Full Press Release Details
AVITA Medical Reports Third Quarter 2022 Financial Results
VALENCIA, Calif. and MELBOURNE, Australia,
Nov. 10, 2022 (GLOBE NEWSWIRE) AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH) (the Company ), a regenerative medicine company leading the development and commercialization of first-in-class devices and autologous cellular therapies for skin restoration, today reported financial results for the third quarter ended September 30, 2022.
Third Quarter Highlights and Recent Updates:
Over the next 24 to 36 months, our growth is expected to be driven by the burns and soft tissue repair
markets, said Jim Corbett, AVITA Medical Chief Executive Officer. Soft tissue repair will expand our hospital and treating physician call points by nearly three times. We are prepared to make the necessary investment in our commercial
organization to support this expansion. This market opportunity expansion and the related revenue growth is the number one priority of AVITA Medical.
Three Months Ended September 30, 2022 Financial Results
Our commercial revenue, which excludes BARDA revenue, increased by 30% or $2.1 million to $9.0 million in the three months ended September 30, 2022,
compared to $6.9 million in the corresponding period in the prior year. Total revenue, which includes BARDA revenue, increased 30% or $2.1 million to $9.1 million compared to $7.0 million in the corresponding period in the prior
year. The growth in commercial revenues was largely driven by deeper penetration within individual customer accounts along with the commencement of commercial sales with our partner COSMOTEC in Japan.
Gross profit margin decreased by 2% to 83% compared to the corresponding period in the prior year.
Total operating expenses increased by 16% or $2.0 million to $14.2 million compared to $12.3 million in the corresponding period in the prior
year. The increase in operating expenses is attributable to higher compensation costs, pre-commercialization costs, research and development expenses, partially offset by lower share-based compensation
expenses. Higher compensation costs were primarily a result of an expansion of our commercial team along with an increase in commissions which resulted from an increase in commercial revenues. In addition, we incurred severance costs in the current
quarter associated with the termination of a former executive employee. Higher pre-commercialization costs are driven by activities related to future RECELL launches in soft tissue reconstruction and vitiligo.
Increased research and development expenses resulted from ongoing development of next generation devices for an automated preparation of Spray-On Skin
Cells. Higher research and development expenses were partially offset by lower clinical trial expenses for soft tissue reconstruction and vitiligo as trial participants were in less costly follow-up phases
this period compared to more costly recruitment and treatment phases in the prior period. Share-based compensation expense was lower in the current period as certain performance milestones were met in the prior period, and there was a reversal in
the current period of previously recognized expense for unvested awards related to the termination of an executive officer.
Net loss decreased by 6% or
$0.4 million to $5.6 million, or $0.22 per share, compared to a net loss of $5.9 million, or $0.24 per share, in the corresponding period of the prior year.
Adjusted EBITDA* loss increased by 2% or $84 thousand to $4.0 million, compared to a loss of $3.9 million in the corresponding period in the
prior year. A table reconciling non-GAAP measures is included in this press release for reference.
2022 Revenue Guidance
Turning to guidance, full year 2022 commercial revenue (excluding BARDA revenues) is expected to be
$33.0-34.0 million, an increase from our prior guidance of $30 million, and an approximate 33% increase year-over-year. We continue to project BARDA revenues of approximately $0.3 million in
Webcast and Conference Call Information
host a conference call to discuss the third quarter financial results after NASDAQ market close on Thursday, November 10, 2022, at 1:30 p.m. Pacific Time (being Friday, November 11, 2022, 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. The live webinar can be accessed at https://ir.avitamedical.com.
Authorized for release by the Chief
Financial Officer of AVITA Medical, Inc.
ABOUT AVITA MEDICAL, INC.
AVITA Medical is a regenerative medicine company leading the development and commercialization of devices and autologous cellular therapies for skin
restoration. The RECELL System technology platform, approved by the FDA for the treatment of acute thermal burns in both adults and children, harnesses the regenerative properties of a
patient s own skin to create Spray-On Skin cells. Delivered at the
point-of-care, RECELL enables improved clinical outcomes and validated cost savings. RECELL is the catalyst of a new treatment paradigm and AVITA Medical is leveraging
its proven and differentiated capabilities to develop first-in-class cellular therapies for multiple indications, including soft tissue repair and repigmentation of
stable vitiligo lesions.
