AVITA Therapeutics, Inc. (NASDAQ: RCEL, ASX:AVH), a regenerative
medicine company that is developing and commercializing a
technology platform that enables point-of-care autologous skin
restoration for multiple unmet needs, announced today preliminary
unaudited results for the fourth quarter and full year ended June
30, 2020, together with a company update.
Preliminary Unaudited Results for Three Month Period Ended
June 30, 2020
With effect from July 1, 2020, the Company is reporting
financial results in United States dollars (US$), and prepared in
accordance with U.S. Generally Accepted Accounting Principles (U.S.
GAAP).
- U.S. RECELL® System Sales:
- Total global net revenue for the fourth quarter (unaudited):
- Cash and Cash Equivalents:
- At the end of the fourth quarter, the Company had cash of
approximately US$73.84M, a decrease of US$5.92M or 7.4% over the
US$79.76M held at the end of previous quarter (inclusive of more
than US$1M expended during the quarter on redomiciliation and
preparation for U.S. GAAP compliance).
- To compare with the Company’s previously reported results (as
reported under IFRS) cash at the end of the fourth quarter was
A$107.02M, a decrease of A$22.92M from the A$129.94M reported in
the previous quarter, driven by A$14.28M attributable to the effect
of movement in the exchange rates on cash, and A$8.64M in operating
expenses.
“We are pleased with our fourth quarter results given the
challenges and limited patient and facility access that we have
experienced with the onset of the COVID-19 pandemic,” said Dr. Mike
Perry, AVITA Therapeutics’ Chief Executive Officer. “Like many
others, this quarter we witnessed the most challenging commercial
conditions since the RECELL System was launched in the U.S. in
early 2019. While burns are not considered elective procedures, the
incidence of burns was not immune to the impact of COVID-19 as
nationwide protective (executive) orders drove a reduction in
accidents resulting in burn injuries. Despite the tough macro
environment, the clear benefits of the RECELL System including
shortened length of hospital stays, together with less invasive and
fewer surgeries, continues to resonate with hospitals, physicians,
and patients, which is reflected in our results this quarter.”
Preliminary Unaudited Results for the Full Year Ended June
30, 2020
- Total consolidated sales:
- U.S. RECELL System Sales:
Company Update
Quarter Ended June 30, 2020
During the fourth quarter we witnessed a wide degree of
variability with both revenue and procedural volumes, together with
an environment where our customers mandated highly restrictive
access practices for our field force given the COVID-19 pandemic.
Face-to-face interaction with our burn caregivers continues to be
exclusively at “physician request” for case support within the
operating theater only, and does not permit participation in the
aftercare setting or otherwise enable clinical and business
development, for example, to expand utilization of the RECELL
System across different burns and users. Given the current state of
affairs, we have no reason to believe that these measures, and our
limited access, will change in the short term.
As previously stated, burn procedures are neither elective nor
deferrable, however the rate of occurrence of these events is very
dependent on broader economic activity and “people movement”. As
such, we saw many of our customers initially experience reduced
burn volumes due to the social distancing and shelter-in-place
restrictions that have been implemented across the nation.
The reprioritization of hospital resources to support COVID-19
readiness meant that our April results were the lowest monthly
revenue and procedural volumes seen this calendar year.
Fortunately, as the quarter developed, the benefits of the RECELL
System providing reduced hospital stays, and fewer and smaller
surgeries, together with both a gradual uptick in burn incidence
and hospitals (partially) reverting back from a COVID-19 centric
focus, enabled a recovery of both revenue and procedural volume
growth through May and June. As with many companies in the current
pandemic environment, it is difficult to predict revenue and
procedural volume over the coming months, but we are pleased with
current utilization rates and our physician commitment.
BARDA
The Company continues to work with the U.S. Biomedical Advanced
Research and Development Authority (BARDA) on the procurement of
the RECELL System for the U.S. strategic national stockpile for
public health medical emergencies (with an estimated contract value
of US$7.6 million). The Company is hopeful of providing further
updates on this topic during this quarter.
