Core Insights - AVITA Medical, Inc. has been recognized for its RECELLⓇ technology, winning the "Best New Technology Solution – Surgical" at the 2025 MedTech Breakthrough Awards, highlighting its innovative approach in acute wound care [1][4] Company Overview - AVITA Medical is a leading therapeutic acute wound care company focused on delivering transformative solutions, with its flagship product being the RECELL System, which is FDA-approved for treating thermal burn wounds and full-thickness skin defects [6][7] - The RECELL System utilizes a patient's own skin to create Spray-On Skin™ Cells, optimizing wound healing and accelerating recovery times [6] Product Benefits - RECELL has treated over 30,000 patients globally and requires significantly less donor skin compared to traditional grafting methods, which reduces donor-site pain and accelerates healing [2][4] - The introduction of RECELL GO enhances procedural consistency and surgical team coordination, making it suitable for high-volume burn and trauma centers [3] Recognition and Awards - In addition to the MedTech Breakthrough Award, Dr. Katie Bush, Senior Vice President of Scientific & Medical Affairs at AVITA Medical, received the 2025 Emerald Pinnacle Healthcare Award for her contributions to innovation and leadership in the medical device sector [5] Market Approvals - The RECELL System is approved for various applications in international markets, including burns and vitiligo, and has received regulatory approvals in Australia, Europe, and Japan [7]

Summary of AVITA Medical (RCEL) Update / Briefing May 13, 2025 Company Overview - **Company**: AVITA Medical - **Industry**: Therapeutic Acute Wound Care - **Transformation**: Shifted from a regenerative tissue company to a therapeutic acute wound care company, focusing on acute wounds rather than chronic wounds [2][6][67] Core Products and Innovations - **Resell Technology**: A flagship product that allows for skin regeneration using a small sample of healthy skin, processed into a sprayable suspension [29][30] - **Product Portfolio**: - **Resell**: First and only in its category, with a significant skin-sparing effect [30] - **Permeoderm**: A biosynthetic dressing that replicates lost epidermis, reducing dressing changes and trauma during application [38][40] - **Cohelix**: A collagen-based dermal matrix designed for faster wound bed preparation and revascularization [49][51] Market Opportunity - **Total Addressable Market (TAM)**: Expanded from $455 million in burns to $3.5 billion in the U.S. across trauma and skin grafts [17][67] - **Patient Impact**: Products aim to reduce hospital length of stay and improve healing times, with significant cost savings for healthcare providers [34][46][57] Financial Performance - **Revenue Growth**: Reported $18.5 million in commercial revenue, a 67% increase from the previous year [68] - **Profitability**: Expected to achieve GAAP profitability by Q4 2025, with a reaffirmed revenue guidance of $100 million to $106 million for the year [70][94] Clinical Evidence and Studies - **Clinical Trials**: Ongoing studies to validate the effectiveness of Cohelix and Permeoderm, with interim results expected throughout 2025 [82][83] - **Patient Testimonials**: Positive patient experiences highlight the effectiveness of Resell in reducing healing time and improving cosmetic outcomes [61][66] Strategic Initiatives - **Sales Model Transformation**: Streamlined sales force from 108 to 82, focusing on efficiency and broader product adoption [75][93] - **Manufacturing Agreement**: Collaboration with Stethical Scientific to reduce costs and improve profitability for Permeoderm [80][81] Future Outlook - **Growth Strategy**: Plans to expand product offerings and market presence in trauma centers, leveraging the new product portfolio [89][90] - **Long-term Vision**: Aiming for sustained profitability and cash flow generation, with a focus on enhancing clinical and economic evidence [102][103] Key Takeaways - AVITA Medical is positioned for significant growth in the therapeutic acute wound care market, with innovative products that address critical patient needs and improve healthcare efficiency [67][101]

