AVITA Medical Reports Fourth Quarter and Full-Year 2023 Financial Results and Provides 2024 Financial Guidance
- AVITA Medical reported a 50% increase in commercial revenue to $14.1 million in Q4 2023 and a 46% increase to $49.8 million for the full-year 2023.
- Gross profit margin stood at 87.3% for Q4 2023 and 84.5% for the full-year 2023.
- The company ended 2023 with $89.1 million in cash, cash equivalents, and marketable securities.
- AVITA Medical's CEO, Jim Corbett, highlighted strategic initiatives for business transformation in 2023, focusing on expanding RECELL indications and applications, doubling the commercial field organization, and launching an expanded label for full-thickness skin defects.
- Future milestones include expanding the sales organization, launching PermeaDerm, FDA approval for RECELL GO, facility expansion, international sales, PMA supplement submission, and achieving cashflow break even and GAAP profitability by Q3 2025.
- Financial guidance projects commercial revenue growth for Q1 2024 and full-year 2024, aiming for cashflow break even by Q3 2025.
- Q4 2023 saw a 50% increase in commercial revenue, with a net loss of $7.1 million, driven by higher production costs and increased operating expenses.
- Full-year 2023 results showed a 46% increase in commercial revenue, with a net loss of $35.4 million, attributed to higher sales and marketing costs, G&A expenses, and R&D investments.
- AVITA Medical will host a conference call on February 22, 2024, to discuss financial results and future guidance.
- None.
Insights
The reported increase in commercial revenue by approximately 46% to $49.8 million for the full year and 50% to $14.1 million for the fourth quarter is a strong indicator of AVITA Medical's growing market presence and effective sales strategy. The expansion of the commercial field organization and strategic initiatives such as launching expanded labels and the international expansion plan have likely contributed to this growth. Investors should note the company's gross profit margin, which stands at an impressive 84.5% for the full year, reflecting efficient cost management and a premium pricing strategy that is sustainable in the regenerative medicine sector.
However, despite the revenue growth, the company reported a net loss of $7.1 million for the quarter and $35.4 million for the year. This raises concerns about the company's current profitability and the sustainability of its growth trajectory without achieving positive net earnings. The expected cash flow break-even and GAAP profitability by the third quarter of 2025 indicate a long-term strategic plan towards profitability, which is a critical factor for investors' confidence.
AVITA Medical's expansion plans and the introduction of new products such as RECELL GO and PermeaDerm® Biosynthetic Wound Matrix are noteworthy. The expansion of the field sales organization and the renovation of the Ventura warehouse facility are poised to enhance the company's operational capabilities and market reach. The anticipation of FDA approvals and international sales commencement in Europe are pivotal milestones that could significantly impact market share and competitive positioning within the regenerative medicine industry.
Furthermore, the company's guidance for commercial revenue growth of 57% to 69% for the full year 2024 suggests a strong outlook and confidence in their strategic initiatives. However, the market will be closely monitoring the actual performance against these projections, as they are aggressive targets that hinge on successful product launches and market adoption.
The clinical and regulatory milestones such as the expected FDA approval for RECELL GO and the submission of a PMA supplement for RECELL GO mini, designed for smaller wounds, are significant. These milestones reflect AVITA Medical's commitment to innovation and addressing unmet needs in wound care. The TONE study for treating patients with stable vitiligo, if successful, could open up a new therapeutic area for the company, potentially expanding its target market and diversifying its revenue streams.
The high gross profit margin indicates that the company's products are likely well-received in the market and there is a willingness to pay a premium for innovative regenerative treatments. However, the increased R&D and sales and marketing expenses, which have contributed to the net loss, highlight the need for a careful balance between growth-driven spending and financial sustainability.
VALENCIA, Calif., Feb. 22, 2024 (GLOBE NEWSWIRE) -- AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH), a commercial-stage regenerative medicine company focused on first-in-class devices for wound care management and skin restoration, today reported financial results for the fourth quarter and full-year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
- Commercial revenue increased approximately
50% to$14.1 million compared to the same period in 2022 - Gross profit margin of
87.3%
Full-Year 2023 Financial Highlights
- Commercial revenue increased approximately
46% to$49.8 million compared to the same period in 2022 - Gross profit margin of
84.5% - As of December 31, 2023, approximately
$89.1 million in cash, cash equivalents, and marketable securities
“We ended the year with yet another quarter of significant growth, marking a year of extraordinary progress,” said Jim Corbett, AVITA Medical Chief Executive Officer. “In 2023, we successfully executed a series of strategic initiatives to transform our business. These initiatives included expanding our RECELL indications and applications, doubling our commercial field organization ahead of FDA approvals, successfully launching our expanded label for full-thickness skin defects, and establishing an international expansion plan. Looking ahead to 2024, we are eager to capitalize on this momentum, and remain committed to innovation and sustained growth.”
