This ASX 200 healthcare share just posted a 67% jump in quarterly revenue

Avita Medical shares are on watch this morning after the healthcare company reported strong third quarter results.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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. 

Kate O'Brien owns shares of Avita Medical Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »