AVITA Medical Announces Preliminary 2023 Financial Highlights, Provides 2024 Financial Guidance and Business Update

Rhea-AI Summary

AVITA Medical, Inc. (RCEL, AVH) announced preliminary unaudited financial highlights for Q4 and full-year 2023. Commercial revenue for Q4 2023 is expected to be approximately $14.1 million, an increase of 50% compared to the same period in 2022. Full-year 2023 commercial revenue is expected to be approximately $49.8 million, with an 46% increase over 2022. Gross margin for 2023 is expected to be approximately 84.5%. The company also provided financial guidance for Q1 and full-year 2024, and announced the completion of patient enrollment in its post-market study, TONE.

Financial Analyst

The reported revenue growth for AVITA Medical in the fourth quarter and full-year 2023 is a robust indicator of the company's market performance and strategic direction. A 50% year-over-year increase in quarterly revenue and a similar uptick for the annual figure suggest a strong demand for the company's regenerative medicine products. The projected gross margin of 84.5% is particularly noteworthy, as it significantly exceeds the average for the biotechnology and pharmaceuticals sector, which typically hovers around 50-70%. Such high margins could indicate operational efficiency and a premium product offering, which are attractive qualities for investors.

Looking ahead, the guidance for Q1 and full-year 2024 indicates a continuation of this growth trajectory, with the company expecting revenue increases of up to 50% and 69%, respectively. The provided range for future earnings also demonstrates management's confidence in the company's continued expansion. The substantial cash reserves of $89.1 million provide a cushion for future R&D and operational costs, which is crucial for sustaining growth in the competitive field of regenerative medicine.

Medical Research Analyst

The completion of patient enrollment in the TONE study is a pivotal step for AVITA Medical. The study's focus on vitiligo, a condition with significant unmet medical needs, could position the company at the forefront of a niche market. The emphasis on health-related quality-of-life indicators aligns with a growing trend in healthcare to measure treatment success beyond traditional clinical outcomes. If the results demonstrate significant patient and clinician satisfaction, along with improvements in mental health status, AVITA could strengthen its value proposition to insurers and healthcare providers, potentially leading to increased adoption of its therapies.

From a research and development perspective, the early completion of enrollment is a positive sign, indicating strong interest and potential demand for the treatment. The 12-month follow-up period will provide a comprehensive data set to assess the long-term efficacy and safety of the therapy, which is crucial for regulatory approval and market acceptance.

Market Research Analyst

The data on AVITA Medical's commercial revenue growth and the successful advancement of its clinical study is indicative of the company's ability to capitalize on the growing regenerative medicine market. The projected growth rates suggest that the market is responding well to AVITA's product offerings, which is likely due to the innovative nature of its autologous cellular therapies for skin restoration. As the regenerative medicine industry is expected to continue expanding, driven by technological advancements and an aging population, AVITA's current trajectory positions it well to capture a significant market share.

Moreover, the company's strategic focus on conditions like vitiligo, which have historically been underserved, presents a strategic market opportunity. By addressing these niche segments, AVITA not only diversifies its revenue streams but also enhances its competitive edge in a field where differentiation is key. The company's ability to exceed enrollment expectations for its TONE study further suggests effective market penetration and a strong reputation among patients and clinicians.

VALENCIA, Calif., Jan. 10, 2024 (GLOBE NEWSWIRE) -- AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH) (the “Company”), a commercial-stage regenerative medicine company focused on first-in-class devices and autologous cellular therapies for skin restoration, today announced preliminary unaudited financial highlights for the fourth quarter and full-year 2023, provided financial guidance for the first quarter and full-year 2024, and announced completion of patient enrollment in its post-market study, TONE.

Preliminary Fourth Quarter and Full-Year 2023 Financial Highlights

• Commercial revenue for the fourth quarter 2023 is expected to be approximately $14.1 million, an increase of approximately 50% compared to same period in 2022
• Commercial revenue for the full-year 2023 is expected to be approximately $49.8 million, an increase of approximately 46% compared to full-year 2022
• Gross margin for the full-year 2023 is expected to be approximately 84.5%
• As of December 31, 2023, approximately $89.1 million in cash, cash equivalents, and marketable securities

“This was a transformative year for AVITA Medical as we focused on accelerating our growth profile,” said Jim Corbett, Chief Executive Officer of AVITA Medical. “We have made tremendous progress over the last four quarters, with consecutive commercial revenue growth rates of 40%, 42%, 51%, and 50%, respectively, over the same periods in 2022. We remain committed to sustaining growth and building our business in 2024.”

