AVITA Medical Limited (ASX: AVH, NASDAQ: RCEL), a regenerative
medicine company with a technology platform positioned to address
unmet medical needs in therapeutic skin restoration, today
announced preliminary estimates of its top line results for the
three months ended 31 March 2020, together with an operating update
relating to the COVID-19 pandemic.
Preliminary Estimates of Top Line Results for Three Month
Period Ended 31 March 2020
On a preliminary estimate basis, AVITA Medical expects its
results of operations for the three months ended 31 March 2020 to
reflect:
- Total revenue of approximately A$6.0M, an increase of A$1.0M or
21% over the A$4.9M recognized during the previous quarter.
- U.S. RECELL Sales of approximately US$3.9M, an increase of
US$0.7M or 22% over the US$3.2M recognized during the previous
quarter.*
- Cash totaled A$129.9M, an increase of A$5.2M from the A$124.7M
reported in the previous quarter, driven largely by the decline in
value of the Australian dollar relative to the U.S. dollar.
- Commercial metrics:
- Estimated procedural volumes increased by approximately 23%
over the prior quarter.
- New accounts added – 9.
- Cumulative accounts with Value Analysis Committee (VAC)
approval – 69.
* This financial measure is not presented in accordance with
International Financial Reporting Standards (“IFRS”). Please see
“Non-IFRS Financial Measures and Other Items” for more
information.
The Australian Securities Exchange (ASX) Appendix 4C Quarterly
Cash Flow Report (“4C Cash Flow Report”) is scheduled to be filed
with ASX during the week commencing 27 April 2020.
“We are pleased with the continued growth trajectory of the
RECELL System during the last quarter,” said Dr. Mike Perry, AVITA
Medical’s Chief Executive Officer. “The onset of COVID-19 has
created challenges for society in general, so it is pleasing to see
that the unique benefits of the RECELL System, including reducing
the length of stay for burn patients, are still being well
received. While it is difficult to predict the medium- to long-term
implications of the pandemic, we are committed to preserving the
safety, health, and wellbeing of our employees, customers, and the
burn patients we serve and are well capitalized to do so. We are
operating in alignment with the guidelines of the World Health
Organization, Centers for Disease Control, and local agencies, and
our priority is to make sure the RECELL System is readily available
for the treatment of burn patients. We expect the current
environment will negatively impact the pace of enrollment of our
investigational studies, and so we are continuing to adapt our
practices and policies in line with daily developments.”
Operating Update Related to the COVID-19 Pandemic
With governments launching unprecedented public-health and
economic responses to the expanding COVID-19 pandemic, we provide
the following overview of the operating measures that we have
implemented in the communities in which we operate:
- Comprehensive work from home procedures, together with social
distancing protocols, have been adopted across the majority of our
organization.
- Employees are largely utilizing company supplied digital and
audio means to support the ongoing needs of the business.
- Manufacturing continues with relevant protective measures to
ensure continuity of supply of the RECELL System for patients
suffering from acute thermal burns.
- Travel is limited to essential travel, meaning it is only
permitted to the extent it is strictly required for patient safety
or emergent case support.
- The broader business is tightly focused on existing activities
pending the relaxation or cessation of movement and related social
restrictions. In this context, the Company is managing expenses
appropriately.
Developments in relation to COVID-19 are a day-by-day
proposition that the Company monitors closely, and it will adapt
its practices and policies in line with those changes. The Company
provides the following information and guidance in relation to the
potential impact of COVID-19 on its business:
- The Company is deeply committed to its employees and patients
and is focused on ensuring that the RECELL System is continuously
available, as needed.
- The Company believes it has enough supplies of raw materials to
support expected demand throughout the balance of this calendar
year and has additional raw materials and access to service
providers (i.e. sterilization) to support demand into 2021.
- The Company does not presently expect any disruptions to its
supply chain or distribution network.
