8-K
0001762303false00017623032023-11-092023-11-09

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 09, 2023

 

 

AVITA Medical, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-39059

85-1021707

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

28159 Avenue Stanford

Suite 220

 

Valencia, California

 

91355

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 661 367-9170

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

RCEL

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 9, 2023, AVITA Medical, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this report, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

 

Description of Exhibit

99.1

 

Press release titled “AVITA Medical Reports Third Quarter Financial Results with 51% Revenue Growth over the same period in the prior year"

104

 

 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

AVITA Medical, Inc.

 

 

 

 

Date:

November 09, 2023

By:

/s/ Donna Shiroma

 

 

 

Donna Shiroma
General Counsel

 


EX-99.1

Exhibit 99.1

https://cdn.kscope.io/ef8bc95aa7d5ef0e7e8ae833eb0992ea-img262816717_0.jpg 

 

 

AVITA Medical Reports Third Quarter Financial Results with 51% Revenue Growth over the Same Period the Prior Year

 

 

VALENCIA, Calif., November 9, 2023 — 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 September 30, 2023.

 

Financial Highlights and Recent Updates

 

Commercial revenue of $13.5 million, an approximately 51% increase compared to $9.0 million for the same period in 2022
Gross margin of 84.5% for the quarter
Announced international expansion plan; engaged first European distribution partner, PolyMedics Innovations GmbH, to lead expansion into Germany, Austria, and Switzerland
In October, secured a debt financing facility for up to $90.0 million, of which $40.0 million was borrowed at closing. Together with the cash on hand of $60.1 million as of September 30, 2023, the Company believes it has sufficient capital to meet its goals and to reach profitability during 2025.

 

“We continue to execute our growth strategy, paving the way to profitability,” said Jim Corbett, Chief Executive Officer of AVITA. “We are diligently working through supplemental in-house testing to support the FDA’s review of our PMA supplement for RECELL GO. Once complete, we expect to submit a response to the FDA’s open questions on February 28, 2024. Under the Breakthrough Device program, we anticipate FDA approval on May 30, 2024, which positions us for a launch the following day.”

 

Future Milestones

 

Expect FDA real-time review of the PMA Supplement for RECELL GO to resume on March 1, 2024, day 91 of the 180-day review cycle, with FDA approval anticipated on May 30, 2024
Reaffirming high growth potential of full-thickness skin defect indication, which presents a market 10 times the size of original burns market
Plan to actively identify new international distributor partnerships, including Australia, Japan, and European Union, over the next 6 to 12 months
Expect full enrollment of post-market study, TONE, by end of February 2024
Initiating health care economics study to capture longitudinal healthcare costs of vitiligo patients
Expect initial reimbursement coverage for vitiligo in Q3 2025
Expect to reach profitability in 2025

 

“We have achieved significant commercial revenue growth rates for the last three quarters of 40%, 42% and 51%, respectively, over the same periods in the previous year,” said David O’Toole, Chief Financial Officer of AVITA Medical. “Further, we remain confident that our cash reserves position us to achieve our goals and reach profitability in 2025.”

 

 

Page 1

 


Financial Guidance

 

Commercial revenue for the fourth quarter 2023 is expected to be in the range of $15.3 to $16.3 million, reflecting a lower bound of 64% and upper bound of 73% growth over the same period in the prior year
Commercial revenue for the full year 2023 is expected to be in the range of $51 to $53 million, reflecting a lower bound of 50% and upper bound of 56% growth over the same period in the prior year
Gross margin for the full year 2023 expected to be in the range of 83% to 85%

 

Third Quarter 2023 Financial Results

 

Our commercial revenue, which excludes Biomedical Advanced Research and Development Authority (BARDA) revenue, increased by 51% to $13.5 million in the three-months ended September 30, 2023, compared to $9.0 million in the same period in 2022. Total revenue, which includes BARDA revenue, increased by 50% to $13.6 million compared to $9.1 million in the same period in 2022.

 

Gross profit margin increased by 1.3% to 84.5% compared to 83.2% for the third quarter of 2022. The increase was largely driven by higher production associated with our increase in revenues and lower shipping costs.

 

Total operating expenses for the quarter were $21.0 million, compared to $14.2 million in the same period in 2022. The increase in operating expenses is primarily attributable to an increase of $5.1 million in sales and marketing costs. The increase in sales and marketing costs is a result of the expansion of our commercial organization in preparation of the commercial launch of full-thickness skin defects that happened in the second quarter. In addition, the increase in operating expenses included an increase of $0.6 million in R&D costs, and an increase of $1.1 million in G&A costs, primarily due to an increase in stock compensation expense.

 

Net loss was $8.7 million, or a loss of $0.34 per basic and diluted share, compared to a net loss of $5.6 million, or a loss of $0.22 per basic and diluted share, in the same period in 2022.

 

As of September 30, 2023, the Company had approximately $60.1 million in cash, cash equivalents, and marketable securities.

 

BARDA income consisted of funding from the Biomedical Advanced Research and Development Authority, under the Assistant Secretary for Preparedness and Response, within the U.S. Department of Health and Human Services, under ongoing USG Contract No. HHSO100201500028C.

 

Webcast and Conference Call Information
The Company will host a conference call to discuss the third quarter financial results and, recent business highlights on Thursday, November 9, 2023, at 1:30 p.m. Pacific 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. A simultaneous webcast of the call will be available via the Company’s website at https://ir.avitamedical.com.

