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August 15, 2019
Michael Perry
Chief Executive Officer
Avita Medical Limited
Level 7, 330 Collins Street
Melbourne VIC 3000 Australia
Re: Avita Medical Limited
Draft Registration Statement on Form 20-F
Submitted July 19, 2019
CIK No. 0001762303
Dear Dr. Perry:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form 20-F
General
1. Please ensure that your disclosure is current. For example, we note your
reference to "the
first half of 2019" on page 14, "mid 2019" on page 31, May 2019 on page
32, and "the
first half of 2019" on page 67.
Risk Factors, page 5
2. Your reference at the top of page 70 to uncalled capital suggests that a
portion of your
capital may be subject to calls. If so, please add an appropriate risk
factor. Also please
describe in an appropriate risk factor the risk related to your quorum
requirements and
voting on a show of hands mentioned on pages 70-71.
Michael Perry
Avita Medical Limited
August 15, 2019
Page 2
We have limited experience manufacturing..., page 9
3. Please provide us your analysis of whether you must name the
third-party manufacturers
that are the subject of this risk factor for investors to adequately
evaluate the risk.
The RECELL System, page 23
4. Refer to the last sentence of the first full paragraph on page 24 and
your disclosure in the
last sentence under the heading "Additional RECELL Clinical Results in
Severe Burns"
on page 28. Please see footnote 41 and the related text of Release No.
34-42728 (April
28, 2000) regarding your responsibility when including a URL in your
document,
including the obligation to file the linked information as part of
your document.
The RECELL System Clinical Results and Ongoing and Planned Clinical Trials,
page 24
5. Where your have not already done so, please clarify which trials, if
successful, you
intend to be sufficient to support an application for regulatory
clearance to market
your product for the disclosed indications in the United States
without additional trials.
Also, please revise the second paragraph of your disclosure under the
heading "BARDA
Contract" on page 34 to clarify which of the referenced studies are
complete, which have
begun, and which have not begun.
Research and Development, page 34
6. We note your disclosure in the last sentence on page 48 that your
research and
development expenses consist primarily of expenses for contracted
research and
development conducted by third parties on your behalf. Please revise
the disclosure in
this section to clarify the extent to which your activities rely upon
the efforts of third
parties. Include risk factor disclosure as appropriate.
FDA and International Regulation, page 37
7. Please clarify why you cannot be certain that you comply with cGMP and
other FDA and
international agency and regulatory requirements as mentioned in the
last sentence of the
second full paragraph on page 38. Likewise, please clarify why laws,
regulations and
permits could require expenditure of significant amounts and why you may
be identified
as a potential responsible party as mentioned on page 39; it is unclear
from your existing
disclosure whether you are aware of violations or deficiencies.
FirstName LastNameMichael applicable laws and regulations permit you to fill
purchase requests
8. Please clarify whether Perry
Comapany NameAvita the non-conformities that you mention in the last paragraph
of this
in the EU given Medical Limited
Augustsection. Page 2
15, 2019
FirstName LastName
Michael Perry
FirstName LastNameMichael Perry
Avita Medical Limited
Comapany NameAvita Medical Limited
August 15, 2019
August 15, 2019 Page 3
Page 3
FirstName LastName
Research and Development Tax Incentive, page 42
9. Please describe how your operations or the incentive have changed such
that you did not
record any amount for the first six months of this fiscal year.
Management's Discussion and Analysis of Results of Operations, page 42
10. Provide a narrative discussion of the extent to which changes in sales
of goods are
attributable to changes in prices or to changes in the volume or
amount of products or
services being sold or to the introduction of new products or
services.
11. Please tell us whether the margins under the vendor-managed inventory
system mentioned
on page 34 are consistent with the margins experienced in your most
recent historic period
disclosed in your filing and the expectations mentioned on page 43.
Also, in an
appropriate section of your document, clarify when that system is
intended to begin
and the period over which the disclosed $7.6 million is intended be
received; if you do not
intend to recognize the full amount upon receipt, please clarify.
Year Ended June 30, 2018 compared to Year Ended June 30, 2017, page 43
12. We note your disclosure that the largest increase in sale of goods
occurred in Asia
Pacific. Please balance this disclosure with disclosure regarding sale
of goods in EMEA.
In that regard, please also disclose management's assessment of
factors and trends which
are anticipated to have a material effect on your financial condition
and results of
operations. Also discuss the causes of material changes to the extent
necessary for an
understanding of your business as a whole.
Liquidity and Capital Resources, page 45
13. We note from your statement of cash flows on pages F-6 and F-55 the
"R&D tax refund
received" amounts. Please expand your disclosure to include
information regarding this
source of liquidity.
14. We note your reference to credit agreements at the top of page 14. If
appropriate, please
include a description of your credit agreements as an external source
of liquidity and a
include a brief discussion of any material unused sources of
liquidity.
Compensation, page 52
15. Please update your compensation disclosure for the last full financial
year. Also, please
clarify how the percentages in the last three columns in the table on
page 57 are
calculated; for example, it is unclear why the percentages from Mr.
McDonald would
show 0% related to performance and 0% not related to performance.
16. Please show us how you reconcile the total compensation disclosed on
page 57 and on
page F-35.
Michael Perry
FirstName LastNameMichael Perry
Avita Medical Limited
Comapany NameAvita Medical Limited
August 15, 2019
August 15, 2019 Page 4
Page 4
FirstName LastName
17. Please clarify the nature of the LTIs mentioned on page 57. For
example, is each LTI one
ordinary share?
Employees, page 62
18. If possible, please provide a breakdown of persons employed by main
category of activity
as required by Form 20-F Item 6.D.
Major Shareholders, page 63
19. Please disclose the natural person or persons who beneficially own the
shares held in the
name of the legal entities identified in your table in this section.
Related Party Transactions, page 64
20. Please describe the services provided for the consultancy fees
mentioned in this section.
Passive foreign investment company rules, page 78
21. Please clarify why the ordinary shares may not be eligible for
mark-to-market treatment
even if the ADSs otherwise satisfy the applicable requirement as
mentioned in your fourth
paragraph in this section.
Jury Trial Waiver, page 88
22. We note your reference to a jury trial waiver. Please revise the last
sentence of this
section regarding investors not being deemed to have waived compliance
with the federal
securities laws to state clearly that investors cannot waive
compliance with the federal
securities laws and the rules and regulations promulgated thereunder.
Also, (1) include
appropriate risk factor disclosure regarding the risks of the
provision, including how it
impacts claims arsing under applicable state and federal laws, and (2)
clarify why your
second sentence of this section suggests that there is uncertainty
regarding whether a court
would enforce the provision. .
Item 19. Exhibits, page 91
23. Please identify the exhibits that you intend to include with your
registration statement.
Report of Independent Registered Accounting Firm, page F-2
24. Please have your auditor revise its opinion paragraph to reference the
exact title of the
financial statements included in the filing. For example, the
reference to consolidated
balance sheets should be changed to consolidated statement of
financial position.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Michael Perry
Avita Medical Limited
August 15, 2019
Page 5
You may contact Michael Fay at (202) 551-3812 or Brian Cascio,
Accounting Branch
Chief, at (202) 551-3676 if you have questions regarding comments on the
financial statements
and related matters. Please contact Tim Buchmiller at (202) 551-3635 or Russell
Mancuso,
Legal Branch Chief, at (202) 551-3617 with any other questions.
Sincerely,
FirstName LastNameMichael Perry
Division of
Corporation Finance
Comapany NameAvita Medical Limited
Office of Electronics
and Machinery
August 15, 2019 Page 5
cc: Christopher H. Cunningham, Esq.
FirstName LastName