AVITA Medical s 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 approved for acute partial-thickness thermal burn wounds in patients 18 years of age and older or application in combination with meshed autografting for acute full-thickness thermal burn wounds in pediatric and
adult patients. In February 2022, the FDA reviewed and approved the PMA supplement for RECELL Autologous Cell Harvesting Device, an enhanced RECELL System aimed at providing clinicians a more efficient user experience and simplified workflow.
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 15,000 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 approved under the RECELL System brand to promote skin healing in a wide range of applications including burns,
soft tissue repair, vitiligo, and aesthetics. 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.
* Use of non-GAAP Measure
AVITA Medical s reported earnings are prepared in accordance with generally accepted
accounting principles in the United States, or GAAP, and represent earnings as reported to the Securities and Exchange Commission. AVITA Medical has provided in this release certain financial information that has not been prepared in accordance with
GAAP. AVITA Medical s management believes that the non-GAAP adjusted EBITDA described in the release, which includes adjustments for specific items that are generally not indicative of our core
operations, provides additional information that is useful to investors in understanding AVITA Medical s underlying performance, business and performance trends, and helps facilitate period-to-period comparisons and comparisons of its financial measures with other companies in AVITA Medical s industry. However, the non-GAAP financial measures
that AVITA Medical uses may differ from measures that other companies may use. Non-GAAP financial measures are not required to be uniformly applied, are not audited and should not be considered in isolation or
as substitutes for results prepared in accordance with GAAP.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release 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 press release 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 press release 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 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. Investors should not place considerable reliance on the forward-looking statements contained in this press release.
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 press release speak only as of the date of this release, and we undertake no
obligation to update or revise any of these statements.
FOR FURTHER INFORMATION:
Phone +1 661 904 9269
Consolidated Balance Sheets
(In thousands, except share and per share data)
| As of | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 23,613 | $ | 55,511 | ||||
| Marketable securities | 60,559 | 29,649 | ||||||
| Accounts receivable, net | 3,553 | 3,118 | ||||||
| BARDA receivables | 792 | 308 | ||||||
| Prepaids and other current assets | 1,041 | 1,213 | ||||||
| Restricted cash | 202 | 201 | ||||||
| Inventory | 1,960 | 2,132 | ||||||
| Total current assets | 91,720 | 92,132 | ||||||
| Marketable securities, long-term | 4,012 | 19,692 | ||||||
| Plant and equipment, net | 1,226 | 1,262 | ||||||
| Operating lease right-of-use assets | 1,029 | 1,544 | ||||||
| Corporate-owned life insurance asset | 948 | 304 | ||||||
| Intangible assets, net | 449 | 443 | ||||||
| Other long-term assets | 548 | 638 | ||||||
| Total assets | $ | 99,932 | $ | 116,015 | ||||
| LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
| Accounts payable and accrued liabilities | 3,118 | 2,708 | ||||||
| Accrued wages and fringe benefits | 4,776 | 5,363 | ||||||
| Other current liabilities | 1,619 | 1,075 | ||||||
| Total current liabilities | 9,513 | 9,146 | ||||||
