Financial Data and Key Metrics Changes - For Q3 2025, the company reported approximately $17 million in revenue, a 13% decline from $19.5 million in the same period last year, primarily due to reimbursement disruptions [4][16] - The full-year revenue outlook has been revised to a range of $70 million-$74 million, down from the previous guidance of $76 million-$81 million [4][16] - Gross profit margin for the quarter was 81.3%, down from 83.7% in Q3 2024, driven by product mix changes [16][17] - Operating loss improved by 34% year-over-year, decreasing to $9.2 million from $13.8 million in the prior year [19] Business Line Data and Key Metrics Changes - The ReCell product line is expected to see renewed demand as reimbursement clarity improves, with significant progress made in provider reimbursement rates [5][10] - Cohelix and PermeaDerm are emerging as complementary growth drivers, with VAC submissions underway in about one-third of target accounts [12] Market Data and Key Metrics Changes - The total addressable market for AVITA's portfolio in U.S. burn and trauma hospitals is approximately $3.5 billion, with the company currently serving about 5% of this segment [9] - The company is focusing on the 200 burn centers and trauma hospitals that represent the most immediate and scalable growth potential [9] Company Strategy and Development Direction - The company is refining its commercial organization to align structure, territories, and accountability around high-value accounts [8] - Execution priorities for Q4 include rebuilding order momentum, driving consistent utilization of products, and enhancing forecast accuracy [10][11] - The company aims to ensure that its products become part of routine clinical practice, creating internal champions to help expand adoption [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q3 was a challenging quarter but emphasized that reimbursement stability and clinical validation are in place for future growth [14][15] - The company is focused on delivering consistent performance and restoring confidence among providers regarding reimbursement [14][23] - Management expressed optimism about the potential for growth in 2026, driven by improved operational execution and market conditions [39] Other Important Information - The company has secured a waiver of its Q3 revenue covenant under its Orbimed credit agreement and has amended the revenue covenant for Q4 [13][22] - Cash management has improved, with a reduction in operating cash use from $10.1 million in Q2 to $6.2 million in Q3 [21] Q&A Session Summary Question: Initiatives for Better Business Forecasting - Management discussed improving forecasting by understanding customer utilization and purchasing patterns, with confidence in better modeling moving forward [25] Question: Balancing Resources for New Market Launches - The primary focus remains on the U.S. market, with limited resources allocated to select international markets [26] Question: Recovery Timeline for ReCell Customer Base - Management indicated that educating accounts on reimbursement processes is crucial for rebuilding confidence, with expectations for recovery in early 2026 [28] Question: Update on VAC Approvals for Cohelix - About one-third of accounts are in the VAC process, with expectations for approvals to trend positively in Q4 [30] Question: Spending Outlook and Organizational Right-Sizing - Management expressed satisfaction with the current expense structure and indicated no further reductions are necessary, focusing on maintaining a disciplined approach [33][34] Question: Changes to Sales Team Incentive Structure - Management is reviewing sales compensation plans to ensure alignment with growth objectives, aiming for simplicity and fairness [35]

Financial Performance - Q3 2025 revenue was $17.1 million, a 13% decrease compared to $19.5 million in Q3 2024[13] - Operating expenses decreased by 24%, from $30.2 million in Q3 2024 to $23.0 million in Q3 2025[13] - Net loss improved by 18.5%, decreasing from $16.2 million in Q3 2024 to $13.2 million in Q3 2025[13] - Net cash use improved to $6.2 million in Q3 compared to $10.1 million in Q2[14] - The company raised $13.8 million through a private placement in August[16] Gross Margin - Gross margin was 81.3% in Q3 2025, a decrease of 240 bps compared to 83.7% in Q3 2024, while RECELL-only gross margin was 83.6% for the quarter[13] Market and Strategy - The company is focusing on approximately 200 key burn and trauma centers[11, 12] - The U S total addressable market (TAM) is estimated to be over $3.5 billion[11] - The company is active in approximately 90% of target sites, representing a $1.3 billion U S total addressable market, and currently serves approximately 5% of this TAM[12] Reimbursement - All seven Medicare Administrative Contractors (MACs) have published or confirmed payment rates for RECELL[7]

