Avita Medical Ltd (ASX: AVH) shares are down 2.17% in morning trade, despite the ASX healthcare company reporting strong third quarter results today.
Avita Medical reported total product sales of $5.9 million during the March quarter, up from $2.3 million in the March 2019 quarter. For the 9 months ending 31 March, Avita Medical recorded $15.6 million in product sales, well above the $4.2 million in sales recorded in the 9 months to March 2019.
"Our strong third quarter results demonstrate continued growing adoption trends within both our existing and new RECELL System customers," said CEO Dr Mike Perry.
What does Avita Medical do?
Avita Medical is a regenerative medicine company with technology that addresses therapeutic skin restoration. Its RECELL system provides spray on skin therapy used to treat burn wounds. It is also being assessed for use in the treatment of vitiligo, traumatic wounds, scar reconstruction, and for dermatological aesthetic applications.
Consistent growth
The March quarter was Avita Medical's strongest quarter since launching in the United States in January 2019. This reflects strong customer uptake, even with the COVID-19 pandemic beginning toward the end of the quarter.
During the March quarter, 9 new customers were added and 21 surgeons certified. This brings Avita Medical customers to a total of 69 with 205 certified burn surgeons. The RECELL System was used in more than 400 procedures for the first time during the quarter.
The company has seen consistent growth since the launch of the RECELL System, and has thus far been somewhat insulated from the challenges of the coronavirus pandemic as treatment of burns patients is not elective or deferrable.
Coronavirus impact
While severe burn treatments are not elective procedures, Avita Medical has seen a pause in enrolment in some of its clinical trials due to COVID-19. The company is supplying redundancies and digital training to continue serving burn surgeons and patients through the pandemic.
Avita Medical says it will be difficult to predict the breath of potential impacts over coming months due to the COVID-19 macro environment. In addition, the burns environment is inherently 'lumpy' and difficult to forecast. Nonetheless, the company is well-positioned from a supply and distribution perspective. No disruptions or delays in the availability of the RECELL System are envisaged.
Outlook
Avita Medical is planning to submit and application to the FDA to allow for a study into the use of the RECELL Sytem to treat vitiligo by June. The company believes the vitiligo market is a large and attractive market, with no approved therapy for patients. A pilot study has already been approved and will be conducted in collaboration with the University of Massachusetts.
The company is also preparing to redomicile to the US under a new parent company, Avita Therapeutics Inc. This fits the immediate commercial focus on unlocking the US market, where the vast majority of Avita's revenue is sourced. The proposed redomiciliation will also substantially reduce financial reporting and compliance costs. Shares in Avita Medical will continue to trade on the ASX and NASDAQ.
