Vericel Analyst Projects Wound Care Product Sales Will Grow Fivefold By 2025

Vericel Corp VCEL, a commercial-stage company that specializes in advanced cell therapies for treating patients with knee cartilage defects and severe burn wounds, is investment-worthy, according to H.C. Wainwright.

The Analyst

Analyst Swayampakula Ramakanth initiated coverage of Vericel with a Buy rating and $19 price target.

The Thesis

Vericel is likely to see nearly a fivefold increase in sales from two of its innovative tissue-repairing cell therapies — MACI and Epicel — and NaxoBrid, a partnered product, Ramakanth said in a Wednesday initiation note. (See his track record here.) 

The analyst estimates revenues from the three products will grow from $116 million in 2019 to $533 million by 2025.

MACI, a cell therapy approved for treating knee cartilage defects, is a major growth driver for the company, with sales reaching $68 million in 2018 despite an estimated market penetration of merely 3%, Ramakanth said. 

MACI has the potential to becomes the standard-of-care in the $5-billion cartilage repair market, he said. 

MACI sales could rise from $91 million this year to $471 million in 2025, assuming an expanded commercial focus and expanded sales force, the analyst said. 

Vericel's agreement with Mediwound Ltd MDWD to market NaxoBrid in the U.S. could energize the former's burn franchise sales, Ramakanth said.

The company's burn care addressable market could increase from Epicel's current market of 1,500 per year to 5,000 burn patients per year with NaxoBrid, he said. 

NaxoBrid is being evaluated in a Phase 3 trial, with a commercial launch likely in the second quarter of 2021, the analyst said. 

"We believe NexoBrid could aid in cross-selling Epicel and help the burn franchise's sales to grow to $62M in 2025 from $25M in 2019." 

Price Action

Vericel shares were up 1.66% at $14.05 at the time of publication. 

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