The AVITA Medical Ltd (ASX: AVH) share price has been a strong performer on Friday.
In afternoon trade the global regenerative medicine company’s shares are up 6.5% to 68.2 cents.
This makes AVITA the second-best performer on the ASX 200 index behind only Link Administration Holdings Ltd (ASX: LNK).
Why is the AVITA share price surging higher?
Investors have been fighting to get hold of the company’s shares on Friday after the release of its second quarter and first half update.
According to the release, AVITA’s strong growth continued in the second quarter. It delivered total revenue of $5.6 million, which was an increase of 41.6% on the prior corresponding period.
This brought its total revenue for the six months to December 31 to $13.53 million, which is up a massive 95.3% on the same period last year.
The main driver of its growth in the first half has been its performance in the massive United States market.
Total revenue in the United States for the half came to $9.3 million, compared to $1.1 million in the prior corresponding period.
AVITA Medical’s Chief Executive Officer, Dr. Mike Perry, was pleased with the half.
He said: “We are extremely pleased with the expanding use of the RECELL System in a large number of U.S. burn centers and in a broadening array of burn types. We have very high interest in the RECELL System with more than 160 trained burn physicians and 63 accredited burn institutions either having navigated through the Value Analysis Committee (VAC) approval process or obtaining ad hoc approval to purchase the RECELL System.”
Dr. Perry revealed that AVITA finished the half strongly. He explained: “In addition, we see ongoing strong support and usage of the RECELL System, including in the last two months of 2019 where we witnessed our highest procedural volumes since FDA approval. Physician feedback continues to be highly positive and we are well-placed to broaden usage as physicians gain broader clinical experience and begin to migrate from large total body surface area (TBSA) full thickness burns to smaller TBSA burns and partial thickness burns.”
Looking ahead, the chief executive appears confident in the company’s prospects.
“We believe that broader TBSA utilization within our existing customer base, together with the addition of new RECELL customers, provides ample opportunity for us to drive revenue increases in 2020. By leveraging our success within our initial market of 14,000 eligible in-patient burn patients, we are now eager to approach the larger opportunities within burns (i.e. smaller burns), soft tissue reconstruction, vitiligo and genetic errors,” he concluded.
These markets represent huge opportunities for AVITA and could be key drivers of growth over the 2020s.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.