AVITA Medical, Inc. Q3 FY2024 earnings call

• Q3 commercial revenue was $19.5 million, exceeding the second quarter and hitting the projected range of $19M to $20M.
• Approximately 75% of the revenue base was transitioned to RECELL GO within 4 months of FDA approval, demonstrating operational agility.
• Focus in Q4 will be on closing 30-40 accounts in the Value Analysis Committee process for full thickness skin defects.
• Cohealyx had its FDA submission in late September with a 90-day review period expected to clear by year-end, setting up a 2025 launch.
• RECELL GO Mini is on track for year-end approval and early 2025 launch.
• International expansion expected to bring RECELL GO to Europe and Australia in 2025 with CE mark expected in Q1 2025.
• TONE Study and health economic study on Vitiligo submitted for publication, with payer activity and coverage policy outcomes expected by end of 2025.

In the third quarter, AVITA Medical achieved $19.5 million in commercial revenue, which is a 29% increase from the second quarter. The RECELL GO platform was a key driver, with approximately 75% of the revenue base transitioned to RECELL GO by the end of September. RECELL currently drives the majority of revenue, but Cohealyx, RECELL GO Mini, and international expansion are expected to contribute significantly in the future. RECELL GO Mini, designed for wounds up to 480 square centimeters, is on track for year-end approval with a launch in early 2025. International expansion has seen delays in CE mark approval, now expected in Q1 2025, covering 14 countries via third-party distribution agreements.

• Q4 2024 commercial revenue expected to be in the range of $22.3 million to $24.3 million, representing sequential growth of 14% to 25% over Q3 and 58% to 72% growth compared to Q4 2023.
• Annual guidance for 2024 is $68 million to $70 million.
• Anticipate Cohealyx and RECELL GO Mini launches in 2025 to contribute significantly to financial results.

• Delay in CE mark approval for international expansion, which could impact timing of RECELL GO launch in Europe and Australia.
• Potential challenges with VAC processes in the full thickness skin defect segment affecting new account conversions.
• Market adoption and acceptance of new products like Cohealyx and RECELL GO Mini could face uncertainties.

Q: What's the process and experience with VACs and new account conversions?

A: There was a deliberate focus on transitioning to RECELL GO, with VAC not being a factor for RECELL GO. VACs in the full thickness segment require evaluation cases, and the company has adapted by being more proactive. Less new account conversions than expected were a deliberate choice of sales time.

Q: How is the sales team performance evaluated and new sales leadership impacting growth?

A: The sales leadership team is developing well, with 29.6 consecutive quarter growth. The team is executing effectively, and there's strong expected growth in Q4.

Q: Thoughts on adoption curve in 2025 and manufacturing capacity?

A: RECELL GO Mini addresses the need to match RECELL use with wound size, expected to accelerate adoption. Project Phoenix revamped the manufacturing facility in Ventura, creating 10x capacity expansion, and the company is comfortable with manufacturing capacity.

Q: Impact of CE mark delay on growth expectations?

A: Not significant, as the company has a strong year planned with other growth drivers, and international expansion is a secondary growth lever.

Q: Details on Cohealyx post-market approval study?

A: The study will evaluate Cohealyx in full thickness wounds using a two-stage procedure, focusing on time to graft ready and time to close, comparing to other dermal matrices.

Q: Feedback on RECELL GO appetite in Europe and timeline for launch?

A: Third-party distributors are looking forward to RECELL GO, with early launches of the manual version in the quarter and expansion expected in 2025. CE mark review is in final stage, expected to clear in Q1 2025.

Q: Vitiligo timeline?

A: TONE Study and health economic study submitted for publication, with payer activity and coverage policy outcomes expected by end of 2025, with Vitiligo revenue not expected in 2025, but a 2026 event.