Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the AVITA Medical Inc.

First Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. advised conference be being Please Instructions] that is today’s recorded. [Operator

the not go to like would call ahead. to Please I Relations. turn over Investor Jessica Ekeberg,

Jessica Ekeberg

Thank quarter Medical’s you, to call. earnings first operator. Welcome XXXX AVITA

Forward-Looking results Act unknown let guarantees begin, actual and promises could differ the that will meaning remind Before risks These from that any Statements Litigation statements cause we the Reform me within Securities nor and and XXXX. materially this uncertainties involve you expressed the to call known include of implied or Private forward-looking neither of are statement. expectations by

Please statements within with the Form provided are based during review additional expectations March SEC, described the recent for for factors ended this of year call, risk AVITA Medical’s management’s today. XX-Q XX, on most forward-looking specifically as Any filings XXXX the information.

on XXXX AVITA is will Investors A Medical’s recording results of under Pacific available on available by first release call the for website, www.avitamedical.com Time today. section. website press today’s X:XX PM quarter its be

Joining Jim Ekins, me Executive Officer. Chief are Corbett, call Chief Financial Sean Acting and Officer; today’s on

turn now comments. Jim for will I call over the to his

James Corbett

the today’s Thank by joining us opening call provide more begin Good our performance you discussing on thank financial for on you, I to by before will the highlights Sean afternoon Jessica. today. an followed will then everyone and first Q&A. of update priorities. quarter, call XXXX detailed commentary

commercial quarter increase We XXXX. of started over in the period with million, revenue same which year first solid a the a XX.X is XX% with

be between million. and we which quarter midpoint expected More to guidance, $XX hit our first million the importantly, of $XX was

year will which the later keeps call. on discuss our of revenue significant growth, to I This us track in deliver

of includes and all quarter. reminder, BARDA global a $XXX,XXX revenue As recognized in revenue the the commercial excludes revenue

two revenue of U.S. foreign commercial components, comprised and revenue. is revenue Our

on this foreign drivers the line mentioned later call. Sean of in revenue revenue the represents of revenue calls, majority will prior Japan As item. detail

to American the burn Meeting and week. discover, and advance as is providers Association professionals and position burn care expand develop the at RECELL scientific This to data RECELL X,XXX by the This more We upcoming share, utilization services Annual standard-of-care. Burn related and products, than care presence continue to evidenced significant field. mobilizes to forum of next our

We presentations poster are five pleased this have to some meeting, three of at podium you unique and to the presentations and see there. year hope

Debbie Avita Additionally, of Vice and the I’m Sales; Senior commercial appointments as Medical Terry Vice as and Debbie announce last to of Global led Bromley President Senior President our the having of of are Gardner veterans Terry and U.S. Marketing thrilled Strategy. Global five-years. efforts

Debbie Both me. report Terry and to will directly

build you to earnings company. I her may would held like Erin efforts for read a our We role Liberto and business, and dedication an behalf a organization. thank Avita our best-in-class commercial to specifically to work have experienced to release, today’s team. On her with appreciate in privately Erin contributions accepted her of has As Medical,

with the expectations our transform XXXX our applications track believe With of June respect remain tissue we FDA, on two our our repair supplement expand on and Moving approvals. to and PMA our application trajectory. soft growth our for will business which affirm for to priorities, PMA we Vitiligo, pending and

acute repair, With for PMA infrastructure wounds we our meaningfully the and tissue supplement broaden pending business. leverage existing soft will our

the the reimbursement same As as a reminder, uses codes soft burns. tissue indication

outpatient both immediately ADRG reimbursement in-hospital through have code and for soft transitional tissue reimbursement indications. through will access pass-through FDA to approval Thus, upon a

repair. in injuries. these approval to immediate already approximately label either U.S. Center tissue Burn those XXX,XXX XXX expanded access VAC have are Since more facilities level or FDA centers, level Additionally, treat X partners, of approved upon nearly half centers, trauma or tissue the X our are which of soft will soft we

opportunity. and tissue we announced process. and field initiated soft the the expansion expansion our sales recruiting first the the plan Last quarter, became our hiring maximize of organization. quarter, we In U.S. To

are pleased We our extremely with recruitment efforts.

