Q1 2025 AVITA Medical Inc Earnings Call

Operator: Good day and thank you for standing by.

Good day, and thank you for standing by.

Operator: Welcome to AVITA Medical's first quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session.

Welcome to the medical first quarter 2025 earnings conference call.

At this time all participants are in a listen only mode.

After the Speakers' presentation, there'll be a question and answer session.

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Ask a question during the session you will need Crestar one one on your telephone.

Dan: Well, Dan here, an automated message.

Operator: Please note that today's conference is being recorded.

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Jessica Ekeberg: I will now hand the conference over to your first speaker for today, Jessica Ekeberg, please go ahead. Thank you, Operator. Welcome to AVITA Medical's first quarter 2025 earnings call.

Speaker Change: I'll now hand, the conference over to your first speaker for today Jessica Baehr.

Dan: Please go ahead.

Jessica Ekeberg: Thank you, operator. Welcome to AVITA Medical's Q1 2025 Earnings Call. Joining me on today's call are Jim Corbett, Chief Executive Officer, and David O'Toole, Chief Financial Officer. Today's earnings release and presentation are available on our website, www.avitamedical.com, under the investor relations section. Before we begin, I'd like to remind you that this call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results to differ materially from any expectations expressed or implied by the forward-looking statements. Please review our most recent filings with the SEC for comprehensive descriptions of the risk factors. Any forward-looking statements provided during this call are based on management's expectations as of today. I will now turn the call over to Jim for his comments.

Speaker Change: Thank you operator, welcome to BD medical first quarter 2025 earnings call.

Jessica Ekeberg: Joining me on today's call are Jim Corbett, Chief Executive Officer, and David OToole, Chief Financial Officer.

Speaker Change: Joining me on today's call are Jim Corbett, Chief Executive Officer, and David O'toole, Chief Financial Officer, today's earnings release and presentation are available on our website www dot a beta medical dot com under the Investor Relations section.

Jessica Ekeberg: Today's earnings release and presentation are available on our website, www.avitamedical.com, under the Investor Relations section.

Jessica Ekeberg: Before we begin, I'd like to remind you that this call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results to differ materially from any expectations expressed or implied by the forward-looking statement. Please review our most recent filings with the SEC for comprehensive descriptions of the risk factors. Any forward-looking statements provided during this call are based on management's expectations as of today.

Speaker Change: Before we begin I'd like to remind you that this call includes forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095 B.

Speaker Change: Statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results to differ materially from any expectations expressed or implied by the forward looking statements.

Speaker Change: Please review our most recent filings with the SEC for a comprehensive description of the risk factors any forward looking statements provided during this call are based on management's expectations as of today I will now turn the call over to Jim for his comments.

James Corbett: I will now turn the call over to Jim for his comments. Thank you, Jessica. Good afternoon to those joining us here in the U.S. Good morning to our colleagues and investors in Australia.

Jim Corbett: Thank you, Jessica. Good afternoon to those joining us here in the US, and good morning to our colleagues and investors in Australia. We entered 2025 stronger, sharper, and more strategically prepared than ever before. There's more to do, but the foundation we've built gives us the opportunity to accelerate and deliver against the full potential of our expanded platform. Let's turn to slide 3. We are no longer a single product burn-only company. Today, we are a fully integrated multi-product platform positioned to lead in therapeutic acute wound care. With this transformation, our US addressable market has expanded from roughly $500 million to more than $3.5 billion annually. That's a seven-fold increase that materially reshapes our long-term growth trajectory. Revenue for Q1 increased 67% over Q1 of the prior year. It's a strong indicator of the traction we're gaining.

Jim: Thank you Jessica.

Jim: Good afternoon to those joining us here in the U S.

Jim: And good morning to our colleagues and investors in Australia.

James Corbett: We entered 2025 stronger, sharper, and more strategically prepared than ever before. There's more to do, but the foundation we've built gives us the opportunity to accelerate and deliver against the full potential of our expanded platform. Turn to slide three. We are no longer a single product, burn only company. Today, we are a fully integrated, multi-product platform positioned to lead in therapeutic acute wound care. With this transformation.

Jim: We entered 2025 stronger sharper.

Jim: More strategically prepared than ever before.

Jim: More to do with the foundation, we've built gives us the opportunity to accelerate and deliver against the full potential of our expanded platform.

Jim: Let's turn to slide three.

Jim: Okay.

We are no longer a sim.

Jim: <unk> products aren't only company.

Today, we are a fully integrated multi product platform position to lead and therapeutic acute wound care.

Jim: With this transformation.

James Corbett: Our U.S. addressable market has expanded from roughly $500 million to more than $3.5 billion annually. That's a sevenfold increase that materially reshapes our long-term growth trajectory. Revenue for the first quarter increased 67% over the first quarter of the prior year. It's a strong indicator of the traction we're gaining. See the quarter as a launch readiness phase, gearing up to fully reignite our growth. in Q2 and beyond. Powered by a portfolio that is now fully ready to scale.

Jim: U S addressable market has expanded from roughly $500 million to more than $3 $5 billion annually.

Jim: That's a seven fold increase that materially reshaped our long term growth trajectory.

Jim: Revenue for the first quarter increased 67% over the first quarter of the prior year.

Jim: It is a strong indicator of the traction we're gaining.

Jim Corbett: We see the quarter as a launch readiness phase, gearing up to fully reignite our growth in Q2 and beyond, powered by a portfolio that is now fully ready to scale. Let me walk you through how our expanded portfolio has come together and how we're positioning the organization to capitalize on it effectively. In February, we launched RECELL GO mini, a targeted innovation designed specifically for trauma centers treating smaller wounds. Let me step back for a moment and explain why we've created it. Our original RECELL System was developed to treat large burns, covering up to 10% total body surface area or about 1,920 sq cm. However, data from our pivotal trial to support our pre-market approval of full-thickness skin defects for trauma and early market observations made it clear.

Jim: We see the quarter as a launch readiness space gearing up to fully reignite our growth.

Jim: In Q2 and beyond.

Jim: Powered by <unk> portfolio is now fully ready to scale.

James Corbett: Let me walk you through how our expanded portfolio has come together, and how we're positioning the organization to capitalize on it effectively.

Jim: Let me walk you through how our expanded portfolio has come together and how we're positioning the organization to capitalize on it effectively.

James Corbett: In February, we launched Resell Go Mini. targeted innovation designed specifically for trauma centers treating smaller wounds.

Jim: In February we launched resell go many.

Jim: Targeted innovation designed specifically for trauma centers treating smaller wounds.

James Corbett: Let me step back for a moment and explain why we created Our original resale system was developed to treat large burns, covering up to 10% total body surface area, or about 1920 square centimeters. However, data from our pivotal trial to support our premarket approval of full-thickness skin defects for trauma and early market observations made it clear most traumatic wounds are significantly smaller, typically well under 480 square centimeters or less than 2.5 For more information visit www.avita.com total body surface area that is treated by ReSoCo Mini. In fact, During our PMA trial for non-thermal skin defects, the wound area treated with less than 2.5% total body surface area.

Jim: Let me step back for a moment and explain why we created it.

Jim: Our original resale system was developed to treat large firms covering up to 10% total body surface area or about 1900 20 square centimeters.

Jim: However data from our pivotal trial to support our pre market approval of full thickness skin defects for trauma and early market observations made it clear most traumatic wounds are significantly smaller.

Jim Corbett: Most traumatic wounds are significantly smaller, typically well under 480 square centimeters or less than 2.5% total body surface area that is treated by RECELL GO mini. In fact, during our PMA trial for non-thermal skin defects, the wound area treated was less than 2.5% total body surface area. What that told us is that outside of burn centers, in trauma and surgical settings, wounds requiring grafting are predominantly smaller, yet our standard RECELL kit was optimized for much larger wounds. Enter RECELL GO mini. Same RECELL GO multi-use processing device, same procedural consistency, same clinical benefits, but with a disposable cartridge optimized for trauma cases covering wounds up to 480 square centimeters. It is a purpose-built solution informed directly by real-world clinical needs and designed for optimal integration into trauma workflows. RECELL GO mini unlocks the trauma market of approximately 270,000 cases annually in the United States.

Jim: Typically well under 480 square centimeters or less than two 5% total body surface area that is treated by Russo go many.

Jim: In fact <unk>.

Jim: During our PMA trial for non thermal skin defects the wound area treated with.

Jim: It was less than two 5% total body surface area.

