Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AVITA Medical Inc (AVHHL, Financial) reported a 30% increase in commercial revenue for Q4 2024 compared to the same period in 2023, driven by the adoption of RECELL GO.
- The company successfully launched PermeaDerm and received approval for RECELL GO mini, expanding its product portfolio and market reach.
- AVITA Medical Inc (AVHHL) achieved a high gross profit margin of 87.6% in Q4 2024, indicating strong operational efficiency.
- The introduction of Cohealyx, a collagen-derived dermal matrix, is expected to significantly reduce hospital stays and healthcare costs.
- The company's total addressable market (TAM) has expanded from $500 million to $3.5 billion in the US alone, reflecting its strategic growth and product diversification.
Negative Points
- AVITA Medical Inc (AVHHL) experienced a revenue shortfall of approximately $3 million to $4 million in Q4 2024 due to deferred purchases by key customers.
- The net loss for Q4 2024 was $11.6 million, an increase from the $7.1 million loss in the same period of 2023.
- Operating expenses increased by $1.4 million in Q4 2024 compared to the same period in 2023, primarily due to higher sales and marketing costs.
- The company faces challenges in the European market due to delays in receiving CE mark approval for RECELL GO.
- AVITA Medical Inc (AVHHL) has a significant amount of debt, with interest expenses increasing by $4.2 million year-over-year.
Q & A Highlights
Q: For the guidance, do you expect similar sequential growth each quarter, or will it be more back half weighted due to contributions from Cohealyx?
A: James Corbett, CEO: With the rollout of multiple products, we expect notable growth in Q1, driven by RECELL GO mini and PermeaDerm. Q2 should also see sequential growth. Cohealyx will have a significant revenue impact in the back half, leading to strong quarterly growth throughout the year.
Q: Can you provide more color on the expected market share gains for Cohealyx in the second half of 2025?
A: James Corbett, CEO: While we won't break down by product, Cohealyx has a considerable revenue upside. We are conducting a limited market release in Q1 to gather clinical data, and we expect to have strong support for a full launch by April 1.
Q: Are there any trends in the adoption of RECELL GO mini that give you confidence for the full commercial launch?
A: James Corbett, CEO: RECELL GO mini uses the same processing device as the standard version, making it easy to adopt. The majority of trauma wounds are under 480 square centimeters, and early feedback is positive, indicating strong potential for adoption.
Q: How should we think about the gross margin cadence in 2025?
A: David O'Toole, CFO: Gross margin for RECELL products will remain in the 85% to 87% range. However, overall gross margin may decrease slightly due to distribution arrangements for Cohealyx and PermeaDerm, but this will still positively impact operating profit margins.
Q: How much of international sales is included in the guidance, and when do you expect clearance in Europe?
A: James Corbett, CEO: International sales are modest in the guidance. We expect European clearance by midyear, but the process is unpredictable despite no technical challenges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
