AVITA Medical, Inc. (NASDAQ: RCEL, ASX:AVH) (the
“
Company”), a regenerative medicine company that
is developing and commercializing a technology platform that
enables point-of-care autologous skin restoration for multiple
unmet needs, today reported its financial results for the quarter
ending December 31, 2021, and its transition period fiscal year
("
Transition Period") from July 1, 2021, to
December 31, 2021.
As announced in December 2021, the Company determined to change
the Company’s fiscal year from June 30 to December 31. As a result
of this change, the Company is reporting a six-month Transition
Period.
Financial Highlights and Recent Updates:
- Revenue increased 37% to $14.0 million in the Transition Period
ended December 31, 2021, compared to $10.2 million over the
six-month corresponding period in the prior year
- Revenue increased 35% to $6.9 million in the fourth quarter of
2021, compared to $5.1 million in the corresponding period in the
prior year
- Completed enrollment in two clinical trials with the goal of
submitting premarket approval (PMA) supplements in 2022
- In December 2021, completed enrollment of pivotal clinical
trial evaluating the safety and effectiveness of the RECELL® System
for the repigmentation of stable vitiligo lesions
- In January 2022, completed enrollment of pivotal study of the
RECELL System for soft tissue reconstruction (trauma)
- In January 2022, successfully established proof of concept with
preclinical data in two key areas of cell-based gene therapy – skin
rejuvenation and epidermolysis bullosa
- In February 2022, received FDA approval of the premarket
approval application (PMA) supplement for RECELL® Autologous Cell
Harvesting Device, an enhanced RECELL system aimed at providing
clinicians a more efficient user experience and simplified
workflow
- In February 2022, Japan’s Pharmaceuticals and Medical Devices
Agency (PMDA) approved our application for commercialization of the
RECELL system with an initial burns indication in Japan to be
commercialized in a marketing and distribution partnership with
COSMOTEC (an M3 company)
- As of December 31, 2021, the Company had approximately $55.5
million in cash and cash equivalents and $49.3 million in
short-term and long-term marketable securities, and no debt
“We are pleased with the terrific results that we are achieving
with RECELL in US burn centers, as well as with our recent
achievement of many key corporate milestones,” said Dr. Mike Perry,
AVITA Medical Chief Executive Officer. “Our success in burns will
help us prepare for and is expected to increase our future adoption
with respect to commercialization in much larger markets for soft
tissue reconstruction and vitiligo in the second half of 2023.”
Financial Results for the Three-Months Ended December
31, 2021, compared to the Three-Months Ended December 31,
2020
Revenue increased 35% to $6.9 million, compared to $5.1 million
in the corresponding period in the prior year. The increase was
largely driven by broader utilization among our customer base as
well as deeper penetration within individual customer accounts.
Gross profit margin was 88% compared with 84% in
the corresponding period in the prior year. Higher gross margin was
driven by increased production at our Ventura facility and the
extension of our shelf-life.
Total operating expenses increased 42% to $14.8
million, compared to $10.4 million in the corresponding period in
the prior year. The increase in operating expenses was primarily
driven by higher share-based compensation costs, higher costs with
ongoing development of a next generation automated skin preparation
device, pre-commercialization planning for RECELL launches in soft
tissue reconstruction and vitiligo, as well as increased hands-on
professional education and training events. Higher share-based
compensation costs in the current year were due to the reversal of
a previously recognized expense for unvested awards related to the
resignation of an executive officer in the prior year. A
decrease in COVID-19 related travel restrictions in the current
year enabled more in-person professional education and training
events.
Net loss increased 52% or $2.9 million to $8.5
million, over the $5.6 million recognized in the corresponding
period in the prior year. The increase in net loss was driven by
higher operating expenses as described above, partially offset by
higher revenue during the year.
Adjusted EBITDA* loss increased by 13%, or $0.7
million to $6.5 million, over the $5.8 million recognized in the
corresponding period in the prior year. A table reconciling
non-GAAP measures is included in this press release for
reference.
