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What changed in Vericel Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Vericel Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+435 added−434 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Vericel Corp's 2025 10-K

435 paragraphs added · 434 removed · 332 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

104 edited+43 added−52 removed157 unchanged
Biggest changeOrphan drug exclusivity, which would most likely run concurrently with the marketing exclusivity, if any, received from the time of first licensure of a reference product, does not prevent the FDA from approving a different biologic for the same disease or condition, or the same biologic for a different disease or condition. 18 Table of Contents Other Healthcare Laws In the U.S., the research, manufacturing, distribution, sale and promotion of biological products and devices are subject to regulation by various federal, state, and local authorities, including (in addition to the FDA), the Centers for Medicare & Medicaid Services, other divisions of the U.S.
Biggest changeOther Healthcare Laws In the U.S., the research, manufacturing, distribution, sale and promotion of biological products and devices are subject to regulation by various federal, state, and local authorities, including (in addition to the FDA), the Centers for Medicare & Medicaid Services, other divisions of the U.S.
(“MediWound”) for North American rights to NexoBrid ® (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, which is indicated for the removal of eschar in adult and pediatric patients with deep partial thickness and/or full thickness thermal burns.
(“MediWound”) for the North American rights to NexoBrid ® (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, which is indicated for the removal of eschar in adult and pediatric patients with deep partial-thickness and/or full-thickness thermal burns.
Analysis of this 144-patient study demonstrated at Week 104 a statistically significant greater improvement in the co-primary endpoint of pain and function for those patients treated with MACI compared to microfracture.
Analysis of this 144-patient study demonstrated a statistically significant greater improvement in the co-primary endpoint of pain and function at Week 104 for those patients treated with MACI compared to microfracture.
First, pain management as practiced for extensive dressing changes of burn wounds is administered, the wound is cleaned, a dressing soaked with antibacterial solution is applied to the treatment area and a petrolatum ointment barrier is created. The NexoBrid lyophilized powder is then mixed with a gel vehicle and applied to the wound.
First, pain management as practiced for extensive dressing changes of burn wounds is administered, the wound is cleaned, a dressing soaked with antibacterial solution is applied to the treatment area and a petrolatum ointment barrier is created. Then, the NexoBrid lyophilized powder is mixed with a gel vehicle and applied to the wound.
Some human cell or tissue products that are intended for implantation, transplantation, infusion, or transfer into a human recipient are regulated solely as human cell, tissue, and cellular and tissue-based products (“HCT/Ps”) and do not require the FDA’s premarket review.
Some human cell or tissue products that are intended for implantation, transplantation, infusion, or transfer into a human recipient are regulated solely as human cell, tissue, and cellular or tissue-based products (“HCT/Ps”) and do not require the FDA’s premarket review.
FDA Post-Approval Requirements Maintaining substantial compliance with applicable federal, state, local, and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Rigorous and extensive FDA regulation of biological products and devices continues after approval, particularly with respect to cGMPs.
Post-Approval Requirements Maintaining substantial compliance with applicable federal, state, local, and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Rigorous and extensive FDA regulation of biological products and devices continues after approval, particularly with respect to cGMPs.
We own one issued patent directed to methods and devices for repairing cartilage defects via arthroscopic MACI, scheduled to expire in the U.S. in March 2043. As a biologic, MACI is entitled to twelve years of data exclusivity until December 13, 2028, calculated from its date of approval.
We own one issued patent directed to methods and devices for repairing cartilage defects via arthroscopic MACI, which is scheduled to expire in the U.S. in March 2043. As a biologic, MACI is entitled to twelve years of data exclusivity, until December 13, 2028, calculated from its date of approval.
Epicel is a permanent skin replacement indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient’s TBSA. Both autologous cell therapy products are currently manufactured and marketed in the U.S.
Epicel is a permanent skin replacement indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient’s TBSA. Both autologous cell therapy products, MACI and Epicel, are currently manufactured and marketed in the U.S.
Epicel was approved by FDA’s Center for Devices and Radiological Health (“CDRH”), as an HDE medical device in 2007, but now is regulated by CBER under the same medical device regulations. MACI, approved in 2016, is regulated by CBER as a combination cell therapy/device product and required an approved BLA to be marketed in the U.S.
Epicel was approved by FDA’s Center for Devices and Radiological Health (“CDRH”) as an HUD under an HDE in 2007 but now is regulated by CBER under the same medical device regulations. MACI, approved in 2016, is regulated by CBER as a combination cell therapy/device product and required an approved BLA to be marketed in the U.S.
Epicel is an important treatment option for patients with severe burns because these patients are generally understood to need a keratinocyte-based epithelium, and, because of the severity and extent of their burns, these patients generally have very little healthy skin remaining on their bodies from which to obtain keratinocyte-based epithelium for autografting.
Epicel is an important treatment option for patients with severe burns who are generally understood to need a keratinocyte-based epithelium, and, because of the severity and extent of their burns, these patients generally have very little healthy skin remaining on their bodies from which to obtain keratinocyte-based epithelium for autografting.
NexoBrid is a topically-administered biological orphan product containing proteolytic enzymes that is indicated for eschar removal in adult and pediatric patients with deep partial-thickness and/or full-thickness burns. We hold exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America.
NexoBrid is a topically-administered biological orphan product containing proteolytic enzymes that is indicated for eschar removal in adult and pediatric patients with deep partial-thickness and/or full-thickness thermal burns. We hold exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America.
The typical Epicel patient has suffered full-thickness burns due to a wide variety of occupational, household or vehicular accidents. Many of the most severely burned patients are medivac transported to one of the approximately 140 specialized burn centers across the U.S.
The typical Epicel patient has suffered full-thickness burns due to a wide variety of occupational, household or vehicular accidents. Many of the most severely burned patients are transported by medivac to one of the approximately 140 specialized burn centers across the U.S.
The Burlington facility is substantially complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel. The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel.
The Burlington facility is complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel. The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel.
The arthroscopic delivery of MACI could increase the ease of MACI’s use for physicians and may reduce both the length of the procedure as well as procedure-induced trauma, which may result in a reduction of a patient’s post-operative pain and accelerate a patient’s recovery.
The arthroscopic delivery of MACI may increase the ease of MACI’s use for physicians and may reduce both the length of the procedure as well as procedure-induced trauma, which may result in a reduction of a patient’s post-operative pain and accelerate a patient’s recovery.
Available Information Additional information about Vericel, including for complying with our disclosure under the SEC’s Regulation FD (Fair Disclosure), is included on our website, www.vcel.com. Information on our website is not incorporated by reference into this Annual Report.
Available Information Additional information about Vericel, including for complying with our disclosure under the SEC’s Regulation FD (Fair Disclosure), is included on our website, at www.vcel.com. Information on our website is not incorporated by reference into this Annual Report.
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 large burns treated with Epicel relative to standard care. Market Opportunity for Epicel Each year in the U.S., more than 40,000 people are hospitalized for burns.
The product label also 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 large burns treated with Epicel relative to standard care. Market Opportunity for Epicel Each year in the U.S., more than 40,000 people are hospitalized for burns.
The following Corporate Governance documents are also posted on the Investor Relations section of our website: Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers, Insider Trading Policy, Special Trading Procedures for Insiders, Board Member Attendance at Annual Meetings Policy, Director Nominations Policy, Shareholder Communications with Directors Policy and the Charters for each of the Committees of the Board of Directors. 23 Table of Contents
The following Corporate Governance documents are also posted on the Investor Relations section of our website: Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers, Insider Trading Policy, Special Trading Procedures for Insiders, Board Member Attendance at Annual Meetings Policy, Director Nominations Policy, Shareholder Communications with Directors Policy and the Charters for each of the Committees of the Board of Directors. 21 Table of Contents
We engage a third-party contractor to provide services in connection with a patient support program to manage patient cases and to ensure that complete and accurate billing information is provided to insurers and hospitals. Following the approval and commercial launch of NexoBrid, we have expanded the burn care commercial team to include both account management and clinical specialist professionals.
We engage a third-party contractor to provide services in connection with a patient support program to manage patient cases and to ensure that complete and accurate billing information is provided to payers and hospitals. Following the approval and commercial launch of NexoBrid, we have expanded the burn care commercial team to include both account management and clinical specialist professionals.
NexoBrid is regulated by FDA’s Center for Drug Evaluation and Research (“CDER”) as a botanical protein biologic and the BLA associated with it was approved by the FDA on December 28, 2022, paving the way for marketing and commercialization. Subsequently, in August 2024, the FDA approved a supplemental BLA expanding NexoBrid’s indication to include pediatric patients.
NexoBrid is regulated by FDA’s Center for Drug Evaluation and Research (“CDER”) as a botanical protein biologic, and the BLA associated with it was approved by the FDA on December 28, 2022, paving the way for marketing and commercialization in the U.S. Subsequently, in August 2024, the FDA approved a supplemental BLA expanding NexoBrid’s indication to include pediatric patients.
Certain raw materials utilized in NexoBrid’s manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan. Pursuant to the terms of our existing license agreement, following the FDA approval of NexoBrid, MediWound transferred the BLA to Vericel. Subsequently, in August 2024, the FDA approved a supplemental BLA expanding NexoBrid’s indication to include pediatric patients.
Certain raw materials utilized in NexoBrid’s manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan. Pursuant to the terms of our existing license agreement, following the FDA’s approval of the BLA for NexoBrid, MediWound transferred the BLA to Vericel. Subsequently, in August 2024, the FDA approved a supplemental BLA expanding NexoBrid’s indication to include pediatric patients.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, imposes requirements 19 Table of Contents on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors, or agents that perform services involving the creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, imposes requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors, or agents that perform services involving the creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
Unlike Carticel, which was a cell suspension and required a membrane to be sutured in place to confine the cell suspension to the defect area, MACI is comprised of cells uniformly seeded on a collagen membrane resulting in a surgery that is simpler than that involved with Carticel.
Unlike Carticel, which was a cell suspension and required a membrane to be sutured in place to confine the cell suspension to the defect area, MACI is comprised of cells uniformly seeded on a collagen membrane resulting in a surgery that is simpler than Carticel involved surgeries.
The FDA provides an incentive for the development of certain devices intended to benefit patients by treating or diagnosing a disease or condition that affects or is manifested in not more than 8,000 individuals in the U.S. per year. These devices receive a HUD designation and may be eligible for marketing approval under an HDE 15 Table of Contents application.
The FDA provides an incentive for the development of certain devices intended to benefit patients by treating or diagnosing a disease or condition that affects or is manifested in not more than 8,000 individuals in the U.S. per year. These devices receive a HUD designation and may be eligible for marketing approval under an HDE application.
Phase 3 studies are performed after preliminary evidence suggesting effectiveness of the product has been obtained and they are intended to establish the overall benefit-risk relationship of the investigational product, and provide an adequate basis for product approval and labeling. 12 Table of Contents Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.
Phase 3 studies are performed after preliminary evidence suggesting effectiveness of the product has been obtained and they are intended to establish the overall benefit-risk relationship of the investigational product, and provide an adequate basis for product approval and labeling. Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.
We expect Epicel’s utility to continue to grow as commercial and medical efforts are appropriately dedicated to the product and the burn centers that use it to treat patients. 8 Table of Contents Due to the low incidence and sporadic nature of severe burns, Epicel revenue has inherent variability from quarter to quarter and does not exhibit significant seasonality.
We expect Epicel’s utility to continue to grow as commercial and medical efforts are appropriately dedicated to the product and the burn centers that use it to treat patients. Due to the low incidence and sporadic nature of severe burns, Epicel revenue has inherent variability from quarter to quarter and does not exhibit significant seasonality.
More specifically, the IRA for the first time allows the government to directly negotiate drug prices with manufacturers 20 Table of Contents of certain “select drugs,” creates inflation rebates for Medicare drugs whose price increases faster than the rate of inflation, benchmarked to 2021, and restructures the Medicare Prescription Drug (Part D) program in significant ways.
More specifically, the IRA for the first time allows the government to directly negotiate drug prices with manufacturers of certain “select drugs,” creates inflation rebates for Medicare drugs whose price increases faster than the rate of inflation, benchmarked to 2021, and restructures the Medicare Prescription Drug (Part D) program in significant ways.
All of these trials must be conducted in accordance with good clinical practice (“GCP”) requirements in order protect the health and safety of human subjects and for the data to be considered reliable for regulatory purposes. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.
All of these trials must be conducted in accordance with good clinical practice (“GCP”) requirements in order protect the health and safety of human subjects and for the data to be considered reliable for regulatory purposes. 12 Table of Contents During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.
Noncompliance with applicable requirements can result in inspectional observations, FDA warning letters, civil penalties, recalls, injunctions or seizures of products, refusal of the government to approve our product approval applications or to allow us to enter into government supply contracts, withdrawal of previously approved applications and criminal prosecution.
Noncompliance with applicable requirements can result in inspectional observations, FDA warning letters, civil penalties, recalls, injunctions or seizures of products, refusal of the government to approve our marketing applications or to allow us to enter into government supply contracts, withdrawal of previously approved applications and criminal prosecution.
The FDA also may perform certain confirmatory tests on lots of some products, such 16 Table of Contents as viral vaccines, before releasing the lots for distribution by the manufacturer. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological products.
The FDA also may perform certain confirmatory tests on lots of some products, such as viral vaccines, before releasing the lots for distribution by the manufacturer. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological products.
In addition, MACI is indicated for a broader range of cartilage defects of the knee, ensures more uniform distribution of the cells in the cartilage defect, and is supported by Phase 3 clinical data demonstrating a statistically significant improvement in pain and function scores compared to microfracture.
In addition, MACI is indicated for a broader range of 6 Table of Contents cartilage defects of the knee, ensures more uniform distribution of the cells in the cartilage defect, and is supported by Phase 3 clinical data demonstrating a statistically significant improvement in pain and function scores compared to microfracture.
GTP requirements are set forth in the FDA regulations that govern the methods used in, and the facilities and controls used for, the manufacture of HCT/Ps, which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient.
GTP requirements are set forth in the FDA regulations that govern the methods used in, and the 13 Table of Contents facilities and controls used for, the manufacture of HCT/Ps, which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient.
Epicel is a cell-based product that is regulated by the Center for Biologics Evaluation and Research (“CBER”) of the FDA under medical device authorities. Epicel was designated as a HUD in 1998 and a Humanitarian Device Exemption (“HDE”) application for the product was submitted in 1999.
Epicel is a cell-based product that is regulated by the FDA’s Center for Biologics Evaluation and Research (“CBER”) under medical device authorities. Epicel was designated as a HUD in 1998 and a Humanitarian Device Exemption (“HDE”) application for the product was submitted in 1999.
MACI Arthro™ allows surgeons to evaluate and prepare the cartilage defect site as well as deliver the MACI implant through small incisions using custom-designed arthroscopic instruments developed by the Company (“MACI Arthro instruments”). MACI Arthro became commercially available in the United States during the third quarter of 2024 and the Company began selling the MACI Arthro instruments at that time.
MACI Arthro ® allows surgeons to evaluate and prepare the cartilage defect site as well as deliver the MACI implant through small incisions using custom-designed arthroscopic instruments developed by the Company (“MACI Arthro instruments”). MACI Arthro became commercially available in the U.S. during the third quarter of 2024, and the Company began selling MACI Arthro instruments at that time.
Epicel is not price-restricted in this manner because on February 18, 2016, the FDA approved our HDE supplement to revise the labeled indications of use for Epicel to specifically include pediatric patients, thus allowing Epicel to be sold for profit.
Epicel is not price-restricted in this manner because in 2016, the FDA approved our HDE supplement to revise the labeled indications of use for Epicel to specifically include pediatric patients, thus allowing Epicel to be sold for profit.
Significant changes to already approved products additionally require a supplemental BLA to be approved before such changes to products may be marketed in the U.S. In August 2024, the FDA approved a supplemental BLA expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling.
Significant changes to products approved under a BLA require a supplemental BLA to be approved before such changes to products may be marketed in the U.S. In August 2024, the FDA approved a supplemental BLA expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling.
MACI may be implanted through a smaller incision or mini arthrotomy for focal defects. Additionally, since the FDA approval of MACI Arthro in August 2024, a surgeon is now able to evaluate and prepare the cartilage defect site, as well as deliver the MACI implant, through small incisions using the MACI Arthro instruments.