James Corbett: What that told us is that outside of burn centers, in trauma and surgical settings, wounds requiring grafting are predominantly smaller. Yet our standard resale kit was optimized for much larger wounds.

Jim: What that told US is that outside of burn centers in trauma and surgical settings wounds, requiring grafting are predominantly smaller yet our standard resale kit was optimized for much larger wounds.

James Corbett: Enter. We shall go many. same ResellGo multi-use processing device, same procedural consistency, same clinical benefits, but with a disposable cartridge optimized for trauma cases covering wounds up to 480 square centimeters. It is a purpose built solution. informed directly by real world clinical needs. Designed for Optimal Integration into Trauma Workflow. Resell Go Mini unlocks the trauma market of approximately 270,000 cases annually in the United States. The early feedback has been encouraging, and we're already seeing adoption.

Jim: Enter resale go many.

Jim: Same resale go multi use processing device same procedural consistency.

Jim: Same clinical benefits, but with a disposable cartridge optimized for trauma cases, covering warms up to 480 square centimeters.

Jim: It is a purpose built solution.

Jim: Informed directly by real world clinical needs and designed for optimal integration into trauma workflows.

Jim: We sell go many unlocks the trauma market of approximately 270000 cases annually in the United States.

Jim Corbett: The early feedback has been encouraging, and we're already seeing adoption. We also launched Cohealyx, our collagen-based dermal matrix, nationwide on 1 April 2025, in all sizes, following a successful limited release during Q1. For those new to the story, last quarter, we shared a standout case that took place at The Ohio State University Wexner Medical Center. In that case, a 67-year-old woman with a third-degree burn was treated under physician direction using Cohealyx as part of the treatment protocol. By day 7, her wound had progressed to a point the physician deemed ready for grafting. She was discharged within 10 days. According to one of her clinicians, had she been treated with an alternative dermal matrix, her hospital stay would likely have extended to a month.

Jim: The early feedback has been encouraging and we're already seeing adoption.

James Corbett: We also launched Cohelic. Collagen-Based Dermal Matrix. nationwide on April 1st, 2025. in all sites. following a successful limited release during Q1.

Jim: We also launched <unk> our.

Jim: Collagen based dermal matrix nationwide on April one 2025.

Jim: In all sizes following a successful limited release during Q1.

James Corbett: For those new to the story, last quarter, we shared a standout case that took place at the Ohio State University Wexner Medical Center. In that case, a 67-year-old woman with a third-degree burn was treated under physician direction using Cohelix as part of the treatment protocol. By day seven, her wound had progressed to a point the physician deemed ready for graft. She was discharged within 10 days. According to one of her colleagues, Had she been treated with an alternative dermal matrix, her hospital stay would likely have extended to a month. Her treating physician also noted that Cohelix not only reduced the time the patient spent in the hospital, but he believes it could allow physicians to treat more patients due to how easy it was to use in the operating.

Jim: For those new to the story last quarter, we shared a standup case that took place at the.

Jim: Ohio State University Wexner Medical center in that case, a 67 year old woman with third degree burn was treated under physician direction using coke helix as part of the treatment protocol.

Jim: By day seven.

Jim: Wound have progressed to a point the physician deemed ready for grafting.

Jim: Discharge within 10 days.

Jim: According to one of her conditions had been treated with an alternative dermal matrix or hospital stay would likely have extended to a month.

Jim Corbett: Her treating physician also noted that Cohealyx not only reduced the time the patient spent in the hospital, but he believes it could allow physicians to treat more patients due to how easy it was to use in the operating room. In fact, the surgical team described Cohealyx as a welcome addition to their toolkit and emphasized its compatibility with their existing protocols. These initial experiences reflect the kind of clinical feedback we're hearing as adoption expands, and it's exactly the type of outcome other centers are looking for as they evaluate integration into their protocols. Cohealyx is now available in multiple sheet sizes, including a large format 700 square centimeter sheet. Importantly, 3 large format sheets cover the treatment area of a typical RECELL burn case of 1,920 square centimeters, enabling full coverage of the wound.

Jim: Her treating physician also noted that helix not only reduce the time the patient spend in the hospital.

Jim: But he believes it could allow physicians to treat more patients due to how easy it was to use in the operating room.

James Corbett: In fact, the surgical team described Cohelix as a welcome addition to their toolkit and emphasized its compatibility with their existing protocols. These initial experiences reflect the kind of clinical feedback we're hearing as adoption expands. This is exactly the type of outcome other centers are looking for as they evaluate integration into their protocol. Cohelix is now available in multiple sheet sizes. including a large format 700 square centimeter. Importantly, three large format sheets cover the treatment area of a typical resale burn case of 1920 square centimeters, enabling full coverage of the wound. To facilitate adoption and stocking, we are deploying Cohelix through an RFID-enabled consignment model that streamlines Hospital Inventory Management and ensures traceability to address important financial and regulatory considerations.

Jim: The surgical team described co helix as a welcome addition to their toolkit and emphasized its compatibility with their existing protocols.

Jim: These initial experiences.

Jim: To reflect the kind of clinical feedback we're hearing as adoption expanse.

Speaker Change: Mr. Exactly the type of outcome other centers are looking for as they evaluate integration into their protocols.

Speaker Change: Helix is now available in multiple sheet sizes, including a large format 700 square centimeter sheet.

Speaker Change: Importantly, three large format sheets cover the treatment area of a typical resell burn case of 90 to 120 square centimeters, enabling full coverage of the winter.

Jim Corbett: To facilitate adoption and stocking, we're deploying Cohealyx through an RFID-enabled consignment model that streamlines hospital inventory management and ensures traceability to address important financial and regulatory considerations. In parallel, we have fully implemented the manufacturing of PermeaDerm, our biosynthetic dressing, under our roof at our state-of-the-art facility in Ventura, California. Alongside this, we have amended our distribution agreement with Stedical Scientific. This strategic move delivers cost efficiencies, scale, and a larger revenue share of the average selling price. 60% of the revenue goes to AVITA, up from 50%. With these additions, our commercial lineup now includes RECELL GO, RECELL GO mini, Cohealyx, and PermeaDerm. This is the first time we've had such a broad spectrum of products available to support both burn and trauma centers. One broad integrated portfolio targeted at the same hospital, same doctor, the same patient, and the same wound.

To facilitate adoption and stocking we are deploying co helix doing RFID enabled the consignment model that streamlines hospital inventory management ensures traceability to address important financial and regulatory considerations.

James Corbett: In parallel, we have fully implemented the manufacturing of Permeter, our biosynthetic dress Under our roof at our state-of-the-art facility in Ventura, California. Alongside this, we have amended our distribution agreement with Statical Scientific. This strategic move delivers cost efficiency. Scale, and a larger revenue share of the average ceiling price. Average of 50% of the revenue goes to AVITA up from $50,000.

In parallel we have fully implemented the manufacturing of per meter our biosynthetic dressing.

Speaker Change: Under our roof at our state of the art facility in Ventura, California.

Speaker Change: Alongside this we have amended our distribution agreement with <unk> scientific.

Speaker Change: This strategic move delivers cost efficiencies scale and a larger revenue share of the average selling price.

Speaker Change: 60% of the revenue goes to Davita up from 50%.

James Corbett: With these additions, our commercial lineup now. Resell Ease of Use, Resell Go, Resell Go Mini, Cohelix, and Permiderm. This is the first time we've had such a broad spectrum of products available to support both burn and trauma center. One broad integrated portfolio targeted at the same hospital, same doctor, the same patient, and the same wound. This matters because hospitals are looking for integrated, scalable wound care solutions that solve more and more of their wound care needs. AVITA Medical provides that now.

Speaker Change: With these additions our commercial lineup now includes resell ease of use resell go resell go many co helix and perimeter.

Speaker Change: This is the first time, we've had such a broad spectrum of products available to support both burn and trauma centers.

Speaker Change: One broad integrated portfolio targeted at the same hospital same doctor the same patient and the same wound.

Jim Corbett: This matters because hospitals are looking for integrated, scalable wound care solutions that solve more and more of their wound care needs. AVITA Medical provides that now. Slide 4 shows what that means in terms of potential revenue per case. As hospitals adopt across our portfolio, we expect the realized average selling price per case to rise meaningfully. Now, to support our portfolio transformation, we needed to evolve our commercial model to match. This required a significant shift in our commercial approach. Historically, our reps provided heavy service-oriented, case-based procedural support, meaning our clinical special staff or sales reps will be physically present for many RECELL cases. That model served us well during the initial introduction of this first-in-category product when we were a burn-only single-product company. With the launch of multiple products and a more complex call point, we need to evolve our sales model.

