Recent Highlights
- Pre-launch U.S. product sales of A$1.1
million in second quarter
- Successful preparation for U.S.
national market launch in January 2019
- 26 abstracts highlighting RECELL®
System clinical and economic benefits accepted for presentation at
multiple burn conferences, including the American Burn Association
(ABA) 51st Annual Meeting
- A$41.7 million equity financing provide
resources for U.S. launch and pipeline expansion
AVITA Medical (ASX: AVH, OTCQX: AVMXY), a global regenerative
medicine company, announced that it filed today with the ASX its
Appendix 4C - Quarterly Cash Flow Report for the quarter ended 31
December 2018. Provided below is an update regarding the
substantial accomplishments achieved during the second fiscal
quarter, including the first U.S. commercial sales of the RECELL®
Autologous Cell Harvesting Device (RECELL® System) for the
treatment of acute thermal burns.
First U.S. Commercial Sales of RECELL System and U.S.
National Market Launch
During the quarter ended 31 December 2018, the Company’s primary
commercial focus was preparing for the January 2019 U.S. national
market launch of the RECELL System. Key commercial achievements
during the quarter included recruiting, hiring and training a
highly experienced sales team of 20 professionals, the receipt of
American Burn Association (ABA) issued reimbursement coding
guidelines within one week of U.S. Food and Drug Administration
(FDA) approval, and commercial product availability within two
weeks of approval.
In advance of the January 2019 U.S. national market launch and
without any direct promotional effort, the clinical and economic
benefits of the RECELL System generated strong interest from burn
centers and greater than expected sales orders. Product sales and
other revenues for the quarter and six months ended 31 December
2018 were as follows (unaudited and provided in advance of
completion of Company’s Mid-Year Report to be filed in Appendix
4D):
Three Months Ended
Six Months Ended
(In thousands of AUD)
31 December
31 December
2018
2017
2018
2017
U.S. Product Sales $ 1,102 $ -
$
1,102 $ - International Product Sales 343 318 711 608 Total Product
Sales 1,445 318 1,813 608 BARDA Revenue 2,456 2,040
5,009
3,857
Total Revenue $ 3,901 $ 2,358
$
6,822
$
$4,465
“We are excited that in advance of our U.S. national market
launch in January 2019 the patient benefits and cost savings
associated with the RECELL System resulted in strong commercial
sales during the first three months after FDA approval,” said Dr.
Mike Perry, Chief Executive Officer. “We look forward to reporting
our progress through 2019 as we begin to see the results of the
U.S. national launch and the deployment of our full sales team of
20 professionals.”
RECELL System Clinical Results Featured in 26 Presentations
at Early 2019 Burn Conferences
26 abstracts highlighting the clinical and cost savings benefits
of the RECELL® Autologous Cell Harvesting Device (RECELL® System)
have been selected for presentation at four burn conferences in
early 2019. Nine of the presentations will be made at the largest
burn conference, the American Burn Association (ABA) 51st Annual
Meeting to be held in Las Vegas April 2-5, 2019, including a
Top-Five Abstract presentation in plenary session. These abstracts
build upon and greatly advance the pivotal clinical trial results
and health economic data presented at last year’s ABA meeting and
will highlight the positive clinical outcomes that burn surgeons
have observed in a broad range of patients and burn types.
In January 2019 eight presentations were made at the North
American Burn Society 37th Annual Conference held in Park City, and
one presentation was made at the LA-ACS/SAL Annual Meeting in New
Orleans, further supporting the clinical and economic benefits of
the RECELL System. In addition to the strong interest from major
burn conferences, results from the Company’s second pivotal
clinical trial of the RECELL System full-thickness burns were
published in Burns, a major peer-reviewed journal. The clinical
results reflected in the 26 abstracts and the Burns publication
further expand the body of scientific materials demonstrating that
the RECELL System is a major innovation in the treatment of burn
patients.
