Vericel Corporation
Vericel Corporation (VCEL) is a leading developer of patient-specific expanded cell therapies for use in the treatment of patients with severe diseases and conditions. Vericel currently have three U.S. Food and Drug Administration (FDA) approved autologous cell therapy products in the United States. 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 that was approved by the FDA on December 13, 2016. The first shipment and implantation of MACI occurred on January 31, 2017. Carticel® (autologous cultured chondrocytes) is an autologous chondrocyte implant indicated for the repair of symptomatic cartilage defects of the femoral condyle (medial, lateral or trochlea), caused by acute or repetitive trauma, in patients who have had an inadequate response to a prior arthroscopic or other surgical repair procedure (e.g., debridement, microfracture, drilling/abrasion arthroplasty, or osteochondral allograft/autograft. Carticel was replaced by MACI, at the end of the second quarter. Vericel also market Epicel ® (cultured epidermal autografts), a permanent skin replacement Humanitarian Use Device (HUD) for the treatment of patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of total body surface area (TBSA). Vericel's development stage portfolio includes ixmyelocel-T, a patient-specific multicellular therapy for the treatment of advanced heart failure due to ischemic dilated cardiomyopathy (DCM).1
Manufacturing
Vericel has a cell-manufacturing facility in Cambridge, Massachusetts which is used for U.S. manufacturing and distribution of MACI and Carticel, Epicel manufacturing and also manufacturing of MACI for the SUMMIT study conducted for approval in Europe and the U.S. Throughout 2016, the company also operated a centralized cell manufacturing facility in Ann Arbor, Michigan. The Ann Arbor facility continues to support the current open label extension portion of the ixCELL-DCM clinical trial being conducted in the United States and Canada and the company believe the company have sufficient capacity, with minor modifications, to supply its early commercialization requirements.
Product Portfolio
Vericel approved and marketed products include two approved autologous cell therapy products: MACI (autologous cultured chondrocytes on a porcine collagen membrane), a third generation autologous implant for the repair of symptomatic, full-thickness cartilage defects of the knee in adult patients and Epicel (cultured epidermal autografts), a permanent skin replacement for full thickness burns in adults and pediatrics with greater than or equal to 30% of total body surface area (TBSA) also currently marketed in the U.S. Vericel also own Carticel (autologous cultured chondrocytes), a first-generation product for autologous chondrocyte implantation (ACI) which is no longer marketed in the U.S. Vericel's product candidate portfolio also includes ixmyelocel-T, a patient-specific multicellular therapy currently in development for the treatment of advanced heart failure due to ischemic dilated cardiomyopathy (DCM). Vericel completed enrolling and treating patients in its Phase 2b ixCELL-DCM study in February 2015 and on March 10, 2016 announced the trial had met its primary endpoint of reduction in clinical cardiac events and that incidence of adverse events, including serious adverse events, in patients treated with ixmyelocel-T was comparable to patients in the placebo group.
Carticel and MACI
Carticel, a first-generation ACI product for the treatment and repair of cartilage defects in the knee, is the first FDA-approved autologous cartilage repair product. Carticel is indicated for the repair of symptomatic cartilage defects of the femoral condyle (medial, lateral or trochlea) caused by acute or repetitive trauma, in patients who have had an inadequate response to a prior arthroscopic or other surgical repair procedure such as debridement, microfracture, drilling/abrasion arthroplasty, or osteochondral allograft/autograft. Carticel received a Biologics License Application (BLA) approval in 1997 and is no longer marketed in the U.S. It is generally used on patients with larger lesions (greater than 3 cm 2 ). Carticel was replaced at the end of the second quarter of 2017 by MACI, which was approved on December 13, 2016 by the U.S. Food and Drug Administration. MACI is a third generation autologous implant for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. The first shipment and implantation of MACI occurred on January 31, 2017, and Vericel stopped manufacturing and marketing Carticel at the end of the second quarter in 2017.
In the U.S., the orthopedic physician target audience is very concentrated, with two thirds of its 2016 Carticel business originating from approximately 150 physicians. Its target Carticel and MACI audience is a group of physicians who self-identify as or have the formal specialty of sports medicine physicians. Vericel believe this target audience is approximately 500 physicians. At the end of 2016 the company expanded its field force from 21 to 28 representatives. Most private payers have a medical policy that allows treatment with Carticel and the company is actively working with payers to ensure reimbursement for MACI. Of the 28 largest payers for Carticel, 18 have a formal medical policy for MACI which the company believe represent approximately half of covered lives. For those private payers which have not yet approved a medical policy for MACI, for medically appropriate cases the company can often obtain approval on a case by case basis. For the six months ended June 30, 2017 , net revenues were $17.9 million for Carticel and MACI.