Speaker Change: This matters because hospitals are looking for integrated scalable wound care solutions that solve more and more of their wound care needs a beta medical provides that now.

James Corbett: Slide four. shows what that means in terms of potential revenue per case. As hospitals adopt across our portfolio, we expect the realized average selling price per case to rise meaningfully.

Speaker Change: Slide four.

Speaker Change: It shows what that means in terms of potential revenue per case.

Speaker Change: As hospitals adopt across our portfolio, we expect our realized average selling price per case to rise meaningfully.

James Corbett: For us to support our portfolio transformation, we needed to evolve our commercial model to This required a significant shift in our commercial approach. Historic. Our reps provided heavy, service-oriented, case-based procedural support. Meaning our clinical special staff or sales reps will be physically present for many resale cases. That model served us well during the initial introduction of this first in category product when we were a burn only single product company.

Speaker Change: Now to support our portfolio transformation, we needed to evolve our commercial model to match this required a significant shift in our commercial approach.

Speaker Change: Historically.

Speaker Change: Our reps provided heavy service oriented case based procedure support.

Speaker Change: Meaning our clinical special staff or sales reps will be physically present for many resale cases.

Speaker Change: That model has served us well during the initial introduction of this first in category product.

Speaker Change: When we were a burden only single product company.

James Corbett: With the launch of multiple products and a more complex call point, we need to evolve ourselves.

Speaker Change: With the launch of multiple products in a more complex call point, we need to evolve our sales model.

James Corbett: Robin Vandenberg, who joined us last August. Let a full evaluation of our commercial organization. Under her leadership, we've redesigned the model, shifting from a service-oriented, case-based support structure to a more focused, selling-oriented approach. Our reps still cover cases. but within a standard two-stage workflow for a full thickness case. typically around 10% total body surface area, they're now actively selling at multiple points throughout the two procedures. In state one. They're introducing and selling the dermal matrix. Then in stage two, they're selling resale with split thickness skin graft and closing the graft with permeability.

Jim Corbett: Robin Vandenberg, who joined us last August, led a full evaluation of our commercial organization. Under her leadership, we've redesigned the model, shifting from a service-oriented, case-based support structure to a more focused, selling-oriented approach. Our reps still cover cases, but within a standard 2-stage workflow for a full thickness case, typically around 10% total body surface area, they're now actively selling at multiple points throughout the 2 procedures. In stage 1, they're introducing and selling the dermal matrix. In stage 2, they're selling RECELL with split-thickness skin graft and closing the graft with PermeaDerm. Here's an overview of the changes we've made. We consolidated from 12 regions to 9 regions. We reduced our total field headcount from 108 to 82. We have transitioned most clinic specialists into commercial roles, preserving critical product knowledge while expanding our commercial reach. We didn't lose expertise. We redeployed our expertise.

Speaker Change: Robin Vandenberg, who joined US last August.

Speaker Change: Let a full evaluation of our commercial organization.

Speaker Change: Under her leadership, we've redesigned the model shifting from a service oriented case based support structure to a more focused selling oriented approach.

Speaker Change: Our reps still cover cases.

Speaker Change: But within our standard two stage workflow for a full thickness case tip.

Speaker Change: Typically around 10% total body surface area. They are now actively selling at multiple points throughout the two procedures.

Speaker Change: In stage one there.

Speaker Change: We're introducing and selling the dermal matrix then in stage two.

Speaker Change: <unk> resale was split thickness skin graft and closing the grafts with perimeter.

James Corbett: Here's an overview of the changes we've made. and Consolidated from 12 Regions to 9 Regions. We reduced our total field headcount from 108 to 82. We have transitioned most clinical specialists into commercial roles, preserving critical product knowledge while expanding our commercial reach. We didn't lose expertise, we redeployed our Now our sales reps are spending more time on conversations that drive adoption. Across the Entire Portfolio, while still covering cases. We've realigned incentives accordingly. We will continue to have a small, single-digit number of clinical specialists generally assigned to our largest customers. As part of this evolution.

Speaker Change: Here's an overview of the changes we've made.

Speaker Change: We consolidated from 12 regions to nine regions.

Speaker Change: We reduced our total field head count from 108 to 82.

Speaker Change: We have transitioned most clinical specialists into commercial roles preserving critical product knowledge, while expanding our commercial reach.

Speaker Change: We didn't lose expertise we redeployed our expertise now our sales reps are spending more time on conversations that drive adoption.

Jim Corbett: Our sales reps are spending more time on conversations that drive adoption across the entire portfolio while still covering cases. We've realigned incentives accordingly. We will continue to have a small single-digit number of clinical specialists generally assigned to our largest customers. As part of this evolution, we evaluated every program in the company, created meaningful efficiencies. Overall, we expect to save $2.5 million per quarter in operating expenses and improve operating margin, all while increasing our selling capacity. Of that, approximately $1.3 million comes from the commercial transformation, with the remainder from G&A and R&D savings. We also strengthened leadership in the process. Laura Ackerman has stepped into one of our 2 area vice president of sales roles, reporting directly to Robin. It's the right team at the right time to meet the moment. We're seeing reimbursement support continue to build.

Speaker Change: Across the entire portfolio, while still covering cases.

Speaker Change: We've realigned incentives accordingly, we will continue to have a small single digit number of clinical specialists generally assigned to our largest customers.

Speaker Change: As part of this evolution, we evaluated every program and company created meaningful efficiencies.

James Corbett: We evaluated every program and company, created meaningful. Overall, we expect to save $2.5 million per quarter in operating and Improve Operating Margin, all while increasing our selling capacity. Of that, approximately $1.3 million comes from the commercial transformation. with the remainder from GNA and R&D saving.

Speaker Change: We're all we expect to save $2 $5 million per quarter in operating expenses and improve operating margin all while increasing our selling capacity.

Speaker Change: Of that approximately $1 3 million comes from the commercial transformation with the remainder from G&A and R&D savings.

James Corbett: We also strengthen leadership in the process.

Speaker Change: We also strengthened our leadership in the process.

James Corbett: Laura. stepped into one of our two Area Vice President of Sales roles, reporting directly to Robin. It's the right team, at the right time, to meet the moment. Meanwhile, we're seeing reimbursement support continue to build.

Speaker Change: Ackerman stepped into one of our two area Vice president of sales roles reporting directly to Robyn. It's the right team at the right time to meet the moment.

Speaker Change: Meanwhile, we're seeing reimbursement support continue to bill earlier this month CMS proposed a new technology add on payment <unk> and tab for resale.

Jim Corbett: Earlier this month, CMS proposed a new technology add-on payment known as NTAP for RECELL. If approved, the policy could take effect on 1 October. We're optimistic, and we're actively engaged in the public comment process. As for vitiligo, our clinical studies were accepted for publication in March, and the results met our expectations. That said, the reimbursement landscape remains highly uncertain. As a consequence, we are stepping back from further commercial investment in the vitiligo indication at this time. Our focus remains squarely on acute wound care, where we see the greatest and clearest opportunity. Let me end by looking ahead. We've come a long way. 2 years ago, we were focused solely on burns, addressing a $500 million market opportunity.

James Corbett: CMS proposed a new technology add-on payment, known as NTEP, for resale. If approved, the policy could take effect on October 1. We're optimistic and we're actively engaged in the public comment process.

Speaker Change: If approved the policy could take effect on October one.

Speaker Change: We're optimistic and we're actively engaged in the public comment process.

James Corbett: As for a bit of LIGO. Our clinical studies were accepted for publication in March and the results met our expectations. That said, the reimbursement landscape remains highly uncertain.

Speaker Change: As for Vitiligo.

Speaker Change: Our clinical studies were accepted for publication in March and our results met our expectations.

Speaker Change: That said the reimbursement landscape remains highly uncertain.

James Corbett: As a consequence, we are stepping back from further commercial investment in the vitiligo indication at this time. Our focus remains squarely on acute wound care. where we see the greatest and clearest.

Speaker Change: As a consequence, we are stepping back from further commercial investment in the vitiligo indication at this time.

Speaker Change: Our focus remains squarely on acute wound care.

Speaker Change: Where we see the greatest and clearest opportunity.