Financial Results for the
Transition Period Ended December 31, 2021, compared to the
Six Months Ended December 31, 2020
Revenue increased 37% to $14.0 million, compared to
$10.2 million in the corresponding period in the prior year.
RECELL® commercial revenues were $13.8 million, while RECELL
revenues associated with U.S. Department of Health and Human
Services’ Biomedical Advanced Research and Development Authority
within the Office of the Assistant Secretary for Preparedness and
Response (“BARDA”) were $0.2 million. Revenues
associated with BARDA were attributable to our services over the
vendor managed inventory for RECELL units purchased in the prior
year.
Gross profit margin was 86% compared with 83% in
the corresponding period in the prior year, driven largely by the
extension of our shelf-life.
Total operating expenses increased 7% to $27.1
million, compared to $25.3 million in the corresponding period in
the prior year. The increase in operating expenses was primarily
driven by ongoing development of a next generation automated skin
preparation device, pre-commercialization planning for RECELL
launches in soft tissue reconstruction and vitiligo, as well as
increased hands-on professional education and training events.
These higher costs were partially offset by certain one-time
professional services to establish the Company as a domestic filer
with the SEC following completion of the AVITA corporate group's
redomiciliation to the United States, and severance costs
associated with a former executive employee incurred in the prior
year.
Net loss decreased 9%, or $1.5 million to
$14.4 million compared to the $15.9 million recognized in
the corresponding period in the prior year. The decrease in net
loss was driven by higher revenue during the year, partially offset
by higher operating expenses as described above.
Adjusted EBITDA* loss decreased by 17%, or $2.1
million to $10.4 million compared to $12.5 million recognized over
the corresponding period in the prior year. A table reconciling
non-GAAP measures is included in this press release for
reference.
Calendar Year 2022 Revenue
Guidance
Total revenues in calendar year 2022 are projected
to be approximately $30 million, excluding BARDA revenues, which
represents a 20% increase year-over year. We project BARDA revenues
of approximately $0.3 million in calendar year 2022, as compared to
$7.9 million in calendar year 2021, since we completed delivery of
RECELL units into the national stockpile in 2021. As we
emerge from COVID-19, we expect further RECELL adoption in US burn
centers where we are focusing our commercial efforts. The adoption
of RECELL, and its positive patient outcomes and safety profile,
positions us very well for broader commercial expansion planned for
soft tissue reconstruction and vitiligo indications in the second
half of 2023 following anticipated FDA approval.
*Adjusted EBITDA is a non-GAAP financial measure.
See the appendix to this release for a discussion of Non-GAAP
financial measures, including a reconciliation to the most closely
correlated GAAP measure.
Authorized for release by the Chief Financial
Officer of AVITA Medical, Inc.
ABOUT AVITA Medical, Inc.AVITA Medical, Inc. is
a regenerative medicine company with a technology platform
positioned to address unmet medical needs in burns, chronic wounds,
and aesthetics indications. AVITA Medical Inc. patented and
proprietary collection and application technology provides
innovative treatment solutions derived from the regenerative
properties of a patient’s own skin. The medical devices work by
preparing a RES® REGENERATIVE EPIDERMAL SUSPENSION, an autologous
suspension comprised of the patient’s skin cells necessary to
regenerate natural healthy epidermis. This autologous suspension is
then sprayed onto the areas of the patient requiring treatment.
AVITA Medicals’ first U.S. product, the RECELL® System, was
approved by the U.S. Food and Drug Administration (FDA) in
September 2018. The RECELL® System is approved for acute
partial-thickness thermal burn wounds in patients 18 years of age
and older or application in combination with meshed autografting
for acute full-thickness thermal burn wounds in pediatric and adult
patients. The RECELL® System is used to prepare Spray-On Skin™
Cells using a small amount of a patient’s own skin, providing a new
way to treat severe burns, while significantly reducing the amount
of donor skin required. The RECELL® System is designed to be used
at the point of care alone or in combination with autografts
depending on the depth of the burn injury. Compelling data from
randomized, controlled clinical trials conducted at major U.S. burn
centers and real-world use in more than 8,000 patients globally,
reinforce that the RECELL® System is a significant advancement over
the current standard of care for burn patients and offers benefits
in clinical outcomes and cost savings. Healthcare professionals
should read the INSTRUCTIONS FOR USE - RECELL® Autologous Cell
Harvesting Device (https://recellsystem.com/) for a full
description of indications for use and important safety information
including contraindications, warnings, and precautions.