Financial Data and Key Metrics Changes - Revenue for the first quarter increased by 67% compared to the same period in the prior year, reaching $18.5 million [6][25] - Gross profit margin for the first quarter was 84.7%, down from 86.4% in the same period of 2024 [26] - Net loss for the first quarter was $13.9 million, improving from a net loss of $18.7 million in the same period in 2024 [30] Business Line Data and Key Metrics Changes - The launch of ReCell Go Mini and Co Helix is expected to significantly contribute to revenue growth throughout 2025 [25][32] - The commercial lineup now includes ReCell, ReCell Go, ReCell Go Mini, Co Helix, and Permeoderm, providing a broad spectrum of products for both burn and trauma centers [14][15] Market Data and Key Metrics Changes - The US addressable market for the company has expanded from approximately $500 million to over $3.5 billion annually, marking a seven-fold increase [6][22] - The trauma market is estimated to have approximately 270,000 cases annually in the US, which ReCell Go Mini targets [10] Company Strategy and Development Direction - The company is focusing on acute wound care, stepping back from further commercial investment in the vitiligo indication due to uncertainty in reimbursement [21][56] - A significant shift in the commercial model has been implemented, transitioning from a service-oriented approach to a more focused selling-oriented approach [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for strong results driven by the expanded product portfolio and operational efficiencies [22][32] - The company expects to generate free cash flow in the second half of the year and achieve GAAP profitability in Q4 of 2025 [31][32] Other Important Information - The company has secured a waiver for its first-quarter trailing twelve-month revenue covenant with OrbiMed, which had been set at $73 million [31] - The annual meeting of stockholders is scheduled for June 4 [32] Q&A Session Summary Question: Can you share any response or performance impressions of Co Helix? - Management noted that early feedback has been positive, with a case from Ohio State demonstrating a seven-day graft readiness, which is faster than other dermal matrices [36][37] Question: How is the rollout of ReCell Go Mini going? - The response has been good, particularly from existing accounts in the trauma area, with opportunities to provide more value to trauma surgeons [41][42] Question: What are the expected revenue contributions from the new launches? - Management indicated that while they are not ready to provide specific guidance, they expect these products to be material contributors to revenue [45] Question: Is the sales force adequately staffed to meet revenue targets? - Management expressed confidence in the current staffing levels and the reconfigured sales model, which focuses on a selling-oriented approach [47][49] Question: What is the expected revenue cadence for the rest of the year? - Management anticipates steady sequential growth throughout the year, with some weighting towards the back end as new products gain traction [51][52] Question: What is the current status of the vitiligo initiative? - The company has paused spending on vitiligo due to uncertainty in reimbursement and is focusing resources on acute wound care instead [56][58]

Financial Data and Key Metrics Changes - For Q1 2025, the company's commercial revenue was $18.5 million, representing a 67% increase compared to the same period in 2024 [24] - The gross profit margin for Q1 was 84.7%, down from 86.4% in the same period of 2024, primarily due to volume discounts and product mix [25] - The net loss for Q1 was $13.9 million, improving from a net loss of $18.7 million in the same period in 2024 [28] Business Line Data and Key Metrics Changes - The launch of ReCell Go Mini and Co Helix is expected to significantly contribute to revenue growth throughout 2025 [24][30] - The company has expanded its product portfolio to include ReCell Go, ReCell Go Mini, Co Helix, and Permuderm, targeting both burn and trauma centers [13][21] Market Data and Key Metrics Changes - The US addressable market for the company has expanded from approximately $500 million to over $3.5 billion annually, marking a seven-fold increase [5] - The trauma market is estimated to have approximately 270,000 cases annually in the US, which the new ReCell Go Mini product aims to address [8] Company Strategy and Development Direction - The company is focusing on acute wound care, stepping back from further commercial investment in the vitiligo indication due to uncertainty in reimbursement [20][52] - A significant shift in the commercial model has been implemented, moving from a service-oriented approach to a more focused selling-oriented approach [15][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting to generate free cash flow in the second half of the year and achieve GAAP profitability in Q4 2025 [29][30] - The company is actively engaged in the public comment process for a proposed new technology add-on payment for ReCell, which could take effect on October 1 [20] Other Important Information - The company expects to save approximately $2.5 million per quarter in operating expenses due to recent transformations and operational efficiencies [27][29] - The annual meeting of stockholders is scheduled for June 4, encouraging participation [30] Q&A Session Summary Question: Response and performance of Co Helix during limited commercial launch - Management noted that early feedback from the limited market release of Co Helix was positive, with a notable case demonstrating faster graft readiness compared to other dermal matrices [33][34] Question: Revenue contributions from ReCell Go Mini - Management indicated that ReCell Go Mini is expected to be a material contributor to revenue, with plans to break out non-resale sales by Q3 [41][42] Question: Sales force adequacy to meet revenue targets - Management expressed confidence in the current sales force structure, which has been reconfigured to enhance selling capabilities across the product portfolio [43][46] Question: Revenue cadence expectations for the rest of the year - Management expects steady sequential growth throughout the year, with some weighting towards the back end as new product approvals are anticipated [48][49] Question: Status of the vitiligo initiative and reimbursement discussions - Management clarified that spending on the vitiligo initiative has been paused due to uncertainty in achieving reimbursement, focusing resources on acute wound care instead [52][53]

Q1 2025 Earnings Presentation May 8, 2025 Forward-Looking Statements & Legal Disclaimers This presentation and the accompanying oral commentary may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are predictions and subject to significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Forward-looking statements may be identified by words such as "anticipate," "expect ...