MACI may be implanted through a smaller incision or mini arthrotomy for focal defects. Additionally, since the FDA approval of MACI Arthro in August 2024, surgeons are now able to evaluate and prepare the cartilage defect site, as well as deliver the MACI implant, through small incisions using the MACI Arthro instruments.
A key driver of ACI’s therapeutic advantage relative to other approaches, such as microfracture, is that autologous chondrocytes have the potential to produce the hyaline-like cartilage that is naturally present in the knee, rather than fibrous cartilage, which lacks the durability and wear characteristics of hyaline cartilage.
A key driver of the therapeutic advantage of autologous chondrocyte implantation (“ACI”) relative to other approaches, such as microfracture, is that autologous chondrocytes have the potential to produce the hyaline-like cartilage that is naturally present in the knee, rather than fibrous cartilage, which lacks the durability and wear characteristics of hyaline cartilage.
In August 2024, the FDA approved a sBLA expanding the MACI indication 7 Table of Contents to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling, permitting the repair of single or multiple full-thickness cartilage defects of the knee up to 4 cm 2 in size via an arthroscopic approach.
In August 2024, the FDA approved an sBLA expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling, permitting the repair of single or multiple full-thickness cartilage defects of the knee up to 4 cm 2 in size via an arthroscopic approach.
Factors that payers consider in determining reimbursement are based on whether the product is (i) a covered benefit under its health plan; (ii) safe, effective, and medically necessary; (iii) appropriate for the specific patient; (iv) cost-effective; and (v) neither experimental nor investigational.
Factors that payers consider in determining reimbursement include whether the product is (i) a covered benefit under its health plan; (ii) safe, effective, and medically necessary; (iii) appropriate for the specific patient; (iv) cost-effective; and (v) neither experimental nor investigational.
NexoBrid’s FDA approval expands our burn care franchise’s total addressable market, which will permit us to treat a significantly larger segment of hospitalized burn patients than with Epicel alone.
NexoBrid’s FDA approval expands our burn care franchise’s total addressable market, which permits us to treat a significantly larger segment of hospitalized burn patients than with Epicel alone.
Commercial production of these products needs to occur in FDA-registered facilities in compliance with cGMP requirements for biologics. Regulatory Process The FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (“FFDCA”) and the Public Health Service Act (“PHSA”), and their implementing regulations.
Commercial production of these products must occur in FDA-registered facilities in compliance with cGMP requirements. Regulatory Process The FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (“FFDCA”) and the Public Health Service Act (“PHSA”), and their implementing regulations.
Manufacturing We have a cell manufacturing facility in Cambridge, Massachusetts, which is used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts, which has been under construction.
Manufacturing We have a cell manufacturing facility in Cambridge, Massachusetts, which is currently used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts.
We own issued patents directed to methods of determining the presence of chondrocytes in cell cultures used to produce both MACI and Carticel, which are scheduled to expire October 2029 in the U.S. and in April 2028 abroad.
We own issued patents directed to methods of determining the presence of chondrocytes in cell cultures used to produce both MACI and Carticel, which are scheduled to expire in September 2030 in the U.S. and in April 2028 abroad.
Carticel received a BLA approval in 1997, and was marketed in the U.S. by Vericel through the second quarter of 2017. The FDA approved MACI on December 13, 2016. 6 Table of Contents MACI is an autologous cellular scaffold product consisting of autologous cultured chondrocytes seeded onto a resorbable Type I/III porcine-derived collagen membrane.
The FDA approved a BLA for Carticel in 1997, and Carticel was marketed in the U.S. by Vericel through the second quarter of 2017. The FDA approved a BLA for MACI on December 13, 2016. MACI is an autologous cellular scaffold product consisting of autologous cultured chondrocytes seeded onto a resorbable Type I/III porcine-derived collagen membrane.
Patents and Proprietary Rights Our success depends in part on our ability, and the ability of our future licensors, to obtain patent protection for our products and processes.
Patents and Proprietary Rights 9 Table of Contents Our success depends in part on our ability, and the ability of our future licensors, to obtain patent protection for our products and processes.
Carticel was the first FDA-approved autologous cartilage repair product for the repair of symptomatic cartilage defects and was 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 (the removal of damaged or defective cartilage), microfracture (the creation of tiny fractures in the bone to encourage new cartilage), drilling/abrasion arthroplasty, or osteochondral allograft/autograft.
It was 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 (the removal of damaged or defective cartilage), microfracture (the creation of tiny fractures in the bone to encourage new cartilage), drilling/abrasion arthroplasty, or osteochondral allograft/autograft.
Third-party payers are increasingly examining the medical necessity and cost effectiveness of medical products and services in addition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics.
Third-party payers are increasingly examining the medical necessity and cost effectiveness of medical products and services in addition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of our products.
In the last five years through 2024, MACI sales volumes from the first through the fourth quarter on average represented 21% (20%-22% range), 22% (16%-24% range), 23% (21%-26% range) and 34% (33%-38% range) respectively, of total annual volumes.
In the last five years through 2025, MACI sales volumes from the first through the fourth quarter on average represented 21% (20%-22% range), 23% (22%-24% range), 22% (21%-24% range) and 34% (33%-34% range) respectively, of total annual volumes.
HUDs are devices that are intended for diseases or conditions that affect fewer than 8,000 individuals annually in the U.S., and certain HUDs are restricted by the amount which a manufacturer may charge for its use.
HUDs are devices that are intended for diseases or conditions that affect fewer than 8,000 individuals annually in the U.S., and, for certain HUDs, the amount a manufacturer may charge for the product’s use is restricted.
We cannot be certain that we, MediWound, or our present or future suppliers will be able to comply with the cGMP requirements and other FDA regulatory requirements.
We cannot be certain that we, MediWound, or our 15 Table of Contents present or future suppliers will be able to comply with the cGMP requirements and other FDA regulatory requirements.
We will need to continue to comply with the terms of such agreements in order to maintain our rights to such patents as we further commercialize NexoBrid in 2025. Our efforts to secure our proprietary rights also include our reliance on trade secrets and know-how, which we seek to protect, in part, by confidentiality agreements.
We will need to continue to comply with the terms of such agreements in order to maintain our exclusive rights to commercialize NexoBrid in the U.S. Our efforts to secure our proprietary rights also include our reliance on trade secrets and know-how, which we seek to protect, in part, by confidentiality agreements.
There are multiple other cartilage repair technologies currently being studied in clinical and preclinical studies. Hyalofast ® is a biodegradable hyaluronic acid-based scaffold used in conjunction with autologous concentrated bone marrow aspirate being developed by Anika Therapeutics, Inc. The Phase 3 trial completed patient enrollment in 2023.
There are multiple other cartilage repair technologies currently being studied in clinical and preclinical studies. Hyalofast ® is a biodegradable hyaluronic acid-based scaffold used in conjunction with autologous concentrated bone marrow aspirate being developed by Anika Therapeutics, Inc. The Phase 3 trial completed patient enrollment in 2023. The final module of clinical data was filed with FDA in late 2025.
We isolate the patient’s chondrocytes (the cells that produce cartilage) from the biopsy and expand those cells in a manufacturing process compliant with current Good Manufacturing Practices (“cGMP”). The expanded cells are then uniformly seeded onto a resorbable collagen membrane using a proprietary process prior to shipment. After receipt by the surgeon, MACI is implanted into the cartilage defect(s).
We isolate the patient’s chondrocytes (the cells that produce cartilage) from the biopsy and expand those cells in a manufacturing process that is compliant with current Good Manufacturing Practices (“cGMP”). The expanded cells are then uniformly seeded onto a resorbable collagen membrane using a proprietary process prior to shipment.
Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus mandatory civil penalties of between $13,946 and $27,894 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and penalties associated with various federal criminal statutes (although the federal False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate federal criminal statutes).
Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus mandatory 17 Table of Contents civil penalties of between $14,308 and $28,619 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and penalties associated with various federal criminal statutes (although the federal False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate federal criminal statutes).
Our MACI commercial team is divided into geographic regions and consists of sales representatives that regularly engage with our target audience and who are managed by a senior sales leadership team.
Our MACI commercial team, which we expanded by approximately 30% in late 2025, is divided into geographic regions and consists of sales representatives that regularly engage with our target audience and who are managed by a senior sales leadership team.
In conjunction with the launch of MACI Arthro, we have expanded our target 10 Table of Contents surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures.
In conjunction with the launch of 7 Table of Contents MACI Arthro, we have expanded our target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures. We also are focused on delivering MACI treatment to patients suffering from cartilage damage in the ankle.
If a patient decides to move forward with MACI treatment, we subsequently use the cartilage sample to manufacture a MACI implant. When an orthopedic surgeon decides to treat a patient by implanting MACI through an arthroscopic approach the surgeon may choose to use our custom MACI Arthro instruments during the procedure, which we sell by way of a separate transaction.
When an orthopedic surgeon decides to treat a patient by implanting MACI through an arthroscopic approach, the surgeon may choose to use our custom MACI Arthro instruments during the procedure, which we sell by way of a separate transaction.
The FDA is not bound by the recommendation of the advisory committee, but it generally follows such recommendations. Before approving a BLA, the FDA will typically inspect one, or more, clinical sites to assure compliance with GCPs.
The FDA is not bound by the recommendation of the advisory committee, but it generally follows such recommendations. Before approving a BLA, the FDA will typically inspect one, or more, clinical sites to assure compliance with GCPs. Additionally, the FDA typically will inspect the facility or facilities at which the biologic is manufactured as part of a pre-license inspection.
Both Orsini and AllCare perform collection activities to collect payment from customers. In addition, we sell MACI directly to hospitals pursuant to an agreed upon purchase order and to a distributor, DMS Pharmaceutical Group, Inc. (“DMS”) at a contracted rate for the treatment of patients at military facilities throughout the U.S.
In addition, we sell MACI directly to hospitals pursuant to an 10 Table of Contents agreed upon purchase order and to a distributor, DMS Pharmaceutical Group, Inc. (“DMS”) at a contracted rate for the treatment of patients at military facilities throughout the U.S.
If left untreated, cartilage defects can progress and lead to degenerative joint disease, osteoarthritis and potentially require total knee replacement, which is a poor option for younger and more active patients.
If left untreated, cartilage defects can progress and lead to degenerative joint disease, osteoarthritis and potentially require total knee replacement, which is a poor option for younger and more active patients. Carticel was the first FDA-approved autologous cartilage repair product for the repair of symptomatic cartilage defects.
MACI Arthro became commercially available in the United States during the third quarter of 2024, and we began selling the MACI Arthro instruments at that time. To date, we have experienced strong surgeon interest in the MACI Arthro technique and Company-sponsored education and training programs concerning the arthroscopic approach are underway.
MACI Arthro became commercially available in the U.S. during the third quarter of 2024, and we began selling the MACI Arthro instruments at that time. We have experienced strong surgeon interest in the MACI Arthro technique since its launch. To date, more than 900 surgeons have participated in Company-sponsored education and training programs concerning the arthroscopic approach.
In addition, a provision of the ACA, referred to as the Sunshine Act, requires biological product manufacturers to track and report to the federal government certain payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals in the previous calendar year.
In addition, a provision of the Patient Protection and Affordable Care Act (“ACA”), referred to as the Sunshine Act, requires manufacturers of drugs, medical devices, and biologics to track and report to the federal government certain payments or other transfers of value made to covered recipients including physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals in the previous calendar year.
We own one issued patent directed to compositions and methods for repairing cartilage defects, scheduled to expire in the U.S. in February 2039. We have one issued patent in the U.S. directed to a device related to MACI that is set to expire in November 2033, and one issued patent in the EU set to expire in November 2034.
We have one issued patent in the U.S. directed to a device related to MACI that is set to expire in November 2033, and one issued patent in the EU that is set to expire in November 2034.
We contract with two specialty pharmacies, Orsini Pharmaceutical Services, Inc. (“Orsini”) and AllCare Plus Pharmacy, Inc. (“AllCare”) to distribute MACI in a manner in which we retain the credit and collection risk from the end customer. We pay each specialty pharmacy a fee in each instance when it dispenses MACI for use in treating a patient.
(“AllCare”) to distribute MACI in a manner in which we retain the credit and collection risk from the end customer. We pay each specialty pharmacy a fee in each instance when it dispenses MACI for use in treating a patient. Both Orsini and AllCare perform collection activities to collect payment from customers.
In addition, there may be additional federal, state, and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
In addition, there may be additional federal, state, and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways, some, but not all, of which may apply to our business activities.
Adequate and well-controlled clinical studies are required by the FDA for approval of a BLA. To conduct a clinical trial in the U.S., the study sponsor is required to submit an Investigational New Drug (“IND”) application, including the study protocols, prior to commencing human clinical trials.
Adequate and well-controlled clinical studies are required by the FDA for approval of a BLA. To conduct a clinical trial in the U.S., the study sponsor is required to submit an IND application, including the study protocols, prior to commencing human clinical trials. The submission must be supported by data, typically including the results of nonclinical, manufacturing and laboratory testing.
Our highly differentiated portfolio of cell therapy and specialty biologic products combines innovations in biology with medical technologies. We were among the first companies to achieve commercial success in the complex field of cell therapies with treatments that use tissue engineering to regenerate skin and healthy knee cartilage. We currently market two U.S.
We were among the first companies to achieve commercial success in the complex field of cell therapies with treatments that use tissue engineering to regenerate skin and healthy knee cartilage. We currently market two U.S. Food and Drug Administration (“FDA”) approved autologous cell therapy products and one FDA-approved specialty biologic product in the U.S.
Importation of drugs from Canada may materially and adversely affect the price we receive for any of our product candidates. In the U.S., individual states have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures.
In the U.S., individual states have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures. In some cases, state measures have been designed to encourage importation of drugs from other countries and bulk purchasing.
Employees and Human Capital Resources As of December 31, 2024, we employed approximately 357 full-time employees. A significant number of our management and professional employees have had prior experience with pharmaceutical, biotechnology or medical product companies.
Employees and Human Capital Resources As of December 31, 2025, we employed approximately 398 full-time employees. A significant number of our management and professional employees have had prior experience with pharmaceutical, biotechnology or medical product companies. None of our employees are covered by collective bargaining agreements, and management considers relations with our employees to be good.
We believe that the availability of MACI Arthro provides a significant growth opportunity for the overall MACI business. In conjunction with the launch of MACI Arthro, we have expanded our target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures.
In conjunction with the launch of MACI Arthro, we have expanded our target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures. A vast majority of the largest commercial payers in the U.S. have a formal medical policy that provides benefit coverage for treatment with MACI.
Obtaining approval of a BLA for a new biological product is a lengthy process, leading from the development of a new product through preclinical and clinical testing. This process takes several years and requires expenditure of significant resources.
Obtaining approval of a BLA for a new biological product is a lengthy process, from the development of a new product through preclinical and clinical testing. This process takes several years and requires the expenditure of significant resources. There can be no assurance that our current or future product candidates will ultimately receive approval.
The extent of the skin surface that the burn affects is usually referred to as a percent of TBSA. Epicel is currently the only FDA-approved cultured epidermal autograft product available for large total surface area burns in both adult and pediatric patients.
Epicel is currently the only FDA-approved cultured epidermal autograft product available for large total surface area burns in both adult and pediatric patients.
Most private payers have a medical policy that covers treatment with MACI, with the top 30 largest commercial payers having a formal medical policy for MACI or ACI in general. With respect to private commercial payers that have not yet approved a medical policy for MACI, we often obtain approval on a case-by-case basis.
A vast majority of the largest commercial payers in the U.S. have a formal medical policy that provides benefit coverage for treatment with MACI. With respect to private commercial payers that have not yet approved a medical policy for MACI, we often obtain approval on a case-by-case basis.
There can be no assurance that our current or future product candidates will ultimately receive approval. 11 Table of Contents The FFDCA, PHSA, and other federal and state statutes and regulations govern the research, testing, manufacture, safety, labeling, storage, record-keeping, approval, distribution, use, adverse event reporting, and advertising and promotion of our products.
The FFDCA, PHSA, and other federal and state statutes and regulations govern the research, testing, manufacture, safety, labeling, storage, record-keeping, approval, distribution, use, adverse event reporting, and advertising and promotion of our products.