Financial Performance - Total revenues for the three months ended September 30, 2025, were $17,062,000, a decrease of 12.7% compared to $19,546,000 for the same period in 2024[18]. - Net loss for the three months ended September 30, 2025, was $13,187,000, compared to a net loss of $16,205,000 for the same period in 2024, representing a 18.6% improvement[21]. - Gross profit for the nine months ended September 30, 2025, was $44,505,000, an increase of 14.0% from $39,031,000 for the same period in 2024[18]. - Total revenues for the nine months ended September 30, 2025, increased by 18% to $54.0 million compared to $45.8 million in the same period last year, driven by deeper market penetration and new accounts[158]. - Commercial revenue from the RECELL product was $15,427,000 for the three months ended September 30, 2025, compared to $19,059,000 for the same period in 2024, indicating a decline of about 19.3%[108]. - The Company recorded a net loss of $13,187,000 for the three months ended September 30, 2025, compared to a net loss of $16,205,000 for the same period in 2024, showing an improvement in loss[108]. - The Company’s basic net loss per share for the three months ended September 30, 2025, was $(0.46), an improvement from $(0.62) in the same period of 2024[126]. Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $23,028,000, down from $30,162,000 in the same period of 2024, reflecting a 23.5% reduction[18]. - General and administrative expenses decreased by 25% to $7.2 million for the three months ended September 30, 2025, compared to $9.6 million in the prior year[154]. - General and administrative expenses decreased by 22%, or $5.8 million, to $20.3 million compared to $26.1 million in the same period last year[162]. - Research and development expenses decreased by 2%, or $0.4 million, to $15.1 million compared to $15.5 million in the same period last year[163]. - The company’s stock-based compensation for the nine months ended September 30, 2025, was $8.146 million, compared to $10.698 million in the same period of 2024, indicating a reduction in compensation expenses[28]. - Stock-based payment expenses for the three months ended September 30, 2025, totaled $2.783 million, a decrease from $4.080 million for the same period in 2024[122]. Cash Flow and Liquidity - Cash and cash equivalents increased to $15,422,000 as of September 30, 2025, compared to $14,050,000 as of December 31, 2024[16]. - The company utilized $25.757 million in cash for operating activities during the nine months ended September 30, 2025, a decrease from $40.858 million used in the same period of 2024, indicating improved cash flow management[28]. - The company reported cash, cash equivalents, and marketable securities totaling $23.3 million as of September 30, 2025, providing a liquidity buffer for ongoing operations[34]. - As of September 30, 2025, the company had approximately $15.4 million in cash and cash equivalents and $7.9 million in marketable securities[165]. - The company completed a private placement on August 12, 2025, raising $14.8 million, which will be used for working capital requirements[166]. - Net cash used in operating activities was $25.8 million for the nine months ended September 30, 2025, down from $40.9 million in the same period last year[175]. - Net cash provided by investing activities was $12.4 million for the nine months ended September 30, 2025, compared to $34.9 million in the same period last year[176]. - Net cash provided by financing activities increased to $14.7 million for the nine months ended September 30, 2025, from $2.5 million in the same period last year[177]. Assets and Liabilities - Total current assets decreased to $41,367,000 as of September 30, 2025, from $57,000,000 as of December 31, 2024, a decline of 