AVITA Medical Reports Fourth Quarter and Full-Year 2023 Financial Results and Provides 2024 Financial Guidance
AVITA Medical Reports Strong Financial Results and Outlines Future Milestones for 2024
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AVITA Medical reported a 50% increase in commercial revenue to $14.1 million in Q4 2023 and a 46% increase to $49.8 million for the full-year 2023.
Gross profit margin stood at 87.3% for Q4 2023 and 84.5% for the full-year 2023.
The company ended 2023 with $89.1 million in cash, cash equivalents, and marketable securities.
AVITA Medical's CEO, Jim Corbett, highlighted strategic initiatives for business transformation in 2023, focusing on expanding RECELL indications and applications, doubling the commercial field organization, and launching an expanded label for full-thickness skin defects.
Future milestones include expanding the sales organization, launching PermeaDerm, FDA approval for RECELL GO, facility expansion, international sales, PMA supplement submission, and achieving cashflow break even and GAAP profitability by Q3 2025.
Financial guidance projects commercial revenue growth for Q1 2024 and full-year 2024, aiming for cashflow break even by Q3 2025.
Q4 2023 saw a 50% increase in commercial revenue, with a net loss of $7.1 million, driven by higher production costs and increased operating expenses.
Full-year 2023 results showed a 46% increase in commercial revenue, with a net loss of $35.4 million, attributed to higher sales and marketing costs, G&A expenses, and R&D investments.
AVITA Medical will host a conference call on February 22, 2024, to discuss financial results and future guidance.
The reported increase in commercial revenue by approximately 46% to $49.8 million for the full year and 50% to $14.1 million for the fourth quarter is a strong indicator of AVITA Medical's growing market presence and effective sales strategy. The expansion of the commercial field organization and strategic initiatives such as launching expanded labels and the international expansion plan have likely contributed to this growth. Investors should note the company's gross profit margin , which stands at an impressive 84.5% for the full year, reflecting efficient cost management and a premium pricing strategy that is sustainable in the regenerative medicine sector.
However, despite the revenue growth, the company reported a net loss of $7.1 million for the quarter and $35.4 million for the year. This raises concerns about the company's current profitability and the sustainability of its growth trajectory without achieving positive net earnings. The expected cash flow break-even and GAAP profitability by the third quarter of 2025 indicate a long-term strategic plan towards profitability, which is a critical factor for investors' confidence.
AVITA Medical's expansion plans and the introduction of new products such as RECELL GO and PermeaDerm® Biosynthetic Wound Matrix are noteworthy. The expansion of the field sales organization and the renovation of the Ventura warehouse facility are poised to enhance the company's operational capabilities and market reach. The anticipation of FDA approvals and international sales commencement in Europe are pivotal milestones that could significantly impact market share and competitive positioning within the regenerative medicine industry.
Furthermore, the company's guidance for commercial revenue growth of 57% to 69% for the full year 2024 suggests a strong outlook and confidence in their strategic initiatives. However, the market will be closely monitoring the actual performance against these projections, as they are aggressive targets that hinge on successful product launches and market adoption.
The clinical and regulatory milestones such as the expected FDA approval for RECELL GO and the submission of a PMA supplement for RECELL GO mini, designed for smaller wounds, are significant. These milestones reflect AVITA Medical's commitment to innovation and addressing unmet needs in wound care. The TONE study for treating patients with stable vitiligo, if successful, could open up a new therapeutic area for the company, potentially expanding its target market and diversifying its revenue streams.
The high gross profit margin indicates that the company's products are likely well-received in the market and there is a willingness to pay a premium for innovative regenerative treatments. However, the increased R&D and sales and marketing expenses, which have contributed to the net loss, highlight the need for a careful balance between growth-driven spending and financial sustainability.
02/22/2024 - 04:01 PM
VALENCIA, Calif., Feb. 22, 2024 (GLOBE NEWSWIRE) -- AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH), a commercial-stage regenerative medicine company focused on first-in-class devices for wound care management and skin restoration, today reported financial results for the fourth quarter and full-year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
Commercial revenue increased approximately 50% to $14.1 million compared to the same period in 2022 Gross profit margin of 87.3% Full-Year 2023 Financial Highlights
Commercial revenue increased approximately 46% to $49.8 million compared to the same period in 2022 Gross profit margin of 84.5% As of December 31, 2023, approximately $89.1 million in cash, cash equivalents, and marketable securities “We ended the year with yet another quarter of significant growth, marking a year of extraordinary progress,” said Jim Corbett, AVITA Medical Chief Executive Officer. “In 2023, we successfully executed a series of strategic initiatives to transform our business. These initiatives included expanding our RECELL indications and applications, doubling our commercial field organization ahead of FDA approvals, successfully launching our expanded label for full-thickness skin defects, and establishing an international expansion plan. Looking ahead to 2024, we are eager to capitalize on this momentum, and remain committed to innovation and sustained growth.”
