After redomiciling to the United States yesterday, the Avita Therapeutics Inc (ASX: AVH) share price is up 8.4% today.
Avita Medical's ordinary shares were transferred to Avita Therapeutics, based out of the US state of Delaware, via a scheme of arrangements.
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What does Avita Therapeutics 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. The company's treatment of vitiligo, traumatic wounds, scar reconstruction, and dermatological aesthetic applications with the use of RECELL is also being assessed.
Why did Avita Therapeutics redomicile?
The redomiciliation will better align the company's corporate structure with its business operations. Avita derives virtually all of its revenue from the United States. The redomiciliation will likely substantially reduce costs associated with dual financial reporting and related compliance obligations in Australia and the United States.
What is the effect of the redomiciliation?
The redomiciliation means Avita's primary listing moves from the ASX to the NASDAQ. Its listing on the ASX will be maintained. Avita shareholders effectively exchange their shares in Avita for equivalent securities in the United States entity. Eligible shareholders received 5 Avita US CHESS Depositary Interests (CDI) for every 100 shares they held.
How has Avita been performing?
Total product sales more than doubled in the March quarter compared to the prior corresponding period. Avita reported total product sales of $5.9 million during the Q3 FY20, up from $2.3 million in Q3 FY19. 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.
The third 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. The company has seen consistent growth since the launch of the RECELL system, and has been somewhat insulated from the challenges of the coronavirus pandemic as treatment of burns patients is not elective or deferrable.