- To ensure continuity of supply, the Company has arranged for
RECELL System inventory to be stored at various locations outside
of our Ventura manufacturing facility.
- Burn procedures are not elective and cannot be deferred.
- Severe burn patients face serious health complications
requiring immediate treatment and hospitalization, including within
intensive care units (ICUs).
- The incidence of burn procedures is “lumpy” and subject to
multiple extrinsic and unpredictable conditions. The onset of
COVID-19 has not changed that dynamic.
- Through the date of this report, there has been no substantial
change in ordering habits of our hospitals.
- Healthcare institutions across the United States have
implemented various restrictions, and together with our own
COVID-19 protocols, we therefore have dramatically reduced
face-to-face experience with our existing, new and potential
customers. In the majority of territories, our clinical and
commercial support employees are no longer providing live case
support at the hospitals.
- Our commercial team is leveraging digital tools to sustain our
business, preserve relationships, and support continued excellent
results for burn patients.
- Our RECELL System super users are more clinically experienced,
and therefore more independent, than our newer users for whom we
are deploying additional coaching, training, and assistance.
- Our field force continues to support cases and provide training
virtually. For example, our case support staff are already
successfully using online channels to provide virtual support for
surgeons treating patients with the RECELL System (as needed).
- The Company will continue to target new account initiations
throughout the course of 2020; however, the rate of progression is
likely to be impaired by the current operating environment.
- With COVID-19 protocols in place and limited onsite hospital
presence for our personnel, it is possible that new account
acquisition and new user uptake may be delayed or more graduated
than would otherwise be the case.
- The cancellation of various professional meetings (e.g. the
2020 Annual American Burn Association Meeting in March) is
disappointing and provides more limited access to existing and new
customers than previously anticipated. The Company continues to
pursue its communications and related strategies for abstracts,
posters, and publications.
- Investigational studies within the United States are largely
being de-prioritized by hospitals and sponsors in order to not
distract critical resources away from patients requiring COVID-19
treatment. While some of the Company’s study sites continue to
search for patients to enroll, the Company largely expects there to
be a pause in enrollment and site roll-out until the COVID-19
pandemic improves.
- The Company is well-capitalized and does not currently require
additional funding.
Corporate Presentation
An updated corporate presentation will also be available on the
Company’s website later today.
Authorized for release by the Chief Executive Officer of Avita
Medical Limited.
Non-IFRS Financial Measures and Other Items
The foregoing information and estimates are preliminary in
nature and are subject to revision as we prepare our 4C Cash Flow
Report and other disclosures as of and for the three months ended
31 March 2020, including all disclosures required by ASX Listing
Rules. Because we have not completed our normal quarterly closing
and review procedures for the three months ended 31 March 2020, and
subsequent events may occur that require material adjustments to
these results, the final results and other disclosures for this
period may differ materially from these estimates. These estimates
should not be viewed as a substitute for the full disclosure of our
4C Cash Flow Report. These estimated results of operations should
be read together with subsequent filings and announcements,
including any subsequent press release announcing the Company’s
earnings for the quarter ended 31 March 2020.
Non-IFRS Financial Measures and Other Items
We use the following measures of financial performance which are
not presented in accordance with IFRS:
- "U.S. RECELL Sales," which is the amount of revenue,
denominated in United States dollars, we generate from our
commercial efforts in relation to the sale of RECELL Systems within
the United States. Management believes that this measurement is
useful for comparing period to period sales performance, and
product acceptance, of the Company’s lead product, the RECELL
System, within the United States burn market.
U.S. RECELL Sales is a non-GAAP financial measure used by
management in evaluating sales performance, and product acceptance,
within the United States and for the purposes of making strategic
decisions. Management believes that the presentation of U.S. RECELL
Sales provides useful information to investors regarding our
revenue results because they assist both investors and management
in analyzing and benchmarking the performance and value of our
business. U.S. RECELL Sales provides indicators of product
performance that are not affected by currency fluctuations.
