Brown Capital Discloses $31 Million Sale of Vericel Stock as Small-Cap Biotech Reports Earnings

On Tuesday, Baltimore-based Brown Capital Management reported selling 861,020 shares of Vericel Corporation for an estimated $30.9 million based on the average share price in the third quarter.

What Happened

According to a filing with the Securities and Exchange Commission released Tuesday, Brown Capital Management reduced its position in Vericel Corporation (NASDAQ:VCEL) by 861,020 shares in the third quarter. The estimated transaction value, based on the average share price for the quarter, was approximately $30.9 million. The post-transaction holding stands at 1,950,989 shares worth $61.4 million.

What Else to Know

Brown Capital Management's sale reduced Vericel's stake to 2.5% of AUM in the third quarter, down from 3.5% in the previous quarter.

Top holdings after the filing:

• NASDAQ:CYBR: $197.3 million (8.1% of AUM)
• NASDAQ:CAMT: $121.2 million (5% of AUM)
• NYSE:VEEV: $108.4 million (4.5% of AUM)
• NASDAQ:DDOG: $101.4 million (4.2% of AUM)
• NYSE:GWRE: $95.2 million (3.9% of AUM)

As of Thursday, Vericel shares were priced at $40.90, down 15% over the past year and well underperforming the S&P 500's 14% gain in the same period.

Company Overview

Company Snapshot

Vericel Corporation is a commercial-stage biopharmaceutical company specializing in advanced cell therapies for sports medicine and burn care. The company maintains a focused portfolio of approved and late-stage products for cartilage repair and severe burn treatment in the United States. Vericel serves hospitals, burn centers, and orthopedic specialists treating patients with cartilage injuries or severe burns.

Foolish Take

Brown Capital Management’s reduction in Vericel Corporation marks another recalibration within its small-cap growth portfolio, following a similar cut in Glaukos (GKOS). The Baltimore-based firm sold 861,020 shares for an estimated $30.9 million reduction, according to its latest SEC filing.

The move comes amid a volatile year for Vericel. Shares have fallen 15% over the past 12 months, underperforming the broader market despite strong fundamentals in its regenerative medicine business. In fact, Vericel stock surged nearly 10% on Thursday after the firm released its third-quarter report, posting $67.5 million in revenue, which climbed 17% year-over-year thanks largely by growth in its MACI cartilage repair therapy.

Brown’s small company strategy emphasizes patience with “exceptional growth companies,” and the simultaneous reductions in Glaukos and Vericel suggest a more defensive shift, at least pertaining to these two names. But for long-term investors, Vericel’s fundamentals—expanding burn and sports medicine franchises and double-digit sales growth—remain strong, though execution risk and market volatility may continue to weigh in the near term.

Glossary

13F reportable AUM: Assets under management that must be disclosed in quarterly SEC Form 13F filings by institutional investment managers.
AUM (Assets Under Management): The total market value of all assets managed by an investment firm or fund.
Post-sale stake: The number of shares or percentage of ownership remaining after a sale transaction.
Quarter (Q3 2025): The third three-month period of the fiscal year, here referring to July–September 2025.
Top holdings: The largest investments, by value, in a fund or portfolio.
Autologous cell therapy: A treatment using a patient's own cells, processed and reintroduced to treat disease or injury.
Burn eschar removal: The process of removing dead tissue (eschar) from burn wounds to promote healing.
Commercial-stage biopharmaceutical company: A company that develops drugs and has products already approved and sold on the market.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog and Veeva Systems. The Motley Fool has a disclosure policy.