27.4%[16]. - Total liabilities increased to $70,394,000 as of September 30, 2025, compared to $74,968,000 as of December 31, 2024[16]. - The total stockholders' equity (deficit) as of September 30, 2025, was $(6,666,000), a decrease from $4,499,000 as of December 31, 2024[16]. - The company had accrued interest income receivable of $32,000 as of September 30, 2025, down from $121,000 as of December 31, 2024[62]. - Total intangible assets as of September 30, 2025, amounted to $5,830,000, with a net carrying amount of $5,204,000 after accumulated amortization of $626,000[8]. - The composition of the inventory as of September 30, 2025, included $2.1 million in raw materials, $100,000 in work in process, and $5.0 million in finished goods, totaling $7.2 million[97]. Debt and Financing - The Company entered into a credit agreement providing for a five-year senior secured credit facility of up to $90.0 million, with $40.0 million available on the Closing Date[84]. - As of September 30, 2025, the interest rate on the outstanding debt was 12.28%[86]. - The long-term portion of the credit facility has been classified as a current liability due to the Company's debt servicing obligations[38]. - The Company has not made any repayments on the outstanding debt balance as of September 30, 2025[85]. - The Company is actively evaluating strategies to obtain additional funding, including a potential equity financing of up to $200.0 million[39]. - There is substantial doubt about the Company's ability to continue as a going concern if it cannot maintain compliance with the minimum cash balance covenant[37]. Regulatory and Compliance - The Company was not in compliance with the trailing 12-month net revenue covenants for Q1 2025 ($73.0 million) and Q2 2025 ($78.0 million), but received waivers for both quarters[36]. - The trailing 12-month revenue covenant has been amended to $73.0 million for Q3 2025, $77.0 million for Q4 2025, $90.0 million for Q1 2026, and $103.0 million for Q2 2026, with a $115.0 million covenant for subsequent quarters[36]. - The Company entered into a sixth amendment to the Credit Agreement on November 5, 2025, amending the trailing 12-month revenue covenant to $70.0 million for the quarter ending December 31, 2025[128]. - The Centers for Medicare & Medicaid Services approved a New Technology Add-On Payment for the RECELL System, allowing up to $4,875 in additional reimbursement per case from October 1, 2025, to September 30, 2026[141]. Product Development and Market Strategy - The company’s RECELL GO mini device was approved by the FDA in December 2024, expanding its product offerings for treating smaller wounds[32]. - Cohealyx, a new collagen-based dermal matrix, was commercially launched in the U.S. on April 1, 2025, aimed at supporting cellular migration and revascularization[144]. - The Company aims to increase market penetration in U.S. burn centers and expand the adoption of the RECELL portfolio for traumatic and surgical wounds[143]. - 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[111]. - The Regenity Agreement allows the Company to market and distribute Cohealyx in the U.S. and potentially in the EU, Japan, and Australia, with an initial term of five years[113]. Stock and Equity - The company’s total common stock increased from 25,682,078 shares at December 31, 2023, to 30,493,111 shares by September 30, 2025, indicating growth in equity financing[25]. - The Company raised $14.8 million through the issuance of 17,201,886 CDIs on August 12, 2025, equivalent to 3,440,377 shares of Common stock[118]. - The Company has an outstanding total of 5,147,459 share options as of September 30, 2025, an increase from 3,540,208 options at the end of 2024[122]. - The Company’s stockholders approved an amendment to increase the share reserve under the 2020 Omnibus Incentive Plan by an additional 2,500,000 shares, totaling 6,750,000 shares[119]. Miscellaneous - The report includes various exhibits related to corporate governance and agreements, such as the Certificate of Incorporation and amendments[194]. - The report was signed by the Interim Chief Executive Officer and Chief Financial Officer, indicating compliance with the Securities Exchange Act of 1934[196][198]. - The date of the report is November 6, 2025, reflecting the company's ongoing regulatory obligations[197].

