Good morning, everyone. I'm Disha Parekh. I'm an associate with the Healthcare Investment Banking Group at JPMorgan Chase. Thank you for joining us for the company presentation for Vericel Corp at the 44th Annual JPMorgan Healthcare Conference in San Francisco. Today, we are joined by Nick Colangelo, who is the President and CEO at Vericel, who will be leading the presentation and the Q&A. For the Q&A, we have the last few minutes reserved, so please save your questions for the end. Thank you.
Okay, well, thank you. It's great to be here today. Before I begin, I will remind listeners that this presentation contains forward-looking statements, and so you should refer to our materials on file with the SEC for further information. Vericel is a leading provider of advanced therapies for the sports medicine and the severe burn care market. We have a portfolio of highly innovative cell therapies and specialty biologics that are used to repair tissue and restore function for patients with tissue injuries. The company, or our business as it exists today, really came about with the acquisition of MACI and Epicel from Sanofi in 2014. These assets were part of the old Genzyme Biosurgery business. When we bought the business, they were, you know, the products were doing something less than $50 million and were sort of flat declining.
Since the time of our acquisition, we've actually turned this business and our company into a leading medtech growth company with a very unique profile of both high revenue and profit growth, as well as cash generation. Our lead product is MACI, which is an advanced cell therapy that uses a patient's own cells to repair cartilage damage, which we launched in 2017 for the repair of cartilage injuries in the knee. MACI is by far the leading cartilage repair product on the market and the only FDA-approved product in its class. We recently gained FDA approval for arthroscopic administration of MACI, which makes it the only restorative biologic cartilage repair therapy that's been approved for arthroscopic delivery by the FDA. On the burn care side of the business, we're really focused, or our products are focused, on the treatment of hospitalized patients with severe burns.
So for these patients, the treatment pathway entails first removing the damaged tissue, or eschar, and then covering or grafting the injured area to close the wound. And we actually have two products that address one each of those pathways. So NexoBrid, which is a product that we acquired North American commercial rights to and launched recently in the U.S., is an orphan biologic product that's indicated for the removal of eschar in adult and pediatric patients with severe burns. And then our other product, Epicel, is again a skin graft product that uses a patient's own cells, and it's the only permanent skin replacement approved by the FDA for large, greater than 30% body surface area wounds. And so, you know, we think with products that treat both aspects of the treatment pathway that we have one of the premier portfolios in severe burn care.
I would say one of the defining characteristics of our company is that our entire portfolio, each of the products, have significant competitive moats and significant competitive barriers to entry. So MACI and Epicel are both regulated by the FDA as combination device biologic products. So there's no defined biosimilar pathway as there are for other biologic products or 510(k) pathway for device products. And so any other competitors that want to enter into this field will have to run full-blown clinical development programs, which is exceedingly difficult to do in these areas. Others have tried and not been able to do so. And there's no like competitors for MACI or Epicel anywhere on the horizon. Similarly, with NexoBrid, as I mentioned, it's an orphan product in the U.S. So in addition to its patent protection, it also has orphan market exclusivities and biologic data exclusivities as well.
We think it's an exceptional portfolio that will support continued strong growth for the company going forward. We think we're in a great position to do so. It starts with our overall financial profile. As we'll talk about, in addition to our strong revenue growth since we launched MACI back in 2017, we've consistently delivered sustained positive Adjusted EBITDA and operating cash flow every quarter for the last five and a half years, even through COVID. We're GAAP net income positive last year. We expect to be so this year as well. We have a very strong balance sheet with $200 million in cash to end the year in investments and no debt. It is a very strong profile to continue to invest in the business to sustain our strong growth.
We also expect to enhance our leadership position not only in cartilage repair, but as a premier sports medicine company. Right now, as I mentioned, MACI is by far the leading cartilage repair product on the market. Since we launched the product nine years ago, it's actually had a 24% compounded annual revenue growth rate, so sustained strong growth, including 20% or more growth in each of the last three years post-COVID. So that strong momentum that we have with MACI, in addition to other expansion initiatives we have, including MACI Arthro, we just completed a 30% sales force expansion that went into place at the beginning of this year, as well as other investments in commercial excellence initiatives. We think we'll sustain that strong growth as we move forward in 2026 and beyond.