Future Milestones
- Expansion of the field sales organization from 70 to 108 professionals in the first quarter of 2024 to maximize our ability to capitalize on the expanded label of full-thickness skin defects
- Integrating PermeaDerm® Biosynthetic Wound Matrix into our selling portfolio; plan to launch PermeaDerm in March 2024
- Expect U.S. Food and Drug Administration Food (FDA) approval for RECELL GO with plans to commence commercial launch on May 31, 2024
- Renovating and expanding our Ventura warehouse facility; expansion will increase capacity 10-fold, ensuring efficient operations for the next five years at this location; expect final phase to be completed during the third quarter of 2024
- Expect non-U.S. sales following the launch in January 2024 of RECELL within Germany, Austria, and Switzerland
- Plan to submit a PMA supplement for RECELL GO mini, which is being designed to address smaller wounds, and expect to receive FDA approval by year-end
- Expect to submit both our post-market study treating patients with stable vitiligo, TONE, and separate health economics study for publication by year-end
Financial Guidance
- Commercial revenue for the first quarter 2024 is expected to be in the range of
$14.8 t o$15.6 million , reflecting growth of approximately42% to approximately50% over the same period in the prior year - Commercial revenue for the full-year 2024 is expected to be in the range of
$78.5 t o$84.5 million , reflecting growth of approximately57% to approximately69% over the full-year 2023 - Expect to achieve cashflow break even and GAAP profitability no later than the third quarter of 2025
Fourth Quarter 2023 Financial Results
Our commercial revenue, which excludes Biomedical Advanced Research and Development Authority (BARDA) revenue, increased by
Gross profit margin was
Total operating expenses for the quarter were
Net loss was
BARDA income consisted of funding from the Biomedical Advanced Research and Development Authority, under the Assistant Secretary for Preparedness and Response, within the U.S. Department of Health and Human Services, under ongoing USG Contract No. HHSO100201500028C.
Other income, net for the quarter was
Full-Year 2023 Financial Results
Our commercial revenue, which excludes BARDA revenue, increased by
Gross profit margin was
Total operating expenses for the year were
Net loss for the full-year 2023 was
Other income, net for the full-year 2023 was
Webcast and Conference Call Information
AVITA Medical will host a conference call to discuss its financial results, business highlights, and 2024 revenue guidance on Thursday, February 22, 2024, at 1:30 p.m. Pacific Time (being Friday, February 23, 2024, at 8:30 a.m. Australian Eastern Daylight Time). To access the live call via telephone, please register in advance using the link here. Upon registering, each participant will receive an email confirmation with dial-in numbers and a unique personal PIN that can be used to join the call. A simultaneous webcast of the call will be available via the Company’s website at https://ir.avitamedical.com.
About AVITA Medical, Inc.
AVITA Medical® is a commercial-stage regenerative medicine company transforming the standard of care in wound care management and skin restoration with innovative devices. At the forefront of our platform is the RECELL® System, approved by the Food and Drug Administration for the treatment of thermal burn wounds and full-thickness skin defects, and for repigmentation of stable depigmented vitiligo lesions. RECELL harnesses the regenerative properties of a patient’s own skin to create Spray-On Skin™ Cells, delivering a transformative solution at the point-of-care. This breakthrough technology serves as the catalyst for a new treatment paradigm enabling improved clinical outcomes. AVITA Medical also holds the exclusive rights to market, sell, and distribute PermeaDerm®, a biosynthetic wound matrix, in the United States.
In international markets, the RECELL System is approved to promote skin healing in a wide range of applications including burns, full-thickness skin defects, and vitiligo. The RECELL System is TGA-registered in Australia, received CE-mark approval in Europe and has PMDA approval in Japan.
To learn more, visit www.avitamedical.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements generally may 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,” and similar words or expressions, and the use of future dates. Applicable risks and uncertainties include, among others, the timing and realization 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. These statements are made as of the date of this release, and the Company undertakes no obligation to publicly update or revise any of these statements, except as required by law. For additional information and other important factors that may cause actual results to differ materially from forward-looking statements, please see the “Risk Factors” section of the Company’s latest Annual Report on Form 10-K and other publicly available filings for a discussion of these and other risks and uncertainties.
Authorized for release by the Chief Financial Officer of AVITA Medical, Inc.
AVITA MEDICAL, INC.