In international markets, our products are marketed under the
RECELL® System brand to promote skin healing in a wide range of
applications including burns, chronic wounds, and aesthetics. The
RECELL® System is TGA-registered in Australia and received CE-mark
approval in Europe.To learn more, visit www.avitamedical.com.
Use of Non-GAAP Measure AVITA Medical’s
reported earnings are prepared in accordance with generally
accepted accounting principles in the United States, or GAAP, and
represent earnings as reported to the Securities and Exchange
Commission. AVITA Medical has provided in this release certain
financial information that has not been prepared in accordance with
GAAP. AVITA Medical’s management believes that the non-GAAP
adjusted EBITDA described in the release, which includes
adjustments for specific items that are generally not indicative of
our core operations, provides additional information that is useful
to investors in understanding AVITA Medical’s underlying
performance, business and performance trends, and helps facilitate
period-to-period comparisons and comparisons of its financial
measures with other companies in AVITA Medical’s industry. However,
the non-GAAP financial measures that AVITA Medical uses may differ
from measures that other companies may use. Non-GAAP financial
measures are not required to be uniformly applied, are not audited
and should not be considered in isolation or as substitutes for
results prepared in accordance with GAAP.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTSThis press release includes forward-looking
statements. These forward-looking statements generally can be
identified by the use of words such as “anticipate,” “expect,”
“intend,” “could,” “may,” “will,” “believe,” “estimate,” “look
forward,” “forecast,” “goal,” “target,” “project,” “continue,”
“outlook,” “guidance,” “future,” other words of similar meaning and
the use of future dates. Forward-looking statements in this press
release include, but are not limited to, statements concerning,
among other things, our ongoing clinical trials and product
development activities, regulatory approval of our products, the
potential for future growth in our business, and our ability to
achieve our key strategic, operational, and financial goals.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Each forward- looking
statement contained in this press release is subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statement. Applicable risks
and uncertainties include, among others, the timing of regulatory
approvals of our products; physician acceptance, endorsement, and
use of our products; failure to achieve the anticipated benefits
from approval of our products; the effect of regulatory actions;
product liability claims; risks associated with international
operations and expansion; and other business effects, including the
effects of industry, economic or political conditions including,
but not limited to the ongoing COVID-19 pandemic which are outside
of the company’s control. Investors should not place considerable
reliance on the forward-looking statements contained in this press
release. Investors are encouraged to read our publicly available
filings for a discussion of these and other risks and
uncertainties. The forward-looking statements in this press release
speak only as of the date of this release, and we undertake no
obligation to update or revise any of these statements.