Financial Performance - Total revenues for the three months ended March 31, 2025, were $18,514,000, representing a 67% increase from $11,104,000 for the same period in 2024[14] - Gross profit for the same period was $15,681,000, up from $9,591,000, indicating a significant improvement in profitability[14] - The net loss for the three months ended March 31, 2025, was $13,859,000, compared to a net loss of $18,658,000 for the same period in 2024, reflecting a reduction in losses by approximately 26%[14] - The company reported a comprehensive loss of $12,333,000 for the three months ended March 31, 2025, compared to a comprehensive loss of $19,839,000 for the same period in 2024[16] - Commercial sales revenue reached $18,450,000 for the three-months ended March 31, 2025, compared to $11,068,000 in 2024, reflecting a 66.5% growth[91] - The company reported a net loss of $13,859,000 for the three-months ended March 31, 2025, an improvement from a net loss of $18,658,000 in the same period of 2024[91] - Operating loss improved by 31% to $11.8 million for the three-months ended March 31, 2025, compared to $17.2 million in the prior year[122] Cash Flow and Liquidity - Cash and cash equivalents increased to $14,870,000 as of March 31, 2025, from $14,050,000 at the end of 2024, showing a positive cash flow trend[12] - Cash flow used in operating activities was $10,309,000 for the three months ended March 31, 2025, compared to $20,864,000 for the same period in 2024, indicating improved cash management[21] - As of March 31, 2025, the Company has an accumulated deficit of $373.7 million and used $10.3 million in cash for operating activities in Q1 2025, compared to $20.9 million in Q1 2024[28] - Cash and cash equivalents at the end of the period were $14.9 million, with sufficient reserves to fund operations for the next 12 months[129] - Net cash used in operating activities was $10.3 million for Q1 2025, a decrease from $20.9 million in Q1 2024, due to higher gross profit[133] - Net cash provided by investing activities was $10.8 million for Q1 2025, down from $15.1 million in Q1 2024, primarily due to lower cash inflows from marketable securities[134] Assets and Liabilities - The company had total liabilities of $74,063,000 as of March 31, 2025, slightly down from $74,968,000 at the end of 2024[12] - Total current assets decreased to $47,967,000 from $57,000,000, primarily due to a reduction in marketable securities[12] - The fair value of long-term debt was estimated at $41,464,000 as of March 31, 2025, down from $42,245,000 at the end of 2024[54] - The company has a contingent liability of $3.0 million as of March 31, 2025, related to the Regenity Agreement[97] Operating Expenses - Operating expenses for the three months ended March 31, 2025, totaled $27,508,000, slightly higher than $26,797,000 for the same period in 2024[14] - Total operating expenses increased by 3% or $0.7 million to $27.5 million compared to $26.8 million in the prior year[124] - Sales and marketing expenses rose by 17% or $2.2 million to $14.8 million, driven by increased salaries and commissions[125] - General and administrative expenses decreased by 29% or $2.6 million to $6.4 million, primarily due to reduced headcount and lower severance payments[126] - Research and development expenses increased by 21% to $6.3 million for the three-months ended March 31, 2025, compared to $5.2 million in the prior year[122] Product Development and Market Position - The RECELL GO Autologous Cell Harvesting Device was approved by the FDA in May 2024, introducing enhanced features for greater consistency in clinical settings[25] - The RECELL GO mini, approved in December 2024, is designed for smaller wounds up to 480 cm², supporting broader adoption in trauma centers[26] - The company initiated a full commercial launch of Cohealyx on April 1, 2025, expanding its therapeutic wound care portfolio[116] - The company plans to conduct post-market studies for Cohealyx and PermeaDerm in 2025 to support ongoing commercialization efforts[119] - The company aims to increase market penetration in U.S. burn centers and position RECELL GO as the standard of care in burn management[119] Compliance and Agreements - The company was not in compliance with the trailing 12-month net revenue covenant for Q1 2025, which was set at $73.0 million, but received a waiver for this covenant[30] - The trailing 12-month revenue covenant was amended to $73.0 million for Q1 2025, with a waiver received for non-compliance[131] - The company entered into a Distribution Agreement with Stedical, increasing its revenue share from 50% to 60% for PermeaDerm sales, with a target of $6.0 million in gross sales for 2025[94] - The company entered into a Credit Agreement providing a $90.0 million loan facility, with $40.0 million borrowed on the closing date[130] - The company filed several exhibits as part of its Quarterly Report on Form 10-Q, including amendments to its Certificate of Incorporation and Credit Agreement[152] Leadership and Governance - The management team is led by President and CEO James Corbett and CFO David O'Toole, indicating continuity in leadership[155] - The report includes certifications from the Chief Executive Officer and Chief Financial Officer, ensuring compliance with regulatory requirements[153]