However, we did not take such actions prior to expiration, and therefore the EU marketing authorization for MACI expired in June 2018.
However, we did not take such actions prior to expiration, and therefore the EU marketing authorization for MACI expired in June 2018. As of January 1, 2021, European Union law no longer directly applies in the UK.
In the event Matricel is unable to supply the membranes, we may license the technology and procure the membranes from another source. The Matricel Supply Agreement provides that Matricel shall supply the ACI-Maix membranes exclusively to us during the term of the agreement.
In the event Matricel is unable to supply the membranes, we may license the technology and procure the membranes from another source.
Market Opportunity for NexoBrid NexoBrid is approved in the European Union (“EU”) and other international markets and has been designated as an orphan biologic in the U.S., EU and other international markets. NexoBrid has the potential to change the standard of care for eschar removal with respect to hospitalized burn patients and treat a significant addressable market in the U.S.
NexoBrid has the potential to change the standard of care for eschar removal with respect to hospitalized burn patients and treat a significant addressable market in the U.S.
A reference biologic is granted 12 years of exclusivity from the time of first licensure of the reference product. Advertising and Promotion The FDA closely regulates the post-approval marketing and promotion of biologics and devices, including regulating through standards and regulations for direct-to-consumer advertising and promotional activities involving the internet.
Advertising and Promotion 16 Table of Contents The FDA closely regulates the post-approval marketing and promotion of biologics and devices, including regulating through standards and regulations for direct-to-consumer advertising and promotional activities involving the internet.
Other non-surgical treatments include clostridial collagenase ointment (Santyl ® ) (Smith & Nephew, plc.), antimicrobial agents (silver sulfadiazine), or hydrogels. Although less invasive than surgical excision, prior to NexoBrid, non-surgical debridement agents have often been considered inefficient, can result in a lengthy sloughing period, and have the potential for the development of granulation tissue and increased infection and scarring.
Although less invasive than surgical excision, prior to NexoBrid, non-surgical debridement agents have often been considered inefficient, can result in a lengthy sloughing period, and have the potential for the development of granulation tissue and increased infection and scarring. Other than NexoBrid, Santyl is the only FDA-approved product for enzymatic eschar removal in the U.S.
Subsequently, in August 2024, the FDA approved an sBLA expanding NexoBrid’s indication to include pediatric patients. The treatment pathway for burn patients is generally determined by the ultimate size and depth of a patient’s burn injury. Patients with full-thickness burn injuries of any size and partial-thickness burn injuries greater than 10% TBSA are most often transferred to specialized burn centers.
NexoBrid is indicated for the removal of eschar in adults with deep partial-thickness and/or full-thickness thermal burns. Subsequently, in August 2024, the FDA approved an sBLA expanding NexoBrid’s indication to include pediatric patients. The treatment pathway for burn patients is generally determined by the ultimate size and depth of the patient’s burn injury.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include, but are not limited to, the following: • We may experience significant quarterly and annual fluctuations in our results of operations due to a number of factors. • Our operating results will be harmed if we are unable to effectively manage and sustain our future growth or scale our operations. • Global crises have had and may have in the future a significant adverse effect on our business, financial condition, and results of operations. • We may not be able to manage inventory in an effective and efficient manner, which could adversely affect our results of operations. • Although we reported net income for the year ended 2024, we have incurred losses in the past and may not achieve consistent profitability for some time or at all. • Our products and product development programs are based on novel technologies and are inherently risky, which may decrease the chances of regulatory approval and could have a material effect on our financial condition and operating results. • We may not be able to raise the required capital to develop and commercialize our future product candidates and otherwise grow and expand our business. • Current financial market conditions may exacerbate certain risks affecting our business. • We are dependent on our key manufacturing, quality and other management personnel and the loss of any of these individuals could harm our business. • Inflationary pressures and our responses thereto as well as other unfavorable global and regional economic conditions, geopolitical events, and conflicts, such as repercussions from the ongoing conflicts in Ukraine or the Middle East region involving Israel.
Biggest changeThese risks include, but are not limited to, the following: • We may experience significant quarterly and annual fluctuations in our results of operations due to a number of factors. • Our operating results will be harmed if we are unable to effectively manage and sustain our future growth or scale our operations. • We may not be able to manage inventory in an effective and efficient manner, which could adversely affect our results of operations. • Although we reported net income for the years ended 2024 and 2025, we have incurred losses in the past and may not achieve consistent profitability for some time or at all. • Our products and product development programs are based on novel technologies and are inherently risky, which may decrease the chances of regulatory approval and could have a material effect on our financial condition and operating results. • If we do not effectively expand and train our direct sales force, we may be unable to add new customers or increase sales to our existing customers, and our business will be adversely affected. • Expansion into international markets is expected to be an aspect of our long-term growth, and as we expand internationally, we will face additional business, political, legal, regulatory, operational, financial, and economic risks, any of which could increase our costs and hinder such growth. • We may not be able to raise the required capital to develop and commercialize our future product candidates and otherwise grow and expand our business. • Current financial market conditions may exacerbate certain risks affecting our business. • We are dependent on our key manufacturing, quality and other management personnel and the loss of any of these individuals could harm our business. • Inflationary pressures and our responses thereto as well as other unfavorable global and regional economic conditions, geopolitical events, and conflicts, such as repercussions from the ongoing conflicts in Ukraine or the Middle East region could harm or adversely affect our business. • If our manufacturing facility is destroyed or we experience any manufacturing difficulties, disruptions or delays, this could limit supply of our products or adversely affect our ability to conduct clinical trials and our business would be adversely impacted. • Failure of third parties, including, for example, Matricel GmbH (“Matricel”), to manufacture or supply certain components, equipment, disposable devices and other materials used in our MACI or Epicel cell manufacturing processes would impair our cell product development and commercialization. • Because our manufacturing and supply chain are subject to significant regulations, failure by our third-party manufacturers, including Matricel, to comply with the regulatory requirements set forth by the FDA with respect to our products could limit our ability to manufacture commercial products and/or result in the products being subject to restrictions or withdrawn from the market. • Our financial results could be significantly impacted by uncertainty in U.S. trade policy, including uncertainty surrounding changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. • Failure to achieve the commercial success of NexoBrid in the U.S. • The commercial success of NexoBrid in the U.S. is dependent, in part, on MediWound’s ability to timely manufacture and supply sufficient quantities of NexoBrid to meet customer demand.
While we cannot predict what impact on federal reimbursement policies these laws or any replacement law will have in general or specifically on any product we may commercialize in the future, modifications to the ACA, subsequent Executive Branch action, or HHS implementation of current laws may result in downward pressure on reimbursement, which could negatively affect market acceptance of new products.
While we cannot predict what impact on federal reimbursement policies these laws or any replacement law will have in general or specifically on any product we may commercialize in the future, modifications to the ACA or IRA, subsequent Executive Branch action, or HHS implementation of current laws may result in downward pressure on reimbursement, which could negatively affect market acceptance of new products.
Inadequate funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Inadequate funding for the FDA and other government agencies and/or other disruptions could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
We have entered into a lease agreement for approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts, which has been under construction. The Burlington facility is substantially complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel.
We have entered into a lease agreement for approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts, which has been under construction. The Burlington facility is complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel.
These laws, and other state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
These laws and efforts, and other state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
Because of the recent tightening of global credit, volatility in the financial markets, and global inflationary pressures, there may be a delay or disruption in the performance or satisfaction of commitments to us by these third parties, which could adversely affect our business. We may incur substantial indebtedness.
Because of the tightening of global credit in recent years, volatility in the financial markets, and global inflationary pressures, there may be a delay or disruption in the performance or satisfaction of commitments to us by these third parties, which could adversely affect our business. We may incur substantial indebtedness.
If our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may have to: obtain licenses, which may not be available on commercially reasonable terms, if at all; abandon an infringing product; redesign our products or processes to avoid infringement; stop using the subject matter claimed in the patents held by others; pay damages; and/or defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. 49 Table of Contents Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
If our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may have to: obtain licenses, which may not be available on commercially reasonable terms, if at all; abandon an infringing product; redesign our products or processes to avoid infringement; stop using the subject matter claimed in the patents held by others; pay damages; and/or defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. 48 Table of Contents Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
We may incur material liabilities relating to product liability claims in the future, including product liability claims arising out of the usage of MACI, Epicel or NexoBrid. Additionally, we may not be able to obtain or maintain product liability insurance on acceptable terms with adequate coverage or at all.
We may incur material liabilities relating to product liability claims in the future, including product liability claims arising out of the usage of MACI, MACI Arthro, Epicel or NexoBrid. Additionally, we may not be able to obtain or maintain product liability insurance on acceptable terms with adequate coverage or at all.
Specifically, our debt could have important consequences to our investors, including the following: • making it more difficult for us to satisfy our obligations under the Revolving Credit Agreement; and if we fail to comply with these requirements, an event of default could result; • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, or other general corporate requirements; • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to general adverse economic and industry conditions; • exposing us to the risk of increased interest rates as borrowings under our Revolving Credit Agreement are subject to floating interest rates based on SOFR, which could increase the cost of servicing our financial instruments and could materially reduce our profitability and cash flows; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete; • placing us at a disadvantage compared to other, less leveraged competitors; and • increasing our cost of borrowing.
Specifically, our debt could have important consequences to our investors, including the following: • making it more difficult for us to satisfy our obligations under the Revolving Credit Agreement; and if we fail to comply with these requirements, an event of default could result; 50 Table of Contents • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, or other general corporate requirements; • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to general adverse economic and industry conditions; • exposing us to the risk of increased interest rates as borrowings under our Revolving Credit Agreement are subject to floating interest rates based on SOFR, which could increase the cost of servicing our financial instruments and could materially reduce our profitability and cash flows; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete; • placing us at a disadvantage compared to other, less leveraged competitors; and • increasing our cost of borrowing.
Furthermore, the criteria by which our ESG practices, including our initiatives and public goals, are assessed may change due to the evolution of the sustainability landscape, which could result in greater expectations of us and may cause us to undertake costly initiatives to satisfy new criteria.
Furthermore, the criteria by which our sustainability practices, including our initiatives and public goals, are assessed may change due to the evolution of the sustainability landscape, which could result in greater expectations of us and may cause us to undertake costly initiatives to satisfy new criteria.
The degree of market acceptance of any of our marketed or potential new products will depend on a number of factors, including: • The clinical safety and effectiveness of our products and their demonstrated advantage over alternative treatment methods; • Our ability to demonstrate to healthcare providers that our products provide a therapeutic advancement over standard of care treatment or other competitive products and methods; • Our ability to educate healthcare providers on the autologous use of human tissue, to avoid potential confusion with, and differentiate ourselves from, the ethical controversies associated with human fetal tissue and engineered human tissue; 27 Table of Contents • Our ability to educate healthcare providers on the benefits and appropriate use of enzymatic agents for the removal of eschar in adult and pediatric patients suffering from deep partial-thickness and full-thickness thermal burns; • Our ability to educate healthcare providers, patients and payers on the safety and adverse reactions associated with our products; • Our ability to meet supply and demand and develop a group of medical professionals familiar with and committed to the use of our products; and • The cost-effectiveness of our products and the reimbursement policies of government and third-party payers.
The degree of market acceptance of any of our marketed or potential new products will depend on a number of factors, including: • The clinical safety and effectiveness of our products and their demonstrated advantage over alternative treatment methods; • Our ability to demonstrate to healthcare providers that our products provide a therapeutic advancement over standard of care treatment or other competitive products and methods; • Our ability to educate healthcare providers on the autologous use of human tissue, to avoid potential confusion with, and differentiate ourselves from, the ethical controversies associated with human fetal tissue and engineered human tissue; • Our ability to educate healthcare providers on the benefits and appropriate use of enzymatic agents for the removal of eschar in adult and pediatric patients suffering from deep partial-thickness and full-thickness thermal burns; • Our ability to educate healthcare providers, patients and payers on the safety and adverse reactions associated with our products; • Our ability to meet supply and demand and develop a group of medical professionals familiar with and committed to the use of our products; and • The cost-effectiveness of our products and the reimbursement policies of government and third-party payers.
Governmental and regulatory actions against us could result in various consequences that could adversely impact our operations, including: • The recall or seizure of products; • The suspension or revocation of the authority necessary for the production or sale of a product; • The suspension of shipments from particular manufacturing facilities, including non-U.S. facilities placed on an import alert; • The imposition of fines and penalties; • The delay of our ability to introduce new products into the market; • Our exclusion or the exclusion of our products from being reimbursed by federal and state healthcare programs (such as military, Medicare, Medicaid, Veterans Administration health programs and/or Civilian Health and Medical Program Uniformed Service, or CHAMPUS); and • Other civil or criminal prosecution or sanctions against us or our officers, directors and employees, such as fines, penalties or imprisonment.
Governmental and regulatory actions against us could result in various consequences that could adversely impact our operations, including: • The recall or seizure of products; • The suspension or revocation of the authority necessary for the production or sale of a product; • The suspension of shipments from particular manufacturing facilities, including non-U.S. facilities placed on an import alert; • The imposition of fines and penalties; • The delay of our ability to introduce new products into the market; 38 Table of Contents • Our exclusion or the exclusion of our products from being reimbursed by federal and state healthcare programs (such as military, Medicare, Medicaid, Veterans Administration health programs and/or Civilian Health and Medical Program Uniformed Service, or CHAMPUS); and • Other civil or criminal prosecution or sanctions against us or our officers, directors and employees, such as fines, penalties or imprisonment.
Generally, if any FDA inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulation occurs independent of such an inspection or audit, we or the FDA may require remedial measures that may be costly and/or time consuming for us or a third-party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales, recalls, warning letters, market withdrawals, seizures, placement of a non-U.S. facility on an import alert, or the temporary or permanent closure of a facility.
Generally, if any FDA inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulation occurs independent of such an inspection or audit, we or the FDA may require 36 Table of Contents remedial measures that may be costly and/or time consuming for us or a third-party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales, recalls, warning letters, market withdrawals, seizures, placement of a non-U.S. facility on an import alert, or the temporary or permanent closure of a facility.
The commercial success of NexoBrid depends, in part, on MediWound’s ability to obtain and maintain patent protection and trade secret protection for NexoBrid and its uses, as well as our ability to operate without infringing upon the proprietary rights of others. The family of patents that covers NexoBrid specifically includes approximately 32 granted patents worldwide.
The commercial success of NexoBrid depends, in part, on MediWound’s ability to obtain and maintain patent protection and trade secret protection for NexoBrid and its uses, as well as our ability to operate without infringing upon the proprietary rights of others. The family of patents that covers NexoBrid specifically includes approximately 17 granted patents worldwide.
On July 29, 2022, we entered into a $150.0 million five-year senior secured Revolving Credit Agreement. As of December 31, 2024, we had no outstanding borrowings under the Revolving Credit Agreement. We may be exposed to the impact of interest rate changes primarily through our borrowing activities.
On July 29, 2022, we entered into a $150.0 million five-year senior secured Revolving Credit Agreement. As of December 31, 2025, we had no outstanding borrowings under the Revolving Credit Agreement. We may be exposed to the impact of interest rate changes primarily through our borrowing activities.
Some of the factors that will impact our ability to raise additional capital and our overall success include: 52 Table of Contents • Our ability to further commercialize our products; • The rate and degree of progress of our product development; • The rate of regulatory approval to proceed with clinical developmental programs; • The level of success achieved in clinical trials; • The requirements necessary for marketing authorization from regulatory bodies in the U.S. and other countries; • The liquidity and market volatility of our equity securities; and • Regulatory and manufacturing requirements and uncertainties, and technological developments by competitors.
Some of the factors that will impact our ability to raise additional capital and our overall success include: • Our ability to further commercialize our products; • The rate and degree of progress of our product development; • The rate of regulatory approval to proceed with clinical developmental programs; • The level of success achieved in clinical trials; • The requirements necessary for marketing authorization from regulatory bodies in the U.S. and other countries; • The liquidity and market volatility of our equity securities; and • Regulatory and manufacturing requirements and uncertainties, and technological developments by competitors.
Additional legislation which may be passed, may cause us to incur significant additional costs of compliance due to the need for expanded data collection, analysis, and certification with respect to greenhouse gas emissions and other climate change related risks, as well as other ESG topics.