to As we of and to fill the were today, of we three left only seeking positions that over ahead of XX are add. schedule have

are with the and underway so we This is tissue our PMA in two Further, trained in from the launch. which process. reorganized expanded for and regions, we repair the to expected Additionally, onboarding place team June the that training supplement eight. been at done has regions soft of sales front

operating breakeven exceeds will individual. emphasize resale is as a direct XXXX.However, XX sold this QX percent peak rep month. field average I the five a sales kits sales kits Currently, a As revenue in per new result noted per in our margin with of on expense approximately last productivity per quarter, professional that a contribution month of

is This quickly. weaponizing enhance call our I the gross market itself adoption to penetration for for salesforce and what profit pays

commercial Given full approval. a XXXX, this on maintain update, Xst, we of expectation launch assuming June of our soft July tissue

of the use in-office of to reimbursement in process For allow the are Vitiligo pursuing indication, RECELL. we for

on our mentioned As goal secure reimbursement XXXX. call, by last is to our it

sponsored and period, our the we Vitiligo studies pay implementing cash interim During podium will presence. build physician to for be patients

Last is RECELL the Now confirmed designation evolution update of of RECELL automate the acute of designed breakthrough now month, technology represents disaggregation. as FDA an process to treatment existing Maintains GO. on this GO for device branded and device the cell wounds. RECELL our we that the automation device. an

substantially reduced more disaggregation time will cell training effectively. the requirements, Automating to allowing us selling process leverage

year. we accelerate training staff to will submit plan by leading and this of We it application supplement to will it burden to GO the perform manually required growth. greatly by the operating June believe and XX PMA of is disaggregation, our a to of physicians component our critical FDA adoption. additional RECELL platform room increased Additionally, ease our

device Under program, January with review the prioritized interactive XXXX breakthrough will submission the expected receive approval. an

reflects care. our patient commitment continued Our dedication to innovation GO to RECELL further in

this over the At year. we second With between respect over we XXXX, guidance, of XXXX be be $XX.X million quarter revenues midpoint up for expect guidance, and to prior to of commercial the would $XX.X million. XX%

revenue continue our delivering on which $XX $XX XX% million, XXXX of XXXX.In XXXX strong guidance, priorities to results. million and maintain be execute annual guidance We committed midpoint to to remain at would closing, of growth over our we

With Acting would that, Chief Ekins, call over the Financial Officer. turn to to like I Sean

Sean Ekins

as In revenues excludes you, March within Thank a commercial is in driven XX.X BARDA penetration, increased procedures. three-months to Jim. smaller which in XX% same by well period revenue XXXX. burn to by increase our The largely usage the million broader particularly XXXX, ended as XX, commercial revenue compared X.X deeper million surgeon in

X.X same Total period of by compared increased BARDA includes XXXX. in Along commencement commercial with revenue sales XX% our million the the which partner XX.X revenue million Japan. to COSMOTEC and with to

Gross reimbursed XXXX. tissue BARDA margin X% in as in trial decreased trial completed visits period compared clinical participants current income expenditures, XX%, to the to in by period decreased compared XXXX. as fall pediatric XX% in to same increased profit soft the largely

in and in largely to increased million in expenses production by is the same quarter XXXX. XX% shipping the to for increase profit margin Total XX XX.X driven costs. The lower operating million period compared gross increased by

FDA ongoing costs Increase operating research salaries submission expenses attributable development involvement, GO device the XXXX. in planned selling result severance is for a RECELL expenses were and to of in June and the development of research and Higher expenses. increased benefits,

with liaisons the Salaries commercial a increased medical, July ahead higher our of of tissue Additionally, XXXX. deployment our we team soft associated of in sales with to benefits science costs of strategic concurrently and expand the anticipation launch. tissue our in had plan force launch soft

the officers. XXXX. As sales of In of that team revenue Jim result severance our related expenses QX percentage will expansion additional a noted, in will executive incurred to costs the quarter, former as force operating in two peak we

