15-June-2020:  Redomiciliation Scheme Meeting - Chair's Address

AVITA Medical Limited proposed redomiciliation to the USA (to have their primary listing on the NASDAQ and a secondary listing on the ASX) Chair’s address to Scheme Meeting - click on the link above for the Chairman's script for today's meeting which explains the company's rationale for the move.

02-Jun-2020:  AVITA Files IDE with FDA for Vitiligo Pivotal Study

AVITA Medical Limited (ASX:AVH, NASDAQ:RCEL), a regenerative medicine company with a technology platform positioned to address unmet medical needs in therapeutic skin restoration, today announced that it has submitted an Investigational Device Exemption (IDE) supplement with the U.S. Food and Drug Administration (FDA) for the initiation of a pivotal clinical trial to investigate the RECELL® System for the treatment of vitiligo. 
 
“We are very pleased to have filed the supplement and look forward to advancing the RECELL® System into the clinic for treatment of vitiligo following acceptance of the application,” said Andrew Quick, Chief Technology Officer of AVITA Medical. “The data from the pivotal trial will form the basis of the FDA submission for consideration to expand use of the RECELL® System for repigmentation of depigmented lesions associated with stable vitiligo. In parallel, and as previously announced, we are also conducting a complementary and more scientifically-oriented feasibility study.” 
 
“Globally, the RECELL® System is approved for additional skin applications, including vitiligo, which is supported by a substantive body of clinical evidence with patients internationally and in peer-reviewed publications, providing us with valuable experience and confidence in pursuing expanded labelling in the U.S.,” said Dr. Mike Perry, Chief Executive Officer of AVITA Medical. “The submission of this pivotal IDE is an important milestone as we continue to explore opportunities to expand the patient populations who can benefit from treatment with the RECELL® System platform.” 
 
About Vitiligo 
 
Vitiligo affects approximately 6.5 million people in the United States, rivalling the prevalence of psoriasis; however, there are limited treatment options available to patients to permanently restore skin pigmentation.

Vitiligo is a disease resulting in loss of color, or pigmentation, in patches of skin that impacts the quality of life for those living with the condition.  There is currently no cure for vitiligo, nor a universally accepted method for limiting the spread of the disease.  Although many treatments are being used for the management of vitiligo, they are often temporary with a high rate of recurrence.  
 
Authorized for release by the Chief Financial Officer of AVITA Medical Limited. 
 
--- end of announcement ---
 
ABOUT AVITA MEDICAL LIMITED:  AVITA Medical is a regenerative medicine company with a technology platform positioned to address unmet medical needs in burns, chronic wounds, and aesthetics indications.  AVITA Medical’s patented and proprietary collection and application technology provides innovative treatment solutions derived from the regenerative properties of a patient’s own skin.  The medical devices work by preparing a RES® REGENERATIVE EPIDERMAL SUSPENSION, an autologous suspension comprised of the patient’s skin cells necessary to regenerate natural healthy epidermis.  This autologous suspension is then sprayed onto the areas of the patient requiring treatment. AVITA Medical’s first U.S. product, the RECELL® System, was approved by the U.S. Food and Drug Administration (FDA) in September 2018.  The RECELL System is indicated for use in the treatment of acute thermal burns in patients 18 years and older.  The RECELL System is used to prepare Spray-On Skin™ Cells using a small amount of a patient’s own skin, providing a new way to treat severe burns, while significantly reducing the amount of donor skin required.  The RECELL System is designed to be used at the point of care alone or in combination with autografts depending on the depth of the burn injury.  Compelling data from randomized, controlled clinical trials conducted at major U.S. burn centers and real-world use in more than 8,000 patients globally, reinforce that the RECELL System is a significant advancement over the current standard of care for burn patients and offers benefits in clinical outcomes and cost savings. Healthcare professionals should read the INSTRUCTIONS FOR USE - RECELL® Autologous Cell Harvesting Device (https://recellsystem.com/) for a full description of indications for use and important safety information including contraindications, warnings and precautions. In international markets, our products are marketed under the RECELL System brand to promote skin healing in a wide range of applications including burns, chronic wounds and aesthetics.  The RECELL System is TGA-registered in Australia and received CE-mark approval in Europe. To learn more, visit www.avitamedical.com. 

--- click on link at the top for more, including their "Cautionary Note regarding Forward Looking Statements" and their contact details ---

Disclosure:  I don't current hold AVH shares, due to the fact that they are in the process of moving their primary listing to the NASDAQ and making their ASX listing their secondary listing.  AVITA Medical are already a US-based company soon to have a primary US-listing, despite being originally formed here in Australia.  I tend to avoid those companies personally, not because they don't make good investments, but just because I prefer to invest in Australian based companies directly, and leave my US and other global exposure to my LICs and LITs such as MGG & WQG (and PAI for Asian exposure) or via ETFs. 

