The stock price of AVITA Medical, Inc. (NASDAQ: RCEL) rose significantly when the company’s financial data were made public. Shares of RCEL rose 7.18% after the market closed on Thursday, hitting $9.41 in after-hours trading. Investor trust in the company’s most recent performance and strategic advancements is reflected in the strong market reaction.
Expansion in Wound Care Portfolio
Significant improvements in wound care solutions were reported by AVITA Medical during the fourth quarter and the entire year ending December 31, 2024. The company’s position in therapeutic acute wound care has been strengthened by the December approval of RECELL GO Mini and Cohealyx.
Through portfolio expansion, AVITA Medical currently offers physicians a wide array of state-of-the-art technology intended to speed wound healing and enhance patient recovery periods. It is anticipated that the expansion would promote long-term, sustainable growth.
Cost Effectiveness and Financial Performance
Compared to $14.1 million during the same period last year, the company’s fourth-quarter commercial revenue of $18.4 million represented a 30% rise. The switch to RECELL GO, which gained more momentum among trauma center accounts treating full-thickness skin abnormalities, was the main driver of this rise.
Furthermore, as a result of improved operational efficiencies, AVITA Medical was able to reduce operating expenditures by $4.1 million from the third quarter. Cash utilization decreased as a result of the company’s emphasis on cost containment, and this trend is anticipated to continue for the following three quarters. AVITA Medical aims to generate free cash flow in the latter half of 2025 and achieve GAAP profitability by the fourth quarter of the same year.
Strategic Developments and Future Plans
In a strategic move, AVITA Medical successfully amended its credit agreement with OrbiMed, modifying the revenue covenants for upcoming quarters through March 31, 2026. However, the $115 million revenue covenant for all subsequent quarters remains unchanged through the debt maturity date.
Looking ahead, the company plans to introduce RECELL GO Mini into burn and trauma centers handling smaller wounds in the first quarter of 2025. Concurrently, AVITA Medical is preparing clinical studies for Cohealyx to build on preclinical success. The Cohealyx I post-market study will evaluate real-world efficacy and cost benefits, paving the way for a full commercial launch by April 1, 2025.