Future Milestones
Expansion of the field sales organization from 70 to 108 professionals in the first quarter of 2024 to maximize our ability to capitalize on the expanded label of full-thickness skin defects Integrating PermeaDerm® Biosynthetic Wound Matrix into our selling portfolio; plan to launch PermeaDerm in March 2024 Expect U.S. Food and Drug Administration Food (FDA) approval for RECELL GO with plans to commence commercial launch on May 31, 2024 Renovating and expanding our Ventura warehouse facility; expansion will increase capacity 10-fold, ensuring efficient operations for the next five years at this location; expect final phase to be completed during the third quarter of 2024 Expect non-U.S. sales following the launch in January 2024 of RECELL within Germany, Austria, and Switzerland Plan to submit a PMA supplement for RECELL GO mini, which is being designed to address smaller wounds, and expect to receive FDA approval by year-end Expect to submit both our post-market study treating patients with stable vitiligo, TONE, and separate health economics study for publication by year-end Financial Guidance
Commercial revenue for the first quarter 2024 is expected to be in the range of $14.8 t o $15.6 million , reflecting growth of approximately 42% to 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 t o $84.5 million , reflecting growth of approximately 57% to approximately 69% over the full-year 2023 Expect to achieve cashflow break even and GAAP profitability no later than the third quarter of 2025 Fourth Quarter 2023 Financial Results
Our commercial revenue, which excludes Biomedical Advanced Research and Development Authority (BARDA) revenue, increased by 50% to $14.1 million in the three-months ended December 31, 2023, compared to $9.4 million in the same period in 2022. Total revenue, which includes BARDA revenue, increased by 50% to $14.2 million compared to $9.5 million in the same period in 2022.
Gross profit margin was 87.3% compared to 85.8% for the fourth quarter of 2022. The increase was largely driven by higher production of our product associated with our increase in revenue and lower shipping costs.
Total operating expenses for the quarter were $24.7 million , compared to $15.0 million in the same period in 2022. The increase in operating expenses is primarily attributable to an increase of $2.4 million in G&A expenses related to stock-based compensation, consulting expenses, and employee-related costs. In addition, the increase in operating expenses included an increase of $3.4 million in R&D costs, which was primarily due to employee compensation costs, including recruiting costs, costs associated with insourcing RECELL GO to our Ventura facility, and accelerated recruitment and third-party costs associated with the TONE study. Lastly, operating expenses included an increase of $3.9 million in sales and marketing costs primarily due to employee related costs, including commissions, travel, and promotion expense, as a result of the expansion of our commercial organization in the second quarter of 2023.
Net loss was $7.1 million , or a loss of $0.28 per basic and diluted share, compared to a net loss of $5.4 million , or a loss of $0.21 per basic and diluted share, in the same period in 2022.
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.
Other income, net for the quarter was $6.3 million , comprised primarily of $1.1 million in income from our investing activities and a $9.4 million non-cash foreign exchange gain as a result of the foreign entity liquidation for previously deferred unrealized cumulative translation adjustments in equity. This was partially offset by a loss on debt issuance of $1.2 million , debt issuance costs of $0.8 million , the change of fair value for our debt of $1.6 million , and change in fair value of warrants for $0.7 million .
Full-Year 2023 Financial Results
Our commercial revenue, which excludes BARDA revenue, increased by 46% to $49.8 million in the full-year ended December 31, 2023, compared to $34.1 million in the same period in 2022. Total revenue, which includes BARDA revenue, was $50.1 million compared to $34.4 million in the same period in 2022.
Gross profit margin was 84.5% compared to 82.4% in the same period in 2022.
Total operating expenses for the year were $86.4 million compared to $59.1 million in the same period in 2022. The increase in operating expenses is largely attributed to an increase of $15.4 million in sales and marketing costs as a result of the expansion of our commercial organization in the first half of 2023. Alongside this expansion, G&A costs increased by $5.0 million due to the increased headcount and related salaries and benefits, stock-based compensation, and recruiting costs. Lastly, R&D costs increased by $6.9 million , primarily driven by the cost of the TONE study, final work and completion of the PMA Supplement to the FDA in June of 2023 for RECELL GO and employee related costs, including stock-based compensation.
Net loss for the full-year 2023 was $35.4 million , or a loss of $1.40 per basic and diluted share, compared to a net loss of $26.7 million , or a loss of $1.07 per basic and diluted share, in the same period in 2022.
Other income, net for the full-year 2023 was $8.5 million , comprised primarily of $3.1 million in income from our investing activities and a $9.4 million non-cash foreign exchange gain as a result of the foreign entity liquidation for previously deferred unrealized cumulative translation adjustments in equity. This was partially offset by a loss on debt issuance of $1.2 million , debt issuance costs of $0.8 million , the change of fair value for our debt of $1.6 million , and change in fair value of warrants for $0.7 million .
Webcast and Conference Call Information
AVITA Medical will host a conference call to discuss its financial results, business highlights, and 2024 revenue guidance on Thursday, February 22, 2024, at 1:30 p.m. Pacific Time (being Friday, February 23, 2024, at 8:30 a.m. Australian Eastern Daylight Time). To access the live call via telephone, please register in advance using the link here https://ir.avitamedical.com
About AVITA Medical, Inc. ® is a commercial-stage regenerative medicine company transforming the standard of care in wound care management and skin restoration with innovative devices. 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. This breakthrough technology serves as the catalyst for a new treatment paradigm enabling improved clinical outcomes. AVITA Medical also holds the exclusive rights to market, sell, and distribute PermeaDerm® , a biosynthetic wound matrix, in the United States.