FOR FURTHER INFORMATION:
U.S. MediaSam Brown, Inc.Christy
CurranPhone +1 615 414 8668christycurran@sambrown.comO.U.S
MediaMonsoon CommunicationsRudi
MichelsonPhone +61 (0)3 9620 3333Mobile +61 (0)411 402
737rudim@monsoon.com.au |
InvestorsICR WestwickeCaroline
CornerPhone +1 415 202 5678caroline.corner@westwicke.com |
AVITA MEDICAL, INC. |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share
data) |
|
|
As of |
|
|
December 31,2021 |
|
June 30,2021 |
|
June 30, 2020 |
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
55,511 |
|
|
$ |
110,746 |
|
|
$ |
73,639 |
|
Marketable securities |
|
|
29,649 |
|
|
|
- |
|
|
|
- |
|
Accounts receivable, net |
|
|
3,118 |
|
|
|
3,467 |
|
|
|
2,076 |
|
BARDA receivables |
|
|
308 |
|
|
|
3,936 |
|
|
|
356 |
|
Prepaids and other current assets |
|
|
1,213 |
|
|
|
1,333 |
|
|
|
990 |
|
Restricted cash |
|
|
201 |
|
|
|
201 |
|
|
|
201 |
|
Inventory |
|
|
2,132 |
|
|
|
1,647 |
|
|
|
1,125 |
|
Total current assets |
|
|
92,132 |
|
|
|
121,330 |
|
|
|
78,387 |
|
Marketable securities long-term |
|
|
19,692 |
|
|
|
- |
|
|
|
- |
|
Plant and equipment, net |
|
|
1,262 |
|
|
|
1,458 |
|
|
|
1,363 |
|
Operating lease right-of-use assets |
|
|
1,544 |
|
|
|
1,480 |
|
|
|
2,347 |
|
Intangible assets, net |
|
|
443 |
|
|
|
472 |
|
|
|
364 |
|
Other long-term assets |
|
|
942 |
|
|
|
761 |
|
|
|
1 |
|
Total
assets |
|
$ |
116,015 |
|
|
$ |
125,501 |
|
|
$ |
82,462 |
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
2,708 |
|
|
|
3,120 |
|
|
|
4,333 |
|
Accrued wages and fringe benefits |
|
|
5,363 |
|
|
|
3,321 |
|
|
|
2,816 |
|
Other current liabilities |
|
|
1,075 |
|
|
|
949 |
|
|
|
560 |
|
Total current liabilities |
|
|
9,146 |
|
|
|
7,390 |
|
|
|
7,709 |
|
Contract liabilities |
|
|
952 |
|
|
|
1,075 |
|
|
|
435 |
|
Operating lease liabilities, long term |
|
|
918 |
|
|
|
878 |
|
|
|
1,917 |
|
Other long-term liabilities |
|
|
375 |
|
|
|
503 |
|
|
|
- |
|
Total liabilities |
|
|
11,391 |
|
|
|
9,846 |
|
|
|
10,061 |
|
Contingencies (Note 10) |
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
Common stock, $0.0001 par value per share, 200,000,000 shares
authorized, 24,925,743 and 24,895,864 shares issued and outstanding
at December 31, 2021 and June 30, 2021, respectively |
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
Preferred stock, $0.0001 par value per share, 10,000,000 shares
authorized, no shares issued or outstanding at June 30, 2021 and
June 30, 2020 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
332,484 |
|
|
|
328,889 |
|
|
|
259,165 |
|
Accumulated other comprehensive income |
|
|
8,060 |
|
|
|
8,259 |
|
|
|
8,146 |
|
Accumulated deficit |
|
|
(235,923 |
) |
|
|
(221,496 |
) |
|
|
(194,913 |
) |
Total shareholders' equity |
|
|
104,624 |
|
|
|
115,655 |
|
|
|
72,401 |
|
Total liabilities and
shareholders' equity |
|
$ |
116,015 |
|
|
$ |
125,501 |
|
|
$ |
82,462 |
|
AVITA MEDICAL, INC. |
Condensed Consolidated Statements of
Operations |
(In thousands, except share and per share
data) |
|
|
|
Three-monthsended |
|
Three-monthsended |
|
TransitionPeriod |
|
Six-MonthPeriod |
|
|
December 31,2021 |
|
December 31,2020 |
|
July 1 –December 31,2021 |
|
July 1 –December 31,2020 |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