We also expect to expand our leadership position in burn care with continued uptake of NexoBrid, which again was recently launched, as well as increased Epicel utilization given the larger commercial footprint we now have for our burn care business. And then finally, expanding our core portfolio in a couple of key lifecycle management and geographic expansion areas. So we initiated in the fourth quarter a clinical study for the use of MACI to treat ankle cartilage defects, which is the second largest market opportunity in terms of cartilage repair. And then we expect to be in commercially manufacturing MACI in our new facility this year, which will allow us to potentially launch MACI back into countries outside the U.S. And we'll talk more about that as well. So we think we have a sustained runway for continued strong growth with MACI as we move forward.
In the large underserved markets that we serve, certainly we'll support that growth. Our current portfolio has an addressable market of north of $4 billion. The addition of a potential MACI ankle indication would take that to over $5 billion in the years ahead. So again, you know, I think we're still in the early innings in terms of the overall growth for the company moving forward. So just to double-click a little bit on revenue, which, you know, again has been strong since we launched MACI at a company level in 2017, we've had a 20% compound annual growth rate through 2024. We did just announce our preliminary 2025 financial results yesterday. We expect revenue to be about $276 million, which was the high end of our guidance range. So good, strong growth for the company again.
And then MACI had a particularly strong, you know, second half of the year and fourth quarter. So MACI came in at the high end of our guidance range, close to $240 million for the year. Again, a really strong fourth quarter overall, 23% revenue growth for the company, 23% revenue growth for MACI. And the MACI performance was really underpinned by really strong underlying business fundamentals. So we had our highest number of biopsies and biopsying surgeons for MACI, implants and implanting surgeons. And we had a particularly strong close to the quarter in December. So we had record implants, record biopsies in December by a wide margin. So really strong close to the year. A lot of momentum as we move into 2026. So we expect strong growth in 2026.
And as I mentioned, you know, we just implemented a MACI sales force expansion of going from 75 to 100 territories, so about a 30% expansion, supplementing that with other commercial excellence initiatives that will support our growth, continued growth in the next several years. And then as you look out a little longer, OUS expansion opportunities for MACI, as well as a MACI ankle indication, really give us a long runway over the next decade to continue MACI growth. So really excited about where we are with that. So as I mentioned earlier, you know, we really do have one of the unique sort of combinations for growth companies, and not just high revenue growth, but also strong profitability growth and cash generation. So from a revenue perspective, you know, we talked about that already. Revenues doubled from 2020 to 2025.
We expect them to essentially double again by the end of the decade and approach about $500 million by 2029. That strong revenue growth, given the leverage in our business model, has translated over the years into strong. We kind of hit an inflection point in profitability over the past couple of years, where we now expect gross margins for this year to be in line with our guidance of about 74% and on track to hit our midterm targets of the high 70% range by 2029, and the same thing with our Adjusted EBITDA, which is also a good proxy for our operating cash flow, where we expect to have about a 26% Adjusted EBITDA margin for 2025, and then achieve our midterm targets of the high 30% range by 2029.
You know, you can look at, for instance, we haven't given all the profitability details for the fourth quarter, but you can back into it or look at last year. In 2024, the fourth quarter had about $75 million in revenue. Gross margin was about 78%. Adjusted EBITDA margin was about 40%. You can see at that scale, which would translate into roughly $300 million, you know, we're certainly on track to hit those midterm financial targets. Really strong performance from a profitability perspective. Now we're entering a phase of really strong cash generation inflection as well. We recently invested over the past couple of years about $100 million in our new manufacturing facility. We actually increased our overall cash balance at the same time. That was great.
But now as we move forward, you know, we really expect to see that operating cash flow kind of make its way onto our balance sheet as well. So we expect about $50 million in operating cash flow this year. That'll get north of $100 million on an annual basis as we move into 2029. So we expect that cash generation to follow suit with our strong profitability as well. So we're really excited about the financial profile of the company and think we have really great things ahead of us. So I'll start now with our products and starting with MACI in the cartilage repair market. So, you know, knee cartilage injuries obviously are a significant issue. Cartilage injuries are found on about 60% of knee arthroscopies, and the damage is caused by either acute or repetitive trauma or degenerative conditions.