Additional legislation which may be passed, may cause us to incur significant additional costs of compliance due to the need for expanded data collection, analysis, and certification with respect to greenhouse gas emissions and other climate change related risks, as well as other sustainability topics.
For example, the SEC recently adopted rules requiring the disclosure of cybersecurity incidents that we determine to be “material,” to be made within four business days of such determination, which can be complex, requiring a number of assumptions based on several factors.
For example, the SEC has adopted rules requiring the disclosure of cybersecurity incidents that we determine to be “material,” to be made within four business days of such determination, which can be complex, requiring a number of assumptions based on several factors.
Under the Orphan Drug Act, the FDA may grant orphan designation to drugs or biologics intended to treat a rare disease or condition, generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or affects more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available the drug or biologic in the U.S for such disease or condition will be recovered from sales in the U.S of such drug or biologic.
Under the Orphan Drug Act, the FDA may grant orphan designation to drugs or biologics intended to treat a rare disease or condition, generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or affects more than 200,000 39 Table of Contents individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available the drug or biologic in the U.S for such disease or condition will be recovered from sales in the U.S of such drug or biologic.
If any of our manufacturers or suppliers fails to perform its respective obligations, or if our supply of certain components, equipment, disposable devices and other materials is limited or interrupted, it could impair our ability to manufacture our products, which would delay our ability to market our commercial products or future product candidates or conduct clinical trials on a timely and cost-competitive basis, if at all.
If any of our manufacturers or suppliers fails to perform its respective obligations, or if our supply of certain components, equipment, disposable devices and other materials is limited or interrupted, it could impair our ability to 33 Table of Contents manufacture our products, which would delay our ability to market our commercial products or future product candidates or conduct clinical trials on a timely and cost-competitive basis, if at all.
Many of our suppliers are sole or single source suppliers. We do not have long-term supply agreements with many of our third‑party sole or single source suppliers of certain components and other materials used in our cell manufacturing process to manufacture our marketed cell therapy products.
Many of our suppliers are sole or single source suppliers. We do not have long-term supply agreements with many of our sole or single source suppliers of certain components and other materials used in our cell manufacturing process to manufacture our marketed cell therapy products.
We purchase our required supply on a purchase order basis, and at any time the third-party suppliers could stop supplying our orders. FDA approval of a new supplier may be required if these materials become unavailable from our current suppliers.
We purchase our required supply on a purchase order basis, and at any time the suppliers could stop supplying our orders. FDA approval of a new supplier may be required if these materials become unavailable from our current suppliers.
The manufacturing processes, reporting requirements, post-approval clinical data, and promotional activities for each of our products is subject to continued regulatory reporting and periodic inspections by the FDA, as well as other domestic and foreign regulatory agencies.
The manufacturing processes, reporting requirements, post-approval clinical data, and promotional activities for each of our products are subject to continued regulatory reporting and periodic inspections by the FDA, as well as other domestic and foreign regulatory agencies.
These commitments may include costly activities, such as additional clinical trials, and a failure to meet these commitments can result in negative actions by the FDA, including the withdrawal of the product from the market. Our business, financial condition, results of operation and cash flows could be significantly and negatively affected by substantial governmental regulations.
These commitments may include costly activities, such as additional clinical trials, and a failure to meet these commitments can result in negative actions by the FDA, including the withdrawal of the product from the market. 37 Table of Contents Our business, financial condition, results of operation and cash flows could be significantly and negatively affected by substantial governmental regulations.
Any delay, interruption or cessation of production by our third-party suppliers of important materials, any delay in qualifying new materials, if necessary, or any delay associated with the transition to and verification of any new manufacturers or suppliers would prevent or delay our ability to manufacture products.
Any delay, interruption or cessation of production by our suppliers of important materials, any delay in qualifying new materials, if necessary, or any delay associated with the transition to and verification of any new manufacturers or suppliers would prevent or delay our ability to manufacture products.
If the Cambridge facility, or some or all of the equipment in it, is significantly damaged or 34 Table of Contents destroyed by fire, flood, power loss, catastrophic incident, or similar event, we will not be able to quickly or inexpensively replace our current manufacturing capacity until FDA qualification of the Burlington facility, and we may not be able to replace our Cambridge facility at all.
If the Cambridge facility, or some or all of the equipment in it, is significantly damaged or destroyed by fire, flood, power loss, catastrophic incident, or similar event, we will not be able to quickly or inexpensively replace our current manufacturing capacity until FDA qualification of the Burlington facility, and we may not be able to replace our Cambridge facility at all.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs, and other business arrangements generally. Activities subject to these laws 44 Table of Contents also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs, and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
If the technology that we use infringes a patent held by others, or if the technology utilized by MediWound in development and manufacturing NexoBrid infringes another’s patent, we could be sued for monetary damages by the patent holder or its licensee, or we could be prevented from continuing research, development, and commercialization of products that rely on that technology, unless a license is obtained to use the patent.
If the technology that we use infringes a patent held by others, or if the technology utilized by MediWound in development and manufacturing NexoBrid infringes another’s patent, we could be sued for monetary 47 Table of Contents damages by the patent holder or its licensee, or we could be prevented from continuing research, development, and commercialization of products that rely on that technology, unless a license is obtained to use the patent.
If we experience significant delays in the progress of our clinical trials, the commercial prospects for our current and future product candidates could be harmed and our ability to generate product revenue would be delayed or prevented. In addition, we and any provider that we retain will be subject to GCP requirements.
If we experience 30 Table of Contents significant delays in the progress of our clinical trials, the commercial prospects for our current and future product candidates could be harmed and our ability to generate product revenue would be delayed or prevented. In addition, we and any provider that we retain will be subject to GCP requirements.
We also sell a portion of MACI implants directly to facilities based on prices stated in an approved contract or an 28 Table of Contents applicable purchase order with the facility. Often the contracted rates are tied to the facility’s third-party reimbursement from an underlying insurance provider.
We also sell a portion of MACI implants directly to facilities based on prices stated in an approved contract or an applicable purchase order with the facility. Often the contracted rates are tied to the facility’s third-party reimbursement from an underlying insurance provider.
These delays may limit our ability to meet demand for our products, which would have a material adverse impact on our business, results of operations and financial condition. We may be unable to establish any agreements with third-party suppliers or to do so on acceptable terms.
These delays may limit our ability to meet demand for our products, which would have a material adverse impact on our business, results of operations and financial condition. We may be unable to establish any agreements with suppliers or be able to do so on acceptable terms.
In many instances, manufacturers and the life science industry do not have the 39 Table of Contents benefit of significant regulatory or judicial interpretation of these laws and regulations. In certain public statements, governmental authorities have taken positions on issues for which little official interpretation was previously available.
In many instances, manufacturers and the life science industry do not have the benefit of significant regulatory or judicial interpretation of these laws and regulations. In certain public statements, governmental authorities have taken positions on issues for which little official interpretation was previously available.
Furthermore, regulatory authorities’ assessment of the data and results required to demonstrate safety and effectiveness can change over time and can be affected by many factors, such as the emergence of new information, including on other products, changing policies and agency funding, staffing and leadership.
Furthermore, regulatory authorities’ assessment of the data and results required to demonstrate safety and effectiveness can change over time and can be affected by many factors, such as the emergence of new information, including on other products, 43 Table of Contents changing policies and agency funding, staffing and leadership.
Failure to meet regulatory requirements and post-marketing commitments and to maintain cGMP compliance could result in severe and detrimental regulatory actions, including the loss of marketing approval. The price and sale of any of our products may be limited by health insurance coverage and government regulation.
Failure to meet regulatory requirements and post-marketing commitments and to maintain cGMP compliance could result in severe and detrimental regulatory actions, including the loss of marketing approval. 35 Table of Contents The price and sale of any of our products may be limited by health insurance coverage and government regulation.
In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act of 2010, as 43 Table of Contents amended by the Health Care and Education Reconciliation Act (jointly, the ACA), which includes measures to significantly change the way health care is financed by both governmental and private insurers.
In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act (jointly, the ACA), which includes measures to significantly change the way health care is financed by both governmental and private insurers.
Non-compliance events that could result in 47 Table of Contents abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
In addition, the off-label use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims being pursued against us. Product liability claims are expensive to defend and could divert our management’s attention and result in substantial damage awards against us.
In addition, the off-label 42 Table of Contents use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims being pursued against us. Product liability claims are expensive to defend and could divert our management’s attention and result in substantial damage awards against us.
Therefore, we may not be able to consistently achieve or sustain profitability. In the longer term, we may need to raise additional funds in order to continue to complete product development programs and the clinical trials needed to obtain approval for, and commercialize, our future product candidates, or to capitalize on potential strategic opportunities.
Therefore, we may not be able to consistently achieve or sustain profitability. 24 Table of Contents In the longer term, we may need to raise additional funds in order to continue to complete product development programs and the clinical trials needed to obtain approval for, and commercialize, our future product candidates, or to capitalize on potential strategic opportunities.
To the extent MediWound is unable to manufacture NexoBrid in accordance with the requirements of its BLA approval, or experiences supply chain or other disruptions, whether as a result of the ongoing conflicts in the Middle East region involving Israel, military or other conflicts between China and Taiwan, or some other event, it could adversely affect the commercial success of NexoBrid. • NexoBrid may not be approved for the treatment of severe burns in other North American markets, outside of the U.S., and NexoBrid may not be accepted in the markets where regulatory approvals have been received. • A cyber security incident could result in a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection and privacy laws, or other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business. • We face risks associated with disruptive technologies, innovation and competition, including artificial intelligence. 24 Table of Contents • Failure to obtain adequate reimbursement and reimbursement rates for our products could have a material adverse effect on our financial condition and operating results. • Failure to obtain and/or maintain required regulatory approvals would severely limit our ability to sell our products. • Environmental, social and governance matters (“ESG”) and any related reporting obligations may adversely impact our business, financial condition and results of operations. • Any changes in the regulatory requirements that affect our products and/or future product candidates could prevent, limit or delay our ability to market or develop new product candidates. • Changes to our products or future product candidates, including the use of MACI to treat cartilage defects in the ankle, will require regulatory approvals which could result in the delay of the change being made or, if not approved, prevent any changes from being made. • If any federal or state agency determines that we have promoted the off-label use of our products and/or we have violated anti-kickback or other anti-bribery laws, we may be subject to various penalties, including civil or criminal penalties, and the off-label use of our products may result in injuries that lead to product liability lawsuits, which could be costly to our business. • If MediWound’s family of patents and proprietary rights covering NexoBrid do not provide substantial protection, our commercialization efforts with respect to NexoBrid could suffer. • Future sales of shares of common stock could have an adverse effect on the market price of such shares.
To the extent MediWound is unable to manufacture NexoBrid in accordance with the requirements of its BLA approval, or experiences supply chain or other disruptions, whether as a result of the conflicts in the Middle East region involving Israel, tensions between China and Taiwan, or some other event, it could adversely affect the commercial success of NexoBrid. • NexoBrid may not be approved for the treatment of severe burns in other North American markets, outside of the U.S., and NexoBrid may not be accepted in the markets where regulatory approvals have been received. • A cyber security incident could result in a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection and privacy laws, or other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business. • We face risks associated with disruptive technologies, innovation and competition, including artificial intelligence. 22 Table of Contents • Failure to obtain adequate reimbursement and reimbursement rates for our products, which could result from recent MFN-related efforts, could have a material adverse effect on our financial condition and operating results. • Failure to obtain and/or maintain required regulatory approvals would severely limit our ability to sell our products. • Corporate sustainability and any related reporting obligations may adversely impact our business, financial condition and results of operations. • Any changes in the regulatory requirements that affect our products and/or future product candidates could prevent, limit or delay our ability to market or develop new product candidates. • Changes to our products or future product candidates, including the use of MACI to treat cartilage defects in the ankle, will require regulatory approvals following the conduct of a clinical trial or trials, which could result in the delay of the change being made or, if not approved, prevent any changes from being made. • If any federal or state agency determines that we have promoted the off-label use of our products and/or we have violated anti-kickback or other anti-bribery laws, we may be subject to various penalties, including civil or criminal penalties, and the off-label use of our products may result in injuries that lead to product liability lawsuits, which could be costly to our business. • If MediWound’s family of patents and proprietary rights covering NexoBrid do not provide substantial protection, our commercialization efforts with respect to NexoBrid could suffer. • Future sales of shares of common stock could have an adverse effect on the market price of such shares.
The GDPR applies to any company established in the EU as well as to those outside the EU if they collect and use personal data in 29 Table of Contents connection with the offering of goods or services to individuals in the EU or the monitoring of their behavior.
The GDPR applies to any company established in the EU as well as to those outside the EU if they collect and use personal data in connection with the offering of goods or services to individuals in the EU or the monitoring of their behavior.
In the event we market any products outside of the U.S. in the future, we will be required to maintain our foreign regulatory approvals in compliance with regulatory requirements and applicable local regulations to allow for commercialization outside the U.S.
In the event we market any products outside of the U.S. in the future, including in the United Kingdom, we will be required to maintain our foreign regulatory approvals in compliance with regulatory requirements and applicable local regulations to allow for commercialization outside the U.S.
An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels.
An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an 29 Table of Contents existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels.
While certain procedures using our products are currently covered by Medicare and other third-party payers, future action by CMS or other government agencies, including the imposition of coverage and reimbursement limitations, may diminish payments to physicians, outpatient centers and/or hospitals for covered services.
While certain procedures using our products are currently covered by Medicare and other third-party payers, future action by CMS or other government agencies, including the imposition of coverage and reimbursement limitations, or MFN pricing-related efforts, may diminish payments to physicians, outpatient centers and/or hospitals for covered services.
Even if we are able to establish agreements with third-party suppliers, reliance on third-party suppliers entails additional risks, including the possible breach of the supply agreement by the third-party, and the possible termination or nonrenewal of the agreement by the third-party at a time that is costly or inconvenient for us.
Even if we are able to establish agreements with suppliers, reliance on them entails additional risks, including the possible breach of the supply agreement by the supplier, and the possible termination or nonrenewal of the agreement by the supplier at a time that is costly or inconvenient for us.
Whether or not we are ultimately successful in any product liability litigation, such litigation could consume substantial amounts of our financial and managerial resources and could result in, among other things: • Significant awards against us; • Substantial litigation costs; • Recall of the product; • Injury to our reputation; • Withdrawal of clinical trial participants; or • Adverse regulatory action.
Whether or not we are ultimately successful in any product liability litigation, such litigation could consume substantial amounts of our financial and managerial resources and could result in, among other things: • Significant awards against us; • Substantial litigation costs; • Recall of the product; • Decreased demand for our products or product candidates; • Injury to our reputation; • Withdrawal of clinical trial participants; or • Adverse regulatory action.
MediWound’s current patents will eventually expire or they may otherwise cease to provide meaningful 46 Table of Contents competitive advantage, and MediWound may be unable to adequately develop new technologies and obtain future patent protection to preserve our competitive advantage or avoid adverse effects on our business.
MediWound’s current patents will eventually expire or they may otherwise cease to provide meaningful competitive advantage, and MediWound may be unable to adequately develop new technologies and obtain future patent protection to preserve our competitive advantage or avoid adverse effects on our business.
U.S. and international regulators, customers and investors are increasingly focused on corporate ESG practices and disclosures, and may evaluate our business or other practices according to a variety of ESG targets, standards, and expectations. For example, new domestic and international laws and regulations relating to ESG matters are under consideration or being adopted.
U.S. and international regulators, customers and some investors have focused on corporate sustainability practices and disclosures, and may evaluate our business or other practices according to a variety of sustainability targets, standards, and expectations. For example, new domestic and international laws and regulations relating to sustainability matters are under consideration or being adopted.
For example, we are planning to move our cell therapy manufacturing operations to a larger facility to support our potential growth, but if the customization and qualification of such facility is delayed, we may be limited in our ability to meet future demand for our products.
For example, we are planning to move our cell therapy manufacturing operations to our new and larger facility in Burlington, Massachusetts to support our potential growth, but if the qualification of such facility is delayed, we may be limited in our ability to meet future demand for our products.