Financial Performance - Commercial revenue for Q3 2025 was $17.1 million, a 13% decrease from $19.5 million in Q3 2024[6] - Total revenues for the three months ended September 30, 2025, were $17,062,000, a decrease of 12.7% compared to $19,546,000 for the same period in 2024[30] - Net loss improved to $13.2 million, or $0.46 per share, from a net loss of $16.2 million, or $0.62 per share, in Q3 2024[15] - Operating loss for the three months ended September 30, 2025, was $9,153,000, an improvement from a loss of $13,806,000 in the same quarter of 2024[30] - Net loss for the nine months ended September 30, 2025, was $36,966,000, compared to a net loss of $50,256,000 for the same period in 2024, indicating a reduction in losses[30] Expenses and Liabilities - Operating expenses decreased by 24%, or $7.2 million, to $23.0 million compared to $30.2 million in the same period last year[13] - Research and development expenses for the nine months ended September 30, 2025, were $15,148,000, slightly down from $15,510,000 in the previous year[30] - Total liabilities increased to $70,394,000 as of September 30, 2025, compared to $74,968,000 at the end of 2024[28] Cash and Assets - Cash, cash equivalents, and marketable securities totaled $23.3 million as of September 30, 2025, reflecting a net use of cash of $6.2 million[16] - Cash and cash equivalents increased to $15,422,000 as of September 30, 2025, up from $14,050,000 at the end of 2024[28] - Total current assets decreased to $41,367,000 as of September 30, 2025, from $57,000,000 at December 31, 2024[28] - The company’s additional paid-in capital increased to $392,782,000 as of September 30, 2025, from $367,568,000 at December 31, 2024[28] Market and Product Development - RECELL GO® received CE Mark approval, enabling commercialization in Europe, starting with Germany, Italy, and the United Kingdom[7] - A global review of over 8,000 patients confirmed RECELL's ability to achieve wound closure with less donor skin and faster healing[8] - The company is focusing on approximately 200 U.S. burn and trauma centers, targeting an addressable market of roughly $1.3 billion[9] Future Outlook - The company expects full-year 2025 revenue in the range of $70 million to $74 million, down from prior guidance of $76 million to $81 million[17] - AVITA Medical is exploring opportunities to enhance financial flexibility and plans to provide an update on capital and growth plans in Q1 2026[19] Profitability - The gross profit margin was 81.3%, down from 83.7% in the prior year, primarily due to product mix and inventory-related adjustments[12] - Gross profit for the nine months ended September 30, 2025, was $44,505,000, representing an increase of 14.2% from $39,031,000 in the prior year[30]

Core Insights - AVITA Medical reported a commercial revenue of $17.1 million for Q3 2025, a 13% decrease from $19.5 million in Q3 2024, primarily due to reimbursement challenges [6][10] - The company expects full-year revenue for 2025 to be between $70 million and $74 million, down from previous guidance of $76 million to $81 million [16] - AVITA Medical's cash management improved, with net cash use decreasing to $6.2 million in Q3 from $10.1 million in Q2 2025 [9][15] Financial Results - Commercial revenue for Q3 2025 was $17.1 million, a decrease of $2.5 million or 13% compared to the same period in 2024 [6][10] - Operating expenses decreased by 24% to $23.0 million, down from $30.2 million in Q3 2024, reflecting cost management strategies [12][9] - Net loss improved to $13.2 million, or $0.46 per share, compared to a net loss of $16.2 million, or $0.62 per share, in Q3 2024 [14] Other Quarterly Milestones - The company is focusing on approximately 200 key U.S. burn and trauma centers, targeting an addressable market of roughly $1.3 billion [3][8] - AVITA Medical received CE Mark approval for RECELL GO® in September, allowing for commercialization in Europe, starting with Germany, Italy, and the UK [5] - The reimbursement environment for RECELL has normalized, with all seven Medicare Administrative Contractors confirming payment rates [4] Clinical and Regulatory Milestones - RECELL demonstrated its effectiveness in achieving wound closure with less donor skin and faster healing, supported by data from over 8,000 patients [7] - Real-world data indicated a 36% reduction in hospital stay length and approximately $42,000 in cost savings per patient compared to traditional methods for treating second-degree burns [7] Portfolio Execution - AVITA Medical's strategy focuses on an integrated portfolio of RECELL, Cohealyx, and PermeaDerm, aiming for disciplined growth in the acute wound care market [8] - The company currently serves about 5% of the $1.3 billion addressable market, indicating significant growth potential [8]

