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I was about to make the same comment about Japan.
RCEL doesn’t trade in Aus. AVH trades on the ASX which is open on Monday.
Good question Steve. My crystal ball is hazy. Must be all the smoke from the bushfires. Hoping it is all about sales...
A push to $12 will require an outstanding 2Q FY result or Japanese approval in my opinion. What would be an outstanding result? US sales of north of $7m, although I reckon it could be closer to $6m.
I have just checked the UK NICE website which I note was updated in November. They indicated that they had commenced review of RECELL in October 2019. It is interesting that Avita had not announced anywhere that they had submitted a revised application, at least not that I am aware. Also I have not seen any discussion of a renewed push in the UK market by Avita management. Given their focus on the US market I wonder whether they addressed all of the concerns and criticisms from the 2014 NICE report in their resubmission. Certainly a lot more supporting clinical data would have been available along with their published health economic model for the current review. Anyone have any insights?
very bullish article but I think the 50% Q on Q growth projection is a tad optimistic. It does however reinforce suggestions made on this forum that JPMDA approval is pending and could be received any day. Opening up another revenue stream in Japan will be very bullish and capture the attention of big pharma. Happy days ahead.
thanks for posting this info. I hadn’t yet seen it on HC. I guess we can say that a decision is now imminent, and I find It difficult to envisage anything other than a positive outcome. Approval in Japan would be fantastic as it would open up a new sales revenue stream in the short term increasing sales growth momentum which frankly is required to support current SP. it is all about sales. I hope the US sales growth we saw in Q1 continues in Q2 which will be announced end of January.
hi KS. It really irks me to hear reports on radio as I am driving to/from work stating hat they need over a million cm2 of skin and there are no other viable technologies available. I recognise that post Bali bombing, the Aussie victims were flown to the WA burns unit where Fiona Wood was able to use the developmental technology. I agree that this is different, being in NZ. If RECELL were widely accepted on the east coast of Australia we probably would hear that RECELL is being used to help the unfortunate victims from White Island. but reality is it isn’t. And I agree that surgeons prefer to employ the techniques with which they are familiar. Adoption of a new technology takes time. However, shortage of donor skin should put alternative technologies such as RECELL in the spot light, but I am not seeing it.
Fitz, this is exactly the question I would ask. We would be keen to see usage rates in the first adopter burn centres to be higher than in recent adopters on a per patient basis. The recent update from a Montgomery suggested that there was a slight increase in usage rates.
Keep. You might have some questions you wish to ask at the AGM. I am wondering whether you would be prepared to ask other questions suggested by members of this discussion board.? It would need to be limited though?
Thanks Keep. I was hoping to get to the AGM but unfortunately work is getting in the way. Looking forward to an update at the AGM and responses to any questions asked.
UK NICE REVIEW.
I thought I would check the NICE website to see whether there were any updates on their review.
Their Nov 2014 decision (MTG21) and 2018 update stated that they would review in Aug 2019. See below. However, the website now has a review date of Oct 2019.
Does anybody on the board have better visibility or understanding of where this stands?
1. Review decision
The review of this guidance is deferred until August 2019.
2. Original objective of guidance
To evaluate the case for adoption of the ReCell Spray-On Skin system for treating skin loss, scarring and depigmentation after burn injury.
3. Current guidance
The recommendations in MTG21 are:
“1.1 The ReCell Spray-On Skin system shows potential to improve healing in acute burns. However, there is insufficient evidence on its use in clinical practice, particularly in relation to which patients might benefit most from its use, to support the case for its routine adoption in the NHS.”
“1.2 Research is recommended to address uncertainties about the claimed patient and system benefits of the ReCell Spray-On Skin system. Clinical outcomes should include time to 95% healing, length of hospital stay, cosmetic appearance of the scar and function of the burned area, compared with standard care. As relevant databases and registers are available, the research might include analysis of data generated from these. NICE will explore the development of appropriate further evidence, in collaboration with the technology sponsor and with clinical and academic partners, and will update this guidance if and when new and substantive evidence becomes available.”