Future Market Opportunities
Set out below is an update on our various future market
opportunities:
- Vitiligo
- On June 2, 2020 the Company announced that it had submitted an
Investigational Device Exemption (IDE) supplement with the U.S.
Food and Drug Administration (FDA) for the initiation of a pivotal
clinical trial to investigate the RECELL System for the treatment
of vitiligo.
-
On July 1, 2020, the FDA approved the IDE application for the
pivotal study which is titled “A Prospective Multi-Arm
Blinded-Evaluator Within-Subject Randomized Controlled Clinical
Study to Investigate the Safety and Effectiveness of RECELL for
Repigmentation of Stable Vitiligo.”
-
The Company is continuing to work with FDA to finalize two (2)
outstanding study design considerations and will provide further
updates, including details regarding the study and initiation plan,
over the next several weeks.
-
The Company expects to commence enrollment in the vitiligo
pivotal study in the second half of this calendar year.
-
The Company continues to have a high degree of confidence that
the RECELL System can be an effective therapeutic offering for
patients with stable vitiligo. More than 1,000 patients have been
treated with the RECELL System for vitiligo outside of the United
States, and to date there are eight (8) publications demonstrating
the benefits of the RECELL System in vitiligo.
- Outpatient (Burn Market)
- As previously disclosed, the Company is seeking incremental
reimbursement, and FDA approval of our next generation “RECELL 2.0”
(expected in the middle of 2021), to assist with market access in
the outpatient hospital setting.
- Once we navigate through the above, our initial focus in the
outpatient hospital setting will target our existing burn center
customer base which has the highest outpatient volumes.
-
By comparison, since October 1, 2019 the Company has benefited
from various reimbursement codes for patients admitted for burn
treatment in the inpatient hospital
setting (under the Hospital Inpatient Prospective Payment System
(IPPS)), including the following:
-
Medicare reimburses hospitals for inpatient services using
MS-DRGs (Medicare Severity Diagnosis-Related Groups) (see MS-DRG
927, 928 and 929 for various types of burns (which are non-specific
to the RECELL System)).
-
Specific ICD-10-PCS code series describing our “cell suspension
technique” for the use of the RECELL System (see the “OHR” codes
within ICD-10-PCS). These procedure codes are assigned to the same
DRGs for payment as other skin grafts.
-
Current Procedural Terminology (CPT) for physicians to support
reimbursement for physician rendered healthcare services.
-
There is no procedure-specific CPT code for the RECELL System’s
cell suspension autografting and so, per recommendations from the
American Burn Association, providers using the RECELL System are
guided to the existing long-standing epidermal autografting codes
(e.g. CPT code 151101 and 15115)2.
-
In the outpatient setting, the
Company has been seeking a New Technology Ambulatory Payment
Classification (APC) under the Outpatient Prospective Payment
System (OPPS) since late 2019. However, based on feedback from The
Centers for Medicare & Medicaid Services (CMS) and given recent
changes to the OPPS payments system discussed below, the Company
will now instead pursue a Transitional Pass-through Payment
Application (TPT) to support separate additional Medicare payment
for the RECELL System.
-
CMS has advised the Company that the availability of the
long-standing CPT code 15110 and CPT code 15115 (which providers
may presently utilize in both the inpatient and outpatient hospital setting) excludes our ability
to apply for a New Technology APC for use in the outpatient setting.
-
On January 1, 2020, CMS implemented changes to the OPPS and
ambulatory surgical centers (ASC) payment systems to permit medical
devices, including the RECELL System, “that have received FDA
marketing authorization and are part of the Breakthrough Devices
Program [to] be approved [by CMS for TPT] through the quarterly
[review] process” (as opposed to the typical annual review
process).
-
TPT was established by CMS to provide an alternative payment
pathway for “transformative medical devices”. Similar to the New
Technology APC, if approved CMS would create a new C code and would
allow the RECELL System to be billed and paid separately in
hospital outpatient facilities and
ASCs.
-
As a recipient of Breakthrough Device status, AVITA Therapeutics
will work with CMS through the next CMS scheduled quarterly review
cycle and is hopeful of having a C code in place for the RECELL
System on January 1, 2021 (which should not change our current
commercialization timeline for the outpatient hospital
setting).
