Avita Medical Inc [ASX:AVH] shares are down by 4.2% today, trading at $4.21 on the ASX this morning after the company announced further FDA approval for its breakthrough skin repair RECELL System.
As you can see, shares of the company are up an incredible 262.1% this past year.
The RECELL Spray-On-Skin system by Avita Medical has gained widespread international adoption, resulting in steady growth for the company.
Today we will examine Avita Medical and why this should be on your watchlist this year.
Source: Tradingview
FDA approval expands the market for Avita Medical
Avita Medical shares are down 4.2% today after the company announced the pre-market approval by the US Food and Drug Administration (FDA) for the use of its RECELL skin repair system on vitiligo patients.
‘RECELL represents first-in-class treatment for repigmentation through the delivery of normal, healthy skin cells,’ said Jim Corbett, Chief Executive Officer of AVITA Medical.
‘This is a breakthrough approval for AVITA Medical, significantly expanding the clinical applications for RECELL, and demonstrates our continued commitment to patient care. We look forward to offering a meaningful one-time treatment option for patients with stable vitiligo across the U.S.’
It appears the market has priced in this news for some time, as shares of AVH have sharply risen since the end of May 2023.
Today’s announcement adds to Avita Medical’s long-term momentum on the ASX and NASDAQ — where the company trades under Avita Medical Inc [NASDAQ:RCEL].
The proprietary RECELL System incorporates the patient’s skin into Spray-On Skin Cells that can be used for various skin conditions, most notably acute burns.
The spray can treat a wound up to 80 times the size of the donor’s skin sample — drastically reducing the size of skin grafts compared to standard methods (up to 97.5% in one trial).
This is the first FDA-approved product offering a one-time treatment for vitiligo sufferers.
RECELL is also being studied for several other skin conditions, including leg ulcers, scar repairs, and elderly skin wound repairs.
Source: Avita Medical
Outlook for Avita Medical shares
Since the initial FDA pre-approval of the RECELL System in 2018, the company has seen a steady uptick in international regulatory approval and sales growth.
In the first quarter of 2023, the company reported AU$10.5 million in total revenue — a 40% increase compared to the same period in 2022.
Gross profit margin was 84% — up 8% from last year’s period.
With the success of initial clinical trials across various applications and the expansion into vitiligo patients, this product’s market is only set to grow.
Physicians and researchers are expecting the number of patients with skin-related issues to rise in correlation with ageing populations.
In recent years, the increase in wildfires across the globe has resulted in a surge of burn patients, which is believed to be a consequence of climate change.
Australia and North America have experienced some of the most severe impacts — most recently, with massive wildfires in Canada burning through millions of acres of land.
With these and other big changes coming, AVH could be one to watch.
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