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 financial results for its second
quarter ended June 30, 2022.
Second Quarter Highlights and Recent
Updates:
- Reported commercial revenue, which excludes BARDA revenue, of
$8.2 million a 23% increase compared to $6.7 million in the
corresponding period in the prior year
- Reported total revenue, which includes BARDA revenue, of $8.3
million compared to $10.3 million in the corresponding period in
the prior year, which included $3.6 million in BARDA revenue
- Gross profit margin improved by 3% to 83% compared
corresponding period in the prior year
- Topline results from its pivotal randomized controlled trial
evaluating the safety and effectiveness of the RECELL® System for
healing of soft tissue reconstruction with reduced donor skin
- As of June 30, 2022, the Company had $91.1 million in cash,
cash equivalents, and marketable securities, with no debt
Year to date Highlights:
- Reported commercial revenue, which excludes BARDA revenue, of
$15.7 million, a 39% increase compared to $11.3 million in the
corresponding period in the prior year
- Reported total revenue, which includes BARDA revenue, of $15.9
million compared to $19.1 million in the corresponding period in
the prior year, which included $7.8 million in BARDA revenue
- Gross profit margin improved by 2% to 80% compared to the
corresponding period in the prior year
“Our commercial team continued to drive further RECELL
utilization and penetration within burn centers, and our clinical
team advanced our soft tissue reconstruction and vitiligo trials,”
said Dr. Mike Perry, AVITA Medical Chief Executive Officer. “We
look forward to topline data from our vitiligo clinical trial in
the second half of this year.”
Three Months Ended June 30, 2022 Financial
Results
Our commercial revenue, which excludes BARDA revenue, was $8.2
million in the three months ended June 30, 2022, an increase of
$1.5 million or 23%, compared to $6.7 million the corresponding
period in the prior year. Total revenue, which includes BARDA
revenue, was $8.3 million in the second quarter compared to $10.3
million in the corresponding period in the prior year which
included $3.6 million in BARDA related revenue that resulted from
our delivery of units to managed inventory for BARDA for emergency
response preparedness. The growth in commercial revenues was
largely driven by an increase in the number of customers ordering
as well as the average order size for those customers.
Gross profit margin improved by 3% to 83% compared to the
corresponding period in the prior year.
Total operating expenses increased by 3% to $13.9 million
compared to $13.4 million in the corresponding period in the prior
year. The increase in operating expenses is primarily attributable
to higher compensation costs, sales commissions, and professional
fees, partially offset by lower clinical trial related expenses.
Higher compensation costs resulted from an expansion of our
commercial team, while higher commissions were driven by an
increase in revenues. Higher professional fees are driven by an
increase in pre-commercialization activities for RECELL launches in
soft tissue reconstruction and vitiligo. Clinical trial
expenses incurred in our soft tissue and vitiligo trials were lower
during the period, as the trial participants were in the follow-up
phase which is less costly than the earlier recruitment and
treatment phase.
Net loss increased by 33% or $1.5 million to $6.3 million, or
$0.25 per share, compared to a net loss of $4.7 million, or $0.19
per share, in the corresponding period of the prior year.
Adjusted EBITDA* loss increased by 51%, or $1.6 million to $4.7
million, over the $3.1 million recognized in the corresponding
period in the prior year. A table reconciling non-GAAP measures is
included in this press release for reference.
Six Months Ended June 30, 2022, Financial
Results
Our commercial revenue, which excludes BARDA revenue, was $15.7
million in the six months ended June 30, 2022, an increase of $4.4
million or 39%, compared to $11.3 million in the corresponding
period in the prior year. Total revenue, which includes BARDA
revenue, was $15.9 million in the current year compared to $19.1
million in the corresponding period in the prior year which
included $7.7 million in BARDA related revenue that resulted from
our delivery of units to managed inventory for BARDA for emergency
response preparedness. The growth in commercial revenues was
largely driven by an increase in the number of customers ordering
as well as the average order size for those customers.
Gross profit margin improved by 2% to 80% compared to the
corresponding period in the prior year.
Total operating expenses increased by 12% to $29.9 million
compared to $26.6 million in the corresponding period in the prior
year. The increase in operating expenses is primarily attributable
to higher compensation costs and professional fees, partially
offset by lower clinical trial related expenses. Higher
compensation costs were primarily a result of increased share-based
compensation expenses due to certain performance milestones being
met, higher commissions driven by an increase in revenues, and an
expansion of our commercial team. Increased professional fees were
driven by an increase in pre-commercialization costs for RECELL
launches in soft tissue reconstruction and vitiligo. Research and
development expenses were lower relative to the prior year during
which higher costs were incurred relating to recruitment and
treatment for the soft tissue and vitiligo clinical trials.