The issue is that cartilage, unlike most other tissues in your body, does not have intrinsic healing properties. There's no blood vessels that bring repair cells into the cartilage. There's no lymphatics to carry away cellular debris. There's no nerves. Once you have a cartilage, a focal cartilage injury on the knee, which is like a pothole on the surface of the knee, it's not going to heal itself. You know, that obviously leads to pain, dysfunction, ultimately osteoarthritis and partial or full knee replacement. The treatment goals in cartilage repair are obviously to reduce symptoms, improve function, and prevent degeneration. Other than MACI, there's not really a lot of good treatment options for surgeons. They typically fall into three buckets. The first is palliative.
So if you have a knee injury and a suspected cartilage injury, often a surgeon will do an arthroscopic procedure or a chondroplasty, scope the knee, clean out any debris. If you have frayed cartilage, shave that. And so it's a palliative treatment. It obviously doesn't heal the cartilage defect, but it can provide some pain relief. And that's the vast majority of procedures that happen, as we'll talk about in a moment. The middle bucket are what are referred to as sort of reparative techniques. So bone marrow stimulation. You've probably heard of microfracture, where a surgeon will drill into the subchondral bone. The bone marrow bleeds into the defect. It fills up the defect. There's often microfracture augmentation scaffolds that are used with that.
It's really sort of fallen out of favor with larger defects because the tissue is really fibrocartilage and doesn't have the durability of repair of the native tissue, but it is used in very small defects pretty extensively to this day. And then the third category is restorative cartilage procedures. And really, MACI is the only FDA-approved product. The other options in the restorative category include basically an osteochondral autograft transplantation or OATS, where you take cartilage from one part of the knee and plug the defect. So you create one injury to fix the other. So that's not a widely used technique anymore, but it does get done. Or cadaver-based options, which are osteochondral allografts, where you take a cadaver knee. As the name implies, you take a punch of cartilage and bone, and that's what's put into the patient's knee.
Neither of those were sort of BLA-approved products. Obviously, they're tissue-regulated products like MACI. So MACI really stands alone as the most effective and clinically proven treatment option in the cartilage repair space. So the MACI product itself is and was the first tissue-engineered autologous cellularized scaffold product approved by the FDA in any therapeutic area. And the product consists of taking a patient's own cells, the chondrocytes, seeding them onto a resorbable collagen membrane that's then surgically implanted. And the process, and you'll hear us talk about biopsies a lot, starts with a biopsy. So when a surgeon is doing a chondroplasty and cleaning up the knee, we'll take a small Tic Tac-sized biopsy from a non-weight-bearing portion of the knee. That's sent to our manufacturing facility. We isolate the chondrocytes. We expand them to a few hundred thousand cells, cryopreserve them for up to five years.
And then when a patient and surgeon are ready to move forward with a surgery, thaw the cells, further expand them. They're seated on the collagen membrane at about 500,000 to 1 million cells per square centimeter. That's shipped off to the surgical site where the surgeon will prepare the defect and simply cut the collagen membrane to the size of the defect, glue it in with fibrin glue. And then those chondrocytes, which are spindle cells that grab onto collagen fibers, migrate down to the subchondral bone. They start to replicate, produce the extracellular matrix that develops into the cartilage and replaces that cartilage with the hyaline-like cartilage that's naturally present in the knee. And so that's how the product works. So it's a very innovative, you know, one-of-a-kind product, certainly in the space.
Given the large incidence of cartilage injuries, it's really a great commercial opportunity for us. When we look at the addressable market, we did a very large quantitative market research project several years ago. It's well understood that there's about 750,000 cartilage repair procedures that are done in the U.S. each year. As I'll talk about in a moment, MACI has a very broad label. And so a lot of those patients technically would qualify for MACI treatment, about 40% or 315,000 of those. We sort of diverted from a normal TAM sort of evaluation when we did this project with a couple hundred surgeons, said, "Okay, we know that, you know, your patients would fit within the MACI label, but how many do you think would be clinically appropriate given the size, the location, sort of the demographic characteristics of patients?
