earlier and back to full- weight bearing earlier, et cetera. All the things that you would expect when you have a less invasive surgery. The smaller defects are about twice the size of the patella, for instance, defect segment. Having a, an entry into that where we can drive deeper penetration is sort of the whole game here. We mentioned on our earnings call last week that patella is about half our business, and it's been really interesting, and it's almost a case study to say when we launched MACI originally, patella was maybe 25% of a much smaller volume. Over the years, the volumes have, you know, gone multiplied, right? It's a multiple of kind of what it was when we launched MACI, and now patella is more than 50% of our business. You see that, you know, we've been able to build that area of our business pretty dramatically. It's the highest volume, highest growth rate over the last 10 years. With the MACI Arthro opportunity, when you have an addressable market segment that's twice as many patients as patella, you know, but it was a smaller volume and a smaller or lower growth rate, what we saw last year was that the smaller femoral condyle defects, their growth rate was on par with patella. It's a lower base, so it doesn't have as much of an impact. You know, MACI growth increased close to 200 basis points last year on a revenue basis, and you can essentially attribute that to the faster growth in the smaller defects that was driven by MACI Arthro. We think if those trends we've seen with trained surgeons, you know, given the number of surgeons that we have entering the year versus last year, and the impact we've seen on the growth rate in small femoral condyle defects, that's a pretty good recipe for continued growth for MACI as we move forward. Absolutely. Just thinking into the out years, I mean, ultimately, do you think MACI Arthro will account for more than 50% of the majority of cases? Is that anything you can share there just on how the mix evolves? I know we're thinking about the MACI franchise as holistically both- Mm-hmm. I don't know how you guys phrase it, standard MACI versus MACI Arthro, if that's the right terminology, but. Right. Any help just thinking about that as you guys go deeper and deeper in this MACI Arthro launch? Yeah. There's always been the question, "Hey, is every case gonna be done arthroscopically at some point?" The answer is probably not, because there are parts of the knee where it's just harder to do things arthroscopically, like those patella cases. We actually have surgeons who are doing that, and I would imagine over time, we'll build arthroscopic instruments that will allow you to do that. You know, when you think about the MACI membrane size, it's about 14.5 square centimeters, so it's a pretty big membrane. Right now we have instrument sets that are either two, three, or four square centimeters, and that's probably the limit of what you wanna put down a cannula, right? Because you've got live cells on there. You need to make sure that, you know, you maintain cell viability. There's a sort of practical consideration. You know, yeah, the majority of the market, probably two-thirds of the market is under four square centimeter defects each year. You know, you're probably, you know, we're never gonna have a 100% MACI Arthro cases. Probably the best you might get to is 50/50, but it'll still be a very large part of our business. Okay. Whether it's 40-60, 50-50, 30-70, not quite sure. Are there any, I guess, real world experience data coming out any in this year or next year just on this MACI Arthro launch? Yeah. Any orthopedic meetings or sports medicine meetings, in 2026, 2027? Yeah, that's certainly the intent. You know, again, I mentioned our excellent regulatory team. Just like MACI, we were able to get the product originally approved in the U.S. without having to run. The pivotal study was done in Europe. You know, the companies that owned this business before thought they'd probably have to do another study in the U.S. We kind of took a different approach, and the FDA said, "Yep, we agree. You can use the old Carticel data, the pivotal study in Europe," and that's what we submitted and got approved. Likewise, with MACI Arthro, it wouldn't have been surprising if the FDA came back and said, "Well, if you're gonna administer it differently, we wanna make sure the membrane stays in place." Even if you didn't need another clinical study, because it's the same drug substance, same drug product, just delivered differently, they might have, you know, required a safety study, making sure it didn't delaminate or whatever. We were able to propose, and the FDA agreed that we would do a human factors study. You go into a cadaver lab, you give the surgeons instructions, you make sure they can follow those instructions, deliver it appropriately. We do have release criteria around minimum cell number, cell viability, and we could apply those in that setting as well. Obviously, we got approved based on that human factors study, but we didn't really have clinical data about what it means for those early post-surgical recovery timelines. Right. That I mentioned. Right. In terms of range of motion, full- weight bearing, that accelerates the whole rehab process. You almost immediately saw surgeons posting on Instagram those kinds of results when they did MACI Arthro cases. We do have a MACI registry now that we are collecting data from patients that will form the basis of multiple publications, some of which will involve MACI Arthro in those early post-surgical recovery timelines. Of course, you have surgeons who are doing their own case studies and starting to publish data. We do have data already accepted for publication. You know, between acceptance and actual publication, there's a time lag, but yeah, we would absolutely expect that to be sort of emerging in this year and then in the years ahead. Great. MACI ankle trial is kicked off. Correct ... billion-dollar TAM expansion opportunity for the MACI franchise. I think you guys have covered that thoroughly. Mm-hmm. Maybe just one quick question. I wanted to touch on the burn business as well. Just in terms of the surgeon base and, you know, how many of your trained surgeons on MACI do you think are doing foot and ankle cartilage, repair surgeries but also there's a whole foot and ankle crew, I think, out there in the orthopedic world that could be new adopters. Maybe just share with us that. Yeah, that's the exact point we're making. You know, our lifecycle management strategy has been about continuing down the path of simpler, less invasive surgeries, that's MACI Arthro, expanding outside the U.S., which we're now able to do with our