$X.XX selling to our of to per a to Lastly, net loss X% costs included period in revenues. XX.X stayed loss commissions same Adjusted driven per flat A higher non-gap compared share in today’s are X.X for at by measures release the decreased reference. of increase or million attributable million. press EBITDA Net in share by XXXX. is loss or table reconciling $X.XX X.X million in the

an as bank did of a failure. Bank. to to loss commercial with established regards Silicon we Bank relationship bank result any banking of former encounter of I the cash new update our Lastly, you wanted commercial with assets or a Valley in We not Subsequently, provide America.

thank your operator for now questions. the we back turn you time, to and your for the that, call will I With

Operator

Cowen. you. Thank question from Jennings TD comes from Joshua first And our Instructions] [Operator

Your now open. line is

Joshua Jennings

year. you. thank a Thanks Sean was notably process so quickly? Sales Hi are the is last reps by on Jim signal signal. talk just a validating the I on and bit where is impressed and you think quality validating reps, the like this rapid hiring the one, to the do earnings coming call, the have about finger you strong it opportunities. about, the congrats those to It fill from start positions on positions. pulse for a Can of it their all talked of we but filling they think I

have guidance And XXXX by think your in and of should potential up, don’t access I market forward follow-up. I’m effort then one terms have reps the of to XXXX? burn you three, XX% or currently pull in of anything the impactful are that of Does about where And the just in this situated. that terms in opening that we more

James Corbett

Josh. Thanks

single we your the in enthusiastic companies, from role. we reps, other candidates first had wound question, typical of from and for actually came First all, to multiple the profile had terms technology very every of the market quality in of and a response some the surgical

had lot work very of a time. compact we So, a in do to

going the that you reps us. growth go it is in what So, see the was and quality is I to where they the because think exciting point like want see reps be, with to out really to good the of

So validating. that was very

and those then schedule, since the team is of respect centers have to them we a train bit put ahead to and they we to that it in early we will, start process. this making to been order tangible little we such calls calls trauma those start although, as have With way, to now project that able terms bit organized I us been level in XX%, for access them to getting them those they one started of have make we able - to VAC a at our have have the hired market a think burns

the it think to in get reasonable assumption as projections. third is And that a soon so I it ready. momentum, as our a cases aren’t quarter. those we early, will to add therefore is we bit as And of that But quite projection capture some we little will start

Joshua Jennings

has in just premium pricing for associated margin or Then filing with remind of us all timelines benefit RECELL the questions. confidence taking of the Thanks gross your just and GO, seems about the are mean, for with for program the again two, I one. upcoming terms but you ever fully like GO. that it de-risked the FDA, there de-risked. can that. Thanks - then And fully RECELL been is fully, almost on just talk Nothing

James Corbett

Yes, questions. a really of good it is set

we that in inside a uses be weeks how cycle will to are There instruments so expect. in cycles, from approximately, terms with testing room the able running validate instrument time can many GO filled So we six I really not so somewhere RECELL disclose is we final filing validation of per that phase. the are will we

the give be will I when really With framed. some you, be respect give think understand should you because will to I different it financial should this, I how financial about outcome you to them think the really to way what elements - here,

the to We be the disposable, think last current GO instrument. cassette project about $X,XXX XXX the us cost itself, RECELL instrument to uses. going The replacing RECELL that a be but approximately device, it that so will will $X,XXX is we will make

profit. just $XXXX you a to about quick if the would product with is you math, come on gross do that little an per $XX And XX% a use conclusion

to approximately thing it conclusion each come So you revenue the $X is time million. place lifetime the next is we would one, that is

adoption So will make to is And use RECELL game more that patients. of to the customers the on the and for more for here benefit. way I revenue think the name easy to focus model is

fixed half In so of year’s overhead. profit gross XX%, is about our terms gross it profit of the margin of think this half for last that approximately our way, model, cost

more that, we and will will cost our over next year the double XX%. So do when we or volume fall

will XX% to higher. So something go materially

enabler way. So as RECELL GO lives of patients in the and treated get we a the with more enabler the see live of helping productive enabler their adoption, of and more RECELL greater profitability,