That's just a personal preference and is in no way supposed to infer that I don't think AVITA will do OK.  They have wonderful tech (and IP) and I both hope and expect that they will do very well, particularly after they move their primary listing to the US (via the NASDAQ) and get onto the radar of so many more investors and fund managers.  To give some context, I also like Resmed (ASX: RMD), but I likewise don't hold RMD shares directly because their primary listing is in the US, and they are headquartered in the US, with a secondary listing on the ASX, despite originally being an Australian company when they first started out.  That doesn't mean they won't do well either.  They've done pretty well so far.  But you can't pat all the fluffy dogs, and it's a personal preference for me to invest directly only in ASX-listed companies and to gain exposure to other companies via ASX-listed LICs and LITs (listed investment companies/trusts) - or ETFs.

29-Apr-2020:  Appendix 4C - Quarterly Report for quarter ending March 31, 2020

AVITA Medical Reports Third Quarter Fiscal 2020 Financial Results and Company Update 

U.S. RECELL® System product sales of A$5.81M for fiscal third quarter.

AVITA Medical Limited (ASX: AVH, NASDAQ: RCEL), a regenerative medicine company with a technology platform positioned to address unmet medical needs in therapeutic skin restoration, reported financial results for the fiscal third quarter ended 31 March 2020 (Q3) today in its Appendix 4C - Quarterly Cash Flow Report filed with the Australian Securities Exchange (ASX). 

Highlights/Excerpts:
 
U.S. Commercial Sales of RECELL® System for Quarter Ended 31 March 2020

[I can't reproduce the numbers in their proper format here - so click on the link above for that.  Suffice to say that revenue for the March 2020 quarter was almost double the revenue for the same three months that ended March 31, 2019, and revenue for the 9 month period ending March 31, 2020 was also almost double the revenue for the 9 month period ending March 31, 2019.]
 
“Our strong fiscal third quarter results demonstrate continued growing adoption trends within both our existing and new RECELL ® System customers,” said Dr. Mike Perry, AVITA Medical’s Chief Executive Officer.  “In the current COVID-19 environment, we are deploying various strategies, including supply redundancies and digital training, to drive usage and continue serving burn surgeons and their patients.  While severe burn treatments are not elective procedures, there has been a pause in enrollment in some of our clinical trials due to COVID-19; however, we are advancing our pipeline and are currently developing the protocol and FDA Investigational Device Application for the RECELL ® vitiligo pivotal study.  In addition, we are continuing to make progress toward redomiciling the Company to the United States to better align the Company’s corporate structure with our U.S. business operations.” 

Corporate Update

Our commercial efforts in Q3 progressed well with quarterly growth exceeding 20% across both procedural volume and U.S. RECELL ® System revenue.  Q3 represents our strongest quarter since launching in the United States in January last year reflecting strong customer uptake, even with the COVID-19 pandemic beginning toward the end of the quarter.  In the quarter ended 31 March 2020, we also added nine new customers and certified an additional 21 surgeons, bringing our total to 69 customers and 205 certified burn surgeons, together with progressing our ongoing clinical investigations with first patient enrollment in our soft tissue and pediatric partial thickness studies.  All of these factors collectively demonstrate ongoing high interest in the RECELL ® System, together with consistent usage and acceptance across our growing customer base. 

We have seen consistent growth since the launch of the RECELL ® System and we have, so far, been somewhat insulated from the COVID-19 challenges to-date given the treatment of burns patients is generally not elective nor deferrable.  While we didn’t see any impact to the rate of burn incidence or RECELL ® System utilization during the quarter, it continues to be difficult to predict the breadth of potential impacts over the coming months due to the current COVID-19 macroenvironment.  These considerations operate in addition to the overarching burn environment which is inherently “lumpy” and difficult to forecast. 

...click on link above for more, and there is plenty more...

23-Apr-2020: 7:43pm:  Just to answer some of @Hackenbacker's questions in relation to AVH's intention to move their primary listing to the NASDAQ and have a secondary listing on the ASX.  Reading through their documentation - like pages 2 to 4 of this announcement - it sounds like the Australian listing will be not shares but CDIs - which are explained here and here.

CHESS Depository Interests (CDI's) are shares of international companies traded on the Australian exchange markets.  This allows investors to receive the same ownership in foreign companies as holding them on the international exchange, but instead these CDI's are traded here in Australia on the ASX.  Companies which are incorporated overseas cannot transfer their shares through to the ASX.  CDI's open up more opportunities for Australian investors as they can access products which are not available in the local market.  For example, News Corp (NWS) is incorporated in the US and only trades in the US.  However Australian investors can own shares in NWS via CDI's.  My understanding is that Resmed (RMD) "shares" on the ASX are also CDI's.  These are often scaled differently to the shares listed on the primary market (Resmed and News Corp both have primary market listings in the USA).  RMD CDI's on the ASX are scaled 10:1, so ten of our RMD CDIs are worth one NASDAQ: RMD.