Funding and technical support for the development of the RECELL
System was provided by the Biomedical Advanced Research and
Development Authority (BARDA), under the Assistant Secretary for
Preparedness and Response, within the U.S. Department of Health and
Human Services, under ongoing USG Contract No. HHSO100201500028C.
Programs included in the above abstracts and publication which were
funded under the BARDA contract include the two randomized,
controlled pivotal clinical trials, the Compassionate Use and
Continued Access programs, development of the health economic model
demonstrating the cost savings associated with the RECELL System,
and two randomized, controlled clinical trials in pediatric burn
patients.
Second Quarter Fiscal 2019 Financial Results
(Unaudited)
(All amounts are in thousands of AUD except where noted)
A copy of the Appendix 4C - Quarterly Cash Flow Report for the
second quarter of fiscal 2019, the quarter ended 31 December 2018,
is attached. Operations for the quarter were focused primarily on
preparation for the U.S. national market launch of the RECELL
System which occurred in January 2019, the commencement of product
shipments in the U.S. after the September 2019 FDA approval of the
RECELL System for the treatment of burns, limited commercial sales
efforts in selected markets in which the RECELL System is approved
for sale, and the preparation and conduct of further clinical
development of the RECELL System.
During the quarter ended 31 December 2018, total cash receipts
were $2,833, a decrease of $1,643 or 37% comparted to the prior
quarter ended 30 September 2018. Cash receipts from customers for
the quarter ended 31 December 2018 were $858, an increase of $511
or 147% compared to the prior quarter due to the commencement of
U.S. product sales. Cash received from BARDA during the current
quarter totalled $1,975, a decrease of $1,643 or 40% compared to
the prior quarter. The decrease was the result of a one-time rate
adjustment that was received during the quarter ended 30 September
2018. Through 31 December 2018, cumulative payments of $22.64
million have been received under the BARDA contract.
As the result of investments in commercial, manufacturing, and
system capabilities for the U.S. market launch of the RECELL System
and related initiatives, overall payments for operating expenses
increased during the second quarter of fiscal 2019. During the
quarter ended 31 December 2018, payments related to sales and
marketing, staffing, administrative and corporate costs for the
current quarter totalled $8,967, a $2,158 or 32% increase compared
to the quarter ended 30 September 2018. The increase was primarily
due to the hiring of the U.S. sales force for the RECELL System and
related activities. This increase is partially offset by payments
for research and development, manufacturing and operating costs
which during the current quarter totalled $1,923, a $628 or 25%
decrease compared to the quarter ended 30 September 2018. The
decrease was the result of the wind-down of certain activities
associated with supporting the U.S. FDA approval of the RECELL
System as well as the Compassionate Use and Continued Access
programs. As a result of the national launch of the RECELL System
in the U.S. in January 2019, and the expansion of research and
development, payments for operating expenses will increase in
future quarters. These expense payments will 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 2018 was $6,583, a $2,763 or 72% increase
compared to the quarter ended 30 September 2018. The current
quarter decrease in net cash used in operating activities resulted
from the decrease in total cash receipts combined with the increase
in payments for operating expenses, partially offset by the $1,421
research and development tax credit received.
During the quarter ended 31 December 2018, net proceeds provided
by Tranche 1 of an institutional placement of shares to U.S.,
Australian and international institutional and sophisticated
investors was $22,268. Cash and cash equivalents held at 31
December 2018 was $30,342. Including the net proceeds of $13,829
and $1,765 received in January 2019 from Tranche 2 of the
institutional placement and from a share purchase plan,
respectively, the pro forma cash and cash equivalents balance at 31
December 2018 was $45,936.
Future cash requirement will be dependent upon the success of
AVITA Medical’s efforts to commercialize the RECELL System,
particularly in the U.S., and the timing and magnitude of clinical
and other research and development programs the Company elects to
undertake to expand its product pipeline. Until such time that the
Company generates sufficient cash flow from operations, it expects
to fund its future cash requirements through a combination of
current cash resources, and potentially the issuance of shares and
debt financing.