We have also developed an integrated information technology system for care coordination for MACI patients who have opted-in to the My Cartilage Care program, which we use with our care coordination contractor and our contracted specialty pharmacies. This system contains patient-related information some of which is accessible by company personnel and healthcare professionals for surgery coordination activities.
We have also developed an integrated information technology system for care coordination for MACI patients who have opted-in to the MyCartilageCare ® program, which we use with our care coordination contractor and our contracted specialty pharmacies. This system contains patient-related information some of which is accessible by company personnel and used for surgery coordination activities.
Adequate third-party reimbursement might not be available to enable us to maintain price levels sufficient to realize an appropriate return on 37 Table of Contents investment in our products and future product development.
Adequate third-party reimbursement might not be available to enable us to maintain price levels sufficient to realize an appropriate return on investment in our products and future product development.
Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. Environmental, social and governance matters and any related reporting obligations may adversely impact our business, financial condition and results of operations.
Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. Corporate sustainability matters and any related reporting obligations may adversely impact our business, financial condition and results of operations.
Additionally, both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Additionally, both advocates and opponents to certain sustainability matters have resorted to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Any third-party that we hire to conduct clinical trials may also provide services to our competitors, which could compromise the performance of their obligations to us.
Any third-party that we hire to conduct or provide services in connection with our clinical trials may also provide services to our competitors, which could compromise the performance of their obligations to us.
Additionally, there is an increasing number of state-level anti-ESG initiatives in the U.S. that may conflict with other regulatory requirements or various stakeholders’ expectations. If we are unable to respond effectively to these changes to the sustainability landscape, governments, customers, and investors may conclude that our policies and/or actions with respect to ESG matters are inadequate.
Additionally, there are several state-level anti-sustainability initiatives in the U.S. that may conflict with other regulatory requirements or various stakeholders’ expectations. If we are unable to respond effectively to these changes to the sustainability landscape, governments, customers, and investors may conclude that our policies and/or actions with respect to sustainability matters are inadequate.
Although, to date, our business has not been materially impacted by the ongoing military conflict between Russia and Ukraine or the ongoing conflict in the Middle East region, geopolitical tensions, or sustained high levels of inflation, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such matters may impact our business.
Although, to date, our business has not been materially impacted by the ongoing military conflicts in Russia and the Middle East region or the political and military developments in South America, geopolitical tensions, or sustained high levels of inflation, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such matters may impact our business.
Our business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the ongoing conflicts in Ukraine, the Middle East Region involving Israel, geopolitical tensions, or sustained high levels of inflation.
Our business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the ongoing conflicts in Ukraine and the Middle East region and political and military developments in South America, geopolitical tensions, or sustained high levels of inflation.
Finally, if we are unable to continue to develop and market new products and technologies (such as our recently 32 Table of Contents commercially launched MACI Arthro) in a timely manner, the demand for our products may decrease or our products could become obsolete, and our revenue may decline or our growth prospects may be adversely affected.
Finally, if we are unable to continue to develop and market new products and technologies (such as MACI Arthro) in a timely manner, the demand for our products may decrease or our products could become obsolete, and our revenue may decline or our growth prospects may be adversely affected.
Failure to do so may harm our long-term growth prospects. Although we reported net income for the year ended December 31, 2024, we have incurred losses in the past and may not achieve consistent profitability for some time or at all. For the year ended December 31, 2024 we reported net income of $10.4 million.
Failure to do so may harm our long-term growth prospects. Although we reported net income for the years ended December 31, 2024 and 2025, we have incurred losses in the past and may not achieve consistent profitability for some time or at all.
Our ability to maintain profitability will depend on, among other things, increasing sales of our current products, improving gross margins, successfully commercializing new products (including the recent commercial launch of MACI Arthro), completing the development of our future product candidates, timely initiation and completion of clinical trials, obtaining regulatory approvals, establishing manufacturing, sales and marketing arrangements with third parties, maintaining supplies of key manufacturing components and the possible acquisition and development of additional and complementary products.
Our ability to maintain profitability will depend on, among other things, increasing sales of our current products, improving gross margins, successfully commercializing new products (including the recent commercial launch of MACI Arthro), completing the development of our future product candidates (including MACI Ankle™, for which we initiated a clinical trial in the fourth quarter of 2025), timely initiation and completion of clinical trials, obtaining regulatory approvals, establishing manufacturing, sales and marketing arrangements with third parties, maintaining supplies of key manufacturing components and the possible acquisition and development of additional and complementary products.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions due, in part, to the conflicts in Ukraine and the Middle East region involving Israel.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions due, in part, to the conflicts in Ukraine and the Middle East region involving Israel and political and military developments in South America.
We are on track to initiate a MACI Ankle clinical trial later in 2025. There can be no guarantee that we will receive regulatory approval of MACI for treatment of cartilage defects in the ankle. A number of companies have suffered significant setbacks during evaluation due to lack of efficacy or unacceptable safety issues, notwithstanding promising preliminary results.
There can be no guarantee that we will receive regulatory approval of MACI for treatment of cartilage defects in the ankle. A number of companies have suffered significant setbacks during evaluation due to lack of efficacy or unacceptable safety issues, notwithstanding promising preliminary results.
In addition, our future earnings could be negatively impacted by changes in tax legislation, changes in tax rates and tax base such as limiting, phasing-out or eliminating deductions or tax credits, increased taxation of certain excess income from intellectual property, revising tax law interpretations and changes in other tax laws in the U.S.
We continue to monitor new tax legislation or other developments since our future earnings could be negatively impacted by changes in tax legislation, changes in tax rates and tax base such as limiting, phasing-out or eliminating deductions or tax credits, increased taxation of certain excess income from intellectual property, revising tax law interpretations and changes in other tax laws in the U.S.
We cannot predict how the ACA will be implemented, whether future litigation will be filed seeking to revise the law, or whether other laws or proposals will be made or adopted, or what impact these efforts may have on us.
We cannot predict how the ACA, IRA, or MFN-related efforts will be implemented, whether future litigation will be filed seeking to revise the laws or to challenge executive actions, or whether other laws or proposals will be made or adopted, or what impact these efforts may have on us.
To the extent that others develop new technologies that address the targeted application for our products, our business will suffer.
To the extent that we or others develop new technologies that address the targeted application for our products, our business may suffer.
Although the length and impact of the ongoing conflict in Ukraine and the Middle East region is highly unpredictable, the geopolitical uncertainty caused by the conflicts has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions, which has contributed to sustained high levels of inflation globally.
Although the length and impact of the ongoing conflicts in Ukraine and the Middle East region and political and military developments in South America are highly unpredictable, the geopolitical uncertainty caused by the conflicts and developments has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, as 51 Table of Contents well as supply chain interruptions, which has contributed to sustained high levels of inflation globally.
Collaboration and licensing arrangements pose many risks, including, but not limited to, the following: • collaborations and licensing arrangements may be terminated; • collaborators and licensors may delay clinical trials or post-market studies and prolong clinical development, or under-fund or stop a clinical trial; • expected revenue might not be generated because clinical adoption of the product may be less than predicted; • collaborators and licensors could independently develop, or develop with third parties, products that could compete with our future products despite non-competition provisions; • the terms of our contracts with current or future collaborators and license parties may not be favorable to us in the future; • disputes may arise delaying, or terminating or interrupting the research, development, supply or commercialization of our products or product candidates, or result in significant and costly litigation or arbitration; and • one or more third-party developers could obtain approval for a similar product resulting in unforeseen price competition in connection with the product. 33 Table of Contents Risks Related to the Manufacturing and Production of Our Products We rely on MediWound for the manufacture, production, and supply of NexoBrid, and our business, financial condition, and results of operations could be materially adversely affected to the extent the manufacture, production, and supply of NexoBrid is disrupted or delayed.
Collaboration and licensing arrangements pose many risks, including, but not limited to, the following: • collaborations and licensing arrangements may be terminated; • collaborators and licensors may delay clinical trials or post-market studies and prolong clinical development, or under-fund or stop a clinical trial; • expected revenue might not be generated because clinical adoption of the product may be less than predicted; • collaborators and licensors could independently develop, or develop with third parties, products that could compete with our future products despite non-competition provisions; • the terms of our contracts with current or future collaborators and license parties may not be favorable to us in the future; • disputes may arise delaying, or terminating or interrupting the research, development, supply or commercialization of our products or product candidates, or result in significant and costly litigation or arbitration; and • one or more third-party developers could obtain approval for a similar product resulting in unforeseen price competition in connection with the product.
As a result, if future revenues are below expectations, net income or loss may be disproportionately affected by a reduction in revenues, as any corresponding reduction in expenses may not be proportionate to the reduction in revenues.
Additionally, our expense levels are based, in part, on our expectations as to future revenues. As a result, if future revenues are below expectations, net income or loss may be disproportionately affected by a reduction in revenues, as any corresponding reduction in expenses may not be proportionate to the reduction in revenues.
Accordingly, in addition to regularly evaluating and making changes and upgrades to our IT systems, we have begun the implementation of a new enterprise resource planning (“ERP”) system.
Accordingly, in addition to regularly evaluating and making changes and upgrades to our IT systems, we have recently implemented a new enterprise resource planning (“ERP”) system.
Some of the manufacturing materials and/or components that we use in, and which are critical to, implementation of our technology involve the use of animal-derived products, including fetal bovine serum.
Restrictions on the use of animal-derived materials could harm our product development and commercialization efforts. Some of the manufacturing materials and/or components that we use in, and which are critical to, implementation of our technology involve the use of animal-derived products, including fetal bovine serum.
We are continuing to monitor inflation, the situations in Ukraine and Israel and global capital markets and assessing the potential impact on our business.
We are continuing to monitor inflation, the situations in Ukraine, the Middle East region and South America and global capital markets and assessing the potential impact on our business.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability, ongoing conflict between Russia and Ukraine and the ongoing conflicts in the Middle East region involving Israel, and sustained high levels of inflation.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability, ongoing conflicts in Russia and the Middle East Region and political and military developments in South America, and sustained high levels of inflation.
Failure to address any FDA inspection observations in a timely manner, pass pre-approval inspections, or comply with cGMP requirements can result in delays to approvals for future product candidates and/or regulatory action that can limit the ability to manufacture commercial products. As a result, our business, financial condition, and results of operations may be materially harmed.
Failure to address any FDA inspection observations in a timely manner, pass pre-approval inspections, or comply with cGMP requirements can result in delays to approvals for future product candidates and/or regulatory action that can limit the ability to manufacture commercial products.
Such claims are expensive to defend and could divert our attention and could result in substantial damage awards and injunctions that could have a material adverse effect on our business, financial condition or results of operations.
Thus, we could be sued for misappropriation of proprietary information and trade secrets. Such claims are expensive to defend and could divert our attention and could result in substantial damage awards and injunctions that could have a material adverse effect on our business, financial condition or results of operations.
General Risks The use of our products and future product candidates may expose us to product liability claims, and we may not be able to obtain adequate insurance. As a result, such claims could affect our earnings and financial condition.
Others may challenge our patents or other intellectual property rights or sue us for infringement. General Risks The use of our products and future product candidates may expose us to product liability claims, and we may not be able to obtain adequate insurance. As a result, such claims could affect our earnings and financial condition.
Factors that may affect our results of operations include: • the timing of new orders and revenue recognition for new and prior year orders; • seasonal buying patterns of our customers; • volatility in the sales of our products; • volume of revenues; • competitive developments; • changes in third-party coverage and reimbursement for our products; • our ability to supply and meet customer demand for our products; • our ability to increase sales to our existing customers, particularly larger customers; • our ability to attract new customers; • our ability to develop and achieve market adoption of our products; • our ability to continue to successfully commercialize NexoBrid; • the impact of a recession or any other adverse global economic conditions on our business; • the impact of public health crises; • erosion in margins or significant fluctuations in revenues caused by changing customer demand; • the timing and cost of hiring personnel and of large expenses such as third-party professional services; • stock-based compensation expenses, which vary along with changes to our stock price; • supply chain disruptions or constraints; • fluctuations in foreign currency exchange rates; and • future accounting pronouncements or changes in accounting rules or our accounting policies. 25 Table of Contents The foregoing factors are difficult to forecast, and these, as well as other factors, could materially adversely affect our quarterly and annual results of operations.
Factors that may affect our results of operations include: • the timing of new orders and revenue recognition for new and prior year orders; • seasonal buying patterns of our customers; • volatility in the sales of our products; • variability in burn-care treatments; • pace and timing of surgeon training and procedural adoption; • volume of revenues; • results of or developments in nonclinical studies and clinical trials of our product candidates and timing of achievement of related regulatory milestones; • competitive developments; • changes in third-party coverage and reimbursement for our products; • our ability to supply and meet customer demand for our products; • our ability to increase sales to our existing customers, particularly larger customers; • our ability to attract new customers; • our ability to develop and achieve market adoption of our products; • our ability to continue to successfully commercialize NexoBrid; • the impact of a recession or any other adverse global economic conditions on our business; • rapid changes in trade policy; • erosion in margins or significant fluctuations in revenues caused by changing customer demand; • the timing and cost of hiring personnel and of large expenses such as third-party professional services; • stock-based compensation expenses, which vary along with changes to our stock price; 23 Table of Contents • supply chain disruptions or constraints; • fluctuations in foreign currency exchange rates; and • future accounting pronouncements or changes in accounting rules or our accounting policies.
The results of early-stage clinical trials do not ensure success in later clinical trials, and interim results are not necessarily predictive of final results. Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. Additionally, several of our ongoing clinical trials utilize an “open-label” trial design.
Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. Additionally, several of our ongoing clinical trials utilize an “open-label” trial design.
With these changes in guidance and expedited programs, competitors may be able to make sales in the U.S. with minimally manipulated or homologous use products without the necessity of a BLA.
With these changes in guidance and expedited programs, competitors may be able to make sales in the U.S. with minimally manipulated or homologous use products without the necessity of a BLA. In addition, competitors may also be able to obtain accelerated approval of new cell therapy products through use of RMAT designation.
This effect could occur even if our shareholders consider the change in control to be in their best interest. Changes to tax legislation and regulations could negatively impact our earnings. We are subject to income taxes in the U.S.
This effect could occur even if our shareholders consider the change in control to be in their best interest. Changes to tax legislation and regulations could negatively impact our earnings. We are subject to income taxes in the U.S. From time to time, various legislative or administrative initiatives may be proposed that could adversely affect our tax positions.
A cyber security incident or data privacy issue could result in a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection and privacy laws, or other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business.
A cyber security incident or data privacy issue could result in a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection and privacy laws, or other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business. 27 Table of Contents We collect and store on our networks and work-issued devices sensitive information, including intellectual property and personally identifiable information.
We have developed comprehensive, integrated information technology (“IT”) systems for the intake of physician orders for our products, to track product delivery, and to store patient-related data that we obtain for purposes of manufacturing MACI and Epicel.
If these systems fail or are disrupted, we could lose product sales and our revenue and reputation would suffer. We have developed comprehensive, integrated information technology (“IT”) systems for the intake of physician orders for our products, to track product delivery, and to store patient-related data that we obtain for purposes of manufacturing MACI and Epicel.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese tools and services include, from time to time: • monitoring emerging data protection laws and best practices regarding application security, access management, device protection, network management, and data loss prevention and recovery and implementing responsive changes to our processes; • undertaking periodic reviews of our partner-facing policies and statements related to cybersecurity; • utilizing intrusion detection and monitoring applications and multifactor authentication; • conducting periodic table-top exercises with management, including our Executive Director, Corporate Information Systems, and testing of our data security, incident response policies and procedures; 55 Table of Contents • conducting periodic cybersecurity management and incident training for employees, including simulated phishing campaigns, which provide education on the risk of potential cybersecurity incidents, methods for identification of such incidents and appropriate responses; and • requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care.
Biggest changeThese tools and services include, from time to time: • monitoring emerging data protection laws and best practices regarding application security, access management, device protection, network management, and data loss prevention and recovery and implementing responsive changes to our processes; • undertaking periodic reviews of our partner-facing policies and statements related to cybersecurity; • utilizing intrusion detection and monitoring applications and multifactor authentication; • requiring that any systems, components, or functionality incorporating or embedded with artificial intelligence capabilities be subject to legal and Information Technology approval, including technical assessments of vendor’s capabilities, established governance controls, and appropriate-use training for employees granted access to such tools; • conducting periodic table-top exercises with management, including our Vice President, Information Technology, and testing of our data security, incident response policies and procedures; • conducting periodic cybersecurity management and incident training for employees, including simulated phishing campaigns, which provide education on the risk of potential cybersecurity incidents, methods for identification of such incidents and appropriate responses; and • requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care.
