AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH) (the
“
Company”), a regenerative medicine company
leading the development and commercialization of first-in-class
devices and autologous cellular therapies for skin restoration,
today reported financial results for the third quarter September
30, 2023.
Financial Highlights and Recent Updates
- Commercial revenue of $13.5 million, an approximately 51%
increase compared to $9.0 million for the same period in 2022
- Gross margin of 84.5% for the quarter
- Announced international expansion plan; engaged first European
distribution partner, PolyMedics Innovations GmbH, to lead
expansion into Germany, Austria, and Switzerland
- In October, secured a debt financing facility for up to $90.0
million, of which $40.0 million was borrowed at closing. Together
with the cash on hand of $60.1 million as of September 30, 2023,
the Company believes it has sufficient capital to meet its goals
and to reach profitability during 2025.
“We continue to execute our growth strategy, paving the way to
profitability,” said Jim Corbett, Chief Executive Officer of AVITA.
“We are diligently working through supplemental in-house testing to
support the FDA’s review of our PMA supplement for RECELL GO. Once
complete, we expect to submit a response to the FDA’s open
questions on February 28, 2024. Under the Breakthrough Device
program, we anticipate FDA approval on May 30, 2024, which
positions us for a launch the following day.”
Future Milestones
- Expect FDA real-time review of the PMA Supplement for
RECELL GO™ to resume on March 1, 2024, day 91 of the 180-day review
cycle, with FDA approval anticipated on May 30, 2024
- Reaffirming high growth potential of full-thickness skin defect
indication, which presents a market 10 times the size of original
burns market
- Plan to actively identify new international distributor
partnerships, including Australia, Japan, and European Union, over
the next 6 to 12 months
- Expect full enrollment of post-market study, TONE, by end of
February 2024
- Initiating health care economics study to capture longitudinal
healthcare costs of vitiligo patients
- Expect initial reimbursement coverage for vitiligo in Q3
2025
- Expect to reach profitability in 2025
“We have achieved significant commercial revenue growth rates
for the last three quarters of 40%, 42% and 51%, respectively, over
the same periods in the previous year,” said David O’Toole, Chief
Financial Officer of AVITA Medical. “Further, we remain confident
that our cash reserves position us to achieve our goals and reach
profitability in 2025.”
Financial Guidance
- Commercial revenue for the fourth quarter 2023 is expected to
be in the range of $15.3 to $16.3 million, reflecting a lower bound
of 64% and upper bound of 73% growth over the same period in the
prior year
- Commercial revenue for the full year 2023 is expected to be in
the range of $51 to $53 million, reflecting a lower bound of 50%
and upper bound of 56% growth over the same period in the prior
year
- Gross margin for the full year 2023 expected to be in the range
of 83% to 85%
Third Quarter 2023 Financial Results
Our commercial revenue, which excludes Biomedical Advanced
Research and Development Authority (BARDA) revenue, increased by
51% to $13.5 million in the three-months ended September 30, 2023,
compared to $9.0 million in the same period in 2022. Total revenue,
which includes BARDA revenue, increased by 50% to $13.6 million
compared to $9.1 million in the same period in 2022.
Gross profit margin increased by 1.3% to 84.5% compared to 83.2%
for the third quarter of 2022. The increase was largely driven by
higher production associated with our increase in revenues and
lower shipping costs.
Total operating expenses for the quarter were $21.0 million,
compared to $14.2 million in the same period in 2022. The increase
in operating expenses is primarily attributable to an increase of
$5.1 million in sales and marketing costs. The increase in sales
and marketing costs is a result of the expansion of our commercial
organization in preparation of the commercial launch of
full-thickness skin defects that happened in the second quarter. In
addition, the increase in operating expenses included an increase
of $0.6 million in R&D costs, and an increase of $1.1 million
in G&A costs, primarily due to an increase in stock
compensation expense.
Net loss was $8.7 million, or a loss of $0.34 per basic and
diluted share, compared to a net loss of $5.6 million, or a loss of
$0.22 per basic and diluted share, in the same period in 2022.
