ASX/News Release AVITA Medical Reports Second Quarter Fiscal 2020 Financial Results and Company Update U.S. RECELL System product sales of A$4.66M for fiscal second quarter Valencia, Calif., USA, and Melbourne, Australia

AVITA Medical Reports Second Quarter Fiscal 2020

Financial Results and Company Update

U.S. RECELL System product sales of A$4.66M for fiscal second quarter

Valencia, Calif., USA, and Melbourne, Australia, 31 January 2020 AVITA Medical Limited (ASX: AVH, NASDAQ: RCEL), a regenerative medicine

company with a technology platform positioned to address unmet medical needs in therapeutic skin restoration, reported financial results for the fiscal second quarter ended 31 December 2019 today in its Appendix 4C Quarterly Cash Flow

Report filed with the Australian Securities Exchange (ASX).

U.S. Commercial Sales of RECELL

System for Quarter and Half-Year Ended 31 December 2019

Product sales and other revenues for the second quarter and six months ended

31 December 2019 were as follows (unaudited):

We are extremely pleased with the expanding use of the RECELL System in a large number of U.S. burn centers and in a

broadening array of burn types. We have very high interest in the RECELL System with more than 160 trained burn physicians and 63 accredited burn institutions either having navigated through the Value Analysis Committee (VAC) approval process or

obtaining ad hoc approval to purchase the RECELL System. In addition, we see ongoing strong support and usage of the RECELL System, including in the last two months of 2019 where we witnessed our highest procedural volumes since FDA approval.

Physician feedback continues to be highly positive and we are well-placed to broaden usage as physicians gain broader clinical experience and begin to migrate from large total body surface area (TBSA) full thickness burns to smaller TBSA burns and

partial thickness burns. We believe that broader TBSA utilization within our existing customer base, together with the addition of new RECELL customers, provides ample opportunity for us to drive revenue increases in 2020. By leveraging our success

within our initial market of 14,000 eligible in-patient burn patients, we are now eager to approach the larger opportunities within burns (i.e. smaller burns), soft tissue reconstruction, vitiligo and genetic errors, said Dr. Mike Perry,

AVITA Medical s Chief Executive Officer.

Avita Medical Limited c/o Mertons

Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

United States In-Patient Burns

2019 marked the first full calendar year (CY) of sales since the U.S. commercial launch of the RECELL System in early January. During the first half of CY2019, our commercial and clinical support team made concerted efforts to build awareness and to

promote the donor-sparing, point-of-care and related clinical benefits of the RECELL System among an initial cohort of the 132 burn centers (i.e. the in-patient setting) that treat approximately 40,000 burn patients each year.

The core of these early efforts involved educating and training many of the 300 certified burn surgeons, proctoring bench and in vivo use of the RECELL

System, and ultimately seeking hospital approval to purchase the RECELL System through the respective VAC at each burn center.

With RECELL being the

first product in more than 20 years granted Premarket Approval (PMA) by the U.S. Food and Drug Administration (FDA) to treat severe thermal burns, we were able to quickly secure orders in 39 of the 132 U.S. burn centers (and train 136 burn surgeons)

by 30 June 2019. Consistent with our two randomized clinical studies and our PMA, early utilization of the RECELL System by the first adopters mainly focused on the less common full thickness or big burns ; that is, the larger and

deeper (full thickness) TBSA burns bracket within the approximately 14,000 of the 40,000 patients treated within the in-patient setting.

ended 30 September 2019, we added a further 13 institutions (as well as increasing to 157 trained burn surgeons) and saw our top line revenue consequently benefit from the addition of these new customers, including some larger stocking orders

from key customers during that period. With the initial core customer base established within this window, our commercial efforts in Q3 CY2019 shifted to building consistent RECELL utilization by ensuring strong clinical outcomes within those early

users of the RECELL System. Creating a strong commercial support presence in centers, paired with excellent RECELL clinical experience was a key focus during the first quarter of fiscal year (FY) 2020 (Q3 CY2019) because the in-patient burn

treatment setting is characterized by physician preference and inherent variability in month-to-month patient accrual (i.e. burns are random, or accident-induced, and therefore lack a consistent referral path).

