Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AVITA Medical Inc (AVHHL, Financial) achieved a 29% increase in commercial revenue, reaching $19.5 million in Q3 2024.
- The company successfully transitioned approximately 75% of its revenue base to the RECELL GO platform within four months of FDA approval.
- RECELL GO is expected to double AVITA Medical Inc (AVHHL)'s market share in the burn market over time.
- The introduction of Cohealyx, a collagen-based dermal matrix, is anticipated to enhance market penetration and competitive position.
- AVITA Medical Inc (AVHHL) is on track to reach cash flow breakeven and GAAP profitability by Q3 2025 without significant organizational growth.
Negative Points
- The company fell short of its initial expectations for new account conversions, achieving 23 instead of the anticipated 40 to 50.
- Operating expenses increased significantly to $30.2 million from $21.1 million in the same period in 2023.
- The CE mark approval process for RECELL GO in Europe and Australia is taking longer than anticipated, now expected by Q1 2025.
- Net loss for the third quarter was $16.2 million, compared to a net loss of $8.7 million in the same period in 2023.
- Cash, cash equivalents, and marketable securities decreased to $44.4 million as of September 30, 2024, from $89.1 million as of December 31, 2023.
Q & A Highlights
Q: Can you provide insights into the VAC process and how it affects your new account approvals?
A: James Corbett, CEO: We focused on accelerating the conversion to the RECELL GO platform, which didn't require VAC approval for most hospitals. However, in the full-thickness segment, VACs often request evaluation cases, which has extended the process. We've adapted by being more proactive in preparing for these evaluations.
Q: How do you evaluate the performance of your sales team and leadership in driving long-term growth?
A: James Corbett, CEO: The sales team is performing well, evidenced by a 29.6% consecutive quarter growth. The new sales leadership is executing effectively, and we expect continued strong performance in Q4.
Q: What is the expected adoption curve for RECELL GO Mini in 2025?
A: James Corbett, CEO: RECELL GO Mini is designed for smaller wounds and will likely see quicker adoption as it better matches the size of the wound to the device. We expect it to fill a gap in our market offering.
Q: How are you positioned to meet the expected demand increase in 2025?
A: James Corbett, CEO: We completed Project Phoenix, which expanded our manufacturing capacity by 10x. We are confident in our ability to meet demand without supply shortages, supported by increased engineering capabilities.
Q: How do you see corporate growth evolving over the next few quarters and into 2025?
A: James Corbett, CEO: We have multiple growth drivers, including RECELL GO, Mini, PermeaDerm, and Cohealyx. We expect significant growth opportunities, especially with our entry into the European and Australian markets, aiming for profitability by Q3 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