Accordingly, management believes that this measurement is useful
for comparing general sales performance from period to period in
the Company’s largest market.
ABOUT AVITA MEDICAL LIMITED
AVITA Medical is a regenerative medicine company with a
technology platform positioned to address unmet medical needs in
burns, chronic wounds, and aesthetics indications. AVITA Medical’s
patented and proprietary collection and application technology
provides innovative treatment solutions derived from the
regenerative properties of a patient’s own skin. The medical
devices work by preparing a REGENERATIVE EPIDERMAL SUSPENSION
(RES®), an autologous suspension comprised of the patient’s skin
cells necessary to regenerate natural healthy epidermis. This
autologous suspension is then sprayed onto the areas of the patient
requiring treatment.
AVITA Medical’s first U.S. product, the RECELL® System, was
approved by the U.S. Food and Drug Administration (FDA) in
September 2018. The RECELL System is indicated for use in the
treatment of acute thermal burns in patients 18 years and older.
The RECELL System is used to prepare Spray-On Skin™ Cells using a
small amount of a patient’s own skin, providing a new way to treat
severe burns, while significantly reducing the amount of donor skin
required. The RECELL System is designed to be used at the point of
care alone or in combination with autografts depending on the depth
of the burn injury. Compelling data from randomized, controlled
clinical trials conducted at major U.S. burn centers and real-world
use in more than 8,000 patients globally, reinforce that the RECELL
System is a significant advancement over the current standard of
care for burn patients and offers benefits in clinical outcomes and
cost savings. Healthcare professionals should read the INSTRUCTIONS
FOR USE - RECELL® Autologous Cell Harvesting Device
(https://recellsystem.com/) for a full description of indications
for use and important safety information including
contraindications, warnings and precautions.
In international markets, our products are marketed under the
RECELL System brand to promote skin healing in a wide range of
applications including burns, chronic wounds and aesthetics. The
RECELL System is TGA-registered in Australia and received CE-mark
approval in Europe.
To learn more, visit www.avitamedical.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This letter includes forward-looking statements. These
forward-looking statements generally can be identified by the use
of words such as “anticipate,” “expect,” “intend,” “could,” “may,”
“will,” “believe,” “estimate,” “look forward,” “forecast,” “goal,”
“target,” “project,” “continue,” “outlook,” “guidance,” “future,”
other words of similar meaning and the use of future dates.
Forward-looking statements in this letter include, but are not
limited to, statements concerning, among other things, our ongoing
clinical trials and product development activities, regulatory
approval of our products, the potential for future growth in our
business, and our ability to achieve our key strategic, operational
and financial goal. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. Each
forward-looking statement contained in this letter is subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statement.
Applicable risks and uncertainties include, among others, the
timing of regulatory approvals of our products; physician
acceptance, endorsement, and use of our products; failure to
achieve the anticipated benefits from approval of our products; the
effect of regulatory actions; product liability claims; risks
associated with international operations and expansion; and other
business effects, including the effects of industry, economic or
political conditions outside of the company’s control. Investors
should not place considerable reliance on the forward-looking
statements contained in this letter. Investors are encouraged to
read our publicly available filings for a discussion of these and
other risks and uncertainties. The forward-looking statements in
this letter speak only as of the date of this release, and we
undertake no obligation to update or revise any of these
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20200406005217/en/
U.S. Media Sam Brown, Inc. Christy Curran Phone +1
615 414 8668 christycurran@sambrown.com
O.U.S. Media Monsoon Communications Rudi Michelson
Phone +61 (0)3 9620 3333 Mobile +61 (0)411 402 737
rudim@monsoon.com.au
Investors: Westwicke Partners Caroline Corner
Phone +1 415 314 1725 caroline.corner@westwicke.com
AVITA Medical Ltd David McIntyre Chief Financial Officer
Phone +1 661 367 9178 dmcintyre@avitamedical.com
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