Do they have time and ability to do rehab and so on?" And so that went down to about 125,000 patients. And then typically insurance plans have a sort of a 1 square centimeter defect or above cutoff. And so when you do that, you end up with about 60,000 patients a year. Now our revenue per implant is north of $60,000. So when you kind of multiply that, we have a very large addressable market for MACI. And so that has supported the growth we've seen to close to $250 million in revenue in 2025. And we think there's a lot of room to grow because if you look at those restorative techniques that I mentioned, it's a very, it's a really small part of the market right now. So of the 750,000 procedures, probably 500,000 or more are chondroplasties, which are not reparative.
Then another couple hundred thousand plus are microfractures, which again are not restorative either, and so, you know, the number of restorative procedures are still less than 10,000 a year when you look at MACI, osteochondral allografts, and OATS out of those 60,000 patients, so, you know, this is really about making sure over the long term that patients are getting appropriate therapy, and that's what gives us a lot of sort of excitement and enthusiasm about our ability to continue to grow MACI from here, so what supports that strong growth for MACI? There's really a number of product attributes, so number one, as I mentioned earlier, it starts with the fact that MACI has a very broad label, so the FDA label basically provides that MACI is appropriate for, you know, defects anywhere in the knee, no limits on the size, whether there's bony involvement or not.
So there's really not a lot of limitations on the use of MACI. And MACI is the only product that in a randomized controlled clinical trial demonstrated superiority versus microfracture, which is the FDA-mandated comparator in these studies. So sort of unsurpassed clinical data, very broad label. And what that means is it's a viable treatment for a larger number of patients. From a surgeon perspective, really the advancement, the technological advancement for MACI is that earlier generations of this product, which in our case was called Carticel, was the same concept where you took expanded cells, but it was in a cell suspension. So it was very difficult to fill a pothole with a cell suspension of essentially water, right? It's hard to, you had to microsuture a flap over the top of the defect and inject the cells, et cetera. So it was highly invasive, time-consuming, technically demanding.
So it was a pretty niche product in the Carticel days. But there's 20-year outcomes data. And so once you repair the cartilage, it actually can last a lifetime unless there's another injury. So it was used. But the, you know, the advancement for MACI is that because the cells are seated on the collagen membrane, it's a much less invasive surgery. So it's a mini arthrotomy, one- or two-centimeter incision. It's much simpler because all you do is cut, you know, it's like arts and crafts. You cut the membrane to the size of the defect and you glue it in. And it's much faster. So that's what's led to the broad adoption among the orthopedic surgeon community of MACI. Because it's less invasive, there's also shorter rehab protocols. So that's obviously a great advantage from a patient perspective. And then MACI has an excellent reimbursement profile.
Every major insurance plan in the country has a medical policy or medical benefit that covers MACI. And because it's a medical benefit, we have to get a prior approval. And those cases are approved about 95% of the time. So as long as the patient meets the medical policy criteria, which again is typically a grade three or grade four focal cartilage defect, ability to do rehab above 1 sq cm or so, you know, those cases are going to get approved. And so, you know, that's really driven a lot of the growth as well that we've been able to develop, you know, case management, a case management team that can help surgeons get these cases approved very quickly and sort of unlocked a lot of value.
When you look at MACI over the last nine years, as I mentioned earlier, the compounded annual revenue growth rate is about 24%. We think there's a lot of reasons that we'll be able to sustain, you know, really strong growth going forward. When we look at MACI Arthro, which was, as I mentioned, approved recently by the FDA for MACI administration, it's really kind of this tried-and-true med tech playbook of you take highly invasive surgeries, you know, open-heart surgery, and you end up having these minimally invasive surgeries. MACI was a big step in that direction. MACI Arthro is continuing that progression that will allow us to kind of deliver on the strategy that we've developed to make MACI a simpler, less invasive procedure. That's important when you kind of double-click on the addressable market for MACI.
This slide's a little busy, but essentially on the left side, the whole slide breaks out the addressable market of 60,000 patients by size and location of the defect. On the left-hand side, that's essentially the go-to areas for MACI, you know, prior to the MACI Arthro launch. MACI's a go-to product for patella or back of the kneecap. When you have, there's a lot of cartilage injuries that occur there, about 10,000 patients a year. It's very hard to do. It's really not blood flow or bone marrow back there to do kind of microfractures. It's hard to do osteochondral allografts there. You know, we have probably half our business pre-MACI Arthro launch is in the patella. Interestingly, it's the fastest, has been the fastest growing part of our business.