2024 Financial Guidance

• Commercial revenue for the first quarter 2024 is expected to be in the range of $14.8 to $15.6 million, reflecting growth at the lower bound of approximately 42% and upper bound of approximately 50% over the same period in the prior year
• Commercial revenue for the full-year 2024 is expected to be in the range of $78.5 to $84.5 million, reflecting growth at the lower bound of approximately 57% and upper bound of approximately 69% over the full-year 2023

Business Update

In July 2023, the Company initiated TONE, a post-market study treating patients with stable vitiligo. The purpose of TONE is to evaluate repigmentation and to understand the impact of repigmentation on improving quality of life for patients with this disease. Key study endpoints include patient and clinician satisfaction of treatment, burden of disease, and patient mental health status. The Company believes that developing these health-related quality-of-life indicators will help create a basis to understand the impact of vitiligo on the mental health of patients and the associated healthcare costs of treatment.

The Company completed enrollment of TONE with 109 patients at investigational sites across the United States earlier than anticipated. Patients will be followed for a 12-month period, with the primary follow-up period being 6-months after treatment.

About AVITA Medical, Inc.
AVITA Medical^® is a commercial-stage regenerative medicine company transforming the standard of care for skin restoration with innovative devices and autologous cellular therapies. At the forefront of our platform is the RECELL^® System, approved by the Food and Drug Administration for the treatment of thermal burn wounds and full-thickness skin defects, and for repigmentation of stable depigmented vitiligo lesions. RECELL harnesses the regenerative properties of a patient’s own skin to create Spray-On Skin™ Cells, delivering a transformative solution at the point-of-care. RECELL enables improved clinical outcomes. This breakthrough technology serves as the catalyst for a new treatment paradigm enabling improved clinical outcomes.

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 Statements
Statements in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements generally may 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,” and similar words or expressions, and the use of future dates. These statements are made as of the date of this release, and the Company undertakes no obligation to publicly update or revise any of these statements, except as required by law. For additional information and other important factors that may cause actual results to differ materially from forward-looking statements, please see the “Risk Factors” section of the Company’s latest Annual Report on Form 10-K and other publicly available filings for a discussion of these and other risks and uncertainties.

Authorized for release by the Chief Financial Officer of AVITA Medical, Inc.

FAQ

What are the financial highlights announced by AVITA Medical, Inc. for Q4 and full-year 2023?

Commercial revenue for Q4 2023 is expected to be approximately $14.1 million, an increase of 50% compared to the same period in 2022. Full-year 2023 commercial revenue is expected to be approximately $49.8 million, with an 46% increase over 2022. Gross margin for 2023 is expected to be approximately 84.5%.

What is the financial guidance provided by AVITA Medical, Inc. for Q1 and full-year 2024?

Commercial revenue for Q1 2024 is expected to be in the range of $14.8 to $15.6 million, reflecting growth at the lower bound of approximately 42% and upper bound of approximately 50% over the same period in the prior year. Full-year 2024 commercial revenue is expected to be in the range of $78.5 to $84.5 million, reflecting growth at the lower bound of approximately 57% and upper bound of approximately 69% over the full-year 2023.

What is the purpose of the TONE study announced by AVITA Medical, Inc.?

The purpose of TONE is to evaluate repigmentation and to understand the impact of repigmentation on improving quality of life for patients with stable vitiligo. Key study endpoints include patient and clinician satisfaction of treatment, burden of disease, and patient mental health status.

How many patients were enrolled in the TONE study by AVITA Medical, Inc.?

The Company completed enrollment of TONE with 109 patients at investigational sites across the United States earlier than anticipated. Patients will be followed for a 12-month period, with the primary follow-up period being 6-months after treatment.