 

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 thermal burn wounds and full-thickness skin defects and for repigmentation of stable depigmented vitiligo lesions, 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. 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.

 

In international markets, our products are approved under the RECELL System brand to promote skin healing in a wide range of applications including burns, full-thickness skin defects, and vitiligo. 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.

 

Page 2

 


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 statements. 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.

 

Investor & Media Contact:

Jessica Ekeberg

Phone +1-661-904-9269

invesotr@avitamedical.com

media@avitamedical.com

 

 

Authorized for release by the Chief Financial Officer of AVITA Medical, Inc.

 

Page 3

 


AVITA MEDICAL, INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

 

 

 

As of

 

 

 

September 30, 2023

 

 

December 31, 2022

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

50,854

 

 

$

18,164

 

Marketable securities

 

 

9,264

 

 

 

61,178

 

Accounts receivable, net

 

 

5,875

 

 

 

3,515

 

BARDA receivables

 

 

201

 

 

 

898

 

Prepaids and other current assets

 

 

3,356

 

 

 

1,578

 

Inventory

 

 

4,377

 

 

 

2,125

 

Total current assets

 

 

73,927

 

 

 

87,458

 

Marketable securities long-term

 

 

-

 

 

 

6,930

 

Plant and equipment, net

 

 

1,862

 

 

 

1,200

 

Operating lease right-of-use assets

 

 

2,607

 

 

 

851

 

Corporate-owned life insurance ("COLI") asset

 

 

1,923

 

 

 

1,238

 

Intangible assets, net

 

 

459

 

 

 

465

 

Other long-term assets

 

 

236

 

 

 

122

 

Total assets

 

$

81,014

 

 

$

98,264

 

LIABILITIES, NON-QUALIFIED DEFERRED COMPENSATION PLAN SHARE AWARDS AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

3,019

 

 

 

3,002

 

Accrued wages and fringe benefits

 

 

7,143

 

 

 

6,623

 

Current non-qualified deferred compensation liability

 

 

333

 

 

 

78

 

Other current liabilities

 

 

1,341

 

 

 

990

 

Total current liabilities

 

 

11,836

 

 

 

10,693

 

Non-qualified deferred compensation liability

 

 

3,361

 

 

 

1,270

 

Contract liabilities

 

 

365

 

 

 

698

 

Operating lease liabilities, long term

 

 

1,845

 

 

 

306

 

Total liabilities

 

 

17,407

 

 

 

12,967

 

Non-qualified deferred compensation plan share awards

 

 

629

 

 

 

557

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, $0.0001 par value per share, 200,000,000 shares authorized, 25,550,694 and 25,208,436 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

 

 

3

 

 

 

3

 

Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding at September 30, 2023 and December 31, 2022.

 

 

-

 

 

 

-

 

Company common stock held by the non-qualified deferred compensation plan ("NQDC Plan")

 

 

(1,290

)

 

 

(127

)

Additional paid-in capital

 

 

347,192

 

 

 

339,825

 

Accumulated other comprehensive income

 

 

7,977

 

 

 

7,627

 

Accumulated deficit

 

 

(290,904

)

 

 

(262,588

)

Total stockholders' equity

 

 

62,978

 

 

 

84,740

 

Total liabilities, non-qualified deferred compensation plan share awards and stockholders' equity

 

$

81,014

 

 

$

98,264

 

 

 

 

 

 

 

 

 

Page 4

 


AVITA MEDICAL, INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three-Months Ended

 

 

Nine-Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

13,645

 

 

$

9,092

 

 

$

35,948

 

 

$

24,966

 

Cost of sales

 

 

(2,113

)

 

 

(1,530

)

 

 

(5,984

)

 

 

(4,694

)

Gross profit

 

 

11,532

 

 

 

7,562

 

 

 

29,964

 

 

 

20,272

 

BARDA income

 

 

212

 

 

 

904

 

 

 

1,369

 

 

 

2,189

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

(10,532

)

 

 

(5,411

)

 

 

(27,075

)

 

 

(15,571

)

General and administrative expenses

 

 

(6,124

)

 

 

(5,004

)

 

 

(20,584

)

 

 

(18,009

)

Research and development expenses

 

 

(4,394

)

 

 

(3,799

)

 

 

(14,056

)

 

 

(10,478

)

Total operating expenses

 

 

(21,050

)

 

 

(14,214

)

 

 

(61,715

)

 

 

(44,058

)

Operating loss

 

 

(9,306

)

 

 

(5,748

)

 

 

(30,382

)

 

 

(21,597

)

Interest expense

 

 

(10

)

 

 

(6

)

 

 

(21

)

 

 

(10

)

Other income

 

 

615

 

 

 

170

 

 

 

2,141

 

 

 

307

 

Loss before income taxes

 

 

(8,701

)

 

 

(5,584

)

 

 

(28,262

)

 

 

(21,300

)

Income tax expense

 

 

(11

)

 

 

(4

)

 

 

(54

)

 

 

(12

)

Net loss

 

$

(8,712

)

 

$

(5,588

)

 

$

(28,316

)

 

$

(21,312

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.34

)

 

$

(0.22

)

 

$

(1.12

)

 

$

(0.85

)

Weighted-average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

25,401,754

 

 

 

25,006,995

 

 

 

25,281,920

 

 

 

24,972,331

 

 

 

 

 

 

 

 

 

 

Page 5