Epicel
Epicel (cultured epidermal autografts) is a permanent skin replacement for full thickness burns greater than or equal to 30% of TBSA. Epicel is regulated by the CBER under medical device authorities, and is the only FDA-approved autologous epidermal product available for large total surface area burns. Epicel was designated as a HUD in 1998 and an HDE application for the product was submitted in 1999. HUDs are devices that are intended for diseases or conditions that affect fewer than 4,000 individuals annually in the United States. Under an HDE approval, a HUD cannot be sold for an amount that exceeds the cost of research and development, fabrication and distribution unless certain conditions are met. Currently, fewer than 100 patients are treated with Epicel in the U.S. each year. For the six months ended June 30, 2017 , net revenues were $8.4 million for Epicel.
A HUD is eligible to be sold for profit after receiving HDE approval if the device meets certain eligibility criteria, including where the device is intended for the treatment of a disease or condition that occurs in pediatric patients and such device is labeled for use in pediatric patients. If the FDA determines that a HUD meets the eligibility criteria, the HUD is permitted to be sold for profit as long as the number of devices distributed in any calendar year does not exceed the annual distribution number (ADN). The ADN is defined as the number of devices reasonably needed to treat a population of 4,000 individuals per year in the United States.
On February 18, 2016, the FDA approved its HDE supplement to revise the labeled indications of use to specifically include pediatric patients and to add pediatric labeling. The revised product label also now specifies that the probable benefit of Epicel, mainly related to survival, was demonstrated in two Epicel clinical experience databases and a physician-sponsored study comparing outcomes in patients with massive burns treated with Epicel relative to standard care. Due to the change in the label to include use in pediatric patients, Epicel is no longer subject to the HDE profit restrictions. In conjunction with meeting the pediatric eligibility criteria, the FDA has determined the ADN number for Epicel is 360,400 which is approximately 50 times larger than the volume of grafts sold in 2016. Vericel currently have a 5-person field force.
Ixmyelocel-T
Vericel's preapproval stage portfolio includes ixmyelocel-T, a unique patient-specific multicellular therapy derived from an adult patient’s own bone marrow which utilizes its proprietary, highly automated and scalable manufacturing system. Its proprietary cell manufacturing process significantly expands the mesenchymal stromal cells, or MSCs and M2-like anti-inflammatory macrophages in the patient’s bone marrow mononuclear cells while retaining many of the hematopoietic cells. These cell types are known to regulate the immune response and play a key role in tissue repair and regeneration by resolving pathologic inflammation, promoting angiogenesis, and remodeling ischemic tissue. Vericel believe the novelty and advantage of using ixmyelocel-T is the expansion of a unique combination of cell populations, including MSCs and M2-like macrophages, which secrete a distinct combination of angiogenic and regenerative factors, and possess the ability to remain anti-inflammatory in the face of inflammatory challenge.
Vericel's lead clinical development program for ixmyelocel-T is focused on addressing severe, chronic ischemic cardiovascular diseases. Vericel is currently conducting the open label extension portion of the Phase 2b ixCELL-DCM study, which is a randomized, double-blind, placebo-controlled clinical trial for patients with advanced heart failure due to ischemic DCM. Ixmyelocel-T has been granted a U.S. Orphan Drug designation by the FDA for the treatment of DCM. An ixmyelocel-T investigator-initiated clinical study was conducted for the treatment of craniofacial reconstruction, and the company has conducted clinical studies for the treatment of critical limb ischemia.
Vericel completed enrolling and treating patients in its completed Phase 2b ixCELL-DCM study in February, 2015. Patients were followed for 12 months for the primary efficacy endpoint of major cardiac adverse events, or MACE. On March 10, 2016, the company announced the trial had met its primary endpoint of reduction in clinical cardiac events and that the incidence of adverse events, including serious adverse events, in patients treated with ixmyelocel-T was comparable to patients in the placebo group. Patients were then followed for an additional 12 months for safety. Because the trial met the primary endpoint, patients who received placebo or were randomized to ixmyelocel-T in the double-blind portion of the trial but did not receive ixmyelocel-T have been offered the option to receive ixmyelocel-T. Vericel successfully treated the last patients in February, 2017, and the last follow-up visit will occur approximately one year later.
Given the expense required to conduct further development and its focus on growing its existing commercial products and becoming profitable, at this time the company has no current plans to initiate or fund a Phase 3 trial on its own. Vericel is assessing all strategic options, including non-dilutive sources of financing, such as a strategic partner, to fund the trial. On February 16, 2017, the investigation of ixmyelocel-T for reduction in the risk of death and cardiovascular hospitalization in patients with chronic advanced heart failure due to ischemic dilated cardiomyopathy was designated a Fast Track Program. On May 10, 2017, the FDA granted the Regenerative Medicine Advanced Therapy (RMAT) designation for ixmyelocel‑T. The RMAT is an expedited drug development and review program for regenerative medicine therapies. Vericel is scheduled to meet with the FDA later this year to explore possible accelerated approval options available under an RMAT designation.