Joshua Jennings

That for details. appreciate all is thanks great, the it. I

Operator

question comes our Sandler. from O’Brien Thank next And Piper from you. Matthew

line now Your open. is

Phillip Dantoin

and quarter for Hi is on taking questions. on this our Phil Matt. the Congrats thanks for

getting further bit touch the soft update there? for process on guidance off, Just might starters, much can Japan is any expansion on And but you I in a label contribution bit how - Japan a be into baked from started understand how this here? Vitiligo tissue into for

James Corbett

questions. set Great of

selling with that Japan haven’t in we we carved see now. said, consecutive you can them guidance specific quarters are yet. That out So to

we going We negotiating are a Japanese are X. fiscal process April most them where is this through with year businesses for

contract the in performance now. rather the original negotiated will more loosely to create business We years and them only in guidance that us parameters. working of a ago transparent the framed forward be lot was model, we you. terms us, And provide which burns of are process was of expressing dependable do to with have our therefore allow where And to to

have that FDA We audits experienced sent the can thing delivering modules to them the predict them data. from Vitiligo. timing repair be we when - first to and already from you Vitiligo almost the soft dates when that we so and And for we and clinical have scrub completed, will the tissue wanted the because only that we

It by FDA. would data basically adjudicated be

there So next to that a to do XX-days. schedule XX is underway the within

Following projected date. that will be filing their

when certainly be will which So be that guidance. we have sometime we third that will in providing quarter,

Phillip Dantoin

so Vitiligo. Thanks a just And things to here helpful. end two Super on parter much.

And the you pay more can market Thank to expectations you the is, so can and XXXX? cash with on post RECELL GO of post then part that your initiate are what in June for market approval, First, detail path conversation approval when second into go cash the the the coverage much. and CMS? you pay then January

James Corbett

Yes.

actually post going quite be the provide reimbursement. both won’t in Most enough until post are to RECELL and cash So GO guidance think have I modest, that we we to expectations approval them. cases,

One AMA that and through has are the is is reason CMS. it. And other is we private two through through what reimbursement. The preparing for payers. associated reimbursement And the is phases with

give expectation in office as So you process, will will XXXX is we I highlight we are coverage faced treatment are for when about why things. a just we and a payment for have little couple different of that to with projecting you Vitiligo

how our So with going, is bound it by part interest that their process respect confidentiality to And requirement, it are AMA actually, ours, in about is course, speak that. not to of we but CPT theirs. process, is that is to of because respect

CMS getting the with although beneficiary will on average about said, old person. will That Vitiligo XX-year treated important, who be be payment a

that the will the most. policy of is coverage private it So payers matter

the we we a health complete And we the are that perceived planned can view. the from they where will a experience really timeframe. ready That have for from think particularly these commencing medically and because post-market Vitiligo benefits impact private who and that study suffering lie understand the cost with that that quality is help will of we life disfigurement health disfigurement patients associated have and that it payers of point the benefits from of are

said, because control. through safe. patient the So as That - did we Vitiligo our steps their the is it track and, works on is the and same got FDA go as some we to is but the - approval it are use

study their is that post-market will partially part so patient not it we implementing that are with RECELL another Vitiligo on treated with body why GO Is helpful? part being control. with And the the where be and of the

Phillip Dantoin

Yep.

Operator

you. [Operator our question Thank Ryan And BTIG. from Instructions] from Zimmerman comes next

Your is now line open.