Revenue and Growth - Commercial revenue for Q1 2025 was $18.5 million, representing a 67% increase from $11.1 million in Q1 2024[9] - The company expects full-year 2025 commercial revenue to be between $100 million and $106 million, reflecting a growth of approximately 55% to 65% compared to 2024[7] - Total revenues increased to $18,514 million for the three months ended March 31, 2025, compared to $11,104 million for the same period in 2024, representing a 66% growth[25] Profitability and Loss - Net loss for Q1 2025 was $13.9 million, or a loss of $0.53 per share, an improvement from a net loss of $18.7 million, or a loss of $0.73 per share, in Q1 2024[13] - Operating loss decreased to $11,827 million from $17,206 million, showing an improvement of 31%[25] - Net loss narrowed to $13,859 million, compared to a net loss of $18,658 million in the prior year, reflecting a 26% reduction[25] - Net loss per common share improved to $(0.53) from $(0.73) year-over-year[25] Expenses - Total operating expenses for Q1 2025 were $27.5 million, an increase from $26.8 million in Q1 2024, driven by higher sales and marketing expenses[11] - Total operating expenses increased to $27,508 million from $26,797 million, a rise of 2.6%[25] - Research and development expenses rose to $6,284 million, compared to $5,194 million, marking a 21% increase[25] - Sales and marketing expenses increased to $14,834 million from $12,640 million, reflecting a 17% increase[25] - Interest expense decreased to $1,233 million from $1,356 million, a reduction of 9%[25] Cash and Financial Position - As of March 31, 2025, the company had approximately $25.8 million in cash, cash equivalents, and marketable securities[14] - The company anticipates generating free cash flow in the second half of 2025 and achieving GAAP profitability in Q4 2025[7] Product Development and Launches - The company launched RECELL GO mini in February 2025 and initiated the nationwide launch of Cohealyx on April 1, 2025, expanding its product portfolio significantly[4] - The company expects to receive the CE mark for RECELL GO in the EU by mid-2025, preparing to meet supply demands upon approval[7] Gross Profit and Margin - Gross profit margin for Q1 2025 was 84.7%, down from 86.4% in the same period last year, primarily due to volume discounts and product mix[10] - Gross profit rose to $15,681 million, up from $9,591 million year-over-year, indicating a 64% increase[25] - The average sales price for Cohealyx is 50% and for PermeaDerm is 60%, which impacts the overall gross margin percentage[10] Shareholder Information - Weighted-average common shares increased to 26,253,565 from 25,637,783, indicating a 2.4% rise[25]

Core Insights - AVITA Medical, Inc. is a leading company in therapeutic acute wound care, focusing on innovative solutions for wound healing [3][4] - The CEO, Jim Corbett, will present at TD Cowen's 45th Annual Health Care Conference on March 4, 2025 [1] - The RECELL® System is a key product that utilizes a patient's own skin to create Spray-On Skin™ Cells, enhancing clinical outcomes [3] Company Overview - AVITA Medical specializes in technologies that optimize wound healing and accelerate patient recovery [3] - The RECELL® System is FDA-approved for treating thermal burn wounds and full-thickness skin defects [3] - The company also markets Cohealyx™, a collagen-based dermal matrix, and PermeaDerm®, a biosynthetic wound matrix in the U.S. [3] International Approvals - The RECELL System is approved for various applications in international markets, including burns and skin defects [4] - It holds TGA registration in Australia, CE mark approval in Europe, and PMDA approval in Japan [4]

Group 1 - Avita Medical Inc. (RCEL) shares have increased by 20.5% in the past four weeks, closing at $10.22, with a mean price target of $15.60 indicating a potential upside of 52.6% [1] - The average price targets from analysts range from a low of $11 to a high of $21, with a standard deviation of $3.71, suggesting a variability in estimates [2] - Analysts show a consensus that RCEL will report better earnings than previously estimated, which is a positive indicator for potential stock upside [4][9] Group 2 - The Zacks Consensus Estimate for RCEL has increased by 30% due to two upward revisions in earnings estimates over the last 30 days, with no negative revisions [10] - RCEL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [11] - While consensus price targets may not be reliable for predicting exact stock gains, they can provide a directional guide for price movement [12]

Core Viewpoint - The sequential sales decline in Q4 2024 may be overlooked if 2025 demonstrates consistent sequential sales growth that shareholders are anticipating [1] Group 1 - The company is expected to show sequential sales growth in 2025, which could mitigate concerns from the decline in Q4 2024 [1]