VALENCIA, Calif. - AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH), a company specializing in regenerative medicine, announced today that the U.S. Food and Drug Administration (FDA) has approved its RECELL GO™ System. This device represents an advancement in autologous cell harvesting technology used for treating burn wounds and skin defects.
The RECELL GO™ System is designed to improve the healing process by using a patient's own skin cells. According to the company, this can lead to better healing outcomes with less donor skin required, reduced pain, faster closure, and fewer procedures needed for definitive closure. AVITA claims that for burns covering less than 50% of Total Body Surface Area (TBSA), the system can also reduce hospital stay lengths.
The newly approved system, which is a supplement to the original premarket approval of the RECELL Autologous Cell Harvesting Device, includes enhanced features aimed at simplifying the preparation of Spray-On Skin™ Cells. These improvements are said to reduce the training burden on medical staff, increase efficiency in the operating room, and ensure optimal cell yield and viability.
Jim Corbett, Chief Executive Officer of AVITA Medical, expressed that the FDA's approval marks a significant shift in the treatment of wounds. He anticipates that the RECELL GO will lead to broader adoption of the technology due to its operational efficiencies.
The RECELL GO is set to launch in top burn treatment centers in the United States in June, with a gradual rollout to other accounts throughout the year. AVITA Medical's strategy includes providing the new system with the first order to new accounts, eliminating the need for conversion from the original device.
AVITA Medical operates on a platform that includes the RECELL System, which is FDA approved for the treatment of thermal burn wounds, full-thickness skin defects, and stable vitiligo lesions repigmentation. The company also holds exclusive rights to market and distribute PermeaDerm®, a biosynthetic wound matrix, in the U.S. Internationally, the RECELL System is approved for a range of skin healing applications.
This announcement is based on a press release statement and contains forward-looking statements, which involve risks and uncertainties that could cause actual results to differ from those projected. AVITA advises that these forward-looking statements are current as of the date of the press release and should not be relied upon as a guarantee of future performance.
InvestingPro Insights
As AVITA Medical, Inc. (NASDAQ: RCEL) gears up for the launch of its RECELL GO™ System, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, AVITA Medical holds a market capitalization of $227.38 million, with a trailing twelve-month revenue of $50.7 million, reflecting a growth of 35.44% over the period. Despite this revenue growth, the company's operating income margin remains deeply negative at -98.35% for the last twelve months as of Q1 2023, indicating significant challenges in converting sales into operating profit.
InvestingPro Tips reveal a mixed financial picture for AVITA Medical. On the positive side, the company's liquid assets exceed its short-term obligations, suggesting a solid position to cover immediate liabilities. Moreover, AVITA holds more cash than debt on its balance sheet, providing a degree of financial flexibility.
On the other hand, the company is quickly burning through its cash reserves and has not been profitable over the last twelve months. Analysts are also cautious, with five analysts having revised their earnings forecasts downwards for the upcoming period, and they do not anticipate the company to be profitable this year.
With the stock price having fallen significantly over the last three months by 51.41%, potential investors may consider the current valuation in light of these financial metrics and analyst outlooks. It is worth noting that AVITA is trading at a high Price / Book multiple of 6.98, which could suggest an optimistic market valuation relative to the company's book value. Furthermore, AVITA does not pay a dividend, which may influence investment decisions for income-focused shareholders.
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