ASX Announcement

Dermal repair company $AVH has received the setback of a delay on FDA approval for their RECELL-GO device, which was under FDA review under the breathrough device 180-day review process, stopping the clock for 4-6 months while the company considers its response.

The SP has reacted sharply and is still down 19% at time of writing, taking it back to levels last seen prior to the approvals for full-thickness skins defects and vitiligo treatment earlier this year.

The RECELL-GO device, which operates with single use cartrdiges, promises to significantly expand adoption of RECELL in the US market.

$AVH have recently significantly expanded their sales and marketing footprint following the FDA approvals, hence most recent financial performance is not too great (a bit like $PNV), however, market consensus is for strong revenue growth in FY23 of $80m up from $51m in FY22, putting it on a similar trajectory to $PNV.

Given the sales momentum and the investment in sales force, as well as the likely temporary nature of the setback, there's probably a good short term trade to be done on this news. However, I'm not a trader, so its not for me.

Disc: I've held $AVH in the past, but my preferred stock in the rapidly growing dermal repair segment is $PNV. However a pullback like this is tempting, as its likely overdone.