6,936 |
|
|
$ |
5,103 |
|
|
$ |
13,956 |
|
|
$ |
10,163 |
|
Cost of sales |
|
|
(817 |
) |
|
|
(821 |
) |
|
|
(1,905 |
) |
|
|
(1,750 |
) |
Gross profit |
|
|
6,119 |
|
|
|
4,282 |
|
|
|
12,051 |
|
|
|
8,413 |
|
BARDA income |
|
|
206 |
|
|
|
449 |
|
|
|
580 |
|
|
|
1,045 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing expenses (1) |
|
|
(4,954 |
) |
|
|
(3,600 |
) |
|
|
(8,472 |
) |
|
|
(6,865 |
) |
General and administrative expenses (1) |
|
|
(5,647 |
) |
|
|
(3,401 |
) |
|
|
(10,996 |
) |
|
|
(11,703 |
) |
Research and development expenses (1) |
|
|
(4,198 |
) |
|
|
(3,361 |
) |
|
|
(7,586 |
) |
|
|
(6,735 |
) |
Total operating expenses |
|
|
(14,799 |
) |
|
|
(10,362 |
) |
|
|
(27,054 |
) |
|
|
(25,303 |
) |
Operating loss |
|
|
(8,474 |
) |
|
|
(5,631 |
) |
|
|
(14,423 |
) |
|
|
(15,845 |
) |
Interest expense |
|
|
(8 |
) |
|
|
(3 |
) |
|
|
(17 |
) |
|
|
(10 |
) |
Other income |
|
|
22 |
|
|
|
4 |
|
|
|
38 |
|
|
|
8 |
|
Loss before income taxes |
|
|
(8,460 |
) |
|
|
(5,630 |
) |
|
|
(14,402 |
) |
|
|
(15,847 |
) |
Income tax benefit/(expense) |
|
|
(19 |
) |
|
|
(11 |
) |
|
|
(25 |
) |
|
|
(21 |
) |
Net loss |
|
$ |
(8,479 |
) |
|
$ |
(5,641 |
) |
|
$ |
(14,427 |
) |
|
$ |
(15,868 |
) |
Net loss per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.34 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.74 |
) |
Diluted |
|
$ |
(0.34 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.74 |
) |
Weighted-average common
shares: |
|
|
|
|
|
|
|
|
Basic |
|
|
24,925,424 |
|
|
|
21,623,509 |
|
|
|
24,915,414 |
|
|
|
21,563,576 |
|
Diluted |
|
|
24,925,424 |
|
|
|
21,623,509 |
|
|
|
24,915,414 |
|
|
|
21,563,576 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes share-based compensation expense as noted in table
below. |
|
|
|
|
|
|
Three-months ended |
|
Three-months ended |
|
TransitionPeriod |
|
Six-MonthPeriod |
|
|
|
December 31,2021 |
|
December 31,2020 |
|
July 1 –December 31,2021 |
|
July 1 –December 31,2020 |
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing expenses |
|
|
372 |
|
|
|
294 |
|
|
|
663 |
|
|
|
624 |
|
General and administrative expenses |
|
|
1,067 |
|
|
|
(774 |
) |
|
|
2,318 |
|
|
|
1,992 |
|
Research and development expenses |
|
|
307 |
|
|
|
134 |
|
|
|
607 |
|
|
|
304 |
|
Total operating expenses |
|
|
1,746 |
|
|
|
(346 |
) |
|
|
3,588 |
|
|
|
2,920 |
|
Reconciliation of reported Net Loss (GAAP) to Adjusted
EBIDTA (NON-GAAP) Measure – Unaudited |
|
|
Three-months ended |
|
Three-months ended |
|
Transition Period Ended |
|
Six-Month Period |
|
December 31, 2021 |
|
December 31, 2020 |
|
July 1 - December 31, 2021 |
|
July 1 - December 31, 2020 |
Net loss |
$ |
(8,479 |
) |
|
$ |
(5,641 |
) |
|
$ |
(14,427 |
) |
|
$ |
(15,868 |
) |
Depreciation Expense |
|
127 |
|
|
|
135 |
|
|
|
274 |
|
|
|
324 |
|
Patent Amortization |
|
32 |
|
|
|
27 |
|
|
|
56 |
|
|
|
49 |
|
Share Based Payment
Expense |
|
1,746 |
|
|
|
(346 |
) |
|
|
3,588 |
|
|
|
2,920 |
|
Interest Expense |
|
9 |
|
|
|
3 |
|
|
|
17 |
|
|
|
10 |
|
Income Tax Expense |
|
19 |
|
|
|
11 |
|
|
|
25 |
|
|
|
21 |
|
Adjusted EBITDA (Non-GAAP) |
$ |
(6,546 |
) |
|
$ |
(5,811 |
) |
|
$ |
(10,467 |
) |
|
$ |
(12,544 |
) |
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