James Corbett: Let me end by looking who's come a long way. Two years ago. We were focused solely on burns addressing a $500 million market today with a broad acute wound care portfolio. Our adjustable market is in excess of $3.5 billion in the U.S. backed by a scalable commercial model. Integrated Operations, and Expanding Reimbursement Support.

Speaker Change: And by looking ahead.

Speaker Change: We've come a long way.

Speaker Change: Two years ago.

Speaker Change: We were focused solely on burns addressing a $500 million market opportunity.

Jim Corbett: Today, with a broad acute wound care portfolio, our addressable market is in excess of $3.5 billion in the US alone, backed by a scalable commercial model, integrated operations, and expanding reimbursement support. Our future is bright. On 13 May, we'll bring this story to life at the AVITA Medical Acute Wound Care Showcase 2025. We'll share clinical results by some of our treating physicians, economic insights, and we will hear how our products have changed patients' lives. You'll be hearing directly from the physicians and patients whose lives they've helped heal. I hope you'll join us. You can register by visiting our website, clicking the investor relations tab, and selecting the events section. With that, I'll turn it over to David to walk through our financial results.

Speaker Change: With a broad acute wound care portfolio are.

Speaker Change: Our addressable market is in excess of $3 5 billion in the U S alone.

Speaker Change: Backed by a scalable commercial model.

Speaker Change: Integrated operations and expanding reimbursement support.

James Corbett: Our future is bright.

Speaker Change: Our future is bright.

James Corbett: On May 13th, we'll bring this story to life at the AVITA Medical Acute Wound Care Showcase 2025. will share clinical results by some of our treating physicians. Economic. And we will hear how our products have changed patients' lives. You'll be hearing directly from the physicians and patients whose lives they've helped.

Speaker Change: On May 13th we will bring this story to life at the Davita medical acute wound care showcase 2025.

Speaker Change: We will share clinical results by some of our treating physicians.

Speaker Change: Economic insights and we will hear how our products have changed patients' lives you'll be hearing directly from the physicians and patients whose lives they've helped heal.

James Corbett: I hope you'll join us. You can register by visiting our website, clicking the Investor Relations tab and selecting the Events section.

Speaker Change: I hope you'll join US you can register by visiting our website.

Speaker Change: The Investor Relations tab and selecting the events section.

David OToole: With that, I'll turn it over to David to walk through our financial results. Thank you, Jim. For the three months ended March 31st 2025. Our commercial revenue was 18.5 representing a 67% increase compared to the same period in 2024. This growth was driven primarily by the continued deployment and ongoing adoption of Resell Go within existing burn. as well as expansion of new accounts targeting trauma.

Speaker Change: With that I'll turn it over to David to walk through our financial results.

David O'Toole: Thank you, Jim. For the 3 months ended 31 March 2025, our commercial revenue was $18.5 million, representing a 67% increase compared to the same period in 2024. This growth was driven primarily by the continued deployment and ongoing adoption of RECELL GO within existing burn centers, as well as expansion of new accounts targeting trauma centers. We acknowledge that we have had 2 quarters where our revenue has been flat. However, as slide 5 shows, over the last 5 years, our growth has been impressive, with approximately 47% compound annual growth rate through the end of 2025, assuming the midpoint of our revenue guidance for this year. As Jim indicated, we are on the precipice of recharging this historical growth rate in the coming quarters.

David: Thank you Jim.

David: For the three months ended March 31, 2025, our commercial revenue was $18 5 million reps.

David: Representing a 67% increase compared to the same period in 2024.

David: This growth was driven primarily by the continued deployment and ongoing adoption of resale go within existing burn centers as well as expansion of new accounts targeting trauma centers.

David OToole: We acknowledge that we have had two quarters where our revenue has been flat. However, as slide five shows, over the last five years, our growth has been impressive. with approximately 47% compound annual growth rate through the end of 2025, assuming the midpoint of our revenue guidance.

David: We acknowledge that we have had two quarters, where our revenue has been flat.

David: However, as slide five shows over the last five years, our growth has been impressive with approximately 47% compound annual growth rate through the end of 2025, assuming the midpoint of our revenue guidance for this year.

David OToole: As Jim indicated, we are on the precipice of recharging this historical growth rate in the coming quarter. Early indicators from the February launch of Resell Go Mini and April launch of Cohelix continue to suggest that these products will meaningfully contribute to revenue growth throughout 2025. alongside the increasing momentum from premium. Gross profit margin for the first quarter was $84.7. down from 86.4% during the same period of 2024. Note that the gross margin for resale products only was 86.4% for the. which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year primarily caused by volume discount.

David: As Jim indicated we are on the precipice of recharging this historical growth rate in the coming quarters.

David O'Toole: Early indicators from the February launch of RECELL GO mini and April launch of Cohealyx continue to suggest that these products will meaningfully contribute to revenue growth throughout 2025, alongside the increasing momentum from PermeaDerm sales. Gross profit margin for Q1 was 84.7%, down from 86.4% during the same period of 2024. Note that the gross margin for RECELL products only was 86.4% for the quarter, which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year was primarily caused by volume discounts, a higher inventory reserve, and product mix. As the percentage of our revenue derived from new products increases, we will continue to see a small degradation of our overall gross margin percentage while increasing our gross margin dollars and operating dollars.

David: Early indicators from the February launch of resale got many an April launch of co helix continue to suggest that these products will meaningfully contribute to revenue growth throughout 2025.

David: Alongside the increasing momentum from Premier Derm sales.

David: Gross profit margin for the first quarter was 84, 7% down from 86, 4% during the same period of 2024.

David: Note that the gross margin for resale products only was 86, 4% for the quarter.

David: Which we believe will remain in this range for future quarters.

David: The decrease in the overall gross margin percentage from the prior year was primarily caused by volume discounts.

David OToole: Higher Inventory Reserve, and Product As the percentage of our revenue derived from new products increases, We will continue to see a small degradation of our overall gross margin.

David: Higher inventory reserve and product mix.

David: As the percentage of our revenue derived from new products increases we will continue to see a small degradation of our overall gross margin percentage, while increasing our gross margin dollars and up.

David OToole: while increasing our gross margin dollars and operating. As we have disclosed, we share the average sales price for Cohelix at 50% and for Permioderm at 60%. These distribution arrangements are highly beneficial. However, it is inevitable because of the revenue sharing nature that our overall gross margin percentage will decrease from historical level.

David O'Toole: As we have disclosed, we share the average sales price for Cohealyx at 50% and for PermeaDerm at 60%. These distribution arrangements are highly beneficial to us. However, it is inevitable because of the revenue-sharing nature that our overall gross margin percentage will decrease from historical levels. Total operating expenses for the quarter totaled $27.5 million compared to $26.8 million in the same period of 2024. This increase stemmed from a $2.2 million rise in sales and marketing expenses due to employee-related costs, including increases in salaries and benefits and commissions, partially offset by a decrease in professional fees. G&A expenses decreased significantly by $2.6 million or 29%, driven by lower salaries and benefits, deferred compensation, professional fees, and corporate expenses. R&D expenses increased by $1.1 million as a result of higher salaries and benefits, stock-based compensation, partially offset by lower outside professional fees and other expenses.

David: Operating dollars.

David: As we have disclosed we share the average sales price for co helix at 50% and for Permian <unk> at 60%.

David: These distribution arrangements are highly beneficial to us power.

David: However, it is inevitable because of the revenue sharing nature that our overall gross margin percentage will decrease from historical levels.

David OToole: Total operating expenses for the quarter totaled $27.5 million compared to $26.8 million in the same period of 2024. This increase stemmed from a $2.2 million rise in sales and marketing expenses due to employee-related costs, including increases in salaries and benefits and commissions, partially offset by a decrease in professional GNA expenses decreased significantly by 2.6 million, or 29%. Driven by lower salaries and benefits, deferred compensation, professional fees, and corporate expenses. R&D expenses increased by $1.1 million as a result of higher salaries and benefits, stock-based compensation, partially offset by lower outside professional fees, and other expenses.

David: Total operating expenses for the quarter totaled $27 5 million compared to $26 8 million in the same period of 2020 for.

David: This increase stemmed from a $2 2 million rise in sales and marketing expenses due to employee related costs, including increases in salaries and benefits and commissions, partially offset by a decrease in professional fees.

G&A expenses decreased significantly by $2 6 million or 29% driven.

David: Driven by lower salaries and benefits deferred compensation professional fees and corporate expenses.

