RCEL - Earnings call transcript Q3 2024

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Operator

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

Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Jessica Ekeberg. ahead. go Please

Jessica Ekeberg

Welcome Call. operator. Medical's Quarter Third Thank to Earnings XXXX you, AVITA

Joining Corbett, release are and call www.avitamedical.com me today's on Relations Investor Jim available our Chief section. Officer. under the are David Financial Chief Today's presentation earnings and on website, O'Toole, Officer; Executive

involve provided implied or this call on These nor the based begin, Litigation expectations for Private expressed his most I'd this Reform remind and statements descriptions within promises statements over call recent as statements. known Act with management's you to I will for Jim we forward-looking of and and to the could by call expectations XXXX. comments. are risks Securities statements guarantees, neither Please actual the Before cause comprehensive that any review differ factors. our of now uncertainties during the like includes forward-looking to risk unknown turn of meaning are of SEC from materially the that the today. filings forward-looking results Any

James Corbett

and Thank everyone. Jessica, good afternoon, you,

breakthrough only by that revenue, but This a also with you expectations. further achieving quarter today. trajectory. QX. record in on you've our calls, strengthened I growth results am third AVITA surpassed XX%, If exceeded our share quarter previous revenue Medical. I'm quarter to our exceeding million was It about during passionate it our commercial not $XX.X especially been wasn't We second excited about incredible just know you

our doing allows care. foundation for In also to but This our this, support we for not move GO strategic GO to advancing accelerated possible immediate provide we more long-term critical our was transition RECELL patient to essentially fulfill to best on deliver while the to converting market revenue platform. our promise to treat patients reach. the This revenue To us strong growth, RECELL to business expand The quarter so, do our to lay and us scalability. continue growth only the focused initiatives. was

with a agility. execution of of let's FDA revenue the GO. had do this of is volumes speaks Moreover, end we about of operational Now milestone. team. XX% our that RECELL base our approximately This successfully just achievement to capabilities major a the our within By X huge approval, managed we start to demonstrating September, transitioned months

commitment instrumental was revenue GO in million. projected QX Our helping to conversions $XX to revenue of us hit range commercial driving growth, million $XX our RECELL guidance

number currently full the skin focus double for accounts initial XXX However, as full we in year will new capitalizing a focus to RECELL that accounts new that commonly GO features the for In is accounts burns The this for thickness defect key ago. burden new we now had XX our XX significantly process. during the thickness than trauma on easier are due and which make defects accounts analysis both across will accounts expectations is conversions its of versus XX bigger nearly more resulted process, the Further, approximately account to training defects, have that closing quarter. in XX reduce a VAC picture that the skin skin centers be full QX, the of committee thickness known value accounts. enhanced

us targets. growth these can QX, last between positioning close to With we our hit new the months, believe in the and groundwork laid accounts over we of XX few XX

over expect drive We revenue these several additional to next quarters. accounts the

RECELL Now let's account GO about why talk conversions. we fast-tracked

patient game delivers RECELL is before, time, healing. most GO shortens and significant workflow room a said As changer. time, reduces I've accelerates anesthesia efficiencies, It operating importantly,

benefits more business effectively as our experienced robust costs. our reducing For are while in These growth. hospitals, burn revenue this reflected third patients means treating quarter

gain us existing see efficiency. a both continued will we and focusing doubling both the estimate help ability expect burn but to Today, time that market, GO we on share hospital by clear patient market. adoption within to care of approximately the We optimize burn hold RECELL RECELL GO's new XX% share path and in which we that accounts, over

to turn our Let's portfolio. product

branded First, matrix play named let's discuss that critical our will in AVITA collagen-based growth have a which strategy. Medical Cohealyx, dermal we role our

Let H-E-A-L its for me a healing moment to out. HEAL, structure. its and C-O collagen, take helix Y-X spell for that triple for properties,

the cases FDA at planned end in additional was had submitted required was we the to fourth the begin of submission, Although quarter, September. preparation which for

