Vcel

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#1

Vcel is one to keep an eye on. I believe it’s better days are in front of it here’s why:

Assuming they get their cartilage replacement approved for the entire population not just the under 55 crowd the tam will explode.

Medicare should approve the procedure as cheaper and better than knee replacement. Knee replacement will be seen as bloodletting from the barber.

By then the Salesforce will be expanded and in place.

And there is the international side of things to address.

The skin product for severe burn victims is truly remarkable and life saving. It is a product w no competition though a small tam.

There is a third product under development cardiac related.

As a $10 stock and $400 mill cap vcel is uninvestible to many funds and institutions but as the price gets to 15 and 20 and the cap expands the funds will come in.

And it has held up well in the recent volatility.

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#2

Knee replacement will be seen as bloodletting from the barber

Rizz,

Does this procedure eliminate knee replacement? I’ve read it compared to micro fracture which admittedly I know nothing about, but assumed it was not full knee replacement.

Or better yet, what is the existing TAM for the product as prescribed now (under 55)?
What do you expect the TAM to expand to if allowed for patients older than 55?

THanks,
A.J.

#3

Correct. Knee replacement is further down the line in treatment pathways. Like some of those 2nd/3rd line, last resort cancer treatments we’ve seen, vs 1st line treatments. Note that the bulk of the TAM is in 1st line treatments, so if your product corners 1st, you’re gold!

However, knee replacement is first-line in the >55s.

So there’s two things here. Can MACI break into the >55 market and replace knee replacement treatment, and can it dominate the <55 market vs microfracture and other ACI treatments.

More food for thought articles from NICE.
https://www.nice.org.uk/guidance/ta477/documents/1
https://www.nice.org.uk/guidance/ta477/chapter/3-Committee-d…

These reviews compare ACI vs microfracture. Not specifically MACI. It’s noted that microfracture isn’t that effective for defects over 2cm2. (not sure how to superscript, doesn’t work).

The UK market is tiny vs USA and obviously has different guidelines vs the insurance companies/medicare. But here are the results nevertheless. NICE publishes guidelines and advises on what treatments would be cost-effective for the NHS to use.

What they have to decide is how much will a treatment cost vs improvement in quality-adjusted life year (QALY). They’ve deemed that the cost will range between £6,000 and over £20,000.
The committee concluded that it was not convinced that the (incremental cost-effectiveness ratio)ICER for ACI compared with microfracture was below £20,000 per QALY gained for the whole population eligible for ACI in clinical practice.

As such, they could only recommend the use of ACI as a cost-effective use of NHS resources for the subgroup with all three criteria filled:
•people who have not had previous knee repair
•people who have minimal osteoarthritic damage to the knee
•people with articular cartilage defects of over 2 cm2.

That’s the low-hanging fruit.
The studies show MACI is better than microfracture. But is it that much better than other ACIs?

I’m always excited by new improvements in knee surgery, but I’m not blown away by MACI. Clearly there’s an improvement, but it looks like a minor improvement over microfracture. It also requires two treatments (although done sameday), as they need to extract some cartilage, grow it, then reinsert it. Whereas microfracture requires just one. But if I were to have surgery done, on this limited research that I’ve done, 100% I would go with MACI if I were eligible. And maybe that kind of thinking is all that is required for VCEL to be successful? Even if it is more expensive.

I reckon future technologies in this area will be:

  • pre-made MACI cells so only one treatment is required
  • an injection or change in local (knee) environment to promote the body to regrow cartilage
  • awesome indestructible and tolerable prosthetic knees, indistinguishable from the real thing.

Either of these three would be disruptive.

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#4

Thanks for the “heads up” regarding Vericel (VCEL). I spent a bit o’ time researching the company, evaluating the numbers and simply pondercating.

I bought in.

I didn’t find any troubling stats in the financials. The products they offer are incredibly valuable: cartilage and skin replacements based on one’s own genetics! The stock price is not outlandish.

I bought in.

It was a bit of an emotional experience. At age 55, I learned I had no cartilage left in my knees. A lifetime of sports (skiing, running, tennis, cycling and marathoning) had taken its toll. There is nothing left for me except knee replacement. I think of Vericel and fervently wish the company great success!

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