COMPANY NEWS & UPDATES
AVITA Therapeutics Inc . ( AVH )
Buy Valuation $ 18.00
Earnings Forecast
Yr to June |
2020A |
2021F |
2022F |
|
Sales Revenue
($ M )
|
20.7 |
27.6 |
59.0 |
|
Reported
Profit ($ M )
|
-61.1 |
-39.2 |
-19.7 |
EPS ( c ) |
-60.2 |
-37.8 |
-19.0 |
Div ( c ) |
0.0 |
0.0 |
0.0 |
P / E ( x ) |
-17.9 |
-16.1 |
-32.1 |
Yield (%) |
0.0 |
0.0 |
0.0 |
Franking (%) |
0.0 |
0.0 |
0.0 |
|
EPS Growth
(%)
|
n / a |
n / a |
n / a |
* Profit & EPS adjusted for options , goodwill , notional earnings and nonrecurring items .
1 st Quarter Rebound
We maintain our AUD 18 fair value estimate for no-moat Avita following first-quarter fiscal 2021 results based on an AUD / USD exchange rate of 0.72 . U . S .-based RECELL revenue increased 59 % on the previous corresponding period to USD 5 million as procedure volumes recovered . Although pandemic restrictions initially saw a significant decline in burns due to lower levels of manufacturing and travel , since April 2020 the company has seen a steady recovery . Procedural volumes in the first quarter increased 27 % sequentially to 496 . As burns treatment is acute and not elective , it cannot be deferred and the reduction in both hospital duration and treatment costs when using RECELL , as opposed to a skin graft , should underpin its use amid a stretched healthcare system . Therefore , while we continue to monitor the resurgence of COVID-19 in the U . S ., we think Avita can sustain the estimated first-quarter run-rate of 770 RECELL units and leave our full-year fiscal 2021 unit sales and revenue forecasts of 3,060 and USD 20 million , respectively , unchanged .
The current U . S . approval of the RECELL system is limited to adult burn wounds , however , the applications are far broader . Pivotal clinical trials are underway , and we still anticipate the roll-out of RECELL to be phased to adults outside burn centres in fiscal 2022 , paediatric use and vitiligo treatment in fiscal 2023 , and soft-tissue reconstruction in fiscal 2025 . Key to our valuation is RECELL achieving 45 % market share in adults and 20 % in children treated at burn centres in the U . S . by fiscal 2025 .
Avita is in a healthy financial position and held USD 66 million in cash and no debt as at Sept . 30 , 2020 . We forecast the company to report a loss of USD 28 million in fiscal 2021 , reducing to USD 14 million in fiscal 2022 , before positing a USD 5 million profit in fiscal 2023 alongside positive free cash flow . As such , we do not forecast it to require additional funding or experience any financial distress .
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