Soleus Capital Management disclosed a $63.4 million stake in Vericel during the first quarter, adding 1.8 million shares. The biotech firm's second-quarter revenue climbed 20% to $63.2 million, driven by its flagship MACI cartilage repair therapy. Vericel shares have fallen about 20% over the past year even as the underlying business posts accelerating growth and margin expansion.
Soleus Capital Management bought 1.8 million shares of Vericel Corp. in the first quarter, a $63.4 million bet on a biotech whose revenue jumped 20% even as its stock lagged the broader market.
The purchase, disclosed in a May 14 SEC filing, gave Soleus a 3.32% stake in the $1.7 billion company. Vericel now ranks among the fund's top holdings alongside Krystal Biotech at $297.9 million, Cellectar Biosciences at $146.6 million, and TG Therapeutics at $133.9 million.
Vericel's second-quarter revenue rose to $63.2 million from $52.7 million a year earlier, with MACI cartilage repair sales up 21%. Gross margin expanded to 74% from about 70%, while adjusted EBITDA more than doubled to $13.4 million. The company held $164 million in cash and investments with no debt.
Chief Executive Officer Nick Colangelo cited "continued strong revenue growth and profitability" from the MACI Arthro launch. The company also received FDA clearance to begin a Phase 3 study evaluating MACI for ankle cartilage defects, opening another potential growth avenue beyond its core knee repair market.
Vericel shares closed Friday at $33.33, down about 20% over the past year compared with the S&P 500's 28% gain. The stock's decline contrasts with improving fundamentals: revenue rose 20% in the latest quarter, and the company raised its full-year outlook. The biotech's net income reached $21.5 million over the trailing 12 months.
The Soleus purchase shows conviction that Vericel's commercial momentum will eventually close the gap between its stock price and business performance. Investors will watch third-quarter results for continued MACI Arthro adoption and updates on the ankle study timeline.
This article is for informational purposes only and does not constitute investment advice.
