Vericel

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. Once 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. See Note 5, “Leases” in our accompanying consolidated financial statements for further information.

• We rely on complex information technology systems for various critical purposes, including timely delivery of products and maintaining patient confidentiality. If these systems fail or are disrupted, we could lose product sales and our revenue and reputation would suffer.
• Our inability to complete our product development activities successfully would materially limit our ability to operate or finance our operations.
• We must successfully complete nonclinical and clinical development to be able to demonstrate safety and efficacy to seek marketing approval of our current or future product candidates. Lack of efficacy and or safety events can lead to the discontinuation of clinical development, and this can occur at any stage of the clinical development program. We may experience numerous unforeseen events during development that can delay or prevent commercialization of our future development candidates.
• We rely on third parties to conduct some of our clinical trials, and their failure to perform their obligations in a timely or competent manner may delay development and/or impact commercialization, if approved, of our current and future product candidates.
• If we do not keep pace with our competitors and with technological and market changes, our products will become less attractive or obsolete and our business may suffer.
• We face risks associated with disruptive technologies, innovation and competition, including artificial intelligence.
• Restrictions on the use of animal-derived materials could harm our product development and commercialization efforts.
• If our licensing arrangement with MediWound is unsuccessful, our development of NexoBrid and its associated revenues may be limited.
• 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.
• We have limited manufacturing capacity and our commercial manufacturing operations in the U.S. depend on one facility. If the 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, 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.
• 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.
• The manufacture of cell therapy products is characterized by inherent risks and challenges and has proven to be a costly endeavor relative to manufacturing other therapeutic products.
• Risks Related to Our Regulation by the FDA and other Government Entities
• Failure to maintain required regulatory approvals would severely limit our ability to sell our products.
• The price and sale of any of our products may be limited by health insurance coverage and government regulation.
• We are subject to significant regulation with respect to the manufacturing of our products. If we are not able to comply with such regulation, our business may be materially harmed.
• Corporate sustainability matters and any related reporting obligations may adversely impact our business, financial condition and results of operations.
• We could incur significant costs complying with environmental and health and safety requirements, or as a result of liability for contamination or other harm caused by hazardous materials that we use.
• In order to obtain marketing authorization of any of our current or future product candidates in the U.S., the FDA requires us to submit a BLA or marketing application, which is subject to the agency’s detailed review and the denial of such applications could negatively impact our prospects, financial condition, and future results.
• Our business, financial condition, results of operation and cash flows could be significantly and negatively affected by substantial governmental regulations.
• 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.
• NexoBrid has been designated as an orphan drug in the U.S., but we may be unable to obtain or maintain such a designation or the benefits associated with orphan drug status, including marketing exclusivity, which may cause our revenue to be reduced.
• Changes to our products or future product candidates may require regulatory approvals and a denial of such required approval will negatively impact our prospects, financial condition and future results.
• If we or our suppliers fail to comply with ongoing FDA or other foreign regulatory authority requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.
• 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.
• If the FDA determines that we have marketed or promoted our products for one or more off-label uses, we may be subject to civil or criminal penalties.
• If the Office of Inspector General within the Department of Health and Human Services, the DOJ, or another federal or state agency determines that we have promoted the off-label use of our products and/or we have violated anti-kickback 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.
• Health care reform measures and changes in policies, funding, staffing and leadership at the FDA and other agencies could hinder or prevent the commercial success of our products.
• Our relationships with healthcare providers, physicians, prescribers, purchasers, third-party payers, charitable organizations, and patients will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
• Tissue-based products are regulated differently in different countries. These requirements may be costly and result in delay or otherwise preclude the distribution of our products in some foreign countries, any of which would adversely affect our ability to generate operating revenues.
• Competitor companies may be able to take advantage of additional FDA guidance and new expedited programs designed for cell therapies to develop and/or commercialize new products in a shorter time period than previously predicted or in certain cases without a BLA. If we cannot remain competitive in light of such developments, our business may suffer.
• Risks Related to Intellectual Property
• If we fail to fulfill our obligations under our intellectual property licenses with third parties, we could lose license rights that are important to our business.
• If we are unable to protect the confidentiality of our proprietary information and know-how related to our products, our competitive position would be impaired and our business, financial condition and results of operations could be adversely affected.
• We have no patent protection for Epicel, which could adversely impact Epicel’s competitive position.
• If MediWound’s family of patents and proprietary rights covering NexoBrid do not provide substantial protection, then our commercialization efforts with respect to the product could suffer.
• Some of our issued patents relating to MACI have already expired and others may be insufficient to protect our business.
• If our patents and proprietary rights do not provide substantial protection, then our business and competitive position will suffer.
• Obtaining and maintaining our patent protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• With respect to MACI, if we are unable to obtain and enforce patents and to protect our trade secrets, others could use our technology to compete with us, which could limit opportunities for us to generate revenues by licensing our technology and selling products.
• A successful challenge to our trademarks, or to MediWound’s trademarks covering NexoBrid, could force us to rebrand Epicel, MACI or NexoBrid, which could result in a loss of brand recognition and adversely affect our business.
• Intellectual property litigation could harm our business. We may be subject to patent infringement claims that could be costly to defend, which may limit our ability to use disputed technologies, and which could prevent us from pursuing research and development or commercialization of some of our products, require us to pay licensing fees to have freedom to operate and/or result in monetary damages or other liability for us.
• We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful and have a material adverse effect on the success of our business.
• If we infringe the rights of third parties, we could be prevented from selling products, forced to pay damages, and defend against litigation.
• Intellectual property rights do not necessarily address all potential threats to our competitive advantage. If we are not able to protect our intellectual property rights, our business may be adversely affected.
• 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.
• We may not be able to raise the required capital to develop and commercialize our future product candidates and product enhancements and otherwise grow and expand our business.
• The current credit and financial market conditions may exacerbate certain risks affecting our business.
• We may incur substantial indebtedness.
• Our Revolving Credit Agreement contains covenant restrictions that may limit our ability to operate our business.
• Adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, such as actual events or concerns involving liquidity, defaults or non-performance, could adversely affect our operations and liquidity.
• We are dependent on our key manufacturing, quality and other management personnel and the loss of any of these individuals could harm our business.
• Efforts to comply with securities laws and regulations require management resources, and we still may fail to comply. If we are not able to comply with such laws and regulations, there may be a material adverse impact on our business, financial conditions and results of operations.
• Our corporate documents and Michigan law contain provisions that may make it more difficult for us to be acquired.
• Changes to tax legislation and regulations could negatively impact our earnings.