In its latest financial results, Cambridge, Mass.-based Vericel (NSDQ:VCEL) saw sales climb 60% for its permanent skin-replacement product, Epicel, designed for patients with severe burns. Sales for its autologous cellular scaffold, Maci, were up 20% following its launch to the commercial market.
Vericel’s growing product adoption helped to fuel the company’s first profitable quarter, according to CEO Nick Colangelo.
“Both products are the only FDA-approved products in their class and they’re highly efficacious,” he told Drug Delivery Business News.
Maci is the first FDA-approved implant to use healthy cartilage tissue from a patient’s own knee to grow cells on the scaffold. In a Phase III extension study of 128 patients, Vericel found that the pain and function improvements seen in a previous late-stage trial were maintained after five years for participants treated with Maci compared to microfracture.
“In this space, you want to make sure that you have a product that actually provides long term durability of repair,” Colangelo explained.
The company was also working on an autologous cell therapy product to treat patients with cardiac myopathy, but was told by the FDA that it needed to conduct another clinical trial if it wanted to land regulatory clearance. Vericel needed to make a strategic decision, according to its chief executive.
“We had a fast growing commercial business and that’s where we’re going to invest because we believe that will generate the greatest value for our company. What we’ve stated publicly is that we will not be moving that program forward in the absence of funding from either a partnership or other sort of financing,” Colangelo said.
Vericel is betting on the future of cell therapies, but its CEO noted that the industry is just beginning to grapple with the issue of pricing. He pointed towards medicines like Novartis‘ (NYSE:NVS) Kymriah, a CAR T-cell therapy, which sports a $425,000 price-tag.
“So the question really becomes is how sustainable is a model when the price points have reached that level,” Colangelo said.
Vericel declined to clarify the exact cost of Maci or Epicel, but described them both as “premium-priced products”.
To help ensure that people who want their cartilage repaired with Maci can access the implant, Colangelo said the company has worked to win reimbursement across various commercial insurance plans.
“These plans look at the clinical data when they make decisions around covering the product. There’s a lot of evidence out there that this is an effective product for patients. It all starts with having compelling clinical data and that’s what allows you to get the coverage,” he added.
Looking ahead, Colangelo is optimistic about the path forward – he characterized the company as “one of the leading cell therapy manufacturers and commercial entities in the country.”
“We feel like we’re in early innings in terms of growth in our current product portfolio,” he said.
Steve MacMillan took over as CEO of Hologic in 2013, drawing on his experience at medtech titans like Stryker and Johnson & Johnson. Since then, Hologic has grown into a $3 billion business.
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