In international markets, the RECELL System is approved 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
CAUTIONARY NOTE REGARDING 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. 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. 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.
AVITA MEDICAL, INC. Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited)
As of December 31, 2023 December 31, 2022 ASSETS Cash and cash equivalents $ 22,118 $ 18,164 Marketable securities 66,939 61,178 Accounts receivable, net 7,664 3,515 BARDA receivables 30 898 Prepaids and other current assets 1,659 1,578 Inventory 5,596 2,125 Total current assets 104,006 87,458 Marketable securities long-term - 6,930 Plant and equipment, net 1,877 1,200 Operating lease right-of-use assets 2,440 851 Corporate-owned life insurance ("COLI") asset 2,475 1,238 Intangible assets, net 487 465 Other long-term assets 355 122 Total assets $ 111,640 $ 98,264 LIABILITIES, NON-QUALIFIED DEFERRED COMPENSATION PLAN SHARE AWARDS AND STOCKHOLDERS' EQUITY Accounts payable and accrued liabilities 3,793 3,002 Accrued wages and fringe benefits 7,972 6,623 Current non-qualified deferred compensation ("NQDC") liability 168 78 Other current liabilities 1,266 990 Total current liabilities 13,199 10,693 Long-term debt 39,812 - Non-qualified deferred compensation liability 3,663 1,270 Contract liabilities 357 698 Operating lease liabilities, long term 1,702 306 Warrant liability 3,158 - Total liabilities 61,891 12,967 Non-qualified deferred compensation plan share awards 693 557 Commitments and contingencies (Note 13) Stockholders' equity: Common stock, $0.00 01 par value per share, 200,000,000 shares authorized, 25,682,078 and 25,208,436, shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 3 3 Preferred stock, $0.00 01 par value per share, 10,000,000 shares authorized, no shares issued or outstanding at December 31, 2023 and December 31, 2022 - - Company common stock held by the non-qualified deferred compensation plan (1,130 ) (127 ) Additional paid-in capital 350,039 339,825 Accumulated other comprehensive income/(loss) (1,887 ) 7,627 Accumulated deficit (297,969 ) (262,588 ) Total stockholders' equity 49,056 84,740 Total liabilities, non-qualified deferred compensation plan share awards and stockholders' equity $ 111,640 $ 98,264
AVITA MEDICAL, INC. Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited)
Three-Months Ended Year-Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Revenues $ 14,195 $ 9,455 $ 50,143 $ 34,421 Cost of sales (1,796 ) (1,347 ) (7,780 ) (6,041 ) Gross profit 12,399 8,108 42,363 28,380 BARDA income 59 1,026 1,428 3,215 Operating expenses: Sales and marketing (10,216 ) (6,342 ) (37,291 ) (21,913 ) General and administrative (7,750 ) (5,321 ) (28,334 ) (23,330 ) Research and development (6,765 ) (3,379 ) (20,821 ) (13,857 ) Total operating expenses (24,731 ) (15,042 ) (86,446 ) (59,100 ) Operating loss (12,273 ) (5,908 ) (42,655 ) (27,505 ) Interest expense (1,122 ) (6 ) (1,143 ) (16 ) Other income, net 6,342 585 8,483 892 Loss before income taxes (7,053 ) (5,329 ) (35,315 ) (26,629 ) Income tax expense (12 ) (24 ) (66 ) (36 ) Net loss $ (7,065 ) $ (5,353 ) $ (35,381 ) $ (26,665 ) Net loss per common share: Basic and Diluted $ (0.28 ) $ (0.21 ) $ (1.40 ) $ (1.07 ) Weighted-average common shares: Basic and Diluted 25,477,690 25,082,816 25,331,264 25,000,180
AVITA Medical's commercial revenue grew by 50% to $14.1 million in Q4 2023.
Future milestones include expanding sales organization, launching PermeaDerm, FDA approval for RECELL GO, facility expansion, international sales, PMA supplement submission, and achieving cashflow break even by Q3 2025.
AVITA Medical reported a net loss of $35.4 million, or a loss of $1.40 per basic and diluted share, in full-year 2023.
AVITA Medical will host a conference call on February 22, 2024, to discuss financial results and future guidance.
AVITA Medical's gross profit margin stood at 87.3% for Q4 2023.
Commercial revenue for Q1 2024 is expected to be in the range of $14.8 to $15.6 million, reflecting growth of approximately 42% to approximately 50% over the same period in the prior year.
AVITA Medical ended 2023 with approximately $89.1 million in cash, cash equivalents, and marketable securities.
AVITA Medical plans to expand the field sales organization from 70 to 108 professionals in the first quarter of 2024 to maximize their ability to capitalize on the expanded label of full-thickness skin defects.