As of September 30, 2023, the Company had approximately $60.1
million in cash, cash equivalents, and marketable securities.
BARDA income consisted of funding from the Biomedical Advanced
Research and Development Authority, under the Assistant Secretary
for Preparedness and Response, within the U.S. Department of Health
and Human Services, under ongoing USG Contract No.
HHSO100201500028C.
Webcast and Conference Call InformationThe
Company will host a conference call to discuss the third quarter
financial results and, recent business highlights on Thursday,
November 9, 2023, at 1:30 p.m. Pacific Time. 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. A simultaneous webcast of the call
will be available via the Company’s website at
https://ir.avitamedical.com.
About AVITA Medical, Inc.AVITA Medical® is
a regenerative medicine company leading the development and
commercialization of devices and autologous cellular therapies for
skin restoration. The RECELL® System technology platform, approved
by the FDA for the treatment of thermal burn wounds and
full-thickness skin defects and for repigmentation of stable
depigmented vitiligo lesions, harnesses the regenerative properties
of a patient’s own skin to create Spray-On Skin™ cells. Delivered
at the point-of-care, RECELL enables improved clinical outcomes.
RECELL is the catalyst of a new treatment paradigm and AVITA
Medical is leveraging its proven and differentiated capabilities to
develop first-in-class cellular therapies for multiple
indications.
In international markets, our products are approved under the
RECELL System brand to promote skin healing in a wide range of
applications including burns, full-thickness skin defects, and
vitiligo. The RECELL System is TGA-registered in Australia,
received CE-mark approval in Europe and has PMDA approval in
Japan.
To learn more, visit www.avitamedical.com.
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 statements. 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.
Investor & Media Contact:Jessica
EkebergPhone +1-661-904-9269
investor@avitamedical.commedia@avitamedical.com
Authorized for release by the Chief Financial
Officer of AVITA Medical, Inc.
AVITA MEDICAL, INC.Consolidated Balance
Sheets(In thousands, except share and per share
data)(Unaudited) |
|
|
|
|
|
|
|
As of |
|
|
September 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
50,854 |
|
|
$ |
18,164 |
|
Marketable securities |
|
|
9,264 |
|
|
|
61,178 |
|
Accounts receivable, net |
|
|
5,875 |
|
|
|
3,515 |
|
BARDA receivables |
|
|
201 |
|
|
|
898 |
|
Prepaids and other current assets |
|
|
3,356 |
|
|
|
1,578 |
|
Inventory |
|
|
4,377 |
|
|
|
2,125 |
|
Total
current assets |
|
|
73,927 |
|
|
|
87,458 |
|
Marketable securities long-term |
|
|
- |
|
|
|
6,930 |
|
Plant and equipment, net |
|
|
1,862 |
|
|
|
1,200 |
|
Operating lease right-of-use assets |
|
|
2,607 |
|
|
|
851 |
|
Corporate-owned life insurance ("COLI") asset |
|
|
1,923 |
|
|
|
1,238 |
|
Intangible assets, net |
|
|
459 |
|
|
|
465 |
|
Other long-term assets |
|
|
236 |
|
|
|
122 |
|
Total
assets |
|
$ |
81,014 |
|
|
$ |
98,264 |
|
LIABILITIES, NON-QUALIFIED DEFERRED COMPENSATION PLAN SHARE
AWARDS AND STOCKHOLDERS' EQUITY |
|
|
|
|
Accounts payable and accrued liabilities |
|
|
3,019 |
|
|
|
3,002 |
|