David: R&D expenses increased by $1 1 million as a result of higher salaries and benefits stock based compensation, partially offset by lower outside professional fees and other expenses.

David OToole: Notably, due to our recent commercial field transformation and additional operational efficiencies we have implemented, we expect to reduce our operating expenses by approximately $2.5 million per quarter on a go-forward basis. We expected total operating expenses to increase in the first quarter compared to total operating expenses of 26.1 million in the fourth quarter of 2024 due to the reset of payroll taxes, benefits and other typical first quarter expenses. The $27.5 million of operating expenses in the first quarter include non-cash expenses of approximately $2.7 million of stock-based compensation expense and approximately $0.4 million of depreciation and amortization.

David O'Toole: Notably, due to our recent commercial field transformation and additional operational efficiencies we have implemented, we expect to reduce our operating expenses by approximately $2.5 million per quarter on a go-forward basis. We expected total operating expenses to increase in Q1 compared to total operating expenses of $26.1 million in Q4 of 2024 due to the reset of payroll taxes, benefits, and other typical Q1 expenses. The $27.5 million of operating expenses in Q1 include non-cash expenses of approximately $2.7 million of stock-based compensation expense and approximately $0.4 million of depreciation and amortization.

David: Notably due to our recent commercial field transformation and additional operational efficiencies. We have implemented we expect to reduce our operating expenses by approximately $2 5 million per quarter on a go forward basis.

David: We expected total operating expenses to increase in the first quarter compared to total operating expenses of $26 1 million in the fourth quarter of 2024 due to the reset of payroll taxes benefits and other typical first quarter expenses.

David: The $27 5 million of operating expenses in the first quarter include noncash expenses of approximately $2 7 million of stock based compensation expense and approximately <unk> 4 million of depreciation and amortization.

David OToole: Other income expense increased by $0.7 million to $0.8 million of expense for the quarter, consisting of non-cast charges totaling $1.1 million related to changes in fair value of debt and $0.5 million of associated debt cost. partially offset by a $0.4 million non-cash gain from the change in fair value of warrant liability. and $0.4 million in investment.

David O'Toole: Other income expense increased by $0.7 million to $0.8 million of expense for the quarter, consisting of non-cash charges totaling $1.1 million related to changes in fair value of debt and $0.5 million of associated debt costs, partially offset by a $0.4 million non-cash gain from the change in fair value of warrant liabilities and $0.4 million in investment income. Net loss for Q1 was $13.9 million, or a loss of $0.53 per basic and diluted share, improving from a net loss of $18.7 million, or a loss of $0.73 per basic and diluted share in the same period in 2024. As of 31 March, we had cash and marketable securities of $25.8 million, compared to $35.9 million at 31 December 2024.

David: Other income expense increased by 0.7 million to zero point $8 million of expense for the quarter, consisting of noncash charges totaling $1 1 million related to changes in fair value of debt.

And zero point $5 million of associated debt costs.

David: Partially offset by a <unk> 4 million noncash gain from the change in fair value of warrant liabilities.

David: And <unk> 4 million in investment income.

David OToole: Net loss for the first quarter was $13.9 million, or a loss of $0.53 per basic and diluted share, improving from a net loss of $18.7 million, or a loss of $0.73 per basic and diluted share, in the same period in 2025. As of March 31st, we had cash and marketable securities of $25.8 million. compared to $35.9 million at December 31, 2024. Although we expected our cash usage to increase in the first quarter due to payment of bonuses and commissions, as well as the reset of payroll, taxes and benefits. The $10.1 million use of cash was higher than we had anticipated.

David: Net loss for the first quarter was $13 9 million or a loss of 53.

David: Per basic and diluted share improving from a net loss of $18 7 million or a loss of 73 per basic and diluted share in the same period in 2024.

David: As of March 31, we had cash and marketable securities of $25 eight.

David: $8 million.

David: <unk> to $35 9 million at December 31, 2024.

David O'Toole: Although we expected our cash usage to increase in Q1 due to payment of bonuses and commissions, as well as the reset of payroll taxes and benefits, the $10.1 million use of cash was higher than we had anticipated. As discussed earlier, we have taken the necessary steps to reduce our use of cash in the coming quarters by eliminating approximately $2.5 million of operating expenses per quarter. We remain confident that our current cash balance will allow us to achieve our plan, which includes generating free cash flow in H2 of the year and achieving GAAP profitability in Q4 of this year. Turning to our OrbiMed credit facility. At the end of March, we secured a waiver of our Q1 trailing 12-month revenue covenant, which had been set at $73 million. To obtain this waiver, we paid a fee to OrbiMed.

David: Although we expected our cash usage to increase in the first quarter due to payment of bonuses and commissions as well as the reset of payroll taxes and benefits.

The $10 1 million use of cash was higher than we had anticipated.

David OToole: As discussed earlier, we have taken the necessary steps to reduce our use of cash in the coming quarters by eliminating approximately $2.5 million of operating expenses per quarter. We remain confident that our current cash balance will allow us to achieve our plan.

David: As discussed earlier, we have taken the necessary steps to reduce our use of cash in the coming quarters by eliminating approximately $2 5 million of operating expenses per quarter.

David: We remain confident that our current cash balance will allow us to achieve our plan.

David OToole: Includes Generating Free Cash Flow in the Second Half of the Year and Achieving Gap Profitability in Q4.

David: Which includes generating free cash flow in the second half of the year and achieving GAAP profitability in Q4 of this year.

David OToole: Turning to our OrbitMid credit facility, at the end of March, we secured a waiver of our first quarter trailing 12-month revenue. which had been set at 73 million. To obtain this waiver, we paid a fee to Orbit. Revenue covenants for future quarters remain intact, with the second quarter 2025 trailing 12-month revenue covenant set at $78 million.

David: Turning to our <unk> credit facility at the end of March we secured a waiver of our first quarter trailing 12 month revenue covenant, which had been set at $73 million.

David: To obtain this waiver we paid a fee to orbit.

David O'Toole: Revenue covenants for future quarters remain intact, with the Q2 2025 trailing 12-month revenue covenant set at $78 million. It is worth highlighting that we have assessed potential implications of current tariff policies and can state the current slate of tariffs will not have a material impact on our business. Looking ahead, we reiterate our full year 2025 commercial revenue guidance of $100 to $106 million, representing growth of approximately 55% to 65% compared to 2024. Additionally, we continue to expect to generate free cash flow in the H2 of the year and achieve GAAP profitability during Q4 of 2025, supported by our operating efficiencies as well as the broader scaling of our commercial portfolio. We remain confident in the success of RECELL GO, the full commercial launch of Cohealyx, the rollout of RECELL GO mini, and the growing adoption of PermeaDerm.

David: Revenue covenants for future quarters remain intact with the second quarter 2025, trailing 12 month revenue covenant.

David: At $78 million.

David OToole: It is worth highlighting that we have assessed potential implications of current tariff policies and can state the current slate of tariffs will not have a material impact on our business. Looking ahead, we reiterate our full year 2025 commercial revenue guidance of $100 to $106 million, representing growth of approximately 55% to 65% compared to 2024. Additionally, we continue to expect to generate free cash flow in the second half of the year and achieve gap profitability during Q4 of 2025. supported by our operating efficiencies, as well as the broader scaling of our commercial portfolio. We remain confident in the success of Resell Go, the full commercial launch of Cohelix, the rollout of Resell Go Mini, and the growing adoption of Premier.

David: It is worth highlighting that we have assess potential implications of current tariff policies and can state. The current slate of tariffs will not have a material impact on our business.

David: Looking ahead, we reiterate our full year 2025, commercial revenue guidance of $100 million to $106 million representing growth of approximately 55% to 65% compared to 2024.

David: Additionally, we continue to expect to generate free cash flow in the second half of the year and achieved GAAP profitability during Q4 of 2025.

David: Supported by our operating efficiencies as well as the broader scaling of our commercial portfolio.

David: We remain confident in the success of <unk> go the full commercial launch of co helix the rollout of <unk> I'll go many and the growing adoption of perimeter.

David OToole: These strategic initiatives position us to deliver strong results this year and drive significant shareholder value.

Jim Corbett: These strategic initiatives position us to deliver strong results this year and drive significant shareholder value. Lastly, as a reminder, our annual meeting of stockholders will be held on 4 June. We encourage all stockholders to participate and cast their votes. With that, I will turn the call back to the operator for your questions.

