Latest news with #AvitaMedical
News.com.au
2 days ago
- Business
- News.com.au
Health Check: Syntara shares plunge on FDA ‘do more trial homework' edict
Syntara shares tumble almost 50% after the FDA 'suggests' another trial Avita Medical looks to raise capital after a disappointing quarter EBR Systems is on track for limited US launch of its novel heart pacing device Shares in cancer drug developer Syntara (ASX:SNT) this morning lost almost half their value, after unfavourable advice from the US Food & Drug Administration (FDA). The agency has advised the company to do a placebo-controlled phase II trial, before proceeding with a proposed pivotal study for myelofibrosis. As any drug developer would attest, it's always a good idea to take the agency's counsel on board. The FDA wants a placebo-controlled trial to glean "additional safety and efficacy data'. Syntara says the trial should focus on improvements in symptoms and spleen volume reductions, 'in order to optimise the design and efficiency of a subsequent pivotal phase III trial'. Agency takes "conservative" approach CEO Gary Phillips today told investors the company only heard the news on Saturday and was still digesting the implications. 'The FDA has taken a more conservative approach to get the drug to approval,' he says. 'It's not the fast track we were looking for, but nonetheless their guidance is extremely helpful.' In effect, the company can't leapfrog to a planned phase II/III trial, enrolling up to 300 patients at a cost of around US$80 million. The company now is likely to carry out a 90-patient phase 2b study, probably with 60 on active treatment and 30 on placebo. Phillips estimates the cost 'in order of US$25 million', but the study would mean a subsequent phase III trial potentially could be smaller and cheaper. The FDA's stance does blow out the company's time lines, given the phase II effort would take 12 to 18 months to recruit. Ironically, the more circuitous path means lower short-term cash requirements: the company's $15 million should last into 2027, rather than mid 2026 as envisaged. 'The FDA has given us a different clinical path, but everything else around this asset remains the same,' Mr Phillips says. Promising early results The FDA mulled the interim data from Syntara's ongoing phase 1c/2 trial, which tests Syntara's amsulostat (SNT-5505) in combination with the standard-of-care ruxolitinib. Results to date from the open-label study suggest amsulostat 'may deliver deep and long-lasting benefit of patients who are sub optimally controlled by ruxolitinib alone'. Syntara values the myelofibrosis market at US$1 billion a year. Meanwhile, the company expects to release further results from the current open-label trial before the end of September. Reimbursement 'confusion' crimps Avita's sales Friday's poorer-than-expected June quarter result from Avita Medical (ASX:AVH) shows the burns and wounds care pioneer is lagging its revenue and earnings targets, with US reimbursement delays delaying sales from upgraded products. Avita has commercialised Recell for thermal burn wounds and full-thickness skin defects. Unlike other treatments, Recell harnesses the patient's own skin in a spray-on format. In May 2024 the FDA approved Recell Go, which has enhanced features for clinicians. The agency in December then approved Recell Go Mini, for smaller wounds of up to 480 square centimetres. Missing expectations In short, the US rollout has been slower than expected, partly because of reimbursement delays. Bell Potter suggests this resulted from confusion over administration of these payments, which saw physicians not getting paid. There's no Hell like a doctor not being remunerated and they reverted to alternative therapies including skin grafts. Avita posted June quarter revenue of US$18.2 million 20% higher year-on-year but flat on the March quarter tally. The numbers were around 16% below market expectations. June half revenue gained 35% to US$36.5 million. The company lost US$9.9 million in the quarter, compared with a US$15.39 deficit a year ago. Management has trimmed calendar 2025 guidance to US$76-81 million, from the previously guided US$100-106 million. The tally is 19-27% higher year on year. Balance sheet concerns As of June 30, Avita had cash and equivalents of US$15.7 million. It also has a US$40 million debt facility, from specialist lender Orbimed Advisors. The company has won a series of waivers its debt covenants, relating to minimum quarterly and annual revenue. But Avita must continue to maintain a minimum US$10 million of cash. In a 'going concern' note to the accounts, management says that 'absent any mitigating action, the company probably won't be able to comply with a minimum cash balance covenant within the next 12 months. 