New to the board - long time holder of Avita (2013) - Noticed on Friday we picked up new analyst coverage Down Under from Morningstar.
One source says .95 cent (ASD) target (Bloomberg). This article says .91 cents (closed at .70 last night). I'm good either way and happy to see Avita on a Global Best Ideas List! --- Nicolette Quinn is the analyst:
Avita Medical: skin in the game
Avita Medical develops and distributes regenerative products for the treatment of a range of wounds, scars, and skin defects.
Avita’s lead product, ReCell, is used in the treatment of a variety of burns, plastic, reconstructive and cosmetic procedures. The company operates in the Asia Pacific, the Americas, Europe, the Middle East and Africa.
“What sets ReCell apart from existing and new therapies is the speed at which it is able to create its Spray-on-Skin to apply to the burn site, as well as attractive pricing,” says Quinn.
ReCell has approval in the US for the treatment of second- and third-degree burns in adults, and Quinn sees potential for Avita to boost its market penetration in the next five years. It is expected to launch paediatric trials in fiscal 2022.
“While the company is currently loss-making, we forecast Avita to be profitable from fiscal 2022 and revenues to grow to $640 million by 2029.
“We expect the high forecast uncertainty is the likely reason for the market currently undervaluing Avita, but the latest results suggest approximately 20 per cent market penetration one year into commercial launch which affirms our longer run expectations of the product potential.”
Avita was up about 5 per cent in a sluggish market on Monday. It has a fair value estimate of 91c.
There are 11 Australian names in the Morningstar Global Best Ideas list. See the full selection here Morningstar Global Best Ideas list for February.