It's patella defects, which are about 10,000 patients a year, larger defects, which are more than 4 sq cm. That's a very large defect. Again, those are sort of go-to places for MACI where we have double-digit penetration overall in those segments. It's the right-hand side of the slide that MACI Arthro is intended to address. Smaller defects on the end of the thigh bone or the femoral condyle, there's about 20,000 patients a year that have those defects. It makes sense. That's where your, you know, your bones meet and there's a lot of stress and forces on the cartilage. And so you have a lot of injuries on the femoral condyle. And two to four sq cm defects are the most common. Our instruments for MACI Arthro are designed to treat either two, three, or four sq cm defects.
We obviously have business there, but our penetration rate is much lower so there, those defects, plus, you know, there's another 20,000 patients with small defects in other parts of the knee as well so our goal with MACI Arthro is to sort of get to the same kind of growth rates and penetration in those smaller defects that we've had in MACI over time and that's kind of why we've developed the MACI Arthro instruments and expect that it can have, you know, an impact on our business in the years ahead so just to kind of summarize, you know, MACI is the clear and convincing leader in the cartilage repair market. You know, we think between MACI Arthro, the increased sales force, investments in commercial excellence that will be able to continue to get broader surgeon penetration and expand our customer base.
We're focused on deeper penetration, treating more patients within each practice. And then because of the innovation profile for MACI, we've had strong pricing power and we expect that to continue. So all of these together, we expect will help MACI growth in the years ahead. In addition to that, we're looking at OUS expansion for MACI. Again, when we have our new commercial manufacturing facility up and running this year, that will allow us to go back into, for instance, countries in Europe where MACI was previously marketed and has great brand awareness and strong surgeon advocacy. So that's one element of our growth strategy going forward, and that can happen in the next few years. Longer term, the MACI ankle indication, we did the same kind of addressable market analysis. It's the second largest opportunity in cartilage repair.
There's about 165,000 cartilage repair or resurfacing procedures in the U.S. each year. Same sort of exercise, asking surgeons of the patients you see, how many would you deem to be clinically appropriate? It was about 40% of those patients and about 20,000 patients with larger defects that would be great candidates for MACI. At our current price, that's another $1 billion-plus market opportunity. So we initiated that study as we had said we were going to do in the fourth quarter of this year. And we look forward to the opportunity over the longer term to be able to have a MACI ankle cartilage repair solution out there as well. So turning to burn care, as I mentioned earlier, we're really focused on not sort of the general wound care space, but hospitalized burn patients with these severe burns.
You know, the way these patients are treated is if they have a full thickness burn, which means all the way down to the bone, muscle, or fat of any size, or a partial thickness burn, which is into the dermal layer of the skin, that's greater than 10% body surface area, which in itself is huge. You know, your hand, the size of your palm is about 1% body surface area. So even a 10% burn is a very large burn. Those are the patients that are typically treated in one of the 140 or so burn centers in the U.S. And as I mentioned, the treatment pathway is you need to get rid of the damaged tissue and then figure out how you're going to graft the wound to promote healing. So those are the patients we're focused on. It's a relatively large addressable market as well.
There's about 500,000 burns in the U.S. each year. About 40,000 patients are hospitalized, as I mentioned. You know, our estimate is about 30,000 or three quarters of those hospitalized patients will have some sort of eschar removal done. I'll get into the different options there in a moment. At our price point and the number, you know, the amount of NexoBrid that's used on a typical patient, it's about a $300 million opportunity for us. When we go down the funnel to Epicel patients, and again, these are the really catastrophic burn patients who have 30% or more body surface area burns, and we're typically treating 60%, 70%, 80% body surface area burns. You know, it's a smaller patient population.
There's about 600-800 of those patients with 40% plus burns that survive each year, but they need a large number of skin grafts, and so when, you know, you kind of do the math there, it's another $300 million market opportunity, so combined, you know, it's a relatively strong addressable market for us, particularly considering there's only 140 burn centers, so the commercial footprint you need to address this market is not very large compared to other areas, so I mentioned earlier that NexoBrid is an orphan biologic product that's indicated for eschar removal in adult and pediatric patients with severe thermal burns, so the standard of care prior to NexoBrid, and that's what we're focused on changing. When you have these burns, typically the patients are taken into the OR and the eschars are removed surgically.
