The Avita (ASX: AVH) share price is down more than 1% after providing an update for FY20.
What is Avita?
Avita is a regenerative medicine company. It aims to address unmet medical needs in burns, chronic wounds and aesthetics indications. Its treatment solutions are derived from the regenerative properties of a patient’s own skin. It works by preparing an autologous suspension of skin cells which are necessary to regenerate natural healthy epidermis. This is then sprayed onto areas of the patient requiring treatment. The first US product, the RECELL system was approved by the FDA in September 2018.
Avita’s FY20 update
With the company’s recent listing in the US, it has decided to change its reporting to US dollars.
In the fourth quarter of FY20, Avita saw US RECELL System sales of US$3.79 million, an increase of 0.2% from the FY20 quarter.
Total global net revenue for the fourth quarter was US$3.88 million. A decrease of 1.6% compared to the third quarter of FY20. However, in Australian dollar terms there was an increase of 2% to AU$6.08 million in the last quarter.
Procedural volumes fell by 4% compared to the last quarter. That shouldn’t be surprising given the COVID-19 pandemic.
Avita balance sheet
At the end of June 2020 the company had cash of US$73.8 million, a decrease of almost US$6 million from the last quarter.
Management comments
Avita CEO Mike Perry said: “Like many others, this quarter we witness the most challenging commercial conditions since the RECELL System was launched in the US in early 2019. While burns are not considered elective procedures, the incidence of burns was not immune to the impact of COVID-19 as nationwide executive orders drove a reduction in accidents resulting in burn injuries.”
Summary
This didn’t seem like a terrible update considering all of the COVID-19 impacts. I’m not sure what a fair share price is for Avita with the potential global growth plans, so I’m happy to just watch from the sidelines.
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