The Avita Medical Inc (ASX: AVH) share price is catching the eye on Friday.
In morning trade, the regenerative medicine company's shares are up 24% to $3.96.
Why is the Avita Medical share price rocketing?
Investors have been picking up Avita Medical's shares this morning after it released its third quarter update and revealed strong top line growth.
Here's a summary of how it performed for the three months ended 30 September:
- Commercial revenue up 51% to US$13.5 million
- Gross margin of 84.5% for the quarter
- Operating expenses up 48% to US$21 million
- Net loss widened 55% to US$8.7 million
- Cash on hand of US$60.1 million
Despite its sizeable loss, management believes the regenerative medicine company is well-positioned and has sufficient cash to meet its profitability goals. This could explain the strong rise in the Avita Medical share price today.
This should be supported by the Recell Go product, which management appears confident will be granted US FDA approval next year.
The company's chief executive officer, Jim Corbett, commented:
We continue to execute our growth strategy, paving the way to profitability. We are diligently working through supplemental in-house testing to support the FDA's review of our PMA supplement for RECELL GO. Once complete, we expect to submit a response to the FDA's open questions on February 28, 2024. Under the Breakthrough Device program, we anticipate FDA approval on May 30, 2024, which positions us for a launch the following day.
This sentiment was echoed by its chief financial officer, David O'Toole, he adds:
We have achieved significant commercial revenue growth rates for the last three quarters of 40%, 42% and 51%, respectively, over the same periods in the previous year. Further, we remain confident that our cash reserves position us to achieve our goals and reach profitability in 2025.
Looking ahead, the company expects its strong top-line growth to continue. It is guiding to fourth-quarter commercial revenue growth of 64% to 73% over the prior corresponding period.
Following today's gain, the Avita Medical share price is now up 100% in 2023.
