Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Licenses, Royalties and Collaborative Agreements

Corning Incorporated — In December 2002, the Company entered into an agreement with Corning Incorporated (Corning) that granted Corning an exclusive sublicense relating to the Company’s cell transfection technology. Under the terms of the agreement, the Company retains exclusive rights to the applications of the technologies involving cells for therapeutic applications. In addition, the agreement provides for future royalty payments on net sales of licensed products sold under the sublicense amounting to 5% of such sales up to $50.0 million. However, the Company does not expect to receive material revenue from this source for several years, if ever.

RealBio Technologies — In May 2009, the Company entered into an agreement with RealBio Technologies, Inc. (RealBio) that granted RealBio an exclusive license to utilize our technology outside of the Company’s core area of focus - human regenerative medicine. In return for this license, the Company received a minority equity interest in RealBio, which was not material as of December 31, 2015 or 2014.

Matricel — In October 2015, the Company signed a long-term supply agreement with Matricel GmbH for the ACI-Maix collagen membrane used in the manufacture of MACI™. Matricel supplied ACI-Maix membranes used in the production of MACI when it was previously marketed outside the U.S. by Genzyme Corporation, a Sanofi company. Under the agreement, the Company has committed to purchase $0.3 million of material in 2016. In the event that the Biologics License Application is approved for MACI, annual purchase commitments would equal approximately $0.6 million per year. The agreement is effective until December 31, 2022 and contains a 5-year renewal option by the Company and an additional 5-year automatic renewal, unless otherwise terminated.

Manufacture, Supply and Other Agreements — The Company has entered into various agreements relating to the manufacture of its products and the supply of certain components. If the manufacturing or supply agreements expire or are otherwise terminated, the Company may not be able to identify and obtain ancillary materials that are necessary to develop its product and such expiration and termination could have a material effect on the Company’s business.

Contractual Obligations

The Company leases facilities in Ann Arbor, Michigan; Cambridge, Massachusetts and Kastrup, Denmark. In March 2016, the Company amended its current lease in Cambridge to extend the terms until March 2022. In addition to the property leases, the Company also leases an offsite warehouse, various vehicles and computer equipment.

Future minimum payments related to Vericel’s operating and capital leases are as follows:



			Payments Due by Period
Contractual Obligations	Total		2016		2017		2018		2019		2020		More than 5 Years
Operating leases	$	27,693	$	4,310	$	4,890	$	4,572	$	4,260	$	4,386	$	5,275
Purchase commitments	300		300		—		—		—		—		—
Capital leases	118		43		43		32		—		—		—
Total	$	28,111	$	4,653	$	4,933	$	4,604	$	4,260	$	4,386	$	5,275

Rent expense for the years ended December 31, 2015, 2014 and 2013, was $4.9 million, $2.5 million and $1.0 million, respectively.