ABOUT AVITA MEDICAL LIMITED
AVITA Medical is a 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 innovative treatment solutions derived from the
regenerative properties of a patient’s own skin. The medical
devices work by preparing a REGENERATIVE EPIDERMAL SUSPENSION™
(RES™), an autologous suspension comprised of the patient’s skin
cells necessary to regenerate natural healthy epidermis. This
autologous suspension is then sprayed onto the areas of the patient
requiring treatment.
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 indicated for use in the
treatment of acute thermal burns in patients 18 years and older.
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 7,000 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 outside of Europe, our products are
marketed under the RECELL System brand to promote skin healing in a
wide range of applications including burns, chronic wounds and
aesthetics. The RECELL System is TGA-registered in Australia,
CFDA-cleared in China, and received CE-mark approval in Europe.
To learn more, visit www.avitamedical.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This letter 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 letter 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 letter 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 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 letter. 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 letter speak only as of the date of this release, and we
undertake no obligation to update or revise any of these
statements.
+Rule 4.7B
Appendix 4C
Quarterly report for entities subject
to Listing Rule 4.7B
Introduced 31/03/00 Amended 30/09/01,
24/10/05, 17/12/10, 01/09/16
Name of entity
Avita Medical Limited
ABN
Quarter ended (“current
quarter”)
28 058 466 523
31 December 2018
Consolidated statement of cash
flows
Current quarter$A’000
Year to date(6
months)$A’000
1. Cash flows from operating activities 858
1,205 1.1 Receipts from customers 1.1a Receipts from government
contract (BARDA) 1,975 6,104 1.2 Payments for (1,569 ) (3,095 ) (a)
research and development (b) product manufacturing and operating
costs (354 ) (1,379 ) (c) advertising and marketing (2,064 ) (3,997
) (d) leased assets (362 ) (514 ) (e) staff costs (3,842 ) (7,355 )
(f) administration and corporate costs (2,699 ) (3,910 ) 1.3
Dividends received 1.4 Interest received 53 97 1.5 Interest and
other costs of finance paid 1.6 Income taxes paid 1.7 Government
grants and tax incentives 1,421 2,441 1.8 Other (provide details if
material)
1.9 Net cash used in
operating activities (6,583 )
(10,403 )
Consolidated statement of cash
flows
Current quarter$A’000
Year to date(6
months)$A’000
2. Cash flows from investing activities (382 )
(722 ) 2.1 Payments to acquire: (a) property, plant and equipment
(b) businesses (see item 10) (c) investments (d) intellectual
property (e) other non-current assets 2.2 Proceeds from disposal
of: (a) property, plant and equipment (b) businesses (see item 10)
(c) investments (d) intellectual property (e) other non-current
assets 2.3 Cash flows from loans to other entities 2.4 Dividends
received (see note 3) 2.5 Other (provide details if material)
2.6 Net cash used in investing
activities (382 )
(722 )
3.
Cash flows from financing activities 24,804 28,054 3.1
Proceeds from issues of shares 3.2 Proceeds from issue of
convertible notes 3.3 Proceeds from exercise of share options 3.4
Transaction costs related to issues of shares, convertible notes or
options (2,536 ) (2,745 ) 3.5 Proceeds from borrowings 3.6
Repayment of borrowings 3.7 Transaction costs related to loans and
borrowings 3.8 Dividends paid 3.9 Other (provide details if
material)
3.10 Net cash from
financing activities 22,268
25,309
Consolidated statement of cash
flows
Current quarter$A’000
Year to date(6
months)$A’000
4. Net increase in cash and cash equivalents for the
period 14,122 14,825 4.1 Cash and cash equivalents at beginning
of quarter/year to date 4.2 Net cash used in operating activities
(item 1.9 above) (6,583 ) (10,403 ) 4.3 Net cash from used in
investing activities (item 2.6 above) (382 ) (722 ) 4.4 Net cash
from financing activities (item 3.10 above) 22,268 25,309 4.5
Effect of movement in exchange rates on cash held 917 1,333
4.6 Cash and cash equivalents at end of
quarter 30,342 30,342
5.
