The Avita Medical Ltd (ASX: AVH) share price is rallying hard on Friday, up 10% to trade at $14.82 at the time of writing.
This follows the release of the company's financial results for the quarter ending 30 June 2024.
For context, the S&P/ASX 200 Index (ASX: XJO) is up less than 1% at the time of writing.
Let's see what the company posted.
Avita Medical share price jumps on solid Q2 FY24 results
Key highlights from the quarter include the following:
- Commercial revenue came to $15.1 million, up 29% from the same period in 2023
- Gross profit margin was 86.2%, a 500 basis point increase
- It achieved FDA approval of RECELL GO for premarket approval (PMA)
- The RECELL GO mini submission was submitted for FDA approval on 28 June 2024
What else happened in Q2 FY24?
The Avita share price had a mixed performance on the chart last quarter, but the company financials were sound.
Sales were almost 30% higher year over year on a gross profit margin of 86%. Growth in existing customer accounts and "new accounts for full-thickness skin defect" underscored this performance.
Operating expenses were around $7 million higher to $28 million, as the business spent more towards marketing and employee-related costs.
Avita also achieved several milestones related to its RECELL GO segment. This system is used to treat wounds, particularly burn wounds and full-thickness tears.
The milestones include the approval of the RECELL GO system by the US Food and Drug Administration (FDA) and the submission of the RECELL GO mini for use on smaller wounds.
It also entered into an exclusive development and distribution agreement with Regenity Biosciences.
This will allow the company to commercialise a unique collagen-based dermal matrix following approvals in the USA.
What did management say?
CEO Jim Corbett highlighted the company's achievements and future plans, which may be useful for the Avita share price:
Our second-quarter commercial revenue reached a record $15.1 million, reflecting the effectiveness of our enhanced focus on commercial execution.
The FDA approval of RECELL GO and our recent submission of RECELL GO mini highlight our progress in expanding treatment capabilities for burn and full-thickness skin defects.
Additionally, our agreement with Regenity further enhances our ability to address a full spectrum of clinical needs.
What's next?
Looking ahead, the business has set ambitious targets for the remainder of FY24 and beyond, which could impact the Avita share price.
It is targeting $70 million in revenues and growth of around 40% year over year. It also expects to reach cash flow breakeven and profitability "no later than the third quarter of 2025".
Furthermore, Avita anticipates FDA approval of RECELL GO mini by December 27 2024.
Avita Medical share price snapshot
The Avita Medical share price is catching a strong bid amid today's 10% spike. It is a welcomed change.
Over the past 12 months, Avita shares are down nearly 49%.
