Today was a great day on the ASX for the Avita Medical Inc (ASX: AVH) share price.
The medical technology company's stock was boosted by news that the US authority Centers for Medicare and Medicaid Services has approved Avita's application for a new device category code.
The new code means the cost of Avita's RECELL System will be able to be offset when it's used in hospitals and surgical centres.
Avita's RECELL System is a skin restorative system that allows healthcare professionals to restore skin cells to burned areas.
As of Thursday's close, the Avita share price is $15.13, 15.8% higher than it was at Wednesday's close.
Let's take a closer look at today's news from Avita.
The latest news of the RECELL System
The Avita share price surged higher today as the company's CEO noted the new code could see its RECELL System adopted widely.
According to the company's release, the code under which the RECELL System will soon lie is designed to help facilities adopt new technology by offsetting the cost. The system will adopt the new code on 1 January 2022.
Avita's CEO Mike Perry commented on the news that drove the company's share price, saying:
The new code will enable health care providers to treat burn patients with RECELL in various care settings especially during the pandemic, and over the long run, help foster adoption of RECELL in small burns as well as in future indications.
Perry noted the new code "lays the reimbursement foundation for the soft tissue repair indication". He also said the space represents a $450 million serviceable market.
Previous studies have found that the RECELL System resulted in 97.5% less donor skin being needed to treat second degree burns. Other findings from the studies have also highlighted that the RECELL System means there is 32% less donor skin required to treat patients with third degree burns.
Avita share price snapshot
Today's gain has boosted the Avita share price back into the ASX green.
It is now 1.3% higher than it was at the start of 2021. However, it's still 14.9% lower than it was this time last year.