Ryan Zimmerman

just Hope couple well you a as to follow-up want well. on are questions I here. doing guys

ER that in is are same term think GO, separate back near moving you of And that as revenue think today? within cetera, kind and using as population is trauma about asked to of are and burden move, it about first think the thinking soft require of context into the that kind just those just it will surgeons year. I market separate facilities soft trauma tissue the physician do the my today more we physicians, of ramp soft So, in the existing et the of you you trained half question or RECELL the surgeons, the tissue training burn in about we tissue

James Corbett

Okay.

the we Let it terms In to answer. their break shot cases good right now, are pieces other that counts question agreeing function time in handling and who try I’m will so in not the to to more get me trained. be trauma up give burn also a of in your going need part clearly that of to a I surgeons are they there because

same those level that treat in trauma one are are centers who trauma, There not do surgeons burns.

come, We case. but ER helpful are the will will it be because places to very need be patients staff some where there that train them, to will these easier will in RECELL using in to be accustomed train staff who and and

that I is think right? is questions, of one your that what

Ryan Zimmerman

is That That right Jim. is helpful. very exactly

James Corbett

Okay. to injuries. to will surgeon trauma, exclusive be And is of TBSA trauma where often, generally we but one surgeon, but burn treats going smaller an the we hospitals usually go course, them when level not

trained. to ramped And is that will than processes one train in provide is and And field those support our that and need able are physicians of we very sales to more they case are be up of physician a to organization, the real-time. a new, double training. certification support That

actually are that. they doing So

accounts have veteran trained, and cases. as an part the and the We taught, of with buddy our where of be are opportunity parts one presently to of training a RECELL coached, actually get case new will both week program where a in and travel we support the team more our one already of reps the performing

our field we the provides. that So value team support

high company quite They for but marks was another surgeons And from these And our with. it us. blinded was burn on field and other it recently and XX, standards got sales only interviews. didn’t I know did team, by that away - another the the such high. far purpose So interact a we of survey any were they

we standard keep. one is to that intend So

Ryan Zimmerman

either the variability kind but treated stability and today. your my your burns and think of for composition the given of as that of second quarter burn? understand or in And great what are the how the inpatient year, you you to just into And between question, dovetails result the Well, is view a today, the the for next it guidance about of outpatient the - kind sharing, of burn the market burn of If sense of hear. the market. is what to state just comfortable is trying versus

it because Just change can rapidly. so

James Corbett

let me Well see.

is questions. First it of a all, different couple

part a make from Let me want them. to One, I I break again. answer sure

we claims - data We of actual of admits volatility own we the and fact, have we get we in monitor and burns In admits. not the buy experience nationally. the see course our do

it at quite accounts And is That are our steady, consistent line. this increasing we quite notwithstanding moment, right. adding not sales

We our one now and the redesign new pointing centers, sales new just targeted trauma. been always have burn just our our towards at only territories and level team

burns quite evidence the of standards, in which that there them, There But they steady seasonality be is significant no decrease. seem consistent. are about the market. It a and quite is is a nor increase is to XX% burn no of significant

and start of little an we looking in will one to be have applications, today. we amount I in sewing harder of when we forward, burns, are then as will to think capture precisely which getting one a opportunity used So RECELL us bit that increasing burn’s it where trauma get access center for be will a level we many

answer I to full about your or trying not. whether think I’m got And

ask. to feel free So

Ryan Zimmerman

just multi of I kind and evening. composition great. you open No, and business kind that apologize this the today questions flowing the maybe of as part that the other how and market? is of between question the inpatient up is the for outpatient, ebbing just was But

James Corbett

Yes.

material very transitional not a We, is burn outpatient. big it do outpatient go the that fact, for the I There much wouldn’t have burns code call the the centers interesting course, of severe in pass our actually, through more of But to get in asked a question. You it a business today. - activity. use of isn’t part

you go we in a second is - you really because burn, a to expect that outpatient get center. that said, sense, you one you the and if at fully X up trauma level centers burns, bad are a center burn less, get increase a degree in activity That trauma smaller to perhaps those that that burn, end significantly a level

soft burns of where the that I we will course, tissue lot go So think But too. for that a of the outpatient increase. is cases also see will

Ryan Zimmerman

very Jim. is That the Yes. helpful, appreciate And help.

James Corbett

a bit to be little difficult for It reason. count that will

Ryan Zimmerman

Thank understood. you. Yes, Yes.

James Corbett

welcome. Most

Operator

And questions. call. you. no conference further concludes you thank showing This And participating, Thank and today’s disconnect. now you may I’m for

AVITA Medical (RCEL) 11 May 232023 Q1 Earnings call transcript