Net loss increased by 47% or $5.0 million to $15.7 million, or
$0.63 per share, compared to a net loss of $10.7 million, or $0.45
per share, in the corresponding period of the prior year.
Adjusted EBITDA* loss increased by 46%, or $3.5 million to $11.1
million, over the $7.6 million recognized in 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
Commercial 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.
*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.
Webcast and Conference Call Information
The Company will host a conference call to
discuss the second quarter financial results after market close on
Thursday August 11, 2022, at 2:00 p.m. Pacific Time / 5:00 p.m.
Eastern Time (being 7.00 a.m. Australian Eastern Standard Time on
Friday August 12, 2022). To access the live call via telephone,
please register in advance using the link here. Upon registering,
each participant will receive an email confirmation with dial-in
numbers and a unique personal PIN that can be used to join the
call. The live webinar can be accessed at
https://ir.avitamedical.com.
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.’s patented, and
proprietary collection and application technology provides
innovative treatment solutions derived from the regenerative
properties of a patient’s own skin. The Company’s lead product is
the RECELL® System, a device that enables healthcare professionals
to Spray-On Skin™ Cells using a small sample of the patient’s own
skin to create an autologous suspension. The RES® Regenerative
Epidermal Suspension™ is then sprayed onto the areas of the patient
requiring treatment to regenerate natural healthy epidermis.
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. In February 2022, the FDA reviewed and approved the PMA
supplement for RECELL Autologous Cell Harvesting Device, an
enhanced RECELL System aimed at providing clinicians a more
efficient user experience and simplified workflow.
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 15,000 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 approved 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, received CE-mark
approval in Europe, and received Japan’s Pharmaceuticals and
Medical Devices Act (PMDA) approval for burns in Japan.
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 goal.
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 and realization
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
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.Consolidated Balance
Sheets(In thousands, except share and per share
data)(Unaudited)
|
|
As of |
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
34,737 |
|
|
|
$ |
55,511 |
|
|
Marketable securities |
|
|
49,618 |
|
|
|
|
29,649 |
|
|
Accounts receivable, net |
|
|
3,884 |
|
|
|
|
3,118 |
|
|
BARDA receivables |
|
|
338 |
|
|
|
|
308 |
|
|
Prepaids and other current assets |
|
|
1,005 |
|
|
|
|
1,213 |
|
|
Restricted cash |
|
|
202 |
|
|
|
|
201 |
|
|
Inventory |
|
|
2,022 |
|
|
|
|
2,132 |
|
|
Total current assets |
|
|
91,806 |
|
|
|
|
92,132 |
|
|
Marketable securities, long-term |
|
|
6,743 |
|
|
|
|
19,692 |
|
|
Plant and equipment, net |
|
|
1,249 |
|
|
|
|
1,262 |
|
|
Operating lease right-of-use assets |
|
|
1,203 |
|
|
|
|
1,544 |
|
|
Intangible assets, net |
|
|
428 |
|
|
|
|
443 |
|
|
Other long-term assets |
|
|
1,240 |
|
|
|
|
942 |
|
|
Total
assets |
|
$ |
102,669 |
|
|
|
$ |
116,015 |
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
2,495 |
|
|
|
|
2,708 |
|
|
Accrued wages and fringe benefits |
|
|
4,174 |
|
|
|
|
5,363 |
|
|
Other current liabilities |
|
|
1,217 |
|
|
|
|
1,075 |
|
|
Total current liabilities |
|
|
7,886 |
|
|
|
|
9,146 |
|
|
Contract liabilities |
|
|
813 |
|
|
|
|
952 |
|
|
Operating lease liabilities, long-term |
|
|
532 |
|
|
|
|
918 |
|
|
Other long-term liabilities |
|
|
715 |
|
|
|
|
375 |
|
|
Total liabilities |
|
|
9,946 |
|
|
|
|
11,391 |
|
|