- Existing Registration / Pivotal Clinical Studies
- As previously reported, prior to the onset of COVID-19, in late
March the Company initiated two pivotal studies for (1) the
treatment of pediatric scalds, and (2) soft tissue
reconstruction.
-
Enrollment of clinical studies across the United States are
largely paused at present and the Company’s enrollment of the
aforementioned studies are accordingly largely on hold.
-
The Company has enrolled three (3) patients in the pediatric
scald study and one (1) patient in the soft tissue reconstruction
study.
-
The Company anticipates that enrollment will resume in the
ensuing quarter.
Publications
Notable publications released during the quarter were as
follows:
- “A Pilot Multi-Centre Prospective Randomised Controlled Trial
of RECELL for the Treatment of Venous Leg Ulcers.” Hayes et al.
International Wound Journal.
- “Impact of graft cell density and viability on repigmentation
upon noncultured autologous cell suspension transplantation in
vitiligo and piebaldism.” Uitentuis et al. Clinical and
Experimental Dermatology.
Japan
AVITA Therapeutics continues to work with our Japanese marketing
partner, COSMOTEC, to advance our application for approval to
market the RECELL System in Japan pursuant to Japan’s
Pharmaceuticals and Medical Devices Act. The application has been
constructed broadly to seek approval for the treatment of patients
with burns, chronic wounds and vitiligo in three (3) size
configurations of the RECELL System.
Progress on the application has been delayed due to the COVID-19
pandemic and the associated State of Emergency declaration in
Japan. In addition, Japan’s regulatory agency, the Pharmaceuticals
and Medical Devices Agency (PMDA), has now requested various
non-clinical “raw data” (e.g., original hand written copies of data
entry forms or records) of a small subset of our historic studies,
some of which were conducted more than ten (10) years ago. To
facilitate PDMA’s request, AVITA Therapeutics is repeating three
(3) non-clinical or “benchtop” tests. These tests are expected to
be completed and submitted in August, and the Company hopes to then
advance our application for approval of the RECELL System in
Japan.
Other Updates
- Redomiciliation
- Redomiciliation of the Company from Australia to the United
States was implemented on June 29, 2020 with trading resuming on
both the ASX (ticker: AVH) and NASDAQ (ticker: RCEL).
- Financial Reporting
- With the completion of redomiciliation to the United States,
the Company has transitioned to U.S. dollar denominated financial
reporting prepared in accordance with U.S. GAAP. The Company
expects to publish on the ASX and NASDAQ the Company’s results for
the twelve (12) months ended June 30, 2020 (i.e., annual report) in
the last week of August (and submitted on Form 10-K as prescribed
by the U.S. Securities and Exchange Commission).
- The Company launched a new corporate website which can be found
at www.avitamedical.com.
Authorized for release by the Chief Executive Officer of Avita
Therapeutics, Inc.
ABOUT AVITA THERAPEUTICS, INC.
AVITA Therapeutics is a regenerative medicine company with a
technology platform positioned to address unmet medical needs in
burns, chronic wounds, and aesthetics indications. AVITA
Therapeutics’ 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 RES® REGENERATIVE EPIDERMAL SUSPENSION,
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 Therapeutics’ 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.
1 CPT code 15110: Epidermal autograft, trunks, arms, legs; CPT
code 15115: Epidermal autograft, face, scalp, eyelids, mouth, neck,
ears, orbits, genitalia, hands, feet, and / or multiple digits. 2
It should be noted that the CPT code may be used in both the
inpatient and the outpatient hospital
setting.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200709005311/en/
FOR FURTHER INFORMATION:
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 +1 415 202 5678 caroline.corner@westwicke.com
AVITA Therapeutics, Inc. David McIntyre Chief Financial
Officer Phone +1 661 367 9178 dmcintyre@avitamedical.com
AVITA Medical (ASX:AVH)
Historical Stock Chart
From Dec 2024 to Jan 2025
AVITA Medical (ASX:AVH)
Historical Stock Chart
From Jan 2024 to Jan 2025