There are some differences between CDI’s and ordinary shares.  You can not vote at a company meeting like you would with ordinary shares unless laws from the country where the company is domiciled allow you to.

Initially you would receive 5 Avita US CDIs for every 100 AVH.ASX shares that you currently own, and these should, all things being equal, be worth roughly 20 times what they were trading at here, so if it happened today, theoretically, if you held 1,000 AVH shares currently trading at $0.44 (44 cents each), you would instead own 50 Avita US CDI's which would still trade on the ASX, but at about $8.80 each.  Currently, AVH has a secondary listing on the NASDAQ under the code RCEL - these are ADS's (American Depositary Shares which are foreign stock issued in the US and registered in the ADR system - the American Depositary Receipt system) - their equivalent to our CDI's - which are currently trading at around $6.12.

AVH have proposed a way for those people who currently hold NASDAQ-listed RCEL ADS's to have those swapped for Avita US shares, and they say:

"Therefore, shareholders in eligible jurisdictions and ADS holders (on the Record Date), upon receiving Avita US CDIs or Avita US Shares, will hold an equivalent proportional interest in Avita US as they held in the Company prior to implementation of the Redomiciliation."

In other words, nobody will be better off or worse off, regardless of whether they owned ADH shares on the ASX or RCEL ADS on the NASDAQ before the reorganisation.

In local terms, you'll own one twentieth of the number of shares you held before, but they'll be worth around 20 times as much, so the value will be unchanged.

In reality, it depends on the local sentiment.  When News Corp did this - moved from a primary listing on the ASX to a primary listing in the USA, their share price went down, but they were a big company and some fund managers here were not allowed to continue to hold them (because they were no longer an Australian-domiciled company) and so had to sell.  That would not be such an issue for AVH, I would think.  However, there still might be shareholders who would rather own shares in companies whose primary listing is here in Australia on the ASX rather than the listing being a secondary listing here for a US-domiciled company.

Liquidity:  AVH are a reasonably liquid company here, with over 12 millions shares (over $5m worth) being traded most days, and often up to 60 million shares ($25 m) or more traded on a busy day.  That may change, but they're already dual listed; they're just proposing to change their NASDAQ listing into their primary listing and their ASX listing into their secondary listing.  I would expect that would increase the liquidity on the NASDAQ, but it's hard to say if less Avita US shares would trade here on the ASX.  Liquidity could well reduce, but it would be unlikely to dry up altogether.  Resmed has their primary listing on the NASDAQ and their secondary listing on the ASX and it hasn't hurt their liquidity.  They are clearly a lot bigger, but Avita is no minnow.  At 44 cents/share Avita are a one billion dollar company.

This is not advice, but if I held AVH shares, and I currently don't, I would not see this as a reason to sell them.  I think the opportunity remains the same, regardless of where they choose to be domiciled and where their primary sharemarket listing is.  As a US domiciled company with a primary listing on the NASDAQ, I imagine that, like RMD, they will attract a lot more investor attention globally, particularly in the USA, and that will be good for the company - and ultimately for their share price.

20-Apr-2020:  7:30pm:  AVITA Announces Intention to Redomicile to the USA

AVITA Medical Announces Intention to Redomicile to the United States of America

Intention to establish primary listing on NASDAQ with continued (secondary) listing on ASX 

Valencia, Calif., USA, and Melbourne, Australia, 20 April 2020:  AVITA Medical Limited (Company) (ASX: AVH, NASDAQ: RCEL), a regenerative medicine company with a technology platform positioned to address unmet medical needs in therapeutic skin restoration, announced today its intention to redomicile the Company and its subsidiaries (Avita Group) from Australia to the United States of America by way of a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (Redomiciliation).

To implement the Redomiciliation, the Company has entered into a Scheme Implementation Agreement dated 20 April 2020 with AVITA Therapeutics, Inc. (Avita US), a newly-formed company incorporated in Delaware in the United States.  A copy of the Scheme Implementation Agreement is attached and will be available on the Company’s website.

If the Redomiciliation is implemented:

• Avita US will become the new holding company of the Avita Group;
• shareholders will effectively exchange their shares in the Company for equivalent securities in Avita US; and
• the existing listing of the Company on the Australian Securities Exchange (ASX) (being the Company’s current primary listing) and on the NASDAQ Stock Market (NASDAQ) (being the Company’s current secondary listing) will be inverted and replaced with a new listing of Avita US on NASDAQ (as its future primary listing) and on the ASX (as its future secondary listing).

The Redomiciliation is subject to regulatory and court approvals, as well as approval by the Company’s shareholders at an extraordinary general meeting which will be convened to address the Redomiciliation (Scheme Meeting).