David: These strategic initiatives position us to deliver strong results this year and drive significant shareholder value.

David OToole: Lastly, as a reminder, our annual meeting of stockholders will be held on June 4. We encourage all stockholders to participate and cast their vote.

David: Lastly, as a reminder, our annual meeting of stockholders will be held on June 4th.

David: We encourage all stockholders to participate and cast their votes.

Operator: With that, I will turn the call back to the operator for your questions. Thank you.

David: With that I will turn the call back to the operator for your questions.

Operator: Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Brooks O'Neil with Lake Street Capital Markets. Your line is now open.

Operator: Ladies and gentlemen, to ask a question at this time, you will need to press star 1 1 on your telephone and wait for your name to be announced. If you would like to withdraw your question, simply press star 1 1 again.

Speaker Change: Thank you, ladies and gentlemen to ask a question at this time, you will need to press star one on your telephone and wait.

David: <unk> name to be announced soon.

David: <unk> Your question simply press Star one again, please standby, while we compile the Q&A roster.

Brooks O'Neill: Please stand by while we compile the Q&A Now first question coming from the line of Brooks O'Neill with Lake Street Capital Markets. Your line is now open. Good afternoon, everyone.

David: No first question coming from the line of.

O'neill: O'neill with Lake Street capital markets. Your line is now open.

Brooks O'Neil: Good afternoon, everyone. I guess I'll start. I have a sense that you've said a limited commercial launch of Cohealyx occurred in Q1. Can you share anecdotally any response, impressions, performance you've witnessed of that product and says to you about the pending full launch that's occurring now?

Brooks O'Neill: I guess I'll start.

Speaker Change: Good afternoon.

James Corbett: I have a Since that you've said a limited commercial launch of Cohelix occurred in Q1, can you share anecdotally any response, impressions, performance you've witnessed of that product and says to you about the pending full launch that's occurring now. Sure can, Brooks. Thanks for the question. So first of all, we, you may recall that the preclinical work demonstrated a graft readiness at seven days, which is quite almost seven to 14 days faster than other dermal matrices that we studied in that same preclinical work. what we experienced in the Limited Market Release was really us gathering case data to help support commercialization April 1, is we actually validated that experience.

Speaker Change: Everyone I guess I'll start.

Speaker Change: Dan that you said limited commercial launch of co helix occurred in Q1 can you share anecdotally any.

Speaker Change: Response impressions performance, you've witnessed of that product and does deal about that.

Speaker Change: Pending Paul launch that's occurring now.

Jim Corbett: Sure can, Brooks. Thanks for the question. First of all, you may recall that the preclinical work demonstrated a graft readiness at 7 days, which is quite almost 7 to 14 days faster than other dermal matrixes that we studied in that same preclinical work. What we experienced in the limited market release was really us gathering case data to help support commercialization 1 April, is we actually validated that experience. There was a case that's in the news put out by Ohio State, where they had a 7-day graft-ready experience with Cohealyx. That is consistent with a couple dozen cases that we did there in Q1. In Q1, we didn't have a broad, full SKU array of sizes, so we were limited to treat certain size of cases. On 1 April, we're fully stocked, including the 700 sq cm sheets.

Speaker Change: Sure sure Ken Brooks, Thanks for the question.

Speaker Change: So first of all we you may recall that the preclinical work demonstrated a grafts readiness at seven days, which is quite almost seven to 14 days faster than.

Speaker Change: Other dermal matrixes that we studied in that same preclinical work.

Speaker Change: What we experienced in the.

Speaker Change: Limited market release was really us gathering case data to help support commercialization April one is.

Speaker Change: As we actually validated that experience and there was a case that it's in the news put out by how state where they had a seven day graft ready experience with co helix and it was that is consistent with the a couple of dozen cases that we did during Q1.

James Corbett: And there was a case that's in the news put out by Ohio State, where they had a seven-day graft-ready experience with Cohelix. And that is consistent with a couple dozen cases that we did during Q1.

James Corbett: In Q1, we didn't have a broad, full SKU Unknown Attendee, Chris Kallos, John Hester, Ross Osborn, Jessica Ekeberg, Rudi Michelson, David OToole, Junwoo Park, Andrew Lang, AVITA Medical Post-Market Study. is in the majority ready to enroll. They've been through IRB, and right now they're screening patients and preparing to enroll. So during the year, we'll get access to that data as well. So since that time, we've had a number of early commercial adoption cases where they've been through VAC already, shorter than we were experiencing, frankly, with resell-go times. So we're really excited about how CoHelix is going.

Speaker Change: In Q1, we didn't have abroad.

Speaker Change: Full.

Speaker Change: S K U.

Speaker Change: Array of sizes. So we were limited to treat certain number of certain size of cases.

Speaker Change: On April one on April one we are fully stocked, including the 700 square centimeter sheets. So we're fully ready to go. So the third thing is co helix one hour.

Jim Corbett: We're fully ready to go. The third thing is Cohealyx-I, our post-market study is in the majority ready to enroll. They've been through IRB, and right now they're screening patients and preparing to enroll. During the year, we'll get access to that data as well. Since that time, we've had a number of early commercial adoption cases where they've been through VAC already, shorter than we were experiencing, frankly, with RECELL GO times. We're really excited about how Cohealyx is going. The organization is trained, and as you heard, we reconfigured the sales organization as well because, of course, Cohealyx gets sold at the first stage of a 2-stage procedure. We want our reps there as well as when RECELL or RECELL GO or RECELL GO mini is being used with a split-thickness skin graft.

Speaker Change: Post market study.

Speaker Change: Is in the majority ready to enroll they've been through IRB.

Speaker Change: And right now they are screening patients and preparing to enroll so during the year, we will get access to that data as well. So since that time, we've had a number of early commercial adoption cases, where they have been through vac already.

Speaker Change: Shorter than we were experiencing frankly with resale go.

Speaker Change: Times. So we're really excited about how co helix is going down.

James Corbett: The organization is trained, and as you heard, we reconfigured the sales organization as well because, of course, CoHelix gets sold at the first stage of a two-stage procedure, and we want our reps there as well as when resell or Resulco or Resulco Mini is being used with a split skin graft. So a lot of info. So sorry about that. But there's a lot to say about Cochlear. Great.

Speaker Change: Organization is trained and as you heard we reconfigured.

Speaker Change: Sales organization as well because of course co helix gets sold at the first stage of a two stage procedure.

Speaker Change: We want our reps there as well as when resell.

Speaker Change: Our resale go or resale to many is being used with a split thickness skin graft. So.

Jim Corbett: A lot of info so sorry about that, but there's a lot to say about Cohealyx.

A lot of info, so sorry about that but there's a lot to say about <unk>.

Brooks O'Neil: Great. That was very helpful, Jim. The other question I want to ask is just obviously RECELL GO mini and the expansion of the product into the level 1 and level 2 trauma centers. I'm curious if you could give us just any sense for whether that's working, what the response is.

Brooks O'Neill: That was very helpful, Jim.

Speaker Change: Yes.

James Corbett: So the other question I want to ask is just Obviously, resale go mini and the expansion of the product into the level one and level two trauma centers. I'm curious if you could give us just any, any sense for whether that's working, what the response So first of all, we had our, although the product was approved at the end of December, our first inventory was in early February. So that was our first promotion time. We've had a fair, I would say a good response from existing VAC approved accounts. that were in the trauma area that we had converted last year.

Speaker Change: Great that was very helpful. Jim So the other question I wanted to ask you is just.

Speaker Change: Obviously, we sell go many and the expansion of the product into the level, one and level two trauma centers I'm curious if you could give us just any.

Speaker Change: Any sense for whether that's working what the responses.

Jim Corbett: First of all, although the product was approved at the end of December, our first inventory was in early February, so that was our first promotion time. We've had a fair, I would say a good response from existing VAC-approved accounts that were in the trauma area that we had converted last year, who've taken in inventory for RECELL GO mini. It's a real important distinction that those patients are way in the majority under that 2.5% total body surface area that RECELL GO mini covers, which is 480 square centimeters. The response is good. You know what else we've noticed is with the portfolio as we now have it with PermeaDerm and Cohealyx and RECELL GO mini, there's more opportunities to provide value to the trauma surgeon. It is making a difference on our selling activity.

Speaker Change: So first of all we had our although the product was approved at the end of December our first inventory was in early February so that was our first promotion time we've.

Speaker Change: We've had a.

Speaker Change: Fair I would say a good response from existing Vac approved accounts.