The closing three months of 2019 (FQ2 FY2020 / Q4 CY2019) resulted in growing and consistent utilization of the RECELL System across our customer base,

including some of the highest procedural rates with the RECELL System since PMA (and 15 to 20% higher than FQ1 FY 2020 / Q3 CY 2019). Furthermore, we were able to add eight new customers late in the quarter and train an additional nine burn

surgeons. This brought our 2019 total to 63 ordering customers and 166 trained burn surgeons. Due to our commercial team s efforts in educating both physicians and burn centers, we have reaped to date 100% success in navigating the VAC approval

process and have established a base of super users, or physicians using the RECELL System across a broad array of burn sizes and depths, and patient types. In this regard, our top 20 customers are relatively concentrated and delivered

approximately 60% of revenue in each of the last two quarters of CY2019. Because of this, we see the opportunity in 2020 to similarly more broadly penetrate our other RECELL customers, as well as to expand our footprint into new burn centers.

In pursuit of wider utilization of the RECELL System, we intend to add 25 new sites in CY2020 and will leverage our current commercial infrastructure to do

so. The rate of in-patient burn admissions is inherently variable, but we feel very confident of incremental revenue growth across the entirety of CY2020 as we

Avita Medical Limited c/o Mertons

Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

continue to focus on our go deep strategy of (1) broader TBSA burn utilization (i.e.

broadening RECELL use from large, full thickness, TBSA wounds, or big burns, to the much higher incidence of smaller or partial thickness burns) consistent with usage patterns demonstrated by our most experienced users; and

(2) educating and training other burn surgeons within our customer base. We see a total addressable burn market for the RECELL System of U.S. $200 million in in-patient burns.

A summary of CY2019 commercial highlights is set out below

While we are making multiple strides across the burn landscape and expanding our addressable markets within those applications, we see many potential synergies

across other areas of skin regeneration, and we are moving forward exploring new indications and approvals.

The nearest term opportunity we are advancing

is in trauma and soft tissue injuries where, similar to the burn market, surgeons graft skin to repair defects from accidents (e.g. road rash, lacerations, gun shots, etc). The grafting process in these situations is surgically quite similar and,

importantly, performed by many of the same physicians as they often complete surgical rotations both in trauma and in burns (thereby potentially allowing portability of the RECELL System across multiple different types of injuries). We expect, and

we are already seeing in clinical practice, that surgeons comfortable with using the RECELL System in burns would become experienced and ready adopters of RECELL in the trauma setting. In addition, we are presently pursuing reimbursement for the

out-patient setting which we are optimistic to see progress with later this year.

In September 2019, we secured an investigational device exemption (IDE)

to pursue FDA approval for soft tissue reconstruction (i.e. trauma injuries). This study will assess the safety and efficacy of the RECELL System in a minimum of 65 trauma patients, and we expect to commence enrollment within FQ3 FY2020 (Q1 CY2020).

We see an addressable trauma market for the RECELL System of U.S. $550 million.

Likewise, we are also seeking FDA approval for a pediatric

scald label. We have IDEs in-hand for two pediatric studies and are pursuing this with BARDA support and financial assistance. We are working closely with BARDA to obtain agreement to commence these studies and are targeting enrollment in

mid-2020. For pediatric scalds we see a total addressable market of U.S. $250 million.

Avita Medical Limited c/o Mertons

Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

Looking ahead to another area of skin regeneration, we see readily addressable markets in skin defects,

which are caused from other disorders, including conditions such as vitiligo where patients present with areas of skin absent of pigmentation (color). Within the burn setting, we ve already demonstrated that the RECELL System can deliver

Spray-On-Skin cells including melanocytes. Further, we have treated more than 1,000 vitiligo patients in China and have seven published scientific papers, which provides a high degree of confidence that we can help patients with stable vitiligo. In

late December 2019, we received FDA IDE approval for a feasibility study with 10 vitiligo patients to primarily determine the optimal concentration of the cell suspension prepared using the RECELL System. This single site study is expected to

commence enrollment in FQ3 FY2020 (Q1 CY2020). We predict an addressable market for the use of the RECELL System in vitiligo of U.S. $600 million.