So surgeons will take a knife and they will slice away the damaged tissue. And, you know, burns are variable depth, so you're invariably taking, you know, some healthy tissue along with that. There's a lot of blood loss and it's very traumatic for patients. There are some non-surgical products out there that are widely recognized as having limited efficacy. So there's clearly a need for a selective and effective eschar removal product like NexoBrid. And it's really a fascinating product. So it's a mixture of proteolytic enzymes derived from pineapple stems that somehow can recognize, it's topically applied in those enzymes recognize collagen proteins in the skin that are denatured by thermal burns. Doesn't work if it's an electrical burn. It's just the characterization of how they're denatured.
And it's applied and over the course of, you know, a few hours, basically it dissolves the dead tissue and leaves the healthy tissue. And then they wipe that away and then they figure out how they're going to treat the wound. So it's really, from a patient perspective, you couldn't ask for a better advancement. And, you know, again, we're focused on changing the standard of care. That takes time. But we think over time this will become the standard of care for eschar removal. Epicel, as I mentioned, is a grafting product after you've done that, only FDA approved permanent skin replacement and a very important and potentially life-saving product for these patients. So if you have these large catastrophic burns, you know, skin is highly immunogenic. Its function, even though, you know, it's an organ whose function is to, you know, protect the body.
So it's highly immunogenic. You can't do a transplant of someone else's skin. The body will slough it off. So really the only option for these patients is to do serial autografts where they'll take an autograft with a dermatome. They'll end up, you know, they do split thickness meshes to try to make it as big and cover as much as they can. But if you've got a very large burn, you just don't have enough healthy tissue to be able to do that. So that's where Epicel comes in. Same concept where we take a postage stamp size biopsy of healthy skin. We can isolate the keratinocytes, which are the predominant cells in the epidermal layer of the skin. We culture those and they create the skin grafts that you see in this slide, put a petroleum gauze on, and those are applied to the patient.
And so it's really another exceedingly important product. You know, there's data that's been published that at each decile burn, which is how these patients are, you know, treated and thought about, there's a profound mortality benefit for patients who are treated with Epicel. So great product there as well. When we look at the growth opportunities for this franchise, it's a little variable because, you know, there's not a large number of these severe burns, and so it can bounce around a little bit. But we believe with the larger commercial footprint that we have now, with both products being cross-sold by all of the reps, that, you know, the strong clinical outcomes will continue to drive NexoBrid uptake over time. And we think Epicel utilization will increase as well as we have a larger commercial footprint and again, more presence in these burn centers with NexoBrid as well.
So in addition to our core portfolio, which provides, you know, a lot of growth opportunities for us, we do obviously, as you'd expect, have a business development and corporate development effort out there. We look at a lot of products, you know, in our sports medicine space. You know, there's a relatively limited set of additional products in the burn space. And then we also look at products that kind of, you know, could take advantage of our cell therapy development, manufacturing, and commercialization capabilities. And so that's kind of where we spend the predominant amount of our time. You know, it's a pretty high hurdle. We've got a great portfolio. We've got a great financial profile. So anything we would look to bring in needs to sort of, you know, enhance that.
And so, you know, we don't need to do deals to sort of grow, but, you know, we are out there looking at ways to maximize the value for the company. And so just in summary, you know, it's been a great ride over the past 10 years. We've taken, again, a business that was kind of just sort of flat to declining. We've built it into one of the fastest growing and most, you know, profitable for our scale companies out there. And we think there's a lot of room in the years ahead to continue down that path and enhance the overall profile of the company. So I will end there and we'll open it up for questions.
Perfect. Thank you, Nick. If you have any questions, we'll have the mic runners providing you with the mic.
But I'll get the room started with one question that keeps me curious, which is you spoke about MACI's expanded sales force. Can you give any additional information on how the transition has been and what can we expect from this initiative in 2026?
Yeah, so, you know, it's important. We had done our last, when we launched MACI's in 2017, essentially every year we had expanded our sales force, 2017, 2018, 2019, and 2020. They were sort of incremental until 2020 when we sort of increased the sales force from, you know, 49 to 76 territories. So about a 50% increase. COVID hit, so things were a little choppy, but we expected that would be sufficient for, you know, several years as we continued to grow. You know, the business has grown very strongly. You know, we knew we would have to expand at some point.