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
| As of | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 22,118 | $ | 18,164 | ||||
| Marketable securities | 66,939 | 61,178 | ||||||
| Accounts receivable, net | 7,664 | 3,515 | ||||||
| BARDA receivables | 30 | 898 | ||||||
| Prepaids and other current assets | 1,659 | 1,578 | ||||||
| Inventory | 5,596 | 2,125 | ||||||
| Total current assets | 104,006 | 87,458 | ||||||
| Marketable securities long-term | - | 6,930 | ||||||
| Plant and equipment, net | 1,877 | 1,200 | ||||||
| Operating lease right-of-use assets | 2,440 | 851 | ||||||
| Corporate-owned life insurance ("COLI") asset | 2,475 | 1,238 | ||||||
| Intangible assets, net | 487 | 465 | ||||||
| Other long-term assets | 355 | 122 | ||||||
| Total assets | $ | 111,640 | $ | 98,264 | ||||
| LIABILITIES, NON-QUALIFIED DEFERRED COMPENSATION PLAN SHARE AWARDS AND STOCKHOLDERS' EQUITY | ||||||||
| Accounts payable and accrued liabilities | 3,793 | 3,002 | ||||||
| Accrued wages and fringe benefits | 7,972 | 6,623 | ||||||
| Current non-qualified deferred compensation ("NQDC") liability | 168 | 78 | ||||||
| Other current liabilities | 1,266 | 990 | ||||||
| Total current liabilities | 13,199 | 10,693 | ||||||
| Long-term debt | 39,812 | - | ||||||
| Non-qualified deferred compensation liability | 3,663 | 1,270 | ||||||
| Contract liabilities | 357 | 698 | ||||||
| Operating lease liabilities, long term | 1,702 | 306 | ||||||
| Warrant liability | 3,158 | - | ||||||
| Total liabilities | 61,891 | 12,967 | ||||||
| Non-qualified deferred compensation plan share awards | 693 | 557 | ||||||
| Commitments and contingencies (Note 13) | ||||||||
| Stockholders' equity: | ||||||||
| Common stock, | 3 | 3 | ||||||
| Preferred stock, | - | - | ||||||
| Company common stock held by the non-qualified deferred compensation plan | (1,130 | ) | (127 | ) | ||||
| Additional paid-in capital | 350,039 | 339,825 | ||||||
| Accumulated other comprehensive income/(loss) | (1,887 | ) | 7,627 | |||||
| Accumulated deficit | (297,969 | ) | (262,588 | ) | ||||
| Total stockholders' equity | 49,056 | 84,740 | ||||||
| Total liabilities, non-qualified deferred compensation plan share awards and stockholders' equity | $ | 111,640 | $ | 98,264 | ||||
AVITA MEDICAL, INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
| Three-Months Ended | Year-Ended | |||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||
| Revenues | $ | 14,195 | $ | 9,455 | $ | 50,143 | $ | 34,421 | ||||||||
| Cost of sales | (1,796 | ) | (1,347 | ) | (7,780 | ) | (6,041 | ) | ||||||||
| Gross profit | 12,399 | 8,108 | 42,363 | 28,380 | ||||||||||||
| BARDA income | 59 | 1,026 | 1,428 | 3,215 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | (10,216 | ) | (6,342 | ) | (37,291 | ) | (21,913 | ) | ||||||||
| General and administrative | (7,750 | ) | (5,321 | ) | (28,334 | ) | (23,330 | ) | ||||||||
| Research and development | (6,765 | ) | (3,379 | ) | (20,821 | ) | (13,857 | ) | ||||||||
| Total operating expenses | (24,731 | ) | (15,042 | ) | (86,446 | ) | (59,100 | ) | ||||||||
| Operating loss | (12,273 | ) | (5,908 | ) | (42,655 | ) | (27,505 | ) | ||||||||
| Interest expense | (1,122 | ) | (6 | ) | (1,143 | ) | (16 | ) | ||||||||
| Other income, net | 6,342 | 585 | 8,483 | 892 | ||||||||||||
| Loss before income taxes | (7,053 | ) | (5,329 | ) | (35,315 | ) | (26,629 | ) | ||||||||
| Income tax expense | (12 | ) | (24 | ) | (66 | ) | (36 | ) | ||||||||
| Net loss | $ | (7,065 | ) | $ | (5,353 | ) | $ | (35,381 | ) | $ | (26,665 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic and Diluted | $ | (0.28 | ) | $ | (0.21 | ) | $ | (1.40 | ) | $ | (1.07 | ) | ||||
| Weighted-average common shares: | ||||||||||||||||
| Basic and Diluted | 25,477,690 | 25,082,816 | 25,331,264 | 25,000,180 | ||||||||||||
FAQ
What was AVITA Medical's commercial revenue growth in Q4 2023?
What are AVITA Medical's future milestones for 2024?
What was AVITA Medical's net loss in full-year 2023?
When will AVITA Medical host a conference call to discuss financial results?
What was AVITA Medical's gross profit margin in Q4 2023?
What is AVITA Medical's financial guidance for commercial revenue in Q1 2024?
What is AVITA Medical's cash position as of December 31, 2023?
What are AVITA Medical's plans for expanding its sales organization in 2024?