also see large opportunities for the RECELL System as a delivery platform to help address cellular and genetic disorders. We believe that the RECELL System can support, and enable, multiple therapies that seek to treat disorders of the skin. To this

end, we entered into a sponsored research agreement with the Gates Center for Regenerative Medicine at the University of Colorado in November 2019. This relationship is focused on proof-of-concept and development of a spray-on treatment of

genetically modified cells for patients with the genetic skin disease epidermolysis bullosa (EB), with potential applicability to other genetic skin disorders. There are more than 50 genetic disorders of the skin and we believe this opportunity is

potentially significantly larger than the aggregate of the other opportunities mentioned above.

Outside of the U.S., we continue to supply our existing

users while maintaining our plan to devote limited commercial resources to the select geographical regions in which the RECELL System is already approved for sale. We will continue to make investments where there is a business opportunity, such as

in our announced collaboration agreement with COSMOTEC, an M3 Group company, to market and distribute the RECELL System for the treatment of burns and other wounds in Japan. On 25 February 2019, COSMOTEC filed a Japan s Pharmaceuticals and

Medical Devices Act ( JPMDA ) application for approval to market the RECELL System in Japan. The JPMDA application has been accepted, and the review is ongoing.

CY2019 was also a busy year for

scientific publications and presentations, notably including the following:

Avita Medical Limited c/o Mertons

Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

Second Quarter Fiscal 2020 Financial Results (Unaudited)

(All amounts are in thousands of AUD except where noted)

of the Appendix 4C - Quarterly Cash Flow Report for the second quarter of fiscal 2020, the quarter ended 31 December 2019, is attached. Operations for the quarter were focused primarily on the U.S. national adoption of the RECELL System for the

treatment of acute thermal burns, and the preparation and implementation of further clinical development of the RECELL System.

During the quarter ended

31 December 2019, total cash receipts were A$7,689, an increase of A$2,452 or 47% compared to the prior quarter ended 30 September 2019. Cash receipts from customers for the quarter ended 31 December 2019 were A$4,920, an increase of

A$841 or 21% compared to the prior quarter due to increased sales on a year-to-date basis. Cash received from BARDA during the current quarter totalled A$2,769, an increase of A$1,611 or 139% compared to the prior quarter. The increase was the

result of a one-time rate adjustment that was received during the quarter ended 31 December 2019. Through 31 December 2019, cumulative payments of A$31.8 million have been received under the BARDA contract.

Overall payments for operating expenses increased in line with expectations during the second quarter as a result of increased initiatives. During the quarter

ended 31 December 2019, payments related to sales and marketing, staffing, administrative and corporate costs for the current quarter totalled A$10,578, a A$1,043 or 11% increase compared to the quarter ended 30 September 2019 primarily

due to higher legal and staffing costs. During the quarter ended 31 December 2019, payments related to product manufacturing and operating costs totalled A$1,974, a A$630 or 47% increase compared to the quarter ended 30 September 2019.

During the quarter ended 31 December 2019, payments for research and development costs totalled A$1,333, a A$33 or 3% increase compared to the quarter ended 30 September 2019. As a result of the ongoing commercialization of the RECELL

System in the U.S. along with other planned initiatives set forth by the Company, payments for operating expenses are expected to increase during 2020. These expense payments are expected to be partially offset by receipts from customers and

receipts under the BARDA contract.

Total net cash used in operating activities during the quarter ended 31 December 2019 was A$6,335, a A$702 or 10%

decrease compared to the quarter ended 30 September 2019 driven primarily by timing of planned initiatives. Cash and cash equivalents held at 31 December 2019 was A$124,658.

Authorised for release by the Chief Executive Officer of Avita Medical Limited.

Avita Medical Limited c/o Mertons

Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

ABOUT AVITA MEDICAL LIMITED

regenerative medicine company with a technology platform positioned to address unmet medical needs in burns, chronic wounds, and aesthetics indications. AVITA Medical s patented and proprietary collection and application technology provides