Speaker Change: That were in the trauma area that we had.

James Corbett: who've taken in inventory for ReCell Go Mini. It's a real important distinction that those patients are way in the majority under that two and a half percent total body surface area that ReCell Go Mini covers, which is 480 square centimeters. So the response is good. And you know what else we've noticed is with the portfolio as we now have it, with Permiaderm and ReCell Go Mini, Cohelix, and Resulco Mini, there's more opportunities to provide value to the trauma surgeon. So it is making a difference on our selling activity. Great.

Speaker Change: Converted last year.

Speaker Change: Who've taken in inventory for resale go many.

Speaker Change: A really important distinction that those patients are.

Speaker Change: Way in the majority under that two 5% total body surface area that we saw Germany covers which is 480 square centimeters.

Speaker Change: So the response is good what else that we've noticed is we.

Speaker Change: With a portfolio as we now have it with Permian Derm and.

Speaker Change: Co helix and resale go many theres more opportunities to provide value to the trauma surgeon. So it is making a difference on our selling activity.

Brooks O'Neil: Great. Thank you very much. I'll jump back in queue.

Brooks O'Neill: Thank you very much.

Operator: I'll jump back in queue. Okay, thanks. Thank you. And as a reminder, to ask a question, please press star 1-1 on your touch-tone telephone.

Speaker Change: Alright, Thank you very much I'll jump back in queue.

Jim Corbett: Okay. Thanks.

Speaker Change: Okay. Thanks.

Operator: Thank you. As a reminder to ask a question, please press star one one on your touch phone telephone. Our next question coming from the line of Joshua Jennings with TD Cowen. Your line is now open.

Speaker Change: Thank you and that's in line to ask a question. Please press star one on your Touchtone telephone.

Eric: Our next question coming from the lineup, Josh Jennings with TD Cowen. Your line is now open. Hi, this is Eric on for Josh. Thank you guys for taking the question. Thank you for all the comments here on CoHelix. It's very helpful and it sounds like that rollout is off to a nice start.

Speaker Change: Our next question coming from the line of Josh Jennings with Cowen. Your line is now open.

[Analyst] (TD Cowen): Hi, this is Eric on for Josh. Thank you guys for taking the question. Thank you for all the commentary on Cohealyx. That's very helpful, and it sounds like that rollout is off to a nice start. I was hoping we could talk just about any potential revenue contributions from that launch that we should be assuming within the guidance for 2025 and maybe beyond that. Just wondering if you have any target attachment rates that you're working towards where folks are using Cohealyx in concert with the RECELL platform.

Eric: Hi, This is Eric on for Josh. Thank you guys for taking the question.

Speaker Change: Thank you for all the commentary on co helix, that's very helpful and it sounds like that rollout is off to a nice start.

Eric: I was hoping we could talk about any potential revenue contributions from that launch that we should be assuming within the guidance for 2025, and maybe beyond that, just wondering if you have any target attachment rates that you're working towards where folks are using Cohelix in concert with the resale platform. Yeah, that is a good question. We're not quite ready to give guidance on that mix. I will tell you it is expected by us to be a material contributor. We think, in fact, it is likely that by Q3, that we'll be breaking out the non-resale sales as a consequence, just to give you some directional guidance.

Speaker Change: I was hoping we could talk.

Speaker Change: About any potential revenue contributions from the launch that we should be assuming within the guidance for 25.

Speaker Change: And maybe beyond that just wondering if you have any target attachment rates that youre working towards where folks are using co helix in concert with the retail platform.

Jim Corbett: Yeah, that is a good question. We're not quite ready to give guidance on that mix. I will tell you it is expected by us to be a material contributor. We think, in fact, it is likely that by Q3 that we'll be breaking out the non-RECELL sales as a consequence, just to give you some directional guidance, if that's helpful.

Speaker Change: That is a good question, we're not quite ready to give guidance on that mix I will tell you. It is expected by us to be a material contributor. We think in fact, it is likely to by Q3, because that will be breaking out the non retail sales as a consequence, just to give you some directional.

Eric: if that's helpful. That is, yeah. Thank you for sharing that.

Speaker Change: Guidance.

Speaker Change: If that's helpful.

[Analyst] (TD Cowen): That is, yeah. Thank you for sharing that. Maybe secondly, just thinking about the sales force here, just looking at where revenues need to be by the end of this year to reach guidance.

Speaker Change: That is yes, thank you for sharing that.

James Corbett: And maybe secondly, just thinking about the sales force here, just looking at where revenues need to be by the end of this year to reach guidance. I was just wondering if you think you have the sales force in place now to, to reach those targets or if that's something that needs to be, to be looked at at some point. Now, actually, we feel very good about our staffing level. We reconfigured, because if you recall, we were... Structurally, we had, I think, 59 sales positions and 29 clinical specialist positions. And those clinical specialist positions were attached to two sales reps, right?

Speaker Change: And maybe secondly, just thinking about the sales force here, just looking at where revenues need to be by the end of this year to reach guidance. I was just wondering if you think you had the sales force in place now to to reach those targets or if that's something that needs to be to be looked at at some point here.

Jim Corbett: Yeah.

[Analyst] (TD Cowen): I was just wondering if you think you have the sales force in place now to reach those targets, or if that's something that needs to be looked at at some point here?

Jim Corbett: Actually, we feel very good about our staffing level. We reconfigured because if you recall, structurally we had, I think, 59 sales positions and 29 clinical specialist positions. Those clinical specialist positions were attached to 2 sales reps, right? The model very much was heavily a sales service model, and in a 2-stage procedure, the clinical specialist, not the sales rep, would be present. Of course, during the initial stage, there was no explicit reason why our rep would be present. What we did is we have a number of very large accounts where we kept the clinical specialist model. We converted the roles of clinical specialists into essentially a sales associate level. We call them market development specialists, but they have a sales role.

Speaker Change: And now actually we feel very good about our staffing level, we reconfigured because if you recall we were.

Speaker Change: Structurally we had I think 59 sales positions and 29 clinical specialist positions and those kinds of asbestos specials positions were attached to.

Speaker Change: So sales reps right.

James Corbett: And the model very much was heavily a sales service model. And in a two-stage procedure, the sales rep... I mean, the clinical specialist, not the sales rep, would be present. And of course, during the initial stage, there was no explicit reason why our rep would be present. So what we did is we have a number of very large accounts where we kept the clinical specialist model. We converted the roles of clinical specialists into a sales associate level, we call them market development specialists, but they have a sales role. And so now our sales coverage is about.

Speaker Change: And the model very much was heavily to us our sales service model and in a two stage procedure the sales rep.

Speaker Change: I mean, the clinical specialist sales ramp.

Speaker Change: President and of course during the initial stage there was no explicit reason why our rep would be present. So what we did is we have a number of very large accounts, where we kept the clinical specialist model.

Speaker Change: We converted the roles of.

Speaker Change: Yes.

Speaker Change: Clinical specialists into a.

Speaker Change: So essentially our sales associate level, we call market development specialist, but they have a sales role.

Jim Corbett: Now our sales coverage is about approximately 70, and their goal is to be a selling team that is in stage 1 of the procedure when a dermal matrix is potentially used, and then to also be there when the split-thickness skin graft is used with RECELL and be there when the dressing that could be PermeaDerm would be applied. It's a much more selling-oriented model, and we trained on that during the Q1 and early in April. That is something that we've been preparing with this portfolio expansion.

Speaker Change: And so now our sales coverage is about.

James Corbett: approximately 70. And their goal is to be a selling team that is in stage one of the procedure when a dermal matrix is potentially used, and then to also be there when the split thickness skin graft is used with resale and be there when the dressing that could be permeaderm would be applied. So it's a much more selling-oriented model, and we trained on that during the first quarter and early in April. So that is something that we've been preparing with this portfolio expansion. Understood. That makes sense.

Speaker Change: Approximately 70.

Speaker Change: And their goal is to be a selling team that is in stage one of the procedure when a dermal matrixes potentially used and then to also be there when the split thickness skin graft is used with resell and be there when the dressing that could be Permian.

Speaker Change: <unk> will be applied.

Speaker Change: A much more selling oriented model and we trained on that during the first quarter and early in April so that is something that we've been.

Speaker Change: Preparing with this.

Speaker Change: Portfolio expansion.

[Analyst] (TD Cowen): Understood. That makes sense. If I could squeeze one last question, maybe for David here.