Reconciliation of cash and cash
equivalentsat the end of the quarter (as shown in the
consolidated statement of cash flows) to the related items in the
accounts
Current quarter$A’000
Previous quarter$A’000
5.1
Bank balances
30,342
14,122
5.2
Call deposits
-
-
5.3
Bank overdrafts
-
-
5.4
Other (provide details)
-
-
5.5
Cash and cash equivalents at end of
quarter (should equal item 4.6 above)
30,342
14,122
6.
Payments to directors of the entity and
their associates
Current quarter
$A'000
6.1
Aggregate amount of payments to these
parties included in item 1.2
(279)
6.2
Aggregate amount of cash flow from loans
to these parties included in item 2.3
6.3
Include below any explanation necessary to
understand the transactions included in items 6.1 and 6.2
6.1 Executive Director remuneration
(169k), Directors fees (64k), Clinical Advisory Board fees (11k),
and Bioscience Consultancy (35k)
7.
Payments to related entities of the
entity and their associates
Current quarter$A'000
7.1
Aggregate amount of payments to these
parties included in item 1.2
7.2
Aggregate amount of cash flow from loans
to these parties included in item 2.3
7.3
Include below any explanation necessary to
understand the transactions included in items 7.1 and 7.2
8.
Financing facilities
availableAdd notes as necessary for an understanding of the
position
Total facility amountat quarter
end$A’000
Amount drawn atquarter
end$A’000
8.1 Loan facilities 8.2 Credit standby
arrangements 8.3 Other (please specify)
8.4 Include below a description of each facility above,
including the lender, interest rate and whether it is secured or
unsecured. If any additional facilities have been entered into or
are proposed to be entered into after quarter end, include details
of those facilities as well.
9. Estimated cash
outflows for next quarter
$A’000
9.1 Research and development 1,600 9.2 Product
manufacturing and operating costs 400 9.3 Advertising and marketing
1,500 9.4 Leased assets 200 9.5 Staff costs 5,000 9.6
Administration and corporate costs 1,200 9.7 Other (provide details
if material)
9.8 Total estimated cash
outflows* 9,900
* Pertains to outflows only, inflows from customer receipts and
government contracts, which totalled $2,833 for the quarter ended
31 December 2018 and are expected to increase in future quarters,
are not included.
10.
Acquisitions and disposals of business
entities(items 2.1(b) and 2.2(b) above)
Acquisitions
Disposals 10.1 Name of entity
10.2 Place of incorporation or
registration 10.3 Consideration for acquisition or
disposal 10.4 Total net assets 10.5
Nature of business
Compliance statement
1
This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A. 2
This statement gives a true and fair view of the matters disclosed.
Dale SanderDale SanderChief Financial Officer31
January 2019
Notes 1. The quarterly report provides a basis for
informing the market how the entity’s activities have been financed
for the past quarter and the effect on its cash position. An entity
that wishes to disclose additional information is encouraged to do
so, in a note or notes included in or attached to this report. 2.
If this quarterly report has been prepared in accordance with
Australian Accounting Standards, the definitions in, and provisions
of, AASB 107: Statement of Cash Flows apply to this report. If this
quarterly report has been prepared in accordance with other
accounting standards agreed by ASX pursuant to Listing Rule 19.11A,
the corresponding equivalent standard applies to this report. 3.
Dividends received may be classified either as cash flows from
operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
+ See chapter 19 for defined terms1 September 2016
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OUS MediaMonsoon CommunicationsSarah KemterPhone
+61 (0)3 9620 3333Mobile +61 (0)407 162
530sarahk@monsoon.com.au
Investors:Westwicke PartnersCaroline CornerPhone
+1-415-202-5678caroline.corner@westwicke.com
AVITA Medical LtdDale A. SanderChief Financial
OfficerPhone +1-661-367-9178dsander@avitamedical.com
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