new facility 'cause it meets global manufacturing requirements. Expanding MACI to other joints because you have articular cartilage in all your joints. Knee, by far, is the largest opportunity. Most injuries, because it's the greatest weightbearing joint in the body. Ankle is number two. There's a large number of cartilage repair, resurfacing procedures that are done each year that leads to, you know, at our price point, a billion-dollar-ish opportunity for us. The number of surgeons, obviously, there are some surgeons who do both knee and ankle cartilage repair procedures, but there is also a separate set, you know, foot and ankle surgeons and then some podiatrists that do that as well. The exact mix, I'd say, you know... I'd be making up numbers. Okay. Yeah. There'll be a. A blend ... a good number of sort of knee and ankles, there'll be some independent foot and ankle folks. That's another opportunity for us because we're obviously moving into other areas in the orthopedic market that we can then build on in those surgeon segments as well. Great. Last couple minutes here. Sorry to leave minimal time for the burn franchise, which is another important business. Epicel, NexoBrid products, a nice combo. Big, you know, sizable TAM, $600 million combined. Maybe just talk about, I mean, the puts and takes. I think you guys have done a great job kinda level setting and helping investors understand just the unpredictability of severe burn cases for the Epicel product. And you guys are still launching NexoBrid. Maybe in the last couple minutes, just maybe frame up 2026 for the burn unit. If you can, if you have time, add in, just, I mean, how do you look at that portfolio? Is that gonna evolve through external business development initiatives down the line? I'll hand it over to you guys. Well, I'll just start on burn care and Joe can cover the guidance piece of it. Yeah, you know, Epicel. You know, the burn care business for us over time has supported the company's overall 20% growth rate since we launched MACI back in 2017. MACI's obviously grown at 24%, but burn care's been a pretty substantial contributor. In fact, even as recently as 2024, it grew faster than MACI in that particular year. It's a little more challenging in that the Epicel patient base is so small that the numbers can move around a little bit. It had a good finish to the year, good second half where it grew. You know, the first part of last year was a little difficult just because a lot of these patients don't survive to be treated, and so that makes it more difficult. I think we've sort of addressed how we are, sort of taking the biopsies we get, converting them into grafts and patient treatments, and think we're on a good path there. With NexoBrid, you know, that's a novel product, right? Now you're talking burn surgeons who, for their whole careers, the only thing they've ever done to get rid of that burn tissue or eschar is wheel patients into surgery and take a knife and slice it away. With NexoBrid, it's a much better treatment option for the patients because, again, the product, you just put it on topically, it enzymatically identifies sort of the skin that's been damaged through or denatured by thermal burns. It sort of washes that away and, you know, it's much better for the patient, obviously. You are asking burn surgeons, who are trained to do surgery, to change their standard of care. It's been adopted, you know, in the majority of the burn centers in the U.S. Really, the thing we're focused on is how do we make all those burn centers sort of consistent users and move them up the scale. We think it'll happen over time. There's a lot of excitement around it. It just takes a while to change the standard of care, especially when you're changing from a surgical approach to a biologic approach. That being said, you know, it has been a contributor to our growth, and there is an important component around BARDA, the US Biomedical Advanced Research and Development Authority, which, you know, put out an RFP. They wanna stockpile this for mass casualty burn events in the U.S. We expect, you know, there's a strong possibility we'll end up doing something around that with BARDA, both stockpiling, developing room temperature formulations, which is important to the military because when you have soldiers out in the field, you know, they're not in hospitals where they can be treated. You know, blast trauma indications as well. The government is interested in kind of funding all of that, which, you know, obviously supports the clinical benefit of NexoBrid and the opportunity for us financially, you know, assuming the government, now that it's reopened, you know, we move forward. Progress ... as we expect. Great. Any just comments on the guidance, Joe, just as we wrap up here? Yeah, so- For the burn business. I think Nick, you know, did a good job kind of laying out some, you know, the sort of puts and takes over the last few years. I would say, you know, one thing. Just grabbing the mic. You know, to one Nick point that Nick made is very important, which is if you actually look over the longer term, this has been a contributor to our growth. Tends to grow, you know, on an annual basis on average. You know, obviously, that can vary, and it can certainly vary by quarter. Unfortunately or, you know, just really fortunately, there's very few severely burned patients each quarter, so it's a very difficult business to predict on a quarterly basis. I would just say, you know, really as we kinda moved into the last half of last year, and then we're continuing that into this year, we really tried to simplify or really oversimplify the guidance framework and just say, "We're gonna assume it's an average run rate per quarter. We will certainly adjust as we kinda move into quarters if we see something trending differently, as we did in Q4, for example." You know, I think that's worked well, you know, as we closed out last year, and I think we'll continue with that framework that we started this year. You know, to Nick's kinda last point on the BARDA piece, you know, obviously we have not baked that into our assumptions, but, you know, that not only could potentially de-risk our guidance, but also could be some upside over the coming quarters. You know, certainly something that, you know, we're thinking about as well. Excellent. Well, we'll wrap it up there. gentlemen, thank you so much for joining again this year. Great to see you in person. Hopefully, we'll. We did visit your new headquarters in the fall last year. Maybe we'll get back up there again this year hopefully. we'll keep in touch, and good luck with the rest of your meetings today. Great. Thanks so much, Josh.