The AVITA Medical Inc (ASX: AVH) share price is on fire on Thursday.
In morning trade, the ASX healthcare share was up as much as 20% to a 52-week high of $5.14.
The AVITA share price has pulled back since then but remains up 14% at the time of writing.
Why is this ASX healthcare share rocketing higher?
Investors have been scrambling to buy this regenerative medicine company's shares after the release of a very positive announcement.
According to the release, the U.S. Food and Drug Administration (FDA) has approved its premarket approval (PMA) supplement for the use of its RECELL System to treat full-thickness skin defects.
The RECELL System was first approved in the U.S. for the treatment of severe burns back in 2018. It is an autologous cell harvesting device that prepares, produces, and delivers a regenerative cell suspension, Spray-On Skin Cells, using a small amount of a patient's own skin.
The company notes that the expanded indication announced today represents a broad label of full-thickness skin defects. This includes wound injuries after traumatic avulsion (e.g., degloving), surgical excision (e.g., necrotising soft tissue infection), or resection (e.g., skin cancer).
Overall, management estimates that this dramatically expands the company's market opportunity at least five times.
'An inflection point'
AVITA Medical's CEO, Jim Corbett, believes the news represents an inflection point for the company. He said:
This is a landmark approval representing an inflection point for AVITA Medical. The FDA approval now offers surgeons a best-in-class treatment option for a multitude of severe wounds within inpatient and outpatient settings.
Corbett also revealed that the ASX healthcare share has prepared for this approval and is ready to hit the ground running. He adds:
We had a high level of confidence in the FDA's approval timeline of RECELL for the treatment of skin defects. In anticipation of the expanded indication, we more than doubled our field sales organization in the first few months of the year.
Our sales team is now ready, trained, and fully prepared for the commercial launch, which will commence July 1, 2023. On behalf of AVITA Medical, I'd like to express my utmost appreciation to the many patients and healthcare providers who partnered with us to help bring our innovative technology to more patients across the U.S.
