AVITA Medical, Inc. Q4 FY2024 earnings call

• Transformed from a single product company to a multiproduct leader in therapeutic acute wound care since 2023, launching strategic growth plan and expanding into trauma and surgical wounds under full-thickness skin defects indication.
• Launched PermeaDerm in January 2024 and rolled it out by April 2024. PermeaDerm is a porous, flexible, transparent dressing aiding wound healing.
• Cohealyx, an FDA-cleared dermal matrix, co-developed with Regenity Biosciences, accelerates graft readiness. A case study showed a 67-year-old patient with a third-degree burn was discharged in 1.5 weeks after Cohealyx application, vs. likely a month with alternative matrices.
• Plan to expand RECELL GO adoption, roll out RECELL GO mini in Q1 2025 focused on trauma centers (expanding trauma center market by ~270,000 full-thickness acute wounds annually), launch Cohealyx commercially in April 2025, and continue rolling out PermeaDerm.

For the three months ended December 31, 2024, commercial revenue was $18.4 million, a 30% increase from Q4 2023. Full-year 2024 commercial revenue was $64 million, up 29% from 2023. Product segments: RECELL is a core product with significant revenue; PermeaDerm was launched in January 2024 and rolled out, contributing to revenue growth; Cohealyx is set for full commercial launch in April 2025, expected to be a major revenue driver. RECELL contributes to treating full-thickness skin defects, PermeaDerm supports wound healing before and after grafting, and Cohealyx accelerates graft readiness.

• Full-year 2025 commercial revenue expected to be in the range of $100 million to $106 million, representing 55%-65% growth from 2024.
• Expect to generate free cash flow in the second half of 2025 and achieve GAAP profitability during Q4 2025.
• Cadence of revenue growth expected to be strong with sequential increases in quarters, driven by RECELL GO adoption, RECELL GO mini rollout, Cohealyx commercial launch, and PermeaDerm adoption.

• Unpredictable regulatory process for EU CE mark approval for RECELL GO, with no technical challenges but an unpredictable timeline.
• Impact of timing of customer purchases on revenue, as seen with deferred purchases in Q4 2024 due to year-end cash preservation strategies.
• Market adoption challenges for new products like Cohealyx, including ensuring cost-effectiveness and navigating value analysis committee processes.

Q: Would you expect similar sequential growth each quarter or might it be more back half weighted given contributions from Cohealyx?

A: Jim Corbett said to expect notable increase in Q1 with RECELL GO mini and PermeaDerm gaining momentum, Q2 also up sequentially, and Cohealyx having a significant impact in the back half but expects a strong consecutive quarter cadence.

Q: How much of international sales is contemplated in the guidance and when to expect EU clearance?

A: Jim Corbett said international sales are modest, with midyear expectation for RECELL GO EU clearance but no technical challenges, just an unpredictable process.

Q: How much of inventory in Q4 was RECELL and PermeaDerm, and if there's inventory to work down in Q1?

A: Jim Corbett said majority of inventory is RECELL, PermeaDerm is a small part, and no signs of inventory to work off that would challenge Q1 revenue as customers need inventory for patient treatment.

Q: On adoption pace of Cohealyx and cost-effectiveness?

A: Jim Corbett said Cohealyx's seven-day graft readiness is a big driver, fits with RECELL theme, and study includes Cohealyx alone or with RECELL, with factors like preclinical data, case studies, and pricing contributing to faster VAC time.