XX-day as PermeaDerm implying We RECELL, plan by clearance comprehensive setting launch. not outcomes, also Cohealyx but for XXXX solution a full-thickness streamlines period, wounds the expect review care treatment only clinician We that together a and a use improves to experience. year-end, the for stage patient

on those participating please refer call, Slide to #X. the For

represented the providing Here, graft we closure autografting. treatment vascularized stage, area illustrate preparing the first for green generation wound use less RECELL graft the wound, compared full-thickness definitive skin a includes blue a delayed thickness meshed matrix skin plus which the RECELL, by promotes a tissue, by second with split the Cohealyx significantly a dermal a In light of with X-stage skin layer, the procedure. of split-thickness followed stage, using In the represents grafting. traditional in to

a how with later, a Using and the to thickness meshed transparent bed. first over the X,XXX expands Finally, to dressing demonstrating XX Approximately serves walk our layer, In the treatment stage, second be wound this solution typical the patient split the second and placed a management. wound, stage generated tissue. is slide, protection business moisture the is care days model. stage, area the revascularized course centimeters over purple our body of surface will XX% for through comprehensive optimized matrix square graft-ready, and and let's Cohealyx In X,XXX for XX% burn transforms the begins. graft PermeaDerm is of autograft RECELL, applied newly placed the a to as skin dermal X to wound total

cell of skin spray with RECELL suspension point the at prepares on clinician Next, GO the the care.

autograft. are meshed cells the spray Following on preparation, this the sprayed over skin

could centimeters protect Lastly, RECELL over to range to which site, applied comes PermeaDerm. then a PermeaDerm to of the wound X,XXX of X,XXX be square

the all, PermeaDerm would treatment use X application in kits, include X typically RECELL the application patient, to and this For of of Cohealyx. X of

patient, the apply For full-thickness defect this eligible skin comprehensive prices we price If current expands market in average addressable within alone, from potential. of to price creates not $XX,XXX the to only $XX,XXX the in estimated of in changes average solution and average business to selling our the a States. RECELL Equivalently, $XX,XXX to market the range selling This a the expands $X,XXX selling range XX,XXX this billion compared our also single RECELL market. PermeaDerm. market it dramatically model, manner cases but nearly United similar $X.X burn total this for

Cohealyx to our multiple In me take cost and other Using assessed consistently for including results ability to tissue compared model, The porcine and patient's close Cohealyx a matrix robust to preclinical controls treat. Let to work. moment take we had market. and take on integration profile, shorter competitors. lower to healing hospital benefits early into translates our the vascularized the generate graft against preclinical the high stays into and time graft quickly products to with time graft a validated significant skin Cohealyx faster and demonstrated wound, share findings, skin integration skin

evaluated treatment split Cohealyx to FDA this support skin procedure, clinical a to in study in health Following plan to impact will of available standard economic be followed RECELL dermal evaluate graft compared by Clinical wounds, the matrices. we preclinical care. of which initiate will work. full-thickness commercially with plus clearance a Cohealyx, is a study X-stage thickness This and post-market current other

first quarter We expect to the begin of in study XXXX. enrollment in this

While our strengthen will first of the competitive full-thickness market borne to penetration and will be tied our market well be position there XXXX. the in enhance study, those believe half expenses skin We Cohealyx defect burn as meaningfully will market. as during expenses the principally the

centimeters Designed for standard to to allowing treat offering our to GO up the Moving square wounds in X,XXX smaller compared expand gap square wounds on by a Mini. us market reach. RECELL Mini RECELL to kits centimeters, fills and RECELL our XXX GO

RECELL and modified device to these the track year-end a approval expected with but for skin remains and by launch early as a RECELL the less X multi-use standard components. enzymes optimized reminder, a uses wells on cartridge in GO smaller As hold requiring for grafts, with device Mini XXXX. This buffer processing featuring GO, same disposable

Turning to an update on our international expansion.

are good on We our efforts. making progress

XX agreements distribution third-party countries. cover The

expected the in mark CE We September.