Non-qualified deferred
compensation share awards |
|
|
163 |
|
|
|
|
- |
|
|
Contingencies (Note 12) |
|
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value per share, 200,000,000 shares
authorized, 25,003,088 and 24,925,743 shares issued and outstanding
at June 30, 2022 and December 31, 2021, respectively |
|
|
3 |
|
|
|
|
3 |
|
|
Preferred stock, $0.0001 par value per share, 10,000,000 shares
authorized, no shares issued or outstanding at June 30, 2022 and
December 31, 2021 |
|
|
- |
|
|
|
|
- |
|
|
Additional paid-in capital |
|
|
336,668 |
|
|
|
|
332,484 |
|
|
Accumulated other comprehensive income |
|
|
7,536 |
|
|
|
|
8,060 |
|
|
Accumulated deficit |
|
|
(251,647 |
) |
|
|
|
(235,923 |
) |
|
Total shareholders' equity |
|
|
92,560 |
|
|
|
|
104,624 |
|
|
Total liabilities and
shareholders' equity |
|
$ |
102,669 |
|
|
|
$ |
116,015 |
|
|
AVITA MEDICAL,
INC.Consolidated Statements of
Operations(In thousands, except share and per
share data)(Unaudited)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenues |
|
$ |
8,335 |
|
|
$ |
10,304 |
|
|
$ |
15,874 |
|
|
$ |
19,069 |
|
Cost of sales |
|
|
(1,386 |
) |
|
|
(2,053 |
) |
|
|
(3,164 |
) |
|
|
(4,199 |
) |
Gross profit |
|
|
6,949 |
|
|
|
8,251 |
|
|
|
12,710 |
|
|
|
14,870 |
|
BARDA income |
|
|
551 |
|
|
|
440 |
|
|
|
1,285 |
|
|
|
1,010 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing expenses* |
|
|
(5,332 |
) |
|
|
(4,146 |
) |
|
|
(10,160 |
) |
|
|
(7,795 |
) |
General and administrative expenses* |
|
|
(5,471 |
) |
|
|
(5,275 |
) |
|
|
(13,005 |
) |
|
|
(10,697 |
) |
Research and development expenses* |
|
|
(3,059 |
) |
|
|
(3,974 |
) |
|
|
(6,679 |
) |
|
|
(8,083 |
) |
Total operating expenses |
|
|
(13,862 |
) |
|
|
(13,395 |
) |
|
|
(29,844 |
) |
|
|
(26,575 |
) |
Operating loss |
|
|
(6,362 |
) |
|
|
(4,704 |
) |
|
|
(15,849 |
) |
|
|
(10,695 |
) |
Interest expense |
|
|
(4 |
) |
|
|
(9 |
) |
|
|
(4 |
) |
|
|
(12 |
) |
Other income |
|
|
109 |
|
|
|
2 |
|
|
|
137 |
|
|
|
9 |
|
Loss before income taxes |
|
|
(6,257 |
) |
|
|
(4,711 |
) |
|
|
(15,716 |
) |
|
|
(10,698 |
) |
Income tax expense |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
(8 |
) |
|
|
(17 |
) |
Net loss |
|
$ |
(6,261 |
) |
|
$ |
(4,718 |
) |
|
$ |
(15,724 |
) |
|
$ |
(10,715 |
) |
Net loss per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.25 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.63 |
) |
|
$ |
(0.45 |
) |
Diluted |
|
$ |
(0.25 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.63 |
) |
|
$ |
(0.45 |
) |
Weighted-average common
shares: |
|
|
|
|
|
|
|
|
Basic |
|
|
24,971,243 |
|
|
|
24,860,738 |
|
|
|
24,954,712 |
|
|
|
23,803,460 |
|
Diluted |
|
|
24,971,243 |
|
|
|
24,860,738 |
|
|
|
24,954,712 |
|
|
|
23,803,460 |
|
* Total operating expenses include impact of share-based
compensation as follows:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Sales and marketing expenses |
|
$ |
285 |
|
$ |
63 |
|
$ |
614 |
|
$ |
301 |
General and administrative
expenses |
|
|
983 |
|
|
1,172 |
|
|
3,310 |
|
|
2,102 |
Research and development
expenses |
|
|
146 |
|
|
175 |
|
|
422 |
|
|
340 |
Total |
|
|
1,414 |
|
|
1,410 |
|
|
4,346 |
|
|
2,743 |
Reconciliation of reported Net Loss
(GAAP) to Adjusted EBIDTA (NON-GAAP) Measure –
Unaudited
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net Loss |
|
$ |
(6,261 |
) |
|
$ |
(4,718 |
) |
|
$ |
(15,724 |
) |
|
$ |
(10,715 |
) |
Depreciation expense |
|
|
129 |
|
|
|
145 |
|
|
|
258 |
|
|
|
282 |
|
Patent Amortization |
|
|
8 |
|
|
|
31 |
|
|
|
42 |
|
|
|
61 |
|
Share-based expense |
|
|
1,414 |
|
|
|
1,410 |
|
|
|
4,346 |
|
|
|
2,743 |
|
Interest Expense |
|
|
4 |
|
|
|
9 |
|
|
|
4 |
|
|
|
12 |
|
Income Tax Expense |
|
|
4 |
|
|
|
7 |
|
|
|
8 |
|
|
|
17 |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(4,702 |
) |
|
$ |
(3,116 |
) |
|
$ |
(11,066 |
) |
|
$ |
(7,600 |
) |
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