Accrued wages and fringe benefits |
|
|
7,143 |
|
|
|
6,623 |
|
Current non-qualified deferred compensation liability |
|
|
333 |
|
|
|
78 |
|
Other current liabilities |
|
|
1,341 |
|
|
|
990 |
|
Total
current liabilities |
|
|
11,836 |
|
|
|
10,693 |
|
Non-qualified deferred compensation liability |
|
|
3,361 |
|
|
|
1,270 |
|
Contract liabilities |
|
|
365 |
|
|
|
698 |
|
Operating lease liabilities, long term |
|
|
1,845 |
|
|
|
306 |
|
Total
liabilities |
|
|
17,407 |
|
|
|
12,967 |
|
Non-qualified deferred compensation plan share awards |
|
|
629 |
|
|
|
557 |
|
Contingencies (Note 12) |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock, $0.0001 par value per share, 200,000,000 shares
authorized, 25,550,690 and 25,208,436 shares issued and outstanding
at September 30, 2023, and December 31, 2022, respectively |
|
|
3 |
|
|
|
3 |
|
Preferred stock, $0.0001 par value per share, 10,000,000 shares
authorized, no shares issued or outstanding at September 30, 2023,
and December 31, 2022. |
|
|
- |
|
|
|
- |
|
Company common stock held by the non-qualified deferred
compensation plan ("NQDC Plan") |
|
|
(1,290 |
) |
|
|
(127 |
) |
Additional paid-in capital |
|
|
347,192 |
|
|
|
339,825 |
|
Accumulated other comprehensive income |
|
|
7,977 |
|
|
|
7,627 |
|
Accumulated deficit |
|
|
(290,904 |
) |
|
|
(262,588 |
) |
Total
stockholders' equity |
|
|
62,978 |
|
|
|
84,740 |
|
Total
liabilities, non-qualified deferred compensation plan share awards
and stockholders' equity |
|
$ |
81,014 |
|
|
$ |
98,264 |
|
AVITA MEDICAL, INC.Consolidated Statements
of Operations(In thousands, except share and per
share data)(Unaudited) |
|
|
|
Three-Months Ended |
|
Nine-Months Ended |
|
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
13,645 |
|
|
$ |
9,092 |
|
|
$ |
35,948 |
|
|
$ |
24,966 |
|
Cost of
sales |
|
|
(2,113 |
) |
|
|
(1,530 |
) |
|
|
(5,984 |
) |
|
|
(4,694 |
) |
Gross profit |
|
|
11,532 |
|
|
|
7,562 |
|
|
|
29,964 |
|
|
|
20,272 |
|
BARDA
income |
|
|
212 |
|
|
|
904 |
|
|
|
1,369 |
|
|
|
2,189 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing expenses |
|
|
(10,532 |
) |
|
|
(5,411 |
) |
|
|
(27,075 |
) |
|
|
(15,571 |
) |
General and administrative expenses |
|
|
(6,124 |
) |
|
|
(5,004 |
) |
|
|
(20,584 |
) |
|
|
(18,009 |
) |
Research and development expenses |
|
|
(4,394 |
) |
|
|
(3,799 |
) |
|
|
(14,056 |
) |
|
|
(10,478 |
) |
Total
operating expenses |
|
|
(21,050 |
) |
|
|
(14,214 |
) |
|
|
(61,715 |
) |
|
|
(44,058 |
) |
Operating loss |
|
|
(9,306 |
) |
|
|
(5,748 |
) |
|
|
(30,382 |
) |
|
|
(21,597 |
) |
Interest
expense |
|
|
(10 |
) |
|
|
(6 |
) |
|
|
(21 |
) |
|
|
(10 |
) |
Other
income |
|
|
615 |
|
|
|
170 |
|
|
|
2,141 |
|
|
|
307 |
|
Loss
before income taxes |
|
|
(8,701 |
) |
|
|
(5,584 |
) |
|
|
(28,262 |
) |
|
|
(21,300 |
) |
Income
tax expense |
|
|
(11 |
) |
|
|
(4 |
) |
|
|
(54 |
) |
|
|
(12 |
) |
Net
loss |
|
$ |
(8,712 |
) |
|
$ |
(5,588 |
) |
|
$ |
(28,316 |
) |
|
$ |
(21,312 |
) |
Net loss
per common share: |
|
|
|
|
|
|
|
|
Basic and Diluted |
|
$ |
(0.34 |
) |
|
$ |
(0.22 |
) |
|
$ |
(1.12 |
) |
|
$ |
(0.85 |
) |
Weighted-average common shares: |
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
25,401,754 |
|
|
|
25,006,995 |
|
|
|
25,281,920 |
|
|
|
24,972,331 |
|
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