ASX stock of the day: Avita Therapeutics share price climbs 8.4% as company redomiciles

After redomiciling to the United States yesterday, the Avita Therapeutics Inc (ASX: AVH) share price is up 8.4% today.

| More on:
CSL share price Digitised bubbles of cells representing ASX biotech shares such as CSL

Image source: Getty Images

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

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.

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. 

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 recommended Avita Medical Limited. 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

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Monday

It looks set to be a decent start to the week for Aussie investors.

Read more »

A young woman does her Christmas shopping online in her lounge room at home with a Christmas tree in the background.
Share Market News

3 things ASX investors should watch this week

Christmas is coming but there's no rest for your stock portfolio. Here are the biggest developments to monitor.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Healthcare Shares

How big could the return be with CSL shares in 2024?

Could this biotech company be a market beater in 2024?

Read more »

Smiling man working on his laptop.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave the thumbs up to these ASX shares last week. Why are they bullish?

Read more »

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Dividend Investing

How to retire early with these ASX titans

There are so many mouth-watering dividend stocks in Australia, those who want to quit work have options.

Read more »

Man sits smiling at a computer showing graphs
Broker Notes

Morgans names more of the best ASX 200 shares to buy in December

These ASX 200 shares have been given the thumbs up by analysts at Morgans in December.

Read more »

A woman looks unsure as she ladles mixture into a pan surrounded by small appliances

My 2024 warning: Don't get (completely) lost in the passive income sauce

It's easy to become fixated on BIG yields to ease the cost of living pressures next year. Here's my word…

Read more »

a diverse groups of about twenty people stand together in a crowd staring to the front with angry and annoyed looks on their faces.
Share Market News

10 popular ASX stocks that faced shareholder revolts this AGM season

Investors vented their fury and frustration over high CEO salaries amid some mostly uninspiring share price performances this year.

Read more »