For the traders, publicity is key to ramping up interest and the SP but large fluctuations become an inevitability. I prefer to see growth in sales and strategies to increase sales in the future (juvenile burns, trauma, vitiligo) to underpin the SP. We all understand the long lead time in trial planning, enrolment and completion, FDA submission, FDA approval and then training and take up by the medical fraternity. The recent CR allows investment in these future sales pipelines to commence/continue. In the interim, it is all about growing the number of Burn centres using RECELL and, arguably more importantly, seeing an increased rate of usage in BCs using RECELL. i am sure that management has been strategic in targeting the largest BCs first which means that we will soon be approaching a state of diminishing returns.. In the medium term, approval for use in Japan will also add sales growth. Sales for off-label use is another potential growth area but I don’t know how much we could expect from this. It would be great if the Co reported these metrics,.
lastly, I am wondering what Avita’s strategy might be to enter the broader burns market outside the burn centres, people have already commented that it would not be cost effective to use RECELL in clinics for small burns. Some have suggested much cheaper mini RECELL kits could be manufactured for this market. It will be interesting to see Avitas next update at the AGM to see where their focus will be. I believe recent management have been very strategic to date in selecting which sales areas to target. they still need to maintain their focus.
I did notice the borrowings in the filing and did wonder whether it is associated with shorting..
substantial shareholder notices filed,
1, Mitsubishi UFJ Group initial substantial shareholding: 141.2 m (7.38%)
2. Morgan Stanley 136.4 (7.13%)
3. BNYMC (Mellon) change from 491.7m to 499.3m
AVH finished at 56c down under, up 7.7% on a volume of 34million shares. You guys should hav3 a better day.
Thanks for following up and posting. I emailed IR some months ago and got zero response so It is good to learn that they do listen to shareholders even if not always. a famous maxim of investing is to buy when there is ‘blood in the streets’. We all love the Avita story. Valuation, however, is difficult while sales are so low, albeit growing. it seemed that SP growth was outpacing sales growth so arguably a pullback was warranted. We all knew a CR would be required by 1Q 2020 - and there was some discussion on this board - and perhaps it came a little sooner than most expected. 3 months ago I would have been ecstatic if I had have been told the CR would be at 59c. So why the negativity today? Avita now has the money in the bank to pursue a very aggressive advertising and product expansion campaign. I say Great! I have been in Avita since the days of Clinical Cell Culture. A long time. That is when management was poor and unfocused. Putting the issue of remuneration aside, today’s management is very different. They got FDA approval after previous management failed. They have rightfully focussed on the US market in adult burns in the first instance. Management have, with Bardas support, published a strong business case for using RECELL which was critical to getting it through the VAC process in each burns unit with a success rate of 100%. Promotion through the major burns conferences was also smart as was providing the training support in the hospitals. Management also acquired the production facility in CA although there was some luck involved, but it was a great strategic move. I think managements response to expansion is very considered. first juvenile burns. Next trauma wounds. Very logical and focussed, given the collocation of burns and trauma facilities. Expansion into Japan with Cosmotec is not far away now - 1Q or 2Q CY 2020. with UK we have NICE review being undertaken - last time it fell over without a strong business case. I expect a different outcome this time. Then the RoW. In short Avita remains a great story with a very long sales runway ahead and is being well managed overall imho.
I do agree that the sale of shares by Perry should have been better managed but I understand the need for it.
The Avita story remains a compelling one for investors and patients alike.
Well summarised Melody......an unusual confluence of events. Now back to business of driving sales,
The Aussie market tends to lead,
The last CR was 8 cents. Raising $120M at 59c less than 12 mo later is a great outcome. Now we will await the deployment of the funds. Saying they will not have to raise again is a bit premature in my opinion, particular if the funds are used, as likely, to support expensive trials into other areas. That can chew through capital reserves really quickly. We need to see US sales growth continue to ramp up, and importantly we need an uptick in monthly usage in burn centres that are ordering. I would really like to see the usage profile (kits per Q) or preferably % of eligible burns patients treated using RCEL for the early BC adopters. Unfortunately, the metrics are not provided - I am sure Avita would have all the stats. Maybe a question for the AGM for any of us local Aussies. The recent Montgomery research update alludes to a minor improvement in Sales per BC but it is hard to know due to an increase in BCs ordering RCEL. We were cautioned in one of Avita’s presentations the length of time to get full penetration of a new technology in a hospital. so while the sales will come over time I would like some granularity in the sales figures presented on a Q basis so we can track this growth.
Strong day in Oz. up 7 cents or 13.5%. tail winds of index inclusion, prospective listing on NASDAQ and Recent announcement of a new trial. Happy Days for investors. My focus however continues to be on sales growth momentum. in the end this is what is most important to long term investors. I am happy with the sales trajectory and looking forward to sales in Japan commencing ca 12 months time frame following approval. SOC treatment for more patients across more indications. I am curious about the RoW sales - expect last Q sales were mostly catch-up restocking in EU but might be surprised.