Europe However, offer RECELL receive as solution to these and body This longer is to process taking in the Australia regions. CE approval an strategy with XXXX, GO allowing expect our innovative QX our notified in We wound care XXXX. for aligns bring to expansion than GO RECELL now by us to mark anticipated.

to while effort possible made policy have publication the we XXXX. quarter, continue for last to The will vitiligo. outcomes me the been the we Before major an we has in strides activity from terms expect these of on I'm delivering have that and year. capitalize we momentum, that end remarkable journal and payer by let a publications, and economic on outcomes patients. sponsored has confident the get summary, we provide In study submitted of clinicians to this From summary, our study the health to this coverage all TONE update for as will begin best both during

new to now broad AVITA to standards and needs, David Medical transform care. turn the call performance. to As wound provide position a that, poised of I'll to address are a care continuum able financial company care we our set details With as of we on wound more over

David OToole

and success echo that Jim. have next third reach for achievement significant representing outpacing organization growth. us. third over to the which significantly later months. revenue signaled, quarter on path our greater of million, even no year-over-year Jim's you, $XX.X second commercial growing enthusiasm. previously XX% GAAP clarity of flow of our fantastic by revenue We the XX% a profitability I XXXX, was we cash This to built strong to breakeven our the all want deliver quarter quarter, Thank than to quarter XX without performance XX to brings This

revenue X, As you operations. RECELL growth our on and strong the for the have Slide GO reflects operational built we within demand see can commercial our efficiencies

positive into trajectory XXXX and beyond. We this to expect continue

the majority drives substantial currently of and anticipate RECELL PermeaDerm revenue, will over become Cohealyx our we that contributors coming the quarters. While revenue

XXXX. XX.X% financial results cartridge. to me The expected GO of to Gross let our profit XX.X%, the durable ongoing quarter margin RECELL some decrease same was due turn validation the the Now engineering details. was and from of provide for period down slightly in and disposable to

be benefits, in operations. $X.X sales commissions million of XXXX. result increase expense first and severance benefits collectively the to to million to operating G&A in compensation, expenses was an as operating expenses our is in our of will the commercial increased the XXXX, gross year XX% $XX.X salaries temporary, period employee-related anticipate in commercial compared of salaries quarter growing the for and $X.X other support increase Total full an $XX.X of in that and and a offset profit expenses. this due decline professional in for The were organization same benefits XXXX. and million and expenses in costs, stock primarily this by However, again, including quarter the travel expenses to quarter sales decrease of second and a attributable result margin increase by as of in marketing of expansion the corporate partially and million in a year higher range we XX% the to fees,

share of in team. $X by to million and compensation costs due for of million million the current decreased in $X.X an consists for Other liaison the and to expense the offset of activities. warrant quarter a to $X.X period loss in $X income loss million primarily in same investing the basic $X.X was of was employee related third medical charges in by expense increased value changes respectively, $XX.X loss of of to debt noncash the basic Other by $X.X diluted R&D million diluted million, the $X.XX fair $X.XX million a science expense income our quarter income prior loss of costs from per which liability, income $X.X $X.X quarter. million period or of the XXXX. and our related million Additionally, Net in to of compared per and share a net or

single-digit equivalents cash to cash, of had marked XX, Note cash millions. million that commercial of lowest $XX.X December million XXXX. in QX during of as at compared our net we XX, expansion September high securities use of of coming phase marketable and this $XX.X the As

We with move decreasing use QX expect the single-digit overall XXXX. in millions continue in the second to this trend low towards free as to of cash cash generating flow we half of

facility. credit OrbiMed our to briefly Turning

the of facility. credit additional available indicated, draw down plan X previously the did we to As under either $XX not million tranches

tranches, agreement tranches. OrbiMed revenue OrbiMed set up covenants covenant for draw agreed As the to in trailing those at XX-month resulted $XX quarter, for The such, amend Under return, quarters $XX.X the we initiated of the a we which the the In million. XX-month terms credit discussions amendment, remain two in facility. our been to $XX formally effect terminate the the gave XXXX to with mutual which set right first with to covenant remove quarter had revenue revenue fourth at million. trailing subsequent million

guidance that range aligns ahead, XXXX, XX% with the $XX.X XXXX third adoption sequential the I well GO, to as back $XX.X XX% us With operator million. This over launches compared for of million $XX will for we turn for $XX previously Cohealyx revenue to will of in of set value and Mini, and create our Looking to we to annual range financial growth that, XX% the PermeaDerm RECELL In are of million, approximately your closing, fourth QX of deliver lasting to GO revenue the combined for questions. call million confident strong the the RECELL with quarter to commercial XX% growth to shareholders. XXXX. expect results the our allow upcoming quarter, of and success representing be the of as expanded to