'The company is actively evaluating strategies to obtain the required additional funding for future operations. This includes an equity raising.' Broker Morgans says 'despite a significant shortfall in sales, Avita successfully rolled through cost-base reductions as planned, decreasing the net loss with more to come in ." Nonetheless, "another missed guidance target is unlikely to reassure investors, and it is now evident that additional capital will be necessary to support the company to profitability.' Rating the stock a 'speculative buy', Morgans forecasts a calendar 2025 loss of US$36.5 million, improving to a US$18.1 million deficit in 2026. Avita then cracks a US$5.6 million profit in 2027. Morgans assumes a US$50 million equity raising. Bell Potter believes the administrative 'confusion' resulted in a 20% drop in demand for Recell over the half – a 'material circa $5 million in lost revenues over the top 10 accounts alone'. The firm says Medicaid patients account for 70-75% of Recell volumes, 'hence it is critical that the matter is resolved without further delay'. Avita shares have tumbled close to 20% since Thursday's close and have lost about two-third of their value since the start of the year. EBR Systems readies US rollout Following a pilot stage, EBR Systems (ASX:EBR) is on track to roll out its novel heart device in the US market in the December quarter. In April the FDA approved WISE, the world's first and only leadless pacing system for heart failure. Addressing a Canaccord Genuity conference in Boston, EBR CEO John McCutcheon said the company would focus on 'strategic' hospitals. Crucially, in October EBR won reimbursement for both inpatient and outpatient settings, at up to US$63,300 per procedure. EBR cites an 'initial addressable market' in the US of US$3.6 billion. In early June EBR announced its first commercial implants, at St David's Medical Centre in Texas and the Cleveland Clinic.
Business Insider
06-06-2025
- Health
- Business Insider
Avita Medical announces Cohealyx data published in Journal of Surgery
Avita Medical (RCEL) announced the first clinical publication evaluating Cohealyx, an Avita Medical-branded collagen-based dermal matrix, published in the Journal of Surgery. According to the investigators, Cohealyx demonstrated significantly faster wound bed vascularization and autograft readiness compared to conventional dermal matrices, achieving readiness within five to 10 days versus the typical two to four weeks. In the case series conducted at The Ohio State University Wexner Medical Center, two patients with complex, full-thickness hand wounds were treated with Cohealyx. One patient achieved a well-vascularized wound bed by day five, enabling autografting by day 7. The second patient reached robust re-vascularization by day 10 and proceeded to autografting on day 13. Both patients had excellent skin graft take outcomes and functional recovery. According to the publication, these outcomes demonstrate accelerated integration and wound bed vascularization, potentially facilitating earlier definitive wound closure, which can significantly reduce patient burden and lower associated complication risks. Confident Investing Starts Here:
News.com.au
20-05-2025
- Business
- News.com.au
Biocurious: Avita Medical gets skin in more games with its wider wound care push
From its spray-on skin treatment origins, Avita has developed products for wider burns applications and other traumatic wounds The company will not be afraid to drop prices to win US market share Nonetheless, management promises the loss-making company will be in the black by the end of the year Avita Medical (ASX:AVH) has been synonymous with its spray-on skin burns treatment Recell, developed by legendary Perth burns surgeon Professor Fiona Wood and first used on Bali bomb blast victims in 2002. In the ensuing years, Avita painstakingly commercialised Recell to become a staple tool for US burns surgeons. Recell addresses only a small share of the burns sector, while traumatic wounds open a more capacious market. In essence, Avita is transforming from a single-product company to an 'integrated, multi-product platform' for acute wound care. The company expects its new dermal matrix, Cohealyx, to triple its share of the US burns market – and has put its bigger rivals on notice that it will drop prices to gain market share. 