David OToole: And if I could squeeze one last question, maybe for David here. Just think about the cadence of revenues through the rest of this year. Should we be expecting to steady sequential increases through 2Q, 3Q, 4Q? Or is this going to be more heavily weighted towards those end of the year quarters as some of the new offerings from the pipeline begin to contribute? Yeah, I think that. Thank you for the question. I appreciate that. You know, the way we model it is there's more just sequential growth every quarter, with some weighted towards the back end, you can imagine that as we get more back approvals, especially for co helix, which is going to be a major contributor for us for this year and into next year.

Speaker Change: Understood that makes sense and if I could squeeze one last question maybe for David here. It looks like just given the cadence of revenues through the rest of this year should we be expecting to steady sequential increases through <unk> or is this going to be more heavily weighted towards those ended the year quarters as some of the new offerings from the pipeline begin to contribute.

Jim Corbett: Go for it.

[Analyst] (TD Cowen): Just thinking about the cadence of revenues through the rest of this year, should we be expecting just steady sequential increases through Q2, Q3, Q4, or is this going to be more heavily weighted towards those end-of-the-year quarters as some of the new offerings from the pipeline begin to contribute?

David O'Toole: Yeah. Thank you for the question. I appreciate that. The way we modeled it is there's more just sequential growth every quarter with some weighted towards the back end. You can imagine that as we get more VAC approvals, especially for Cohealyx, which is going to be a major contributor for us for this year and into next year. As we get more VAC approvals with Cohealyx, that will be towards the back end of the year that will take off. Overall, kind of an even sequential growth is what we're looking to do for the rest of the year.

David: Yes, I think that thank you for the question I appreciate that.

Speaker Change: Okay.

Speaker Change: The way, we modeled it as theres more just sequential growth every quarter with some weighted towards the backend you can imagine that as we get more vac approvals, especially for <unk>.

Speaker Change: <unk> helix, which is going to be a major contributor for us.

David OToole: So as we get more back approvals with co helix, that will be towards the back end of the year that that will take off. But overall, kind of an even sequential growth is what we're looking to do for the rest of the year. Okay, that's very helpful.

Speaker Change: For this year and into next year, so as we get more vac approvals with <unk> that will be towards the back end of the year that that will take off but overall kind of and even sequential growth is what we're looking to do for the rest of the year.

[Analyst] (TD Cowen): Okay. That's very helpful. Thank you for all the questions.

Eric: Thank you for all the questions.

Speaker Change: Okay. That's very helpful. Thank you for all the questions.

Operator: Thank you. Our next question coming from the line of Chris Callis with MSD Access.

Speaker Change: Yes.

Chris Kallos: Our next question coming from the line of Chris Kallos with MSD Access. Your line is now open. Thank you for taking my call.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of Chris Collett with MST access your line is now open.

Chris Callis: Oh, thank you for taking my call. Hi, Jim. I just wanted to ask just some clarifying point on the vitiligo initiative. Could you just maybe just clarify where exactly that stands at the moment in terms of pursuing reimbursement?

Chris Collett: Thank you for taking my call Hi, Jim just wanted to ask.

Chris Kallos: Hi Jim, I just wanted to ask some clarifying point on the Vitiligo initiative. So could you just maybe just clarify where exactly that Stand at the moment in terms of pursuing reimbursement. Yes, Chris, I can. Good to hear from you.

Speaker Change: Terrifying point on the <unk> initiatives.

Speaker Change: Could you just.

So could you just maybe just clarify where exactly that. [inaudible]

Speaker Change: Staying at the moment in terms of pursuing reimbursement.

Jim Corbett: Yes, Chris, I can. Good to hear from you. What we've done is we have made a decision to pause spending on vitiligo because of the uncertainty of achieving reimbursement in the, it's called the office-based lab setting, which is a physician's office. That's where the market desire to treat is. RECELL is not reimbursed for vitiligo there, only in the hospital. As a consequence of our expanded opportunity in therapeutic acute wound care and the big opportunity we have there, we've decided that the best use of our resources is to build that market. As of now, we don't have a plan that we can define for solving vitiligo. We don't have a plan that we can define, and therefore we've suspended spending as a consequence until we identify a path.

James Corbett: So what we've done is we have made a decision to pause spending. on vitiligo because of the uncertainty of achieving reimbursement in the It's called the office-based lab setting, which is a physician's office. That's where the market desire to treat is. And resale is not reimbursed for vitiligo there, only in the hospital. And as a consequence. of our expanded opportunity in therapeutic acute wound care and the big opportunity we have there, we've decided that the best use of our resources is to build that market.

Yes, Chris, I can. Good to hear from you.

Speaker Change: So, what we've done is we have made a decision to pause suspending.

Speaker Change: Resel is not reimbursed for a bit like of their only in the hospital [inaudible]

and as a consequence, Williams.

of our expanded opportunity in therapeutic to acute wound care.

Speaker Change: and the bigger, in the big opportunity we have there, we've decided that the best use of our resources is to build that market.

James Corbett: So as of now, we don't have a plan that we can define. for solving for solving dental LIGO. And so we don't have a plan that we can define. And therefore, we've suspended spending as a consequence until we. Identify a Path. Urspan Agencies. I'm sorry. And that would include ongoing discussions that have now been suspended with reimbursement agencies. Since we talked with them on other reimbursement matters, we'll be talking to them about this.

Speaker Change: So, as of now, we don't have a plan that we can define.

for solving, for solving it a lot ago.

Speaker Change: and so we don't have a plan that we can define and therefore we suspended spending as a consequence until we

Identify a path

Chris Callis: Reimbursement agencies?

Jim Corbett: I'm sorry?

Chris Penagencies,

Chris Callis: That would include ongoing discussions that have now been suspended with reimbursement agencies?

I'm sorry.

Speaker Change: and that would include ongoing discussions that have now been suspended with reimbursement agencies.

Jim Corbett: Since we talked with them on other reimbursement matters, we'll be talking to them about this. It's not an absolute zero, but I'd say that there should be no revenue dependence in any future estimates for the company on vitiligo until we come forth with some defined plan.

Since we talked with them on other reimbursement matters,

Chris Kallos: So it's not an absolute zero, but I'd say that there should be no revenue dependence in any future estimates for the company on vitiligo until we come forth with some defined plan. Understood. Thanks for that. Thanks for clarifying. Thanks, Jim. Okay, thanks, Chris. And I'm showing no further questions in the Q&A queue at this time.

Speaker Change: We'll be talking to them about this, so it's not an absolute zero, but I'd say that there should be no revenue dependence in any future estimates for the company I'm going to lie to until we come forth with some defined plan.

Chris Callis: Understood. Thanks for that. Thanks for clarifying. Thanks, Jim.

Jim Corbett: Okay. Thanks, Chris.

Anderson. Thanks for that. Thanks for clarifying. Thanks, Jim.

Operator: Thank you. I'm showing no further questions in the Q&A queue at this time. I will now turn the call back over to Mr. Jim Corbett for any closing remarks.

Okay, thanks Chris.

Speaker Change: Thank you. And I'm showing you no further questions from the Q&A Q at this time. I will now turn the call back over to Mr. Jim Corbett for any closing remarks.

James Corbett: I will now turn the call back over to Mr. Jim Corbett for any closing remarks. Thank you, Operator, and thanks to those of you listening. We really appreciate your interest in AVITA Medical.

Jim Corbett: Thank you, operator. Thanks to those of you listening. We really appreciate your interest in AVITA Medical. I hope you have the time to join the AVITA Medical Showcase. Reminding you that you can go to our website, click on the investor tab and register for it, which is scheduled for next Tuesday, US time. We hope to see you there. We think we've got a really interesting program for you. Thank you very much.

Speaker Change: Thank you operator, and thanks to those of you listening. We really appreciate your interest and AVITA Medical. I hope you had the time to join the AVITA Showcase.

James Corbett: I hope you have the time to join the AVITA Showcase, reminding you that you can go to our website, click on the Investor tab, and register for it, which is scheduled for next Tuesday, U.S. time, and we hope to see you there. We think we've got a really interesting program for you, and thank you very much.

Speaker Change: Reminding you that you can go to our website, click on the Investor tab and register for it, which is scheduled for next Tuesday, US time, and we hope to see you there. We think we've got a really interesting program for you and thank you very much.

Operator: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Speaker Change: District Attorney's Conference call. Thank you very much for this patient and you may now disconnect.

Speaker Change: [music].