Hi Jugs,
The report states that on 19 July 2019, AVITA submitted a confidential draft registration statement
and
the Company intends to apply for listing on NASDAQ.
So they haven't applied yet. Not sure what what a registration statement is.
The next report due is Appendix 4C which must be filed with the ASX by COB 31st July. Avita typically files the morning of the last day.
Loved your posts Pete Jugs and Hark. The wisdom and patience that comes with age. I guess it's been a few decades since I have had candles on my birthday cake that equated my actual years as well
With reference to Apollo 11, AVH has just had separation of its first stage withe second stage rockets preparing to fire. A long way to go with the AVH rocket!. Hope you have a profitable session in the US.
Well I'm off to have me a vegemite sandwich!
thanks FMello. The graph suggests that once. Burn Centre gets through the VAC process and commences ordering RECELL there is a fair way to go before full uptake is achieved, whatever that might be. As we have been cautioned, surgeons are a conservative breed and adoption of new technology takes time, even if it is transformative. But adopted it shall be.....just a bit longer than some people might wish..
If Only I had a dime every time............
I agree with Melody. It is worth reviewing the graph that AVH provided in their brief to RBC Capital Markets Healthcare Conference on 21st May.
page 35. I haven't been able to select and drop the slide in here. The slide is titled "Field development Models Plan for each Phase of the Adoption Curve".
https://www.avitamedical.com/uploads/pdf/Royal-Bank-of-Canada-Capital-Markets-Conference-2019.pdf
Phase 1: Awareness and Interest (2 months)
Phase 2: Institution-level evaluation of RECELL (5.5 months)
Phase 3: Surgeon increase in use post Hospital Approval (6 months)
Phase 4: Expansion within the Burn Centre (6-12 months.
The early adopters have been going through Phase 3 over the last 6 months, so we should not get ahead of ourselves here.
However, the positive takeaway is we have a solid runway of expanding US sales over the next two years, with additional sales ramping when paediatric burns and Japan come onboard.
pretty much spot on. The major focus, for now, is, as it should be, supporting adoption of RECELL as the SOC in the US Burn Centres. Over recent months I have appreciated more the importantance of recruiting the experienced team to train the hospital surgeons and burn centres in the use of RECELL. Management had a lot of time to prepare for the launch of RECELL as they awaited FDA approval and in my opinion they did not waste it, ticking a bunch of boxes including a cost benefit study for RECELL. The presentations at the ABA Conference was a major launch pad for the company. With acceptance and adoption of RECELL in the major Burn Centres word will continue to spread. So adoption in other indications and in Japan following approval there will experience a 'pull' effect. And the winners will be all the patients who will have an improved outcome and us investors who have been patiently waiting for the curtain to lift.
Good luck to all.
Yes, just over two weeks before the 4Q sales results. Personally I am not expecting much growth in the US Burn Centres ordering RECELL - maybe increasing to low to mid 30s. We should see a quite a few more emerging from the VAC process in Q1 FY19-20. I am hoping to see some material increase in the usage of RECELL in the BCs that were the early adopters. All in all, US sales (excluding BARDA) of $3 to $3.5m would be very very nice. Full adoption by each BC will take time, even for a great product such as RECELL. Just reflects the conservative nature of surgeons and hospitals. But it will happen. Looking for a solid growth trajectory in the US. Cheers.
Thanks Jugs. Now that is one helluva welcome. Looking forward to sharing posts with you all. You will see that AVH traded strongly in AUS finishing up 2 cents (pennies for you guys) at $0.44. Good day ahead.
thanks Risk. Plenty to be excited about.. Just a waiting game atm.
Hi all, This is my first post on this message board although I have been visiting periodically over the last few months. Let me introduce myself. I am an Aussie. I am a long term holder of AVH stock and have spent most of the last decade underwater in my investment. I am kicking myself that I didn't take up any allocation in the last capital raising at 8 cents (AUD for AVH) - timing was not good. Hence my handle.... if Only. .. I guess we can all relate, if not in relation to AVMXY then to other stocks. On a positive note though, I have enjoyed the positivity if this forum and the support and encouragement you offer each other. It is refreshing. I wish you all good fortune with AVMXY as, in doing so, I am also wishing the same for myself. JUGS I love your altruism. Being invested in a stock that promises so much, to ourselves as investors but also the those unfortunate to suffer severe burns is doubly rewardiing.
Happy investing to all. Am looking forward to the next sales update hoping that we see a few more burn centres commence ordering and that existing burn centres ramp up their use of RECELL.
If Only......I had a dollar every time I said 'if only'.