Reasons for the Redomiciliation

After carefully considering the advantages, disadvantages and risks of the Redomiciliation, the directors of the Company (Board) are of the unanimous view that the advantages of the Redomiciliation materially outweigh its disadvantages and risks.  In particular, the Board believes that the Redomiciliation will:
 

• substantially reduce the costs, burden, resourcing and risks associated with dual financial reporting and related compliance obligations that the Company has become subject to in both the United States and Australia (since 31 December 2019), which is expected to save approximately A$400,000 per annum in external professional costs alone;

• create a “local” share listing on the NASDAQ exchange in the United States, the largest market for the treatment for burns, and where the Board’s immediate strategy is to further grow the Avita Group’s visibility and presence;

• increase the attractiveness of the Avita Group to a broader range of investors in the United States capital market, the largest in the world in terms of market capitalisation and trading volume; and

• better align the Avita Group’s corporate structure with its business operations in the United States, which is where nearly all of the Avita Group’s employees are located.  The Company derives virtually all of its revenue from the United States, has no physical presence outside of the United States, and a significant majority of its issued share capital (taking into account its American Depositary Shares (ADSs), which are traded exclusively on NASDAQ) is currently held by investors in the United States.

--- click on link above for more ---

06-Apr-2020:  Corporate Presentation

Also:  Preliminary Top Line 3rd Quarter Results and COVID Update

Also - recently:  02-Apr-2020:  RECELL Data Online from American Burn Association Meeting

05-Mar-2020:  First Patient Treated in Pediatric Scald Study

There are many applications for AVH's RECELL® System technology for treating conditions other than burns, and Avita is conducting a number of studies into these various possible applications.  And many believe that this is the tip of the iceberg for this company.  The tech is proven, accepted, and in use already.  This study (pediatric scalds) is another medical application, but there are plenty of non-medical applications where the market is absolutely enormous, such as anti-aging, or replacing old and wrinkled skin with fresh new skin.  People spend billions on treatments in this area already and most of those treatments don't actually work.  Imagine the market for a treatment that actually DID work, and we know that the RECELL® System DOES work.  Another massive opportunity that Avita is already working on is Vitiligo.

03-March-2020:  Latest news from Avita (AVH) today:

First Patient Enrolled in Soft Tissue Reconstruction Study

Also:  AVITA to Attend BTIG Healthcare Conference

19 Feb 2020:  Corporate Presentation

Also:  Appendix 4D & Half Yearly Report and Accounts

26-Nov-2019:  2019 AGM Presentation by Dr. Mike Perry

The RECELL opportunity is massive.  Already a proven front-line treatment in severe burns, the market outside of burns is much bigger.  They are looking very interesting to me right now.  Just doing some digging.  The more I look, the better they look.

Further reading:

https://www.avitamedical.com/investors

https://recellsystem.com/

https://www.nature.com/articles/d41586-018-07430-w

https://www.businesswire.com/news/home/20170911006350/en/Research-Definitively-Confirms-Superiority-ReCell®-Treatment-Burn

When reading those various resources/articles, keep the publication dates in mind, as the information presented would have been relevant and accurate at the time of publication, and things have moved on since then in some cases.  In the case of Avita and RECELL, I think things have only improved for that treatment and its potential.

14-Feb-2020:  Roger Montgomery from Montgomery Investment Management (and The Montgomery Fund) makes a short but reasonably compelling bull case for Avita (AVH) towards the end of this video:

https://www.livewiremarkets.com/wires/buy-hold-sell-5-high-growth-mid-caps

Other companies discussed include TWE (Sell/Sell), JIN (Hold/Hold), and A2M (Hold/Buy).

Jessica Amir from Bell Direct is the host, and the second panel participant is James Gerrish from Shaw and Partners.  James' tip is Bingo (BIN).  On this Valentine's day, they're talking about the stocks they love the most - plus covering some of the most traded ex-top-20 stocks (outside of the S&P/ASX20 index). 

21-May-2019:  AVITA Medical Presentation by Dr. Mike Perry, CEO, at RBC Capital Markets Healthcare Conference on May 21, 2019.

http://www.livewiremarkets.com/wires/does-avita-medical-have-a-bright-future

That's a Livewire article posted on 13-May-2019 by Joseph Kim of Montgomery Investment Management on Avita Medical.  It is pretty bullish (hence I've used the "Bull Case" tag above) but does also clearly outline the most obvious risks with this investment.  It seems to me that AVH may have now reached (or just passed) an inflection point, where their product is being adopted by burns centres globally.  I note the relatively small addressable market - for burns victims - but I also suspect that this tech has other applications, which will be easier to commercialise now that RECELL has been approved and is being adopted.  I think it's one worth following, and I am adding it to my Strawman.com scorecard today.