- Skin regeneration specialist Avita Medical (AVH) is expecting some healthy revenue growth in the midst of the coronavirus pandemic
- The company released its preliminary financial results for the first quarter of 2020 today
- Avita expects a 21 per cent boost in total revenue compared to the quarter before and a 22 per cent increase in U.S. RECELL sales
- RECELL is the company’s skin regeneration tech, currently focussed on treating burn victims
- Burn procedures are not elective and, as such, are going ahead in hospitals just as they were before the COVID-19 pandemic
- Avita shares are trading 6.90 per cent higher today for 46.5 cents each
Skin regeneration company Avita Medical (AVH) has released some healthy preliminary results for the first quarter of 2020.
While the official ASX-approved quarterly report will be released towards the end of the month, the company has whet investor’s palates with expectations of revenue growth during the quarter where COVID-19 tore through global economies.
Avita expects total revenue of $6 million for the quarter, which is 21 per cent higher than the $4.9 million pulled in from October to December 2019.
U.S. sales of Avita’s RECELL skin regeneration tech are expected to come in at US$3.9 million (A$6.46 million) compared to last quarter’s US$3.2 million (A$5.3 million).
Cash during COVID
Investors are likely encouraged by the revenue growth in the midst of coronavirus pandemic — particularly for a medical company not operating in the biotech space.
It would seem Avita’s call to focus on burn divisions throughout 2020 came at a pertinent time.
While the company said it is implementing all the standard regulations and recommendations to slow the spread to the virus, burn procedures are not elective and cannot be deferred.
Because of the serious consequences of severe burns to patients, Avita has had “no substantial change” to the ordering habits of the hospitals it services. Though many health procedures are taking a back seat while COVID-19 overwhelms workers, the burn divisions do not have this luxury.
On top of this, Avita said it has enough raw materials to support expected demand throughout the rest of the calendar year and even into 2021.
This means should the company face supply and distribution challenges because of the coronavirus, it believes it can keep operating until things return to normal. Nevertheless, Avita told shareholders today it doesn’t expect any supply chain or distribution network disruptions from the virus.
Growing sales for growing skin
Avita CEO Dr Mike Perry said the company is pleased with the growth of RECELL in the face of the pandemic.
“The onset of COVID-19 has created challenges for society in general, so it is pleasing to see that the unique benefits of the RECELL System, including reducing the length of stay in hospital for burn patients, are still being well received,” Dr Mike said.
“While it is difficult to predict the medium- to long-term implications of the pandemic, we are committed to preserving the safety, health, and wellbeing of our employees, customers, and the burn patients we serve and are well-capitalised to do so,” he said.
The RECELL System is designed to treat severe burn wounds with its “Spray-On Skin Cells” application. Essentially, the tech can use a small sample of the patient’s own skin to literally spray a regenerative layer of skin on the wounded area.
Avita shares have seen an upswing today, reflecting the wider market. At 11:47 am AEST, shares were trading 6.90 per cent higher for 46.5 cents each in a $947 million market cap.