Always thought probably 100 reps would be about the right next step. And then it really came down to a decision of, you know, when do we want to implement that? And sort of middle of last year, often in the early days, we'd expand sort of in the first quarter. We knew our fourth quarter was going to be very large. We wanted to get the reps on board as soon as we could. Not that we realigned the territories because you don't want to disrupt sort of your largest quarter, but we wanted them there to support the volumes that we knew we were going to have in the fourth quarter. And we also wanted them, you know, to be able to move into the new territories and execute on the realignment on January 2nd and not give up part of the year recruiting.
And so, you know, the transition went great. I guess the proof is in the pudding that there was no disruption in the fourth quarter. It was our highest quarter ever. So that part was great. You know, I think in terms of the profile that we're able to attract, I'll just say if you're in the sports medicine business, even at larger competitors, you know, Vericel is a very attractive opportunity. MACI is just sort of a unique product. You get a lot of airtime with the surgeons. And so it's not particularly hard to recruit top sales reps who have a lot of experience in this field. And, you know, we typically recruit from the large cap med tech companies that you would expect that have big sports medicine franchises. So we're really excited about it. I mean, it's one piece of the puzzle.
We think MACI Arthro can help continue to grow a larger sales force. You know, these investments in commercial excellence that I referred to are important. So how do we continue to broaden our surgeon base, but also go deeper? You know, how do we standardize best practices across the entire sales force? So you need to do things a little differently. You know, going from $40 million to $250 million is one thing and how you get from $250 million to $500 million is another. And so that is top of mind for us. And we're certainly making all the investments we need to make to be able to make sure we get what's kind of right out there in front of us. Sounds good.
And we are like one minute short, but one last question would be, what are the key imperatives that you see for 2026 for Vericel?
Yeah, well, I think, you know, first of all, it's just around operational excellence. So we have a new facility that needs to be approved by the FDA and get that up and running, which, you know, we're well on track to do. So that's kind of right on the timelines that we've communicated before. Commercial execution is also top of mind for the reasons that I mentioned. And so that's really sort of what's driving sort of our focus in 2026. You know, rep productivity has always been very high for us.
You know, anyone can do the math and say if you have 75 or 76 reps last year and you did $240 million in revenue, you know, you're generating a lot of revenue per rep. So when you have an expansion like this, you want to make sure you're kind of on track to get right back up there and beyond, which we think we'll be able to do. So it's those kinds of sort of execution, you know, executing on our MACI ankle clinical study to make sure we get off to a great start in enrollment. So it's really around execution.
Perfect. Any other questions from the room?
Hi, do you have any data on how long the MACI treatment lasts? Do patients need to be redosed?
Then after they get the treatment, do they need to like not use their leg for a while to let it kind of get?
Yeah, on the latter question of sort of rehab, yeah, there's always rehab after any surgical procedure. I think, as I mentioned earlier, in the Carticel days when it was very invasive, to be able to do the work you had to do to microsuture a cover onto the defect, you know, or a periosteal flap. I mean, it was a highly invasive surgery. And so that entailed a lot longer rehab. Currently, it's MACI kind of, because it's a less invasive surgery, it's kind of on par with other options. But there's always going to be a rehab. And you can even look at the MACI website.
It's kind of, you know, we're focused on functional based, how quickly you can move to the next stage, but you know, it's a six-to-nine-month sort of rehab process for any of these surgeries.
I'm sorry, the second part of the question. How long it like persisted?
Oh, okay, so yeah, so durability of repair. I mentioned that earlier, so even with Carticel, you know, we had 20-year outcomes data. You know, that's when you're following these patients and, you know, pain and function scales are sort of the endpoints. You know, you saw just great outcomes even 20 years out. Once you repair that tissue, unless you have another injury, you don't have to go back in and have another one. You know, MACI is a newer product, so it's a little behind, but we published 10-year data, outcomes data.
It's really impressive. I mean, in the pivotal study, there was like a 90% responder rate. So you achieved a certain, you know, pain and function improvement. And that's high for any therapeutic. Great clinical outcomes for MACI.