AVITA Medical Accelerates Revenue 30% in Q4, Revises Credit Covenants
AVITA Medical reported a strong 30% increase in Q4 2024 commercial revenue and amended its credit agreement with OrbiMed to adjust revenue covenants through 2026. The company is poised for significant growth with new product rollouts and expects profitability by year-end 2025.
- Q4 2024 commercial revenue up 30% to $18.4 million
- Full-year 2024 revenue increased 29% to $64 million
- Fourth amendment to credit agreement adjusts revenue covenants through March 2026
- Issued warrants to OrbiMed as part of credit amendment
- Guidance for 2025 revenue of $100-$106 million and GAAP profitability in Q4 2025
Robust Revenue Growth and Credit Agreement Update
AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH) announced a notable 30% increase in commercial revenue for the fourth quarter ended December 31, 2024, reaching $18