Operator

O'Neil [Operator line Markets. of Our Capital comes Instructions] Lake question from the Street first Brooks of

Brooks O'Neil

say and you can accelerate in you the any a I your what in bit success the guess process seeing you I expectations in you you're new ask terms us VACs? approvals the But about general, up VAC. in whether way I you heard to of you're through this color wanted give came quarter. to with of some about what and adapt experience first hospitals short to seeing plan

James Corbett

Brooks, from to good you. hear So,

I'll to we your answer were emphasizing here. your think little different. I something -- question get a

conversion for First, on RECELL any focused that. to of is GO hospital we made not a because for the accelerating the RECELL So, okay? pivot a approval purpose GO. that deliberately adoption, of the quarter platform during required And the our driver one only VAC we

just factor. in looking was that the We an segment, we years, So, or a VACs nearly context, a are that find not in a evaluation it somewhere X.XX in been is VAC reflection full-thickness back now not see do wanting more. finding every which in -- the VAC about upon was process, has the to case over case, the

have And the and whole of at the so, when longer fact. that taken we anticipated get year at process quarter us driver it's we of the why VACs ago, in a beginning general than a

adapted about eventuality. that. we've that prepared We've more proactive so, been And for now being to

vaccination, doing form see. a So, some it in some precondition they're or in follow-up want a either a procedures to conditional cases, to as another or they multiple approval a

actually a So, the sales fact we less expected that than was of time. deliberate we had choice

So, got in your I contextualized question I somewhere. there hope

Brooks O'Neil

helpful. very was That did. You

Can it sales spin you, about end and how a the sales you beginning of leadership. had sales team ask of organization year, major in the new obviously, you trying and terms last the a expansion of evaluate this sales slightly to drive growth of just just the sort year, new I'll of in long-term you and comment way of for the company? leadership So, performance different

James Corbett

with begins growth. XX.X% of part evaluating that consecutive first answer, I'm it the how So, quarter

under a as sales we executing our more are in think new developing well. quarter unusual, manner. sales That kind leadership still I consecutive team is growth strong effective really a We're the QX is of expecting well leader. and

always, do, quarter performance was but the progress. So, more this the really, good. with work really I'm quite to as last There's quite pleased

Operator

line Fitzgerald. of from the comes Cantor question Osborn with Ross next Our

Ross Osborn

up to think Go but from maybe prior getting on the following your So XXXX with Mini, in the how regards should we curve question, into about adoption with accounts? learnings

James Corbett

we FDA over us Well, we broad Ross. one back gave was for of that if indication, that at thickness that you XXX patient Thanks, cases square that you'd full see study go Yes. our the first centimeters. that all, not did, look you and approval performed

a treats X,XXX customer. that bit we the a intellectually, so, of for you -- think creates that centimeters, square I dissonance, for think, have And when device little

broader indications developed need. RECELL And to Mini of fit that where we population the we so, patient's get better at

the think that one of same. the is so, Mini fundamentally And had we preceding on hand, I introduction opportunity market the

I think quicker the you're little adoption will bit be concept matching size a use wound. with the that RECELL the the the of with

Ross Osborn

we you demand? And sense. meet a Got year, how manufacturing about to and XXXX, That capacity expect year sticking see incremental then significant makes that are it. to where demand to perfect feeling relative with this

James Corbett

terrific. feel we Actually,

that we the we an Project the facility by was the had quarter, Phoenix, which inside revamp our in located underway walls really older during older part early reconstructing manufacturing fact, a and called fundamentally of of building was was because completed to Ventura. an quarter project In that's It the building. whole building it

XXx expansion and completed was objective did Our project create with it. which we we and to that capacity

we're really of some facility very So, device before. of our capacity. a capabilities the expanded is about different than because engineering processing skills our in good We've that feeling RECELL we what set manufacturing needed

we've We, manufacturing -- course, had we durable. in Ventura could that also in-sourcing increased service well. we engineering a to of so service put created as RECELL our center the So, GO, by talent the of

and during we a So, we we're anything haven't revenue time about feeling our or very been expanding comfortable quickly. supply really had when shortages have capacity, our any close quite