In the three most recently completed fiscal years and as of the date of this Annual Report on Form 10-K, we have not experienced any material cybersecurity incidents. Additionally, we do not believe any previous cybersecurity incidents we may have experienced are reasonably likely to materially affect us.
In the three most recently completed fiscal years and as of the date of this Annual Report on Form 10-K, we do not believe we have experienced any material cybersecurity incidents. Additionally, we do not believe any previous cybersecurity incidents we may have experienced are reasonably likely to materially affect us.
For a discussion of how any risks from cybersecurity threats could materially affect the Company, including our business strategy and results of operations, see “Risk Factors – A cyber security incident or data privacy issue could result in a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection and privacy laws, or other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business,” which is incorporated by reference into this Item 1C.
For a discussion of how any risks from cybersecurity threats could materially affect the Company, including our business strategy and results of operations, see “Risk Factors – A cyber security incident or data privacy issue could result in a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection and privacy laws, or 53 Table of Contents other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business,” which is incorporated by reference into this Item 1C.
The entire Board receives annual training from outside experts concerning the current global cybersecurity threat landscape and corporate best practices for mitigating cybersecurity risks, as well as the Board’s legal, regulatory and fiduciary responsibilities from a cybersecurity standpoint.
The entire Board receives annual training from outside experts concerning the current global cybersecurity and artificial intelligence threat landscape and corporate best practices for mitigating cybersecurity risks, as well as the Board’s legal, regulatory and fiduciary responsibilities from a cybersecurity standpoint.
Additionally, the Board was engaged with management and outside experts throughout 2022, 2023 and 2024 in overseeing the development of the Company’s Enterprise Incident Response Plan. This plan is reviewed and updated on an annual basis.
Additionally, the Board was engaged with management and outside experts throughout 2023, 2024 and 2025 in overseeing the development of the Company’s Enterprise Incident Response Plan. This plan is reviewed and updated on an annual basis.
Management, including our Executive Director, Corporate Information systems, collaborates with our information technology team and technical partners to review at least annually our enterprise-wide incident response plan. Periodically, we engage assessors, consultants, auditors and other third parties, including by conducting exercises with an external partner to stress test our data security systems and practice company-wide response tactics.
Management, including our Vice President, Information Technology, collaborates with our information technology team and technical partners to review at least annually our enterprise-wide incident response plan. Periodically, we engage assessors, consultants, auditors and other third parties, including by conducting exercises with an external partner to stress test our data security systems and practice company-wide response tactics.
Our Executive Director manages and leads the internal Information Technology team to maintain, update and enhance the Company’s technology infrastructure and corresponding safety measures, as well as to ensure that appropriate safety measures are implemented to protect against evolving cybersecurity threats.
Our Vice President, Information Technology manages and leads the internal Information Technology team to maintain, update and enhance the Company’s technology infrastructure and corresponding safety measures, as well as to ensure that appropriate safety measures are implemented to protect against evolving cybersecurity threats.
Our 56 Table of Contents Chief Legal Officer works closely with him and reports regularly to the Board and to the Audit Committee of the Board, covering the risks from cybersecurity threats.
Our Chief Legal Officer works closely with him and reports regularly to the Board and to the Audit Committee of the Board, covering the risks from cybersecurity threats.
Our Executive Director, Corporate Information Systems has over 20 years of experience in the life science industry, including a focus in the past four years on information technology management. Additionally, his academic background includes advanced degrees in the life sciences and he brings a strong track record of managing cyber incident responses and related activities.
Our Vice President, Information Technology has over 20 years of experience in the life science industry, including a focus in the past five years on information technology management. Additionally, his academic background includes advanced degrees in the life sciences and he brings a strong track record of managing cyber incident responses and related activities.
In this role, our Executive Director, Corporate Information Systems works closely with an internal team that includes resources with various cybersecurity certifications and leverages the support of our external information security firm, technology partners and an industry-leading intelligence platform.
In this role, our Vice President, Information Technology works closely with an internal team that includes resources with various professional cybersecurity certifications and leverages the support of our external information security firm, technology partners and an industry-leading intelligence platform.
Our Executive Director, Corporate Information Systems is informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents through the management of and participation in the cybersecurity risk management and strategy processes described above, including the operation of our Enterprise Incident Response Plan.
Our Vice President, Information Technology is informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents through the management of and participation in the cybersecurity risk management and strategy processes described above, including the operation of our Enterprise Incident Response Plan.
Our Executive Director, Corporate Information Systems, along with our Chief Legal Officer, Information Technology management team, and Chief Operating Officer, oversees our approach to cybersecurity and is responsible for assessing and managing material risks associated with cybersecurity threats.
Our Vice President, Information Technology, along with our Chief Legal Officer, Information Technology management team, and Chief Operating Officer, oversees our approach to cybersecurity and is responsible for assessing and managing material risks associated with cybersecurity threats.
The Audit Committee also reviews cybersecurity and data security risks and mitigation strategies, along with program assessments, planned improvements and the status of information technology initiatives.
The Audit Committee also reviews cybersecurity and data security risks and mitigation strategies, along with program assessments, planned improvements and the status of information technology initiatives. The Audit Committee also consider the evolution of different cybersecurity threats, including through artificial intelligence.
Despite our security measures, there can be no assurance that we, or the third parties with which we interact, will not experience a cybersecurity incident in the future that will materially affect us.
Despite our security measures, there can be no assurance that we, or the third parties with which we interact, will not experience a cybersecurity incident in the future that will materially affect us. Cybersecurity attacks are constantly evolving, may be difficult to detect quickly, and often are not recognized until after they have been launched against a target.
Item 1C. Cybersecurity Risk management and strategy We have developed processes for assessing, identifying and managing material risks from cybersecurity threats. Our enterprise risk management system incorporates risks from cybersecurity threats alongside other risks to the Company.
Item 1C. Cybersecurity Risk management and strategy We have developed processes for assessing, identifying and managing material risks from cybersecurity threats, including such threats associated with our use of any third-party service providers.
Added
Our enterprise risk management system incorporates risks from cybersecurity threats, including those emanating from the rapid emergence of artificial intelligence in the marketplace, alongside other risks to the Company.
Added
For example, the emergence of artificial intelligence has provided additional tools for those who perpetrate these attacks, including through social engineering, the development of customized malware, and an enhanced ability to evade detection.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOnce validated, the facility's manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel. We believe that our facilities are adequate to meet our current needs. Additional facilities may be required to support expansion of our manufacturing operations and research and development activities. See Note 5, “Leases” in our accompanying consolidated financial statements for further informatio n.
Biggest changeOnce validated, the facility’s manufacturing space will eventually become the primary manufacturing facility for MACI and Epicel. We believe that our facilities are adequate to meet our current needs. Additional facilities may be required to support expansion of our manufacturing operations and research and development activities.
Properties The following table summarizes information regarding our leased properties as of January 31, 2025: Location Primary Use Approximate Square Footage Lease Expiration Date Renewal Option Burlington, Massachusetts Manufacturing, laboratory and office space * 126,000 June 2036 One ten-year term Cambridge, Massachusetts Manufacturing, laboratory and office space 57,000 February 2032 One five-year term Ann Arbor, Michigan Office space 6,000 April 2025 None * The Burlington facility is substantially complete, and we are currently utilizing the facility's office space.
Properties The following table summarizes information regarding our leased properties as of December 31, 2025: Location Primary Use Approximate Square Footage Lease Expiration Date Renewal Option Burlington, Massachusetts Manufacturing, laboratory and office space * 126,000 June 2036 One ten-year term Cambridge, Massachusetts Manufacturing, laboratory and office space 57,000 February 2032 One five-year term Ann Arbor, Michigan Office space 6,000 April 2026 None * The Burlington facility is complete, and we are currently utilizing the facility's office space.
Added
See Note 5, “Leases” in our accompanying consolidated financial statements for further informatio n. 54 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe historical stock price performance of our common stock shown in the graph below is not necessarily indicative of future stock price performance, and we do not make or endorse any predictions as to future stockholder returns. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Vericel Corporation (VCEL) $100 $177 $226 $151 $205 $316 NASDAQ Composite Index (^IXIC) $100 $144 $174 $117 $167 $215 NASDAQ Biotechnology Index (^NBI) $100 $126 $125 $111 $115 $114 58 Table of Contents Purchases of Equity Securities by the Issuer There were no repurchases of shares of common stock made during the year ended December 31, 2024.
Biggest changeThe historical stock price performance of our common stock shown in the graph below is not necessarily indicative of future stock price performance, and we do not make or endorse any predictions as to future stockholder returns. 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Vericel Corporation (VCEL) $100 $127 $85 $115 $178 $117 NASDAQ Composite Index (^IXIC) $100 $121 $81 $116 $150 $180 NASDAQ Biotechnology Index (^NBI) $100 $99 $89 $92 $91 $120 56 Table of Contents Purchases of Equity Securities by the Issuer There were no repurchases of shares of common stock made during the year ended December 31, 2025.
The comparison assumes that a hypothetical $100 was invested on December 31, 2019 in our common stock and in both of the foregoing indices. All values assume reinvestment of the pre-tax value of dividends paid by companies included in these indices.
The comparison assumes that a hypothetical $100 was invested on December 31, 2020 in our common stock and in both of the foregoing indices. All values assume reinvestment of the pre-tax value of dividends paid by companies included in these indices.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchase of Equity Securities Market Information Our common stock is currently trading on the NASDAQ Stock Market under the symbol “VCEL”. Holders of Record As of January 31, 2025 there were approximately 166 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchase of Equity Securities Market Information Our common stock is currently trading on the NASDAQ Stock Market under the symbol “VCEL”. Holders of Record As of January 31, 2026 there were approximately 162 holders of record of our common stock.
Set forth below is a line graph comparing the cumulative total shareholder return on Vericel’s common stock with the cumulative total return of (i) the NASDAQ Composite Index, and (ii) the NASDAQ Biotechnology Index, for the period from December 31, 2019 through December 31, 2024.
Set forth below is a line graph comparing the cumulative total shareholder return on Vericel’s common stock with the cumulative total return of (i) the NASDAQ Composite Index, and (ii) the NASDAQ Biotechnology Index, for the period from December 31, 2020 through December 31, 2025.
Removed
Rule 10b5-1 Trading Plans During the three months ended December 31, 2024, the following Section 16 officers and directors adopted, modified or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act): • On November 14, 2024, Heidi Hagen, a member of the Vericel Corporation Board of Directors, entered into a Rule 10b5-1 trading arrangement providing for the potential sale of up to 24,000 shares of our common stock between March 3, 2025, and March 27, 2026. • On November 15, 2024, Joseph Mara, Vericel Corporation’s Chief Financial Officer, entered into a Rule 10b5-1 trading arrangement.
Removed
Mr. Mara subsequently amended that trading arrangement on November 26, 2024.
Removed
The amended trading arrangement provides for the potential sale of up to 88,500 shares of our common stock between March 3, 2025, and December 31, 2025. • On November 19, 2024, Michael Halpin, Vericel Corporation’s Chief Operating Officer, entered into a Rule 10b5-1 trading arrangement providing for the potential sale of up to 30,000 shares of our common stock between March 3, 2025, and February 27, 2026. • On December 2, 2024, Dominick Colangelo, Vericel Corporation’s President and Chief Executive Officer, entered into a Rule 10b5-1 trading arrangement providing for the potential sale of up to 131,008 shares of our common stock between March 12, 2025, and June 2, 2025.
Removed
Additionally, there were no “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange Act) adopted, modified or terminated during the three months ended December 31, 2024 by our Section 16 officers or directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+11 added−15 removed37 unchanged
Biggest changeResults of Operations The following is a summary of our consolidated results of operations: 62 Table of Contents Year Ended December 31, 2024 vs. 2023 (In thousands) 2024 2023 2022 Change $ Change % Total revenue $ 237,224 $ 197,516 $ 164,365 $ 39,708 20.1 % Cost of product sales 65,117 61,940 54,577 3,177 5.1 % Gross profit 172,107 135,576 109,788 36,531 26.9 % Research and development 24,797 21,042 19,943 3,755 17.8 % Selling, general and administrative 142,791 120,998 106,903 21,793 18.0 % Total operating expenses 167,588 142,040 126,846 25,548 18.0 % Income (loss) from operations 4,519 (6,464) (17,058) 10,983 169.9 % Total other income 5,991 4,096 1,070 1,895 46.3 % Income tax expense 148 814 721 (666) (81.8) % Net income (loss) $ 10,362 $ (3,182) $ (16,709) $ 13,544 425.6 % Comparison of the Periods Ended December 31, 2024 and 2023 Total Revenue Revenue by product is as follows: Year Ended December 31, 2024 vs. 2023 (In thousands) 2024 2023 2022 Change $ Change % MACI $ 197,309 $ 164,800 $ 131,967 $ 32,509 19.7 % Epicel 36,623 31,574 31,731 5,049 16.0 % NexoBrid 3,292 1,142 667 2,150 188.3 % Total revenue $ 237,224 $ 197,516 $ 164,365 $ 39,708 20.1 % Total revenue increase for the year ended December 31, 2024, compared to 2023, was driven primarily by MACI volume and price growth, in addition to higher Epicel and NexoBrid volume.
Biggest changeResults of Operations The following is a summary of our consolidated results of operations: Year Ended December 31, 2025 vs. 2024 (In thousands) 2025 2024 2023 Change $ Change % Total revenue $ 276,259 $ 237,224 $ 197,516 $ 39,035 16.5 % Cost of product sales 70,660 65,117 61,940 5,543 8.5 % Gross profit 205,599 172,107 135,576 33,492 19.5 % Research and development 27,563 24,797 21,042 2,766 11.2 % Selling, general and administrative 166,992 142,791 120,998 24,201 16.9 % Total operating expenses 194,555 167,588 142,040 26,967 16.1 % Income (loss) from operations 11,044 4,519 (6,464) 6,525 144.4 % Total other income 6,333 5,991 4,096 342 5.7 % Income tax expense 859 148 814 711 480.4 % Net income (loss) $ 16,518 $ 10,362 $ (3,182) $ 6,156 59.4 % 60 Table of Contents Comparison of the Periods Ended December 31, 2025 and 2024 Total Revenue Revenue by product is as follows: Year Ended December 31, 2025 vs. 2024 (In thousands) 2025 2024 2023 Change $ Change % MACI $ 239,506 $ 197,309 $ 164,800 $ 42,197 21.4 % Epicel 32,066 36,623 31,574 (4,557) (12.4) % NexoBrid 4,687 3,292 1,142 1,395 42.4 % Total revenue $ 276,259 $ 237,224 $ 197,516 $ 39,035 16.5 % Total revenue increase for the year ended December 31, 2025, compared to 2024, was driven primarily by MACI volume and price growth and NexoBrid volume growth, partially offset by lower Epicel volume.
(“MediWound”) for North American rights to NexoBrid ® (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, which is indicated for the removal of eschar in adult and pediatric patients with deep partial-thickness and/or full-thickness thermal burns.
(“MediWound”) for the North American rights to NexoBrid ® (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, which is indicated for the removal of eschar in adult and pediatric patients with deep partial-thickness and/or full-thickness thermal burns.
Net Cash Used in Investing Activities Net cash used in investing activities during the year ended December 31, 2024 was the result of $68.2 million in investment purchases, $64.0 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $53.2 million of investment sales and maturities.
Net cash used in investing activities during the year ended December 31, 2024 was the result of $68.2 million in investment purchases, $64.0 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $53.2 million of investment sales and maturities.
Net Cash Provided by Financing Activities Net cash provided by financing activities during the year ended December 31, 2024 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $24.5 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $5.5 million.
Net cash provided by financing activities during the year ended December 31, 2024 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $24.5 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $5.5 million.
Prior authorization and confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of product to a patient. We recognize product revenue from sales of all MACI implants upon delivery at which time the customer obtains control of the implant and the claim is billable.
