Nick Colangelo: Yeah. Hey, Mike. This is Nick. Obviously, as we said, we’re really excited about MACI Arthro for the reasons we’ve described. It targets the largest segment of our addressable market. It will be the only arthroscopic restorative cartilage repair procedure for these femoral condyle defects of a certain size. So we think this is going to be very meaningful for us as we move forward. Obviously, we can’t at this point, since it’s not an approved method of administration, be out there talking generally to surgeons. But we are working with a couple dozen surgeons through the human factors study, voices at customer labs, additional trainings, et cetera. And I’ll just say the enthusiasm from the surgeons who have been exposed to the new instruments has been significant and great.
So they’re really excited about it and I would expect that that will translate to those who aren’t as familiar with it right now. And I would just, last point would be that, for these surgeons, if you look at our addressable market, right now, the vast majority of cartilage repair procedures are done arthroscopically, whether it’s chondroplasties, microfracture. Those are the things that make up the majority of the cartilage repair market. So this kind of is right in the wheelhouse for those surgeons in terms of how they currently do their cartilage repair procedures. And there’s nothing out there that has the clinical outcomes that MACI has. So, we think that combination is going to be very powerful for us as we move forward.
Mike Kratky: Got it. Yeah. I really appreciate the color there. And then maybe just as a follow-up. Is it reasonable to think that as you get arthroscopic approval, that could ultimately lead to an improvement in the conversion rate just as more implants end up getting done over time? Is that available?
Nick Colangelo: Yeah. Well, we certainly believe and our surgeons believe that, number one, with a less invasive procedure that obviously there’s better aesthetic outcomes, there’s less post-operative pain and we would expect there to be faster post-surgical recoveries, and that is something from a medical affairs perspective that we’ll be focused on as soon as we launch the product and generating data that actually supports what I think everybody expects to be the case. So, yeah, I think that is very much in line with sort of what we’re thinking.
Mike Kratky: Got it. Thanks very much.
Nick Colangelo: Okay. Thanks, Mike.
Operator: Thank you. One moment for our next question. Our next question comes from Richard Newitter with Truist Securities. Please go ahead.
Sam Brodovsky: Hey. Sorry. It’s actually Sam on. Thanks for taking the questions. Just first one, on MACI, can you just sort of walk us through the price dynamic in 2023 and then any changes there for 2024 and how should we be thinking about that impacting revenue and any price impact from arthroscopic as well?
Nick Colangelo: Yeah. Hey, Sam. This is Nick. So, yeah, so we’ve spoken before about sort of we routinely take annual price increases for MACI. We, of course, expect to do that this year as well. We’ve typically taken a mid-year price increase. The — with respect to arthroscopic MACI, MACI’s reim — — the product itself obviously is reimbursed under a J code. That pricing will not change whether a surgeon delivers MACI in a mini arthrotomy or an arthroscopic procedure. So that won’t impact it. The CPT codes is the same. So the reimbursement for the surgeon will be the same for the procedure. We do anticipate charging. This will be a disposable set of instruments and we do expect to charge for those instruments. So much like our MACI biopsy kits where there’s a line item in our financial filings that you can see.
We expect that these instruments will generate some revenue for the company and offset some other costs potentially over time. But really the main revenue driver is the reimbursement for the implant itself.
Sam Brodovsky: Great. Thanks for that. And then thanks for all the really detailed great color earlier. That was really helpful. I did just want to touch a little more on Epicel given the quarterly volatility this product can have. Can you just give us a little more insight into the visibility you have into that sort of run rate through the year and why you’re so confident again? Thanks.
Nick Colangelo: Yeah. I’ll start and Joe can kind of chime in. I think Joe referenced it in the prepared remarks that historically and pre-COVID, I mean, things got a little more variable during COVID, obviously. And we would always say probably a safe place to start the year, assuming high single-digit to low double-digit growth for Epicel. We kind of routinely outperformed that. But again, given sort of less visibility than we have, for instance, with MACI, we kind of always just assume that kind of communicated, I should say, that that was a good place to start. I would say that over the past essentially three quarters now Epicel with a larger share of voice has been sort of returning. It’s not even back to its highest levels ever and but we’ve seen it kind of get back routinely into more of like an $8 plus million run rate.
And the market’s kind of normalized. The — we had some dynamics with respect to our largest customer that have now been resolved at their facility, not Epicel related, but other issues. And so all of that is kind of normalized and so we’re kind of back into sort of that place we were in from prior years. And so, again, obviously, we have — when we have a biopsy quarter, like we did in the fourth quarter, we know that’s going to create strength into the year, as we discussed earlier. So, yeah, we’re feeling pretty good about it. And again, we said all along that we expected pull through for Epicel from having a larger share of voice. We’re in more hospitals than we were previously and all that. It had an impact starting kind of the middle of last year, as we talked about on earlier calls and it continues to have an impact.
