The Avita Medical Inc (ASX: AVH) share price is climbing higher this morning following the release of the company's financial year 2021 (FY21) earnings.
At the time of writing, the Avita share price is up 7.13%, trading at $5.335.
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Avita Medical share price in focus on 105% revenue increase
Here's a snapshot of the medical technology company's performance over FY21:
- US$29.2 million of revenue – up 105% on that of FY20.
- Net loss of US$26.5 million – a 37% improvement on FY20's $42 million loss.
- Earnings per share came to a US$1.17 loss.
Over FY21, Avita's commercial revenues from its Recell system were US$21.5 million. The company's total commercial revenues increased 50% on that of FY20.
Revenues from a contract between Avita and the United States Department of Health and Human Services' Biomedical Advanced Research and Development Authority within the Office of the Assistant Secretary for Preparedness and Response (BARDA) for the supply of Recell came to US$7.7 million.
The company also received US$2.1 million of funding from BARDA for FY21, down from US$3.9 million of funding in the previous financial year. The drop in funding was due to the wind-down of some activities to do with supporting the US Food and Drug Administration's (FDA) approval of the Recell system, as well as the compassionate use, continued access programs, and pivotal trials for the treatment of paediatric scald injuries.
Avita's total operating expenses dropped 10% to US$51.9 million in FY21.
Costs involved with sales and marketing fell by 7% to US$14.7 million, due to a lessening in conferences, lower travel expenses due to COVID-19 restrictions, and higher FY20 costs from a product launch.
Avita's general and administrative expenses dropped 32% to US$22.4 million.
Research and development expenses increased 61% to US$14.8 million as the company's clinical trials and related activities for the treatment of vitiligo ramped up.
Avita ended the period with cash and cash equivalents valued at US$110.7 million and no debt.
What happened in FY21 for Avita Medical?
Here's some of what drove the Avita share price in FY21:
The major news out of the company in FY21 was its latest contract with BARDA.
Under the contract, Avita provided BARDA with 5,614 Recell system units. Additionally, Avita was to support the emergency deployment of the Recell system for use in mass casualty or other emergency situations. The company announced the news in July 2020.
Avita was also listed on the NASDAQ stock market on 1 July 2020. Its prospectus for the dual listing was released to the ASX in March. The proceeds from the prospectus' offer were around US$69.1 million.
What did management say?
Avita chief medical officer Dr Mike Perry commented on the results:
We are excited to report our substantial progress this quarter. As COVID-related restrictions decreased and people resumed everyday activities, the organisation was well-positioned for the marked increase in burn-related accidents.
We realised a significant revenue increase primarily from the increase in burn cases but also from our further penetration in burn centre accounts. We also realised an acceleration of enrolment into our soft tissue reconstruction trial, which is now over half enrolled at 36 of 65 subjects.
What's next for Avita Medical?
While Avita didn't give any clues today as to what investors should keep an eye out for during FY22, here's a little of what might impact the company moving forward.
Earlier this month, Avita announced it had received FDA approval to amend its clinical trial, testing if Recell may help treat vitiligo. As we reported at the time, Avita stated it could have Recell available for vitiligo applications in early 2023.
Additionally, another version of Avita's Recell system is under review with the FDA. The company hopes it will be commercialised in the first half of 2022.
Finally, the company hopes it will be able to launch Recell in Japan in 2022.
Avita share price snapshot
The Avita share price has fallen 1.5% year to date. It is also currently 19% lower than it was this time last year.