Ross Osborn

quarter. strong and progress the on Congrats

Operator

at Cowen. Our the comes TD line question Josh from of Jennings next

Eric Anderson

corporate around ultimately, up. how where in Thinking quarter the all I wind Josh. drivers over in few your just you is hoping terms in growth evolving growth thoughts currently, of may see works the Eric 'XX things on nice quarters, the for Congrats you and was different have next This actually on about get the here. to

estimates solid at of in 'XX look street the I XX% like if now, think showing right growth I range. some acceleration

of, just that or up you appropriate there? how to you kind think was hoping if think on step If I your you step-up is thoughts get that

James Corbett

Well, moment, because guidance a increasing quite mind, a have GO, do is usage account. we're me have that give at you're consequence which don't for way, the -- let is you in it RECELL next But the different not comment correct. ready to having we we of if RECELL in What of we have year.

that is evidence We limited development have we the is a now RECELL year. the in doing size, in GO substantial market for a And clinical QX. accumulating which next will see Mini be data Cohealyx, full of PermeaDerm first going year. you'll into where we're clinical launch expand launch during a QX

You are us. entry And our platform. for there's when an and a add broader talking, yes, into Union it, opportunity you about the for European lot to growth growth Australia, abundant

I big focusing outcome into profitability, So, think we it's crossover is we're on. on the QX that have which the guided

very adding I So, we're so going to expenses that doing of combination think without operating durable. are little in be growing,

Eric Anderson

Understood. becoming and just maybe going how your the I contributors was in And was you in as the margins particularly gross substantial coming profitability quarters. on those Cohealyx impact PermeaDerm, offerings of approach I year get targets. appreciate a to think some thoughts on that then about earlier call next color. forward, those hoping you there comment might that

James Corbett

question. great a that's Yes,

as is profit way. think gross on about than RECELL. So, it a those product percentage less this The lines

we're margin since contribution operating adding not substantial. the commensurate is However, expenses, operating

ASP. -- be square between might a centimeter Cohealyx depending $XX,XXX So, X,XXX in use with to wound of somewhere on a Cohealyx for example, $XX,XXX

of Half a of be will possibilities. broad So, operating margin. range that there's

it as So, adding about to margin, gross we're with and those about think gross think when it you margin, products. significantly total

Operator

comes from question of Sandler. line Matthew with the Piper O'Brien Our next

Samantha

for on Samantha first, to into touch guess, headed Matt. like the guidance is This on I we'd QX.

we been sizable what this said it's a more of it's quarter. saw step-up from think just I

talk just bit and of the terms So, can just wound guidance kind what you're versus of what of, little makes about yes, in you there? a in maybe in kind baking burns,

James Corbett

we've is step-up $XX.X actually absolute guidance almost right? was $XX.X million bit excess less $XX.X said $XX.X step-up it. the to the range a Well, million as QX of million, is in is to million little million in And $X.X to from because the in million. terms actually, QX $X QX

about our support. healing a the is the RECELL And reduce requires my and our the and time, and reduce you bit RECELL used operating burn GO, it cases accelerate do devices from When fair is clinical area use burns, room consecutively multiple when the Now that to begin patient. case. one the benefits and RECELL business it run you anesthesia manual happens X time can that strongest are GO average, And you you you on the of we when time, RECELL attend follow in RECELL GO reduce often that, just because think simultaneously. most in use those burns it's time, the version, you thought to devices here, business average you what actually case, of staff to you staff you time, provide when for

All of this money. saves

QX doubling we as I mentioned for of imagine is in happens that reason. move and and RECELL thought the what So, reasons patients year XX,XXX eligible market we we just could beyond, that a the burn the our into one that of share

so, to use fast fast. device multiple full-thickness burn us market, in usually but is it's add unit continue a new get will which And a full-thickness RECELL typical it's one, new a where burns. account one for real use we real you with the GO They RECELL and case, leverage in single because procedures, develop

inevitably it burns faster basis. that will Is So, helpful? grow hospital on level a in

