Company Overview and History
AVITA Medical, Inc. (NASDAQ: RCEL) is a leading therapeutic acute wound care company delivering innovative solutions that are transforming the standard of care. With a focus on optimizing skin restoration procedures, AVITA Medical's technologies are designed to effectively accelerate patient healing and recovery, addressing critical needs that arise from unpredictable and life-changing events.
AVITA Medical has a rich history dating back to its founding in 1992 in Australia as AVITA Australia. The company's initial focus was on developing innovative technologies to optimize skin restoration procedures and accelerate patient healing and recovery. A significant milestone was achieved in September 2018 when the U.S. Food and Drug Administration (FDA) granted premarket approval (PMA) for the use of the RECELL System in the treatment of acute thermal burns in patients 18 years and older. This approval paved the way for the company to begin commercialization of the RECELL System in the United States in January 2019.
The early years of commercialization presented challenges for AVITA Medical as it worked to increase market penetration and adoption of the RECELL System in U.S. burn centers. Significant investments were made in clinical education and training to ensure medical staff were comfortable with the technology. The company also had to navigate the complex process of obtaining favorable reimbursement coverage and pricing for the RECELL System.
In 2019, AVITA Australia began trading its American Depositary Shares on the Nasdaq Capital Market under the symbol RCEL, marking an important step in the company's growth and visibility in the U.S. market. Another significant milestone was reached in June 2021 when the FDA approved a PMA supplement to expand the use of the RECELL System for acute full-thickness thermal wounds in both pediatric and adult patients, broadening the addressable market for the technology.
Strategic Transformation
Over the past two years, AVITA Medical has undergone a remarkable transformation, evolving from a single-product company to a multi-product leader in the therapeutic acute wound care space. This strategic shift began in 2023 when the company launched its plan to expand its core business, treating not only burn injuries but also trauma and surgical wounds under the full-thickness skin defects indication. To support these efforts, AVITA Medical built a scalable infrastructure, setting the stage for its first portfolio expansion.
In January 2024, the company announced the addition of PermeaDerm, a biosynthetic wound matrix, to its product lineup. By April 2024, AVITA Medical had successfully launched PermeaDerm, marking a pivotal milestone in its transformation and aligning its portfolio with its mission to position the company as a leading provider of therapeutic acute wound care solutions.
Product Portfolio
RECELL System
The company's flagship technology, the patented and proprietary RECELL System, remains at the forefront of its portfolio. RECELL harnesses the regenerative properties of a patient's own skin to create an autologous skin cell suspension, Spray-On Skin Cells, delivering a transformative solution at the point of care. Clinical evidence has demonstrated that RECELL allows for significantly reduced donor-skin requirements while maintaining or improving healing outcomes compared to traditional grafting techniques.
RECELL GO and RECELL GO mini
Building on the success of RECELL, AVITA Medical introduced the next-generation RECELL GO system in 2024. RECELL GO features enhanced capabilities that streamline the preparation of Spray-On Skin Cells and improve workflow efficiency in burn and trauma centers. The company has reported that nearly all of its burn accounts and over 70% of its trauma center accounts have converted to RECELL GO, accounting for approximately 83% of its total unit volume.
To further address the needs of the trauma market, AVITA Medical received FDA approval for RECELL GO mini in December 2024. This line extension is designed specifically to treat smaller wounds up to 480 square centimeters, filling a critical gap in the company's product portfolio and expanding its addressable market.
Cohealyx
In July 2024, AVITA Medical entered into an exclusive multi-year development and distribution agreement with Regenity Biosciences, granting the company the rights to market, sell, and distribute Cohealyx, a unique collagen-based dermal matrix. Cohealyx is designed to facilitate tissue integration and revascularization, resulting in reduced treatment timelines and improved patient outcomes in the treatment of full-thickness wounds.
Preclinical studies have demonstrated that Cohealyx can generate robust tissue capable of consistently supporting a split-thickness skin graft in a two-stage procedure earlier than leading dermal matrices. This expedited timeline is anticipated to lead to quicker wound closure, streamlined clinician workflows, shorter hospital stays, reduced treatment costs, and better patient outcomes.
