avita medical reports strong half year financi

AVITA MEDICAL REPORTS STRONG HALF YEAR FINANCIAL RESULTS

REVENUES UP 23% COMPARED TO THE CORRESPONDING 1HY11

SIGNIFICANT INCREASE IN SALES OF RECELL SPRAY ON SKIN

INCREASED SALES & MARKETING EFFORTS; COMMENCED R&D INITIATIVE


Australia, 29 February 2012

Avita Medical Ltd. (ASX: AVH), the regenerative medicine company, is pleased to provide audited financial results for the fiscal Half Year ending 31 December 2011
(1HY12).


Revenues for 1HY12 were $2.62 million, an increase of 23% compared to the corresponding 1HY11;

revenues for 2Q12 (per Appendix 4C) were $1.29 million, an increase of 26% compared to the corresponding 2Q11.

Revenue increases during this period was primarily attributable to growth in sales of ReCellR Spray.On SkinR.
Revenues from sales of ReCell increased significantly in 1HY12 compared to the corresponding 1HY11.

This strong 12.month increase reflects the growing penetration of ReCell in the core European markets as ReCell gains awareness within the medical community. Management expects this growth trend to continue, with regenerative products contributing an ever.increasing proportion of total sales revenues.

Based on the continued strong cash position and record and increasing ReCell sales we have lifted investment in R&D and Sales & Marketing (including clinical marketing trials) with the result that operating expenses for the period, excluding fair value movements in financial derivative, increased to $4.22M (2011: $3.61M) representing an increase of 17% on the previous
corresponding half year.

Loss for the period of $2.1M was up 14% compared to 1HY11 losses of $1.88M (less movement of financial derivative associated with the termination of the La Jolla Cove Convertible Note).

Sales of ReCell show robust and consistent year.over.year growth¨ said William Dolphin, Ph.D.,CEO of Avita Medical.

ReCell is being adopted by key surgeons in a wide range of indications and is becoming the preferred first line approach for the treatment of many chronic and acute wounds, plastic and reconstructive surgeries and an expanding range of aesthetics procedures.

We maintain our strong commitment to improved efficiencies and are extracting further gains in gross margins for our products, added Dr Dolphin. We are increasing our sales and marketing efforts in key countries and are investing strongly in our R&D initiatives.

Avita has commenced development work on the ¡¥Next Generation¡ regenerative products and made significant commitment to expanded clinical marketing studies.

We currently have five studies underway throughout Europe on indications including chronic leg ulcers, acne scars &
wrinkles, vitiligo and treatment of donor sites following skin grafting.

We are pleased with the financial results for 1HY12 and are confident that we will maintain this growth trajectory, establishing Avita as a market leader in the field of regenerative medicine concluded Dr Dolphin.