| Non-qualified deferred compensation plan liability | 1,016 | 262 | ||||||
| Contract liabilities | 740 | 952 | ||||||
| Operating lease liabilities, long-term | 405 | 918 | ||||||
| Other long-term liabilities | 113 | |||||||
| Total liabilities | $ | 11,674 | $ | 11,391 | ||||
| Non-qualified deferred compensation plan share awards | 272 | |||||||
| Contingencies (Note 12) | ||||||||
| Shareholders Equity: | ||||||||
| Common stock, $0.0001 par value per share, 200,000,000 shares authorized, 25,030,902 and 24,925,743 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 3 | 3 | ||||||
| Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding at September 30, 2022 and December 31, 2021 | ||||||||
| Company common stock held by the non-qualified deferred compensation plan | (127 | ) | ||||||
| Additional paid-in capital | 337,995 | 332,484 | ||||||
| Accumulated other comprehensive income | 7,350 | 8,060 | ||||||
| Accumulated deficit | (257,235 | ) | (235,923 | ) | ||||
| Total shareholders equity | $ | 87,986 | $ | 104,624 | ||||
| Total liabilities and shareholders equity | $ | 99,932 | $ | 116,015 |
Consolidated Statements of Operations
(In thousands, except share and per share data)
| Three-Months Ended September 30, | Nine-Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 9,092 | $ | 7,020 | $ | 24,966 | $ | 26,089 | ||||||||
| Cost of sales | (1,530 | ) | (1,088 | ) | (4,694 | ) | (5,287 | ) | ||||||||
| Gross profit | 7,562 | 5,932 | 20,272 | 20,802 | ||||||||||||
| BARDA income | 904 | 374 | 2,189 | 1,384 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing expenses* | (5,411 | ) | (3,518 | ) | (15,571 | ) | (11,313 | ) | ||||||||
| General and administrative expenses* | (5,004 | ) | (5,349 | ) | (18,009 | ) | (16,046 | ) | ||||||||
| Research and development expenses* | (3,799 | ) | (3,388 | ) | (10,478 | ) | (11,471 | ) | ||||||||
| Total operating expenses | (14,214 | ) | (12,255 | ) | (44,058 | ) | (38,830 | ) | ||||||||
| Operating loss | (5,748 | ) | (5,949 | ) | (21,597 | ) | (16,644 | ) | ||||||||
| Interest expense | (6 | ) | (9 | ) | (10 | ) | (21 | ) | ||||||||
| Other income | 170 | 16 | 307 | 25 | ||||||||||||
| Loss before income taxes | (5,584 | ) | (5,942 | ) | (21,300 | ) | (16,640 | ) | ||||||||
| Income tax expense | (4 | ) | (6 | ) | (12 | ) | (23 | ) | ||||||||
| Net loss | $ | (5,588 | ) | $ | (5,948 | ) | $ | (21,312 | ) | $ | (16,663 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic | $ | (0.22 | ) | $ | (0.24 | ) | $ | (0.85 | ) | $ | (0.69 | ) | ||||
| Diluted | $ | (0.22 | ) | $ | (0.24 | ) | $ | (0.85 | ) | $ | (0.69 | ) | ||||
| Weighted-average common shares: | ||||||||||||||||
| Basic | 25,006,995 | 24,905,403 | 24,972,331 | 24,174,811 | ||||||||||||
| Diluted | 25,006,995 | 24,905,403 | 24,972,331 | 24,174,811 |
| (In thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Sales and marketing expenses | $ | 408 | $ | 291 | $ | 1,022 | $ | 592 | ||||||||
| General and administrative expenses | 761 | 1,251 | 4,071 | 3,353 | ||||||||||||
| Research and development expenses | 267 | 300 | 689 | 640 | ||||||||||||
| Total | $ | 1,436 | $ | 1,842 | $ | 5,782 | $ | 4,585 |
Reconciliation of reported Net Loss (GAAP) to Adjusted EBIDTA
(NON-GAAP) Measure Unaudited
| (In thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net Loss | $ | (5,588 | ) | $ | (5,948 | ) | $ | (21,312 | ) | $ | (16,663 | ) | ||||
| Depreciation expense | 130 | 147 | 388 | 429 | ||||||||||||
| Patent Amortization | 8 | 27 | 50 | 88 | ||||||||||||
| Share-based expense | 1,436 | 1,842 | 5,782 | 4,585 | ||||||||||||
| Interest Expense | 6 | 9 | 10 | 21 | ||||||||||||
| Income Tax Expense | 4 | 6 | 12 | 23 | ||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | (4,004 | ) | $ | (3,917 | ) | $ | (15,070 | ) | $ | (11,517 | ) |