Following the FDA's 510(k) clearance for Cohealyx in December 2024, AVITA Medical commenced a post-market clinical study known as Cohealyx 1 to build on the preclinical success and support the product's full commercial launch. The company expects to have the initial data from this study by April 2025, which it believes will further reinforce the value of Cohealyx and drive adoption.
Market Opportunity
AVITA Medical's expanded product portfolio, which now includes RECELL, RECELL GO, RECELL GO mini, PermeaDerm, and Cohealyx, has transformed the company's total addressable market (TAM) from a $500 million opportunity focused solely on burn centers to a $3.5 billion opportunity across both burn and trauma centers in the United States.
Financial Performance
The company's financial performance in 2024 reflects this transformation. For the full year, AVITA Medical reported commercial revenue of $64.25 million, representing a 28.1% increase compared to 2023. Gross profit margin improved to 85.8%, up 130 basis points from the prior year.
While the company's operating expenses increased by 29% in 2024 to $111.8 million, driven primarily by higher sales and marketing costs associated with the commercial team's expansion, AVITA Medical remains committed to generating free cash flow in the second half of 2025 and achieving GAAP profitability during the fourth quarter of 2025.
For the fourth quarter of 2024, AVITA Medical reported revenue of $21.23 million, representing a 30% year-over-year increase. However, the company's net loss for the quarter widened to $13.55 million, primarily due to higher operating expenses, which were partially offset by the increased revenues.
Geographic Performance
AVITA Medical generates the majority of its revenue in the United States. In 2024, approximately 97% of total revenue came from the US, with the remaining 3% coming from international markets such as Japan, Europe, Australia, and the UK.
Liquidity and Financial Flexibility
As of December 31, 2024, AVITA Medical reported cash and cash equivalents of $14.05 million. The company's debt-to-equity ratio stood at 0.003, indicating a low level of leverage. AVITA Medical also has access to a $90 million credit facility with OrbiMed Advisors, of which $50 million remained undrawn at the end of 2024.
The company's current ratio of 2.83 and quick ratio of 2.48 as of December 31, 2024, indicate strong short-term liquidity. To further enhance its financial flexibility, AVITA Medical amended its credit agreement with OrbiMed in February 2025, adjusting the trailing 12-month revenue covenants for upcoming quarters. This provides the company with increased financial flexibility as it continues to execute on its growth strategy.
Future Outlook
For the full-year 2025, AVITA Medical expects commercial revenue to be in the range of $100 million to $106 million, representing growth of 55% to 65% compared to 2024. This guidance is driven by several key factors, including the continued adoption of RECELL GO, the launch of RECELL GO mini in Q1 2025, the full commercial launch of Cohealyx on April 1, 2025, and the growing adoption of PermeaDerm.
Challenges and Outlook
The company's transformation has not been without its challenges, however. In January 2025, AVITA Medical lowered its Q4 2024 revenue guidance, citing slower-than-expected purchasing activity from hospitals at the end of the year. Despite this setback, the company remains confident in its ability to deliver strong results in 2025, driven by the continued rollout of RECELL GO mini, the full commercial launch of Cohealyx, and the growing adoption of PermeaDerm.
Looking ahead, AVITA Medical's strategic priorities include further expanding RECELL GO adoption, rolling out RECELL GO mini in trauma centers, launching Cohealyx commercially, and continuing to expand the reach of PermeaDerm. The company also expects to receive CE mark approval for RECELL GO in the European Union and Australia by mid-2025, unlocking additional growth opportunities in those markets.
With its diversified product portfolio, scalable infrastructure, and a clear focus on delivering transformative solutions in the therapeutic acute wound care space, AVITA Medical is well-positioned to capitalize on the significant market opportunities that lie ahead. As the company continues to execute on its growth strategy, investors will be closely watching for signs of sustained revenue growth, improved profitability, and the successful commercialization of its latest innovative offerings.