Avita Medical AVH
February 22, 2019 - 3:59pm EST by
2019 2020
Price: 0.13 EPS 0 0
Shares Out. (in M): 2 P/E 0 0
Market Cap (in $M): 207 P/FCF 0 0
Net Debt (in $M): -37 EBIT 0 0
TEV (in $M): 170 TEV/EBIT 0 0

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Above metrics in AUD and share count from Jan-19 presentation (ADR trades under AVMXY, 20:1)


AVITA Medical is currently launching a revolutionary product for burn wound patients that is significantly cheaper and more effective than existing standard of care (SOC). This is the first major burn advancement in the last 25 years. While the stock does not screen well given the current cash burn/lack of revenue/lack of coverage, the company officially launched in January after commercial approval (prior to this, it derived most cases from compassionate use/BARDA funding). We believe this is an easy 2-bagger and potential 10-bagger if the product migrates into aesthetics from purely burn care. The company has enough cash given recent equity raise to run until product break-even while funding clinical programs.


Why Standard of Care (SoC) is Lacking

  • Current SoC is Split-Thickness Skin Grafts (STSG) – a skin graft is a piece of unburned skin surgically removed from a donor sire on the patient’s body (in the OR) and used to cover a burned area of the body
    • Currently used in 75% of cases
  • Issues:
    • Significant burns require large donor areas
    • Significant pain during and after the skin grafting procedure
    • Extended hospitalization (=SIGNIFICANTLY MORE COSTS)
    • Risks of infection



  • Timely treatment is vital for all burn patients (skin is the body’s protection)
  • Average cost - $792,000 and 59.4 days in the hospital for 40% Total Burn Surface Area (TBSA) burn


  • RECELL is an autologous (obtained from same individual) cell harvesting device that uses proprietary enzyme and buffer formulations to generate a “spray-on skin” replacement within 30 minutes
  • Device is single-use, sterile, self-contained and delivers skin regeneration at the point-of-care
  • RECELL can cover treatment area 80x than the donor site  (=significant reducing donor tissue)
  • Skin sample the size of a credit card can be used to treat a patient’s entire back
  • 7,000+ uses with no observed safety signals
  • FDA approved RECELL on September 20, 2018

Clinical Results

  • There has been two multicenter, randomized, controlled clinical trials (131 patients) and results have been stellar
    • Pivotal Trial #1 RECELL vs. SOC (STSG) in Second-Degree Burns
    • Pivotal Trial #2 RECELL with widely spaced SG Versus SOC (STSG) in Third-Degree Burns