'We are ready to go,' says Avita's US based CEO Jim Corbett. Reflecting Avita's US focus, the company is listed on the Nasdaq as well as the ASX. Avita's legacy Recell product involves taking a small skin sample from the body and mixing the cells into a liquid spray. Recell competes with traditional skin grafts – the main difference being one battery-operated Recell kit can cover 80 times the area of a graft. European regulators approved Recell in 2005, followed by the US Food and Drug Administration (FDA) in 2018. The FDA later extended approval to wounds and full-thickness skin defects. As is typical for device makers, Avita gleans its revenue from the more economically attractive US market. Avita's new variant, Recell Go makes the process more automated, so that surgeons don't have to spend precious time scraping the skin. The company claims it will reduce the time it takes to train a user, from 50 minutes to five minutes. Recell Go applies to burns covering up to 10% of total body surface area (TBSA), or up to 1920 square centimetres. The company expects FDA approval for another iteration, Recell Go Mini, for smaller burns up to 2.5% of the body (up to 480 sq cm). Enter The Matrix Launched on April 1 - but not foolishly - Cohealyx is a collagen-based dermal marix that acts as a 'scaffolding' for new tissue. Designed to be used with Recell for regenerating full-thickness wounds, Cohealyx pits Avita against rivals including Integra Lifesciences and Organogenesis, as well as the ASX-listed PolyNovo (ASX:PNV). (Polynovo's $950 million market valuation eclipses Avita's $280 million, even though they have similar revenue). Avita also holds the exclusive US rights to market, sell and distribute Permeaderm, a biosynthetic wound dressing that goes on top. Permeaderm has 'microporous variability', meaning it can be stretched to make it bigger or smaller while ensuring the pus exits the wound (a good thing). In the meantime, Avita has throttled back on developing a product for Vitiligo, a common skin condition, for commercial reasons. Go low to go high If Avita's management is cowed by having so many rivals, it's not letting on. 'We believe Cohealyx will be the real winner for the company,' chief financial officer David O'Toole says. 'We are going to price it to gain market share'. O'Toole says rival products typically sell for US$15 ($24) per square centimetre. 'We will sell it for US$10 if value analysis committee wants it that low,' he says. 'But we don't think we have to go that low because it is a superior product.' Naturelement! Avita envisages a consignment model, by which product is shipped to the hospitals and then only paid for when used. While not good for the company's cash flow, the hospital bean counters should love it. Avita also is undertaking post-market clinical studies to demonstrate the product's efficacy and economic relevance. That's code for 'we need data to help hospitals justify buying this stuff'. In the black by Christmas? Avita reported March quarter revenue of US$18.5 million, 65% higher year-on-year, with a loss of US$13.8 million compared with an US$18.6 million deficit previously. Avita shares were birched 16% post results, because revenue fell short of consensus expectations of US$20.5 million. Turnover was also flat on the December quarter. Patient investors are hankering for a turnaround may not have to wait too much longer. Why? Management has affirmed calendar 2025 revenue guidance of US$100-106 million – 55-65% better than previously. The company expects to be profitable by the end of 2025, as per generally accepted accounting principle (GAAP) measures. Avita had US$14.8 million of cash at the end of quarter, but also has a US$40 million loan from healthcare investor Orbimed. 'We expect to accumulate cash through 2026,' O'Toole says. From burns to bucks The US$100 million revenue target sounds like a stretch in the context of the US$18.5 million first quarter tally. So, too does the profitability target: Bell Potter forecasts negative calendar 2025 earnings before interest tax depreciation and amortisation (ebitda) of $25 million. Given Avita has three quarters of cash runway at current burn rates - excuse the pun- investors expect a capital raising. O'Toole has a different take, noting Avita products have a presence in every one of the approximate 125 US burns centres. 'Our salespeople know these centres very well and we should be able to convert those surgeons to Cohealyx," he says. O'Toole adds most of the wounds treated are 10-20% TBSA and thus suitable for Cohealyx with the Recell Go overlay. If the company obtained only a 10% of the cases suited to a dermal matrix, that would amount to more than US$40 million a year of revenue. Tiger in the tank On management's reckoning, Avita soon will have something to show for the US$373 million of losses accrued along the winding development path. As well as the Cohealyx "game changer', O'Toole cites an almost US$1 billion a year addressable market for Recell Mini. 'We haven't scratched the surface yet, its early days," he says. O'Toole adds that Avita has converted its sales team from being oriented to serving existing clients to a 'sales machine'. Armed with extra tiger in the sales tank and testimonials from grateful burns victims, Avita is ready to roar in the US. 'It's a heavy lift for the rest of the year, but we have all of the products ready to go now,' O'Toole says. In the meantime, investors will be watching cash burn like a hawk with a calculator - and if consistent profits emerge investors will be in raptors, that's for sure.