Core Insights - AVITA Medical's RECELL System is positioned as a standard of care for acute wound treatment, demonstrating significant clinical and economic benefits across various wound types and patient populations [1][3][5] Clinical Evidence - A systematic review of 99 peer-reviewed studies involving over 8,000 patients across 13 countries confirms that the RECELL System consistently delivers strong outcomes, achieving wound closure with less donor skin and faster healing [3][4] - The RECELL System reduces donor site burden by up to 97.55% and meets or exceeds outcomes observed with traditional split-thickness skin grafts (STSG) [7] Economic Impact - Real-world data from the American Burn Association's registry shows that RECELL treatment results in a 36% average reduction in hospital stays, equating to a 5.6-day decrease [4][8] - The estimated cost savings per patient treated with RECELL is over $42,000, allowing hospitals to treat an additional 13 patients per bed annually [8] Patient Outcomes - RECELL treatment leads to improved patient recovery, with 83% of patients discharged home compared to 70% for STSG [8] - The findings highlight the ability of RECELL to accelerate recovery and enhance resource utilization in healthcare settings [5][8]

Core Insights - AVITA Medical, Inc. will report its third quarter 2025 financial results on November 6, 2025, after U.S. market close [1] - A conference call and webcast will be held on the same day to discuss financial results and business highlights [1] Company Overview - AVITA Medical is a leading therapeutic acute wound care company focused on delivering transformative solutions [3] - The company's flagship product, the RECELL System, is FDA-approved for treating thermal burn and trauma wounds, utilizing a patient's own skin to create Spray-On Skin™ Cells [3] - In the U.S., AVITA Medical also has rights to manufacture and exclusively market PermeaDerm, a biosynthetic wound matrix, and Cohealyx™, a collagen-based dermal matrix [3] International Market Presence - The RECELL System is approved for various applications in international markets, including thermal burn and trauma wounds, with regulatory clearances in Europe, Australia, and Japan (excluding RECELL GO) [4]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of AVITA Medical, Inc. due to allegations of materially misleading business information issued by the company [1] Company Summary - AVITA Medical, Inc. (NASDAQ: RCEL) is facing scrutiny for potentially misleading information provided to investors [1] - Shareholders who purchased AVITA Medical securities may be entitled to compensation without any out-of-pocket fees or costs through a contingency fee arrangement [1]

Core Insights - Australia's Medical Services Advisory Committee (MSAC) has recommended amendments to the Medicare Benefits Schedule to include the use of autologous skin cell suspension (ASCS) prepared with RECELL for treating severe acute burn wounds in both adults and children [1][2] Company Overview - AVITA Medical, Inc. is a leading therapeutic acute wound care company focused on delivering transformative solutions that optimize wound healing and accelerate patient recovery [4] - The RECELL System is at the forefront of AVITA Medical's platform, approved by the U.S. Food and Drug Administration for treating thermal burn and trauma wounds [4] Clinical Impact - MSAC's endorsement highlights RECELL's clinical effectiveness, demonstrating that it is as safe and effective as traditional autologous skin grafting while offering superior outcomes in donor site sparing and reducing the need for additional grafting procedures [2][3] - RECELL can shorten hospital stays, alleviate patient pain, and minimize scarring, thus improving overall patient outcomes [2][3] Treatment Applications - The MSAC recommendation supports the use of RECELL for adult patients with burns covering 20% or more of total body surface area (TBSA) and pediatric patients with burns covering 10% or more TBSA, including whole-of-face burn wound closure [7]

Core Insights - Avita Medical is a significant player in the therapeutic acute wound care industry, focusing on innovative solutions for treating wounds, burns, and skin defects [1] - The company is currently undergoing a leadership transition with Cary Vance appointed as Interim CEO following Jim Corbett's departure, aimed at maintaining stability while searching for a permanent CEO [1][4] - Lake Street downgraded Avita Medical from a Buy to a Hold on October 17, 2025, with the stock trading at $5.38 amid the leadership change and anticipated third-quarter revenue of approximately $17 million [2] - The stock, RCEL, has shown volatility, recently increasing by $0.05 (0.94%), with a trading range between $5.19 and $5.43, reflecting market responses to internal changes and industry trends [3] - Avita Medical's market capitalization is approximately $143.3 million, with a trading volume of 190,762 shares, indicating moderate investor interest [4] - The company remains focused on delivering innovative wound care solutions despite the challenges posed by leadership changes and market fluctuations [5]