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AVITA Medical Inc AVH

Morningstar Rating
A$2.96 +0.10 (3.50%)
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Company Report

Avita’s Road to Profitability Is Long, but It Continues to Take the Right Steps

We expect Avita’s RECELL to pose a significant challenge to the standard of care for larger burns, currently a skin graft sourced from elsewhere on the patient’s body. We believe Avita will be successful based on the product’s clinical performance, ease of use and relative price point. RECELL creates Spray-on Skin within 30 minutes from a skin sample, typically less than 5% of the size required in a graft. It has been clinically demonstrated to heal the burn site as effectively as a skin graft without creating a large donor site wound.

Price vs Fair Value

AVH is trading at a 133% premium.
Price
A$2.96
Fair Value
A$5.80
Uncertainty
Very High
1-Star Price
A$1.76
5-Star Price
A$8.90
Economic Moat
Hbtq
Capital Allocation
Pxhyzdjwl

Bulls Say, Bears Say

Bulls

We view Avita’s RECELL system as a sound alternative treatment for large second- and third-degree burns treated in burn centers. It compares favorably on price and ease of use with new products and the existing standard of care being skin grafts.

Bears

Avita is still burning cash and the road to profitability depends on clinical readouts for further indications over the next few years, with the use of RECELL currently limited to adult and paediatric patients at burn centers.

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News

Trading Information

Previous Close Price
A$2.86
Day Range
A$2.943.00
52-Week Range
A$2.346.27
Bid/Ask
A$2.97 / A$2.98
Market Cap
A$381.84 Mil
Volume/Avg
185,574 / 368,234

Key Statistics

Price/Earnings (Normalized)
Price/Sales
4.88
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Avita is a single product company. Its RECELL system is an innovative burn treatment device which creates Spray-on Skin from a small skin sample within 30 minutes, thus avoiding or reducing the need for skin grafts. It's approved for the treatment of adult patients in the US with paediatric clinical trials and expanded indications in soft-tissue reconstruction and vitiligo underway. It is currently in roll-out across the approximately 136 US burn centers. Despite having product approval in Australia, Europe, Canada, and China, Avita is not actively marketing in those territories and focussing instead on the US region. However, it is expected to launch in Japan via distribution partner Cosmotec in second-half fiscal 2022. Avita is domiciled, and has its primary listing, in the US.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Small Growth
Total Number of Employees
207

Competitors

Valuation

Metric
AVH
FPH
RMD
Price/Earnings (Normalized)
91.1028.31
Price/Book Value
7.4210.846.45
Price/Sales
4.8810.906.61
Price/Cash Flow
44.5923.78
Price/Earnings
AVH
FPH
RMD

Financial Strength

Metric
AVH
FPH
RMD
Quick Ratio
6.540.881.32
Current Ratio
7.251.833.04
Interest Coverage
−17.5713.7722.63
Quick Ratio
AVH
FPH
RMD

Profitability

Metric
AVH
FPH
RMD
Return on Assets (Normalized)
−48.66%11.54%15.75%
Return on Equity (Normalized)
−77.11%15.07%24.94%
Return on Invested Capital (Normalized)
−58.44%13.94%19.33%
Return on Assets
AVH
FPH
RMD
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