- Avita Medical (AVH) reports a 14 per cent year-on-year decrease in net revenue to $7.5 million in the March quarter
- Despite this, commercial sales rose 61 per cent to $7.4 million, reflecting sales of its RECELL system which treats acute thermal burns
- The company reported increased spending across operating, sales, and admin and higher costs were driven by an increase in works and travel, training events and higher pre-commercialisation costs
- Positively, Avita’s RECELL received FDA approval as well as approval to market the system in Japan
- AVH shares are down 7.23 per cent at $1.61
Avita Medical (AVH) has reported a 14 per cent year-on-year decrease in net revenue to $7.5 million in the March quarter.
The healthcare stock reported $8.76 million in total revenue as of March 31, 2021, which was made up of $4.6 million in commercial sales and $4.1 million in in revenue related to the Biomedical Advanced Research and Development Authority (BARDA).
Avita’s revenue consists of sales of its RECELL system to hospitals and treatment centres, and to BARDA. The company also records service revenue for the emergency preparedness services it provides to BARDA.
Despite the dip in net revenues, Avita clocked in a 61 per cent year-on-year growth in commercial revenue to $7.4 million as of March 31, 2022. BARDA sales totalled just $93,000.
Like the prior corresponding period, Avita’s gross margin was 76 per cent which it said was lower than historical periods due to lower production and higher production costs at its Ventura facility.
The company reported increased spending with total operating expenses rising 21 per cent to $16 million, sales and marketing expenses increased 32 per cent to $4.8 million, and general and admin costs spiked 39 per cent to $7.5 million.
In saying that, research and development costs dropped 12 per cent to $3.6 million.
Higher costs were reportedly driven by an increase in works and travel, training events and higher pre-commercialisation costs which related to RECELL launches in soft tissue reconstruction and vitiligo.
Avita Medical achieved some key milestones during the recent quarter including receiving FDA approval for its RECELL Autogenous Cell Harvesting Device. The ‘ease-of-use’ device is designed to treat acute thermal burns and is expected to launch in the US in the June quarter.
In January, the regenerative medicine company also completed enrolling patients into a trial for the RECELL system for soft-tissue reconstruction. Data from the trial is expected in the second half of the year.
An important milestone followed in February when Avita received approval to market the RECELL system in Japan.
The approval from the Japan Pharmaceuticals and Medical Devices Agency means the RECELL system will be available in Japanese medical institutions and marks a “valuable opportunity” in the world’s second largest healthcare market.
As of March 31, 2022, the company had $95 million in cash and equivalents.
AVH shares were down 8.38 per cent to $1.59 at 3:37 pm AEST.