AVITA Medical(US:RCEL)2022-08-12 01:03Financial Data and Key Metrics Changes - The company reported record commercial RECELL revenues of $8.2 million for Q2 2022, a 23% increase from $6.7 million in the same quarter last year [9] - Total revenue for Q2 2022 was $8.3 million, down from $10.3 million in the prior year, which included $3.6 million in BARDA revenue [32] - Gross profit margin improved by 3% to 83% compared to the prior year [33] - Net loss increased by 33% 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 prior year [35] - Adjusted EBITDA loss increased by 51% to $4.7 million compared to $3.1 million in the prior year [36] Business Line Data and Key Metrics Changes - Commercial revenue for the first half of 2022 was $15.7 million, a 39% increase from $11.3 million in the same period last year [10] - The company achieved greater penetration and a larger base of accounts, leading to an increase in burn cases treated with RECELL [11] - The outpatient market is expected to become a larger portion of the addressable market, with ongoing efforts to familiarize centers with outpatient care pathways [14] Market Data and Key Metrics Changes - In Japan, the company completed its first training and evaluation cases during the quarter, with ongoing discussions regarding reimbursement and pricing [15] - The company anticipates that outpatient treatment will comprise the core soft tissue market, supporting continued growth [14] Company Strategy and Development Direction - The company is focused on driving healthcare provider engagement through education and maintaining momentum in burn treatments [28] - Plans to submit PMA supplements for soft tissue reconstruction and vitiligo indications by the end of 2022, with market entry anticipated in the second half of 2023 [29] - The company aims to leverage its existing infrastructure to launch RECELL in trauma centers co-located with burn centers [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving projected commercial revenue of approximately $30 million for 2022, representing a 20% year-over-year increase [42] - Concerns were raised regarding potential supply chain issues, macroeconomic factors, and staffing shortages in hospitals affecting growth [55] - Management noted that labor shortages have stabilized but have not improved, with increased training efforts to address staffing challenges [56] Other Important Information - The company is developing an automated RECELL device to improve efficiency in dermatology practices [24] - The RECELL system is expected to differentiate itself in the vitiligo market due to its strong safety record and treatment procedure [26] Q&A Session Summary Question: Clarification on soft tissue trial data and non-inferiority - Management explained that while donor skin sparing was statistically significant, non-inferiority for healing was not met at the pre-specified level, but they remain confident in the PMA submission [45][46] Question: Safety events in the study - Management confirmed that there were no differences in adverse events between the control and treated groups [49] Question: Updates on vitiligo trial data presentation - Management indicated that top-line data from the vitiligo trial would be released shortly, and they are currently pursuing a go-it-alone strategy for commercialization [51] Question: Guidance for the second half of the year - Management reiterated confidence in the $30 million revenue guidance, citing seasonality and external factors as reasons for not increasing guidance [55] Question: Labor shortages and improvements - Management noted that while labor shortages have stabilized, they have not improved, and training efforts have increased to address this issue [56] Question: Adoption and reimbursement in Japan - Management expressed optimism about reimbursement discussions in Japan and indicated that they expect favorable pricing [63][64] Question: Maintenance of gross margins - Management stated that they aim to maintain gross margins at the low 80% level moving forward [67]