Prior authorization and confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of a MACI implant to a patient. We recognize product revenue from sales of all MACI implants upon delivery at which time the customer obtains control of the implant and the claim is billable.
Historically, MACI orders are normally stronger in the fourth quarter due to several factors including the satisfaction by patients of insurance deductible limits and the time of year patients prefer to start rehabilitation. Due to the low incidence and variable occurrence of severe burns, Epicel revenue has inherent variability from quarter-to-quarter and does not exhibit significant seasonality.
Historically, MACI orders are normally stronger in the fourth quarter due to several factors including the satisfaction by patients of insurance deductible limits and the time of year patients prefer to start rehabilitation. Due to the low incidence and variable occurrence of severe burns, Epicel has inherent variability from quarter-to-quarter and does not exhibit significant seasonality.
Epicel is a permanent skin replacement indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient’s TBSA. Both autologous cell therapy products are currently manufactured and marketed in the U.S.
Epicel is a permanent skin replacement indicated for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of a patient’s TBSA. Both autologous cell therapy products, MACI and Epicel, are currently manufactured and marketed in the U.S.
NexoBrid is a topically-administered biological orphan product containing proteolytic enzymes that is indicated for eschar removal in adult and pediatric patients with deep partial-thickness and/or full-thickness burns. We hold exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America.
NexoBrid is a topically-administered biological orphan product containing proteolytic enzymes that is indicated for eschar removal in adult and pediatric patients with deep partial-thickness and/or full-thickness thermal burns. We hold exclusive license and supply agreements with MediWound to commercialize NexoBrid in North America.
Certain raw materials utilized in NexoBrid’s manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan. Product Portfolio Our marketed products include two FDA-approved autologous cell therapies and one FDA-approved specialty biologic product.
Certain raw materials utilized in NexoBrid’s manufacture, including the supply of the active ingredient bromelain, are sourced from Taiwan. Product Portfolio Our current marketed products include two FDA-approved autologous cell therapies and one FDA-approved specialty biologic product.
The arthroscopic delivery of MACI could increase the ease of MACI’s use for physicians and may reduce both the length of the procedure as well as procedure-induced trauma, which may result in a reduction of a patient’s post-operative pain and accelerate a patient’s recovery.
The arthroscopic delivery of MACI may increase the ease of MACI’s use for physicians and may reduce both the length of the procedure as well as procedure-induced trauma, which may result in a reduction of a patient’s post-operative pain and accelerate a patient’s recovery.
We have no immediate plans to borrow under the Revolving Credit Agreement, but we may use the facility for working capital needs and other general corporate purposes. As of December 31, 2024 , there are no outstanding borrowings under the Revolving Credit Agreement, and we are in compliance with all applicable covenant requirements.
We have no immediate plans to borrow under the Revolving Credit Agreement, but we may use the facility for working capital needs and other general corporate purposes. As of December 31, 2025 , there are no outstanding borrowings under the Revolving Credit Agreement, and we are in compliance with all applicable covenant requirements.
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 large burns treated with Epicel relative to standard care.
The product label also 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 large burns treated with Epicel relative to standard care.
Subsequently, in August 2024, the FDA approved a sBLA expanding NexoBrid’s indication to include pediatric patients. NexoBrid is approved in the European Union (“EU”) and other international markets and has been designated as an orphan biologic in the U.S., EU and other international markets.
Subsequently, in August 2024, the FDA approved an sBLA expanding NexoBrid’s indication to include pediatric patients. In addition to the U.S., NexoBrid is approved in the European Union (“EU”) and other international markets and has been designated as an orphan biologic in the U.S., EU and other international markets.
Total Other Income The change in total other income for the year ended December 31, 2024, was due primarily to fluctuations in the rates of return on our investments in various marketable debt securities and money market funds.
Total Other Income The change in total other income for the year ended December 31, 2025, was due primarily to fluctuations in the rates of return on our investments in various marketable debt securities and money market funds.
The overall decrease in cash from our working capital accounts was primarily driven by an increase in inventory primarily related to supporting NexoBrid commercial availability and an increase in accounts receivable due to higher sales volume, partially offset by an increase in operating lease liabilities due to receipts of tenant improvement allowances which exceeded payments on operating leases amortization.
The overall decrease in cash from our working capital accounts was primarily driven by an increase in inventory primarily related to supporting NexoBrid commercial 62 Table of Contents availability and an increase in accounts receivable due to higher sales volume, partially offset by an increase in operating lease liabilities due to receipts of tenant improvement allowances which exceeded payments on operating leases amortization.
The total consideration which we expect to collect in exchange for MACI implants (the “Transaction Price”) may be fixed or variable. Direct sales to hospitals or distributors are recorded at a contracted price, and there are typically no forms of variable consideration.
The total consideration which we expect to collect in exchange for MACI implants (the “Transaction Price”) may be fixed or variable. Direct sales to hospitals or distributors are recorded at a contracted price, and there are typically no forms of variable consideration related to warranties to customers.
MACI Arthro™ allows surgeons to evaluate and prepare the cartilage defect site as well as deliver the MACI implant through small incisions using custom-designed arthroscopic instruments developed by the Company (“MACI Arthro instruments”). MACI Arthro became commercially available in the United States during the third quarter of 2024 and the Company began selling the MACI Arthro instruments at that time.
MACI Arthro ® allows surgeons to evaluate and prepare the cartilage defect site as well as deliver the MACI implant through small incisions using custom-designed arthroscopic instruments developed by the Company (“MACI Arthro instruments”). MACI Arthro became commercially available in the U.S. during the third quarter of 2024 and the Company began selling MACI Arthro instruments at that time.
Epicel is not price-restricted in this manner because on February 18, 2016, the FDA approved our HDE supplement to revise the labeled indications of use for Epicel to specifically include pediatric patients, thus allowing Epicel to be sold for profit.
Epicel is not price-restricted in this manner because in 2016, the FDA approved our HDE supplement to revise the labeled indications of use for Epicel to specifically include pediatric patients, thus allowing Epicel to be sold for profit.
Comparison of the Periods Ended December 31, 2023 and 2022 For a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see “Part II, Item 7.
Comparison of the Periods Ended December 31, 2024 and 2023 For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see “Part II, Item 7.
NexoBrid’s FDA approval expands our burn care franchise’s total addressable market, which will permit us to treat a significantly larger segment of hospitalized burn patients than with Epicel alone.
NexoBrid’s FDA approval expands our burn care franchise’s total addressable market, which permits us to treat a significantly larger segment of hospitalized burn patients than with Epicel alone.
Our total purchase commitments consist of minimum purchase amounts of raw materials and finished goods used in our cell manufacturing process to manufacture our marketed cell therapy products and total $15.4 million as of December 31, 2024, as well as usage of offsite warehouse space.
Our total purchase commitments consist of minimum purchase amounts of raw materials and finished goods used in our cell manufacturing process to manufacture our marketed cell therapy products and total $15.8 million as of December 31, 2025, as well as usage of offsite warehouse space.
Manufacturing We have a cell manufacturing facility in Cambridge, Massachusetts, which is used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts, which has been under construction.
Manufacturing We have a cell manufacturing facility in Cambridge, Massachusetts, which is currently used for U.S. manufacturing and distribution of MACI and Epicel. In January 2022, we entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts.
NexoBrid Our portfolio of commercial-stage products also includes NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, for which the FDA approved a BLA in December 2022 permitting the product’s use for the removal of eschar in adults with deep partial-thickness and/or full thickness thermal burns.
NexoBrid Our portfolio of commercial-stage products also includes NexoBrid (anacaulase-bcdb), a topically-administered biological orphan product containing proteolytic enzymes, for which the FDA approved a BLA in December 2022. NexoBrid is indicated for the removal of eschar in adults with deep partial-thickness and/or full-thickness thermal burns.
Seasonality. Sales of MACI implants have historically experienced a level of seasonality throughout the year. In the last five years through 2024, MACI sales volumes from the first through the fourth quarter on average represented 21% (20%-22% range), 22% (16%-24% range), 23% (21%-26% range) and 34% (33%-38% range) respectively, of total annual volumes.
Seasonality. Sales of MACI implants have historically experienced a level of seasonality throughout the year. In the last five years through 2025, MACI sales volumes from the first through the fourth quarter on average represented 21% (20%-22% range), 23% (22%-24% range), 22% (21%-24% range) and 34% (33%-34% range) respectively, of total annual volumes.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025.
The Burlington facility is substantially complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel. 60 Table of Contents The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel.
The Burlington facility is complete, and we are currently utilizing the facility’s office space. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel. The manufacturing process for NexoBrid is conducted by MediWound, primarily at manufacturing locations in Israel.
Gross Profit Gross profit increased for the year ended December 31, 2024, compared to the same period in 2023, driven by revenue growth across all products, combined with our primarily fixed manufacturing cost structure, which consists mainly of labor and facility costs.
Gross Profit Gross profit increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by MACI revenue growth combined with our primarily fixed manufacturing cost structure, which consists mainly of labor and facility costs.
In conjunction with the launch of MACI Arthro, we have expanded our target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures. We also are evaluating the feasibility and potential market opportunity involved in delivering MACI treatment to patients suffering from cartilage damage in the ankle.
In conjunction with the launch of MACI Arthro, we have expanded our target surgeon base from 5,000 to 7,000 to include orthopedic surgeons that perform high volumes of knee cartilage repair surgeries, predominantly through arthroscopic procedures. We also are focused on delivering MACI treatment to patients suffering from cartilage damage in the ankle.
Net Cash Provided by Operating Activities Our cash, cash equivalents, and restricted cash totaled $85.0 million, short-term investments totaled $41.7 million and long-term investments totaled $39.9 million as of December 31, 2024.
Our cash, cash equivalents, and restricted cash totaled $85.0 million, short-term investments totaled $41.7 million and long-term investments totaled $39.9 million as of December 31, 2024.
ROU assets represent our right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent our obligation to make lease payments arising from the lease.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets represent our right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent our obligation to make lease payments arising from the lease.
Recent Accounting Pronouncements Refer to Note 2, “Summary of Significant Accounting Policies” in the accompanying consolidated financial statements located under Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting standards that may have a significant impact on our business.
This summary of significant accounting policies should be read in conjunction with our consolidated financial statements and related notes and this discussion of our results of operations. 65 Table of Contents Recent Accounting Pronouncements Refer to Note 2, “Summary of Significant Accounting Policies” in the accompanying consolidated financial statements located under Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting standards that may have a significant impact on our business.
In the future, we may finance our operations through the sales of equity securities, revolver borrowings or other debt financings, in addition to cash generated from operations.
To date, we have financed our operations primarily through cash received through MACI, Epicel and NexoBrid sales, debt, and public and private sales of our equity securities. In the future, we may finance our operations through sales of equity securities, revolver borrowings or other debt financings, in addition to cash generated from operations.
Our highly differentiated portfolio of cell therapy and specialty biologic products combines innovations in biology with medical technologies. We were among the first companies to achieve commercial success in the complex field of cell therapies with treatments that use tissue engineering to regenerate skin and healthy knee cartilage. We currently market two U.S.
We were among the first companies to achieve commercial success in the complex field of cell therapies with treatments that use tissue engineering to regenerate skin and healthy knee cartilage. We currently market two U.S. Food and Drug Administration (“FDA”) approved autologous cell therapy products and one FDA-approved specialty biologic product in the U.S.
We assess risk and determine a loss percentage by pooling accounts receivable based on similar risk characteristics. The loss percentage is calculated through the use of forecasts that are based on current and historical economic and financial information. Changes in estimates of the Transaction Price are recorded through revenue in the period in which such change occurs.
We assess risk and determine a loss percentage 64 Table of Contents by pooling accounts receivable based on similar risk characteristics. The loss percentage is calculated through the use of forecasts that are based on current and historical economic and financial information.
Income Tax Expense For the years ended December 31, 2024 and 2023, we recorded $0.1 million and $0.8 million, respectively, of income tax expense as a result of state income taxes.
Income Tax Expense For the years ended December 31, 2025 and 2024, we recorded $0.9 million and $0.1 million, respectively, of income tax expense as a result of state income taxes. The increase in income tax expense is primarily due to an increase in taxable income.
We have no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition. 66 Table of Contents Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that could materially impact the consolidated financial statements and disclosures based on varying assumptions.
Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that could materially impact the consolidated financial statements and disclosures based on varying assumptions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. 64 Table of Contents Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 58,163 $ 35,311 $ 17,687 Net cash used in investment activities (79,034) (3,130) (36,206) Net cash provided by financing activities 19,054 3,618 1,045 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (1,817) $ 35,799 $ (17,474) For a discussion of our liquidity and capital resources related to our cash flow activities for the fiscal year ended December 31, 2022, see “Part II, Item 7.
Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 51,910 $ 58,163 $ 35,311 Net cash used in investment activities (43,937) (79,034) (3,130) Net cash provided by financing activities 7,070 19,054 3,618 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 15,043 $ (1,817) $ 35,799 For a discussion of our liquidity and capital resources related to our cash flow activities for the fiscal year ended December 31, 2023, see “Part II, Item 7.
The $35.3 million of net cash provided by operations in 2023, was primarily the result of non-cash charges of $32.3 million related to stock compensation expense, $6.1 million in operating lease amortization and $4.6 million in depreciation and amortization expense, offset by a net loss of $3.2 million and a net decrease of $4.1 million related to movements in our working capital accounts.
The $51.9 million of net cash provided by operations in 2025, was primarily the result of net income of $16.5 million, non-cash charges of $38.8 million related to stock compensation expense, $11.5 million in depreciation and amortization expense and $5.4 million in operating lease amortization, partially offset by a net decrease of $22.4 million related to movements in our working capital accounts.
The overall decreases in cash from our working capital accounts were primarily driven by an increase in accounts receivable due to an increase in sales volume, offset by a decrease in inventory due to usage for production needs, an increase of accounts payable and accrued expenses due to timing of payments and receipts of tenant improvement allowances which exceeded payments on operating leases amortization.
The overall decrease in cash from our working capital accounts was primarily driven by an increase in accounts receivable due to higher sales volume and payments on operating leases, partially offset by an increase in accounts payable and accrued expenses due to timing of payments.
Net cash used in investing activities during the year ended December 31, 2023 was the result of $55.2 million in investments purchases, a $7.5 million regulatory milestone payment to MediWound resulting from the FDA’s approval of the NexoBrid BLA, and $20.0 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $79.6 million of investment sales and maturities.
Net Cash Used in Investing Activities Net cash used in investing activities during the year ended December 31, 2025 was the result of $72.4 million in investment purchases, $27.2 million of property and equipment purchases primarily for construction in process related to the Burlington Lease, partially offset by $55.6 million of investment sales and maturities.
Certain of our lease agreements include lease payments that are adjusted periodically for an index or rate. The leases are initially measured using the present value of the projected payments adjusted for the index or rate in effect at the commencement date. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The leases have varying terms, some of which may include options to extend. Certain of our lease agreements include lease payments that are adjusted periodically for an index or rate. The leases are initially measured using the present value of the projected payments adjusted for the index or rate in effect at the commencement date.
The total remaining contractual obligations related to the warehouse agreement are $0.9 million as of December 31, 2024. See Note 14, “Commitments and Contingencies” in our accompanying consolidated financial statements for further informatio n.
The total remaining contractual obligations related to the warehouse agreement are $0.7 million as of December 31, 2025. See Note 14, “Commitments and Contingencies” in our accompanying consolidated financial statements for further informatio n. We have no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition.
The team is divided into geographic regions and is managed by a senior sales leadership team. Most private payers have a medical policy that covers treatment with MACI with the top 30 largest commercial payers having a formal medical policy for MACI or ACI in general.
The team is divided into geographic regions and is managed by a senior sales leadership team. A vast majority of the largest commercial payers in the U.S. have a formal medical policy that provides benefit coverage for treatment with MACI.
Epicel is regulated by CBER of the FDA under medical device authorities, and is the only FDA-approved cultured epidermal autograft product available for large total surface area burns in both adult and pediatric patients. Epicel was designated as a HUD in 1998 and an HDE application for the product was submitted in 1999.
Epicel is regulated by the FDA’s Center for Biologics Evaluation and Research (“CBER”) under medical device authorities, and is the only FDA-approved cultured epidermal autograft product available for large total surface area burns in both adult and pediatric patients.
