here we goFourth Quarter 2023 Financial HighlightsCommercial...

here we go

Fourth Quarter 2023 Financial Highlights

• Commercial revenue increased approximately 50% to $14.1 million compared to the same period in 2022
• Gross profit margin of 87.3%

Full-Year 2023 Financial Highlights

• Commercial revenue increased approximately 46% to $49.8 million compared to the same period in 2022
• Gross profit margin of 84.5%
• As of December 31, 2023, approximately $89.1 million in cash, cash equivalents, and marketable securities

“We ended the year with yet another quarter of significant growth, marking a year of extraordinary progress,” said Jim Corbett, AVITA Medical Chief Executive Officer. “In 2023, we successfully executed a series of strategic initiatives to transform our business. These initiatives included expanding our RECELL indications and applications, doubling our commercial field organization ahead of FDA approvals, successfully launching our expanded label for full-thickness skin defects, and establishing an international expansion plan. Looking ahead to 2024, we are eager to capitalize on this momentum, and remain committed to innovation and sustained growth.”

Future Milestones

• Expansion of the field sales organization from 70 to 108 professionals in the first quarter of 2024 to maximize our ability to capitalize on the expanded label of full-thickness skin defects
• Integrating PermeaDerm^® Biosynthetic Wound Matrix into our selling portfolio; plan to launch PermeaDerm in March 2024
• Expect U.S. Food and Drug Administration Food (FDA) approval for RECELL GO with plans to commence commercial launch on May 31, 2024
• Renovating and expanding our Ventura warehouse facility; expansion will increase capacity 10-fold, ensuring efficient operations for the next five years at this location; expect final phase to be completed during the third quarter of 2024
• Expect non-U.S. sales following the launch in January 2024 of RECELL within Germany, Austria, and Switzerland
• Plan to submit a PMA supplement for RECELL GO mini, which is being designed to address smaller wounds, and expect to receive FDA approval by year-end
• Expect to submit both our post-market study treating patients with stable vitiligo, TONE, and separate health economics study for publication by year-end

Financial Guidance

• Commercial revenue for the first quarter 2024 is expected to be in the range of $14.8 to $15.6 million, reflecting growth of approximately 42% to approximately 50% over the same period in the prior year
• Commercial revenue for the full-year 2024 is expected to be in the range of $78.5 to $84.5 million, reflecting growth of approximately 57% to approximately 69% over the full-year 2023
• Expect to achieve cashflow break even and GAAP profitability no later than the third quarter of 2025

Fourth Quarter 2023 Financial Results

Our commercial revenue, which excludes Biomedical Advanced Research and Development Authority (BARDA) revenue, increased by 50% to $14.1 million in the three-months ended December 31, 2023, compared to $9.4 million in the same period in 2022. Total revenue, which includes BARDA revenue, increased by 50% to $14.2 million compared to $9.5 million in the same period in 2022.

Gross profit margin was 87.3% compared to 85.8% for the fourth quarter of 2022. The increase was largely driven by higher production of our product associated with our increase in revenue and lower shipping costs.

Total operating expenses for the quarter were $24.7 million, compared to $15.0 million in the same period in 2022. The increase in operating expenses is primarily attributable to an increase of $2.4 million in G&A expenses related to stock-based compensation, consulting expenses, and employee-related costs. In addition, the increase in operating expenses included an increase of $3.4 million in R&D costs, which was primarily due to employee compensation costs, including recruiting costs, costs associated with insourcing RECELL GO to our Ventura facility, and accelerated recruitment and third-party costs associated with the TONE study. Lastly, operating expenses included an increase of $3.9 million in sales and marketing costs primarily due to employee related costs, including commissions, travel, and promotion expense, as a result of the expansion of our commercial organization in the second quarter of 2023.

Net loss was $7.1 million, or a loss of $0.28 per basic and diluted share, compared to a net loss of $5.4 million, or a loss of $0.21 per basic and diluted share, in the same period in 2022.

BARDA income consisted of funding from the Biomedical Advanced Research and Development Authority, under the Assistant Secretary for Preparedness and Response, within the U.S. Department of Health and Human Services, under ongoing USG Contract No. HHSO100201500028C.

Other income, net for the quarter was $6.3 million, comprised primarily of $1.1 million in income from our investing activities and a $9.4 million non-cash foreign exchange gain as a result of the foreign entity liquidation for previously deferred unrealized cumulative translation adjustments in equity. This was partially offset by a loss on debt issuance of $1.2 million, debt issuance costs of $0.8 million, the change of fair value for our debt of $1.6 million, and change in fair value of warrants for $0.7 million.

Full-Year 2023 Financial Results

Our commercial revenue, which excludes BARDA revenue, increased by 46% to $49.8 million in the full-year ended December 31, 2023, compared to $34.1 million in the same period in 2022. Total revenue, which includes BARDA revenue, was $50.1 million compared to $34.4 million in the same period in 2022.

Gross profit margin was 84.5% compared to 82.4% in the same period in 2022.

Total operating expenses for the year were $86.4 million compared to $59.1 million in the same period in 2022. The increase in operating expenses is largely attributed to an increase of $15.4 million in sales and marketing costs as a result of the expansion of our commercial organization in the first half of 2023. Alongside this expansion, G&A costs increased by $5.0 million due to the increased headcount and related salaries and benefits, stock-based compensation, and recruiting costs. Lastly, R&D costs increased by $6.9 million, primarily driven by the cost of the TONE study, final work and completion of the PMA Supplement to the FDA in June of 2023 for RECELL GO and employee related costs, including stock-based compensation.

Net loss for the full-year 2023 was $35.4 million, or a loss of $1.40 per basic and diluted share, compared to a net loss of $26.7 million, or a loss of $1.07 per basic and diluted share, in the same period in 2022.

Other income, net for the full-year 2023 was $8.5 million, comprised primarily of $3.1 million in income from our investing activities and a $9.4 million non-cash foreign exchange gain as a result of the foreign entity liquidation for previously deferred unrealized cumulative translation adjustments in equity. This was partially offset by a loss on debt issuance of $1.2 million, debt issuance costs of $0.8 million, the change of fair value for our debt of $1.6 million, and change in fair value of warrants for $0.7 million.