AVITA Pre-Announces Accelerating Growth in 3Q23 and Secures $90M Debt Facility Following Recent Expanded Indications for RECELL and RECELL GO Filing Delay
AVITA Medical has reported financial highlights for the third quarter of 2023. Preliminary commercial revenue for this period reached $13.5 million, marking a 50% increase from the approximately $9.0 million achieved in the same quarter of 2022. Based upon the results, the company maintained its guidance for full-year 2023 commercial revenue and is expected to fall within the range of $51 to $53 million. The mid-range of the guidance implies strong growth in the fourth quarter with total revenue of $16.1 million.
Growth accelerated in the quarter and AVITA recently received an expanded indication from the FDA for its RECELL technology for soft tissue repair. The initial submission of the PMA supplement for soft tissue repair and reconstruction targeted approval for traumatic wounds like degloving, surgical wounds such as fasciotomy and necrotizing fasciitis, totaling approximately 127,000 eligible procedures across U.S. trauma centers. However, the label allows the company to also target 35,000 eligible burn procedures and also included additional procedures, such as traumatic wounds like gunshot wounds, traumatic hematomas, surgical wounds such as muscle-only flaps, laparotomies, and chronic wounds including DFU and VLU, non-pressure ulcers, and pressure ulcers, as well as surgical excisions of cancer. The expansion accounts for at least 264,000 additional eligible procedures.
On the negative front, AVITA recently announced a request for additional data from the FDA for RECELL GO™, its second-generation wound product. The company’s filing was placed on hold for an estimated duration of 4 to 6 months while the company addresses the FDA’s inquiries. Avita now anticipates a potential product launch falling between May 1 and July 1, 2024. Previously AVITA had expected to receive FDA approval around year end.
In addition to its revenue results, AVITA Medical announced the finalization of a debt financing facility with healthcare investment firm OrbiMed. This facility provides the company with up to $90 million in non-dilutive capital, enhancing financial flexibility for various purposes, including portfolio expansion, global endeavors, and the ongoing development and commercialization of approved indications. Under the Credit Agreement with OrbiMed, AVITA Medical initially borrowed $40 million. Furthermore, two additional tranches totaling $50 million are available to the company at its discretion, contingent on the achievement of specific revenue milestones. The Credit Agreement carries a five-year term that matures in October 2028. As part of the agreement, AVITA Medical issued OrbiMed a warrant for the purchase of 409,661 shares of the company’s common stock, featuring an exercise price of $10.9847.
Jim Corbett, Chief Executive Officer of AVITA Medical, expressed enthusiasm for the partnership with OrbiMed, stating that it furnishes the company with the capital to execute strategic growth plans as they continue their business transformation. He emphasized that this financing obviates the immediate necessity for equity financing and positions AVITA Medical to attain profitability by 2025.