Stock-based Compensation Expense Non-cash stock-based compensation expense is summarized in the following table: Year Ended December 31, 2024 vs. 2023 (In thousands) 2024 2023 2022 Change $ Change % Cost of product sales $ 3,911 $ 2,970 $ 3,630 $ 941 31.7 % Research and development 4,068 3,705 5,261 363 9.8 % Selling, general and administrative 28,516 25,650 28,292 2,866 11.2 % Total non-cash stock-based compensation expense $ 36,495 $ 32,325 $ 37,183 $ 4,170 12.9 % The increase in stock-based compensation expense for the year ended December 31, 2024, is due primarily to fluctuations in stock prices and the mix of service-based options and restricted stock units, which impacts the fair value of the options and restricted stock units awarded and the expense recognized in the period.
We continue to maintain a full valuation allowance on all of our net deferred tax assets. 61 Table of Contents Stock-based Compensation Expense Non-cash stock-based compensation expense is summarized in the following table: Year Ended December 31, 2025 vs. 2024 (In thousands) 2025 2024 2023 Change $ Change % Cost of product sales $ 4,217 $ 3,911 $ 2,970 $ 306 7.8 % Research and development 4,680 4,068 3,705 612 15.0 % Selling, general and administrative 29,870 28,516 25,650 1,354 4.7 % Total non-cash stock-based compensation expense $ 38,767 $ 36,495 $ 32,325 $ 2,272 6.2 % The increase in stock-based compensation expense for the year ended December 31, 2025, is due primarily to fluctuations in stock prices and the mix of service-based options and restricted stock units, which impacts the fair value of the options and restricted stock units awarded and the expense recognized in the period.
Since MACI’s commercial launch, the product’s FDA-approved labeling has provided for a treating surgeon to use MACI to treat a patient through an open surgical procedure. In August 2024, the FDA approved a supplemental Biologics License Application (“sBLA”) expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling.
In August 2024, the FDA approved a supplemental Biologics License Application (“sBLA”) expanding the MACI indication to add instructions for the arthroscopic delivery of MACI to the product’s approved labeling.
We will continue to monitor our cumulative loss position and forecasts and reevaluate the need for a valuation allowance as it could be reversed in future periods. This summary of significant accounting policies should be read in conjunction with our consolidated financial statements and related notes and this discussion of our results of operations.
We will continue to monitor our cumulative loss position and forecasts and reevaluate the need for a valuation allowance as it could be reversed in future periods.
On July 1, 2023, we renewed our long-term supply agreement with Matricel for the supply of ACI-Maix collagen membranes used in the manufacture of MACI. Under the terms of the Matricel Supply Agreement, we have committed to annual minimum purchase values totaling approximately €12.5 million over the eight-year term.
Under the terms of the Matricel Supply Agreement, we have committed to annual minimum purchase values totaling approximately €12.5 million over the eight-year term.
HUDs are devices that are intended for diseases or conditions that affect fewer than 8,000 individuals annually in the U.S., and certain HUDs are restricted by the amount which a manufacturer may charge for its use.
Epicel was designated as a HUD in 1998 and an HDE application for the product was 59 Table of Contents submitted in 1999. HUDs are devices that are intended for diseases or conditions that affect fewer than 8,000 individuals annually in the U.S., and, for certain HUDs, the amount a manufacturer may charge for the product’s use is restricted.
Net cash provided by financing activities during the year ended December 31, 2023 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $6.0 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $2.3 million. 65 Table of Contents Liquidity Since our acquisition of MACI and Epicel in 2014, our primary focus has been to invest in our existing commercial business with the goal of growing revenue.
Net Cash Provided by Financing Activities Net cash provided by financing activities during the year ended December 31, 2025 was the result of net proceeds from the exercise of stock options and the employee stock purchase plan of $13.9 million, partially offset by the payment of employee withholding taxes related to the vesting of restricted stock units of $6.8 million.
MACI MACI is a third-generation autologous chondrocyte implantation (“ACI”) product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.
The Company operates its business primarily in the U.S. in one reportable segment - the research, product development, manufacture and distribution of cellular therapies and specialty biologics for use in the treatment of specific conditions. 58 Table of Contents MACI MACI is a third-generation autologous chondrocyte implantation (“ACI”) product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.
Leases with an initial term of 12 months or less are not recorded on the balance sheet. We 67 Table of Contents primarily enter into lease agreements for manufacturing and office space, warehouse space, and certain equipment. The leases have varying terms, some of which may include options to extend.
Operating lease commitments with a lease term greater than 12 months are recognized as right-of-use (“ROU”) assets and liabilities, on a discounted basis on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We primarily enter into lease agreements for manufacturing and office space, warehouse space, and certain equipment.
The increase is primarily related to MACI arthroscopic development program costs and an increase in headcount and employee expenses. Selling, General and Administrative Expenses Selling, general and administrative expenses for the year ended December 31, 2024 were $142.8 million, compared to $121.0 million for 2023.
Selling, General and Administrative Expenses Selling, general and administrative expenses for the year ended December 31, 2025 were $167.0 million, compared to $142.8 million for 2024.
They relate primarily to changes in the initial expected reimbursement or collection expectation upon completion of the billing claims process for MACI implants that occurred in a prior year. A 50 basis points change to the estimated uncollectible percentage could result in approximately $0.5 million decrease or increase in the revenue recognized for the year ended December 31, 2024.
Changes in estimates of the Transaction Price are recorded through revenue in the period in which such change occurs. They relate primarily to changes in the initial expected reimbursement or collection expectation upon completion of the billing claims process for MACI implants that occurred in a prior year.
Food and Drug Administration (“FDA”) approved autologous cell therapy products and one FDA-approved specialty biologic product in the U.S. MACI ® is an autologous cellularized scaffold product that is indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.
MACI ® 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. Since MACI’s commercial launch, the product’s FDA-approved labeling has provided for a treating surgeon to use MACI to treat a patient through an open surgical procedure.
We have raised significant funds in order to advance and complete our product development and product life-cycle management programs and to market and commercialize our products, including NexoBrid. To date, we have financed our operations primarily through cash received through MACI, Epicel and NexoBrid sales, debt, and public and private sales of our equity securities.
Liquidity Since our acquisition of MACI and Epicel in 2014, our primary focus has been to invest in our existing commercial business with the goal of growing revenue. We have raised significant funds in order to advance and complete our product development and product life-cycle management programs and to market and commercialize our products, including NexoBrid.
The increase in selling, general and administrative expenses is primarily due to higher headcount and an increase in employee expenses and stock compensation, the Burlington Lease which commenced in June of 2023, and additional travel, marketing programs and in person events across the commercial organization, including to support the MACI arthroscopic launch.
The increase in selling, general and administrative expenses is primarily due to higher headcount and employee expenses, including stock compensation, an increase in marketing programs and sales activity, and facility costs including depreciation expense for the new facility in Burlington, Massachusetts.
If approved, we believe MACI’s label expansion allowing its use to repair cartilage defects in the ankle will be a significant long-term growth driver for the product in the coming years. 61 Table of Contents Epicel Epicel is a permanent skin replacement for deep-dermal or full-thickness burns comprising greater than or equal to 30 percent TBSA.
We estimate that approximately 18,000 of those patients suffer from larger ankle cartilage lesions, resulting in an increase of MACI’s addressable market. If approved, we believe MACI’s label expansion allowing its use to repair cartilage defects in the ankle will be a significant long-term growth driver for the product in the coming years.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview Vericel Corporation is a fully-integrated, commercial-stage biopharmaceutical company and a leading provider of advanced therapies for the sports medicine and severe burn care markets. Whether we are treating damaged cartilage or severe burns, we provide advanced therapies to repair serious injuries and restore lives.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview Vericel Corporation is a leading provider of advanced therapies for the sports medicine and severe burn care markets. We have a highly differentiated portfolio of cell therapy and specialty biologic products that combines innovations in biology with medical technologies.
Our cash, cash equivalents and restricted cash totaled $86.9 million, short-term investments totaled $40.5 million and long-term investments totaled $25.3 million as of December 31, 2023.
Net Cash Provided by Operating Activities Our cash and cash equivalents totaled $100.1 million, short-term investments totaled $37.4 million and long-term investments totaled $61.4 million as of December 31, 2025.
MACI Arthro became commercially available in the United States during the third quarter of 2024 and we began selling the MACI Arthro instruments at that time.
MACI Arthro became commercially available in the U.S. during the third quarter of 2024 and we began selling MACI Arthro instruments at that time. We have experienced strong surgeon interest in the MACI Arthro technique since its launch. To date, more than 900 surgeons have participated in Company-sponsored education and training programs concerning the arthroscopic approach.
Removed
See “Risk Factors “Our success depends, in part, on the commercial success of NexoBrid for the removal of eschar in adults with deep partial thickness and/or full thickness thermal burns.” The Ongoing Conflicts in the Middle East In May 2019, we entered into exclusive license and supply agreements with MediWound, under which MediWound manufactures and supplies NexoBrid to the U.S. market on a unit price basis.
Added
We believe that the availability of MACI Arthro provides a significant growth opportunity for the overall MACI business, as we have already seen a significant increase in both MACI biopsies and implants from those surgeons who have engaged in MACI Arthro training and education programs.
Removed
MediWound develops and manufactures NexoBrid, in part, at its facilities in Yavne, Israel. We continue to monitor the ongoing conflicts in the Middle East region involving Israel, and we are in close communication with MediWound leadership.
Added
Following an application to the FDA, we received Investigational New Drug (“IND”) clearance for MACI’s use in the ankle during the second quarter of 2025, and during the fourth quarter of 2025 initiated a Study of MACI in Patients Aged 17 to 65 with Symptomatic Chondral or Osteochondral Defects of the Talus (“MASCOT”).
Removed
MediWound’s NexoBrid manufacturing operations are continuing and, as of the date of this disclosure, MediWound does not anticipate a material disruption to its ongoing supply of commercial NexoBrid to the United States.
Added
MASCOT is a two-year prospective, multicenter, two-arm, parallel group open-label trial in which a total of 309 subjects, aged 17 to 65 will be randomized 2:1 to receive a one-time treatment in the talus with MACI or arthroscopic bone marrow stimulation.
Removed
To the extent the conflicts in the Middle East region intensify or expand and MediWound’s facilities in Israel are damaged or destroyed, travel to and from Israel is halted or inhibited, or significant key MediWound operational personnel are called to military service, MediWound’s ability to continue to supply NexoBrid to the U.S. market could be disrupted.
Added
MASCOT is the first randomized, controlled clinical trial evaluating MACI for the treatment of Osteochondral Lesion of the Talus (“OLT”). There are approximately 165,000 ankle resurfacing procedures conducted in the U.S. each year. Approximately 66,000 of those patients each year are considered clinically appropriate for MACI by surgeons.
Removed
As of the date of this report, we maintain an ample supply of NexoBrid at our U.S.-based third-party logistics provider. For a discussion of additional risks associated with the ongoing conflicts in the Middle East, please see Part I, Item 1A. “Risk Factors”.
Added
Finally, our Burlington facility, discussed more fully above, is designed to meet both U.S. and global manufacturing requirements, which provides strategic flexibility to potentially commercialize MACI outside the U.S., and we are currently evaluating introducing MACI in additional geographies.
Removed
The Company operates its business primarily in the U.S. in one reportable segment - the research, product development, manufacture and distribution of cellular therapies and specialty biologics for use in the treatment of specific conditions.
Added
We are currently focused on obtaining regulatory and marketing approval for MACI in the United Kingdom through the Medicine and Healthcare products Regulatory Agency (“MHRA”) and, if successful, anticipate commercializing MACI in the United Kingdom in 2027. Epicel Epicel is a permanent skin replacement for deep-dermal or full-thickness burns comprising greater than or equal to 30 percent TBSA.
Removed
We believe that this potential lifecycle enhancement and indication expansion for MACI will require conducting an additional randomized clinical trial concerning the product’s use in the ankle and we are on track to initiate a MACI Ankle clinical trial beginning in 2025.
Added
Research and Development Expenses Research and development expenses for the year ended December 31, 2025 were $27.6 million, compared to $24.8 million for 2024.
Removed
U.S. sales of NexoBrid began September of 2023 and as such we are still relatively early in its commercial launch, but we do not expect NexoBrid revenue to experience significant seasonality given its emergent use in treating severe burns.
Added
The increase is primarily related to additional headcount and expenses including to support the technical transfer of MACI to our new manufacturing facility in Burlington, Massachusetts, primarily offset by lower MACI Arthro project costs compared to 2024.
Removed
Research and Development Expenses The following table summarizes research and development expenses, which include materials, professional fees and an allocation of employee-related salary and fringe benefit costs for our research and development projects: 63 Table of Contents Year Ended December 31, 2024 vs. 2023 (In thousands) 2024 2023 2022 Change $ Change % MACI $ 18,075 $ 13,813 $ 11,969 $ 4,262 30.9 % Epicel 4,433 3,885 4,924 548 14.1 % NexoBrid 2,289 3,344 3,050 (1,055) (31.5) % Total research and development expenses $ 24,797 $ 21,042 $ 19,943 $ 3,755 17.8 % Research and development expenses for the year ended December 31, 2024 were $24.8 million, compared to $21.0 million for 2023.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025.
Removed
This is primarily due to the elimination of the option to deduct research and development expenditures immediately in the year incurred and instead amortize such expenditures over five years for tax purposes. We continue to maintain a full valuation allowance on all of our net deferred tax assets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe have evaluated the potential credit risk exposure for our accounts receivable and available-for sale investment securities in accordance with ASC 326 , Financial Instruments - Credit Losses . See Note 3 and Note 6 in the accompanying consolidated financial statements located under Item 8 of this Annual Report on Form 10-K for further discussion.
Biggest changeWe have evaluated the potential credit risk exposure for our accounts receivable and available-for sale investment securities in accordance with ASC 326, Financial Instruments - Credit Losses. See Note 3 and Note 6 in the accompanying consolidated financial statements located under Item 8 of this Annual Report on Form 10-K for further discussion. We currently operate in the U.S. only.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2024, we held marketable debt securities, which are classified as available-for-sale and carried at fair value in the accompanying consolidated balance sheet included in this Form 10-K. The fair value of our cash equivalents and marketable securities is subject to changes in market interest rates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2025, we held marketable debt securities, which are classified as available-for-sale and carried at fair value in the accompanying consolidated balance sheet included in this Form 10-K. The fair value of our cash equivalents and marketable securities is subject to changes in market interest rates.
We are also subject to interest rate risks in connection with our Revolving Credit Agreement, which is variable rate indebtedness. As of December 31, 2024, there were no borrowings outstanding under the Revolving Credit Agreement.
We are also subject to interest rate risks in connection with our Revolving Credit Agreement, which is variable rate indebtedness. As of December 31, 2025, there were no borrowings outstanding under the Revolving Credit Agreement.
Our earnings and cash flows are subject to fluctuations due to changes in interest rates, principally in connection with our investments in marketable debt securities. We believe that 68 Table of Contents probable near-term changes in interest rates would not materially affect our financial condition, results of operations or cash flows.
Our earnings and cash flows are subject to fluctuations due to changes in interest rates, principally in connection with our investments in marketable debt securities. We believe that probable near-term changes in interest rates would not materially affect our financial condition, results of operations or cash flows.
We do not currently use interest rate derivative instruments or hedging transactions to manage exposure to interest rate changes of our investments. We estimate that a 100 basis point, or 1%, unfavorable change in interest rates would have resulted in approximately a $0.8 million decrease in the fair value of our investment portfolio as of December 31, 2024.
We do not currently use interest rate derivative instruments or hedging transactions to manage exposure to interest rate changes of our investments. We estimate that a 100 basis point, or 1%, unfavorable change in interest rates would have resulted in approximately a $0.9 million decrease in the fair value of our investment portfolio as of December 31, 2025.
We operate in the U.S. only. We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities due to vendors in countries outside the U.S., which are typically paid in Euros. We do not enter into hedging transactions and do not purchase derivative instruments. 69 Table of Contents
We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities due to vendors in countries outside the U.S., which are typically paid in Euros. We do not enter into hedging transactions and do not purchase derivative instruments. 66 Table of Contents

Other VCEL 10-K year-over-year comparisons