Samantha

the want CE that's on delay. mark have Yes, growth helpful. What on touch next impact one more I for And that just expectations your guess does year? to I

James Corbett

Not significant.

our with going annualize year to holding us have headcount particularly the a QX, we're strong line. year, just next you If

new So, us the are those international expectations, all entering markets.

patients choice get them so them they're third-party prepared. with to work careful expect of that have and treated, you of will you go distributors, all training a So, get can on, lot and

goal. a be the we bit per have on se delay, little QX profitability of high a to dependency going there's don't a although revenue our to So, achieve

Samantha

GO talk plans about yes, were and And a that. -- if just could kind then could rollout just we We you the more there? plans Mini, more I little just guess, for your appreciate in. if one are what wondering of, sneak bit I

James Corbett

instance, RECELL when which training full GO we in accounts then at those So, cases because the January. during the smaller in meeting centers, is And we're over defect do XXX PMA we the XXX burn a rolling are primarily. also last our year. time, we bigger get roll will skin that achieved centers. half in out out the trauma the targeted full-thickness is of by wounds then market by into but first we'll added during We where expecting the that year-end. Mini centers, They and will it's those approved be that That's sales and first population it be accounts. Mini having QX. for would We're during be days of is to supplement. will our since thickness accounts well And approval trauma have time, It

flow, have adding the we same because which durable. growth And its will in to QX half device, Mini, So, it. the which already -- practical be with will first I if quarter expansion RECELL quarter think our a in terms first of in second about during that our mode utilization. think new the product of platform begin We'll be processing be -- GO that rollout of the introduced uses been have drivers is it one accounts will you

and have have We PermeaDerm we'll Cohealyx.

of And a get as new well. those wounds of nice suite used have Mini. products course, join and PermeaDerm we'll Cohealyx GO RECELL same in with So, to the

for to us next pretty year. year going it's exciting a be So,

Operator

of Instructions] question Bell [Operator Our from line next Potter. John Hester comes of the

John Hester

to this you, I come just approval study post-market ask back for and focus on Cohealyx. wanted we

As very you is know, well that extracellular matrix established. category

going What us this bit you about can tell after? more So, trial? wounds are specific you little a

James Corbett

that at to other is to a of let's Cohealyx gets graft X close because say, compared a more we a measure what to question and remember, our And to it's our want Thanks, close. makes in days porcine bit is so infection the days describe we're hospital. makes of close. work rapidly to we preclinical of Days we major let's to it's in faster. in those What faster faster time model, What it terms it differently parameters little the days of that way, graft days John. the and going to terms it Cohealyx than X-stage And players, I'm competitors primarily. Actually, that the found time ready faster out in anticipated ready without faster procedure, come prove. to for graft-ready days, proving

those the are of demonstrate prove. So elements are wanting X we what and to

John Hester

enough. Fair

So, burns trauma and I there. targets would think the primary are

up the for outpatient on believe sort historically. other seen you Is appropriate that use be something Just following about that question will Mini. had success been outpatient because you've the of great where hasn't one

James Corbett

it the in has GO of outpatient is platform. And been for Well, thickness the full RECELL we outpatient. benefits growing good is one there one the because application developed for us and of a the answer yes. That's of reasons the

get -- those sub in will -XXX wounds outpatient. treated centimeter it So, square do often

us of competitive outpatient. speak, will And in terms so, it help alternative treatments our so in to profile,

Operator

the Chris line of Kallos question next Access. from Our comes MST at

Chris Kallos

preliminary about the Is feedback you're GO? question about Europe from Europe appetite in seeing any CE quick a and Just the there unfolding. RECELL market in distributors for mark how

James Corbett

since Chris. -- partners quite forward there company and distribution RECELL RECELL It's Yes, is, GO. for it are GO less question. requires user, a the is for looking our good to training the third-party

version this the early manual proceeding RECELL quarter. in of Now of we are launches with

the However, expansion will during coming we think be year. the

So, Europe RECELL in GO in curve adoption RECELL really and Australia. the will for help

Chris Kallos

AVITA Medical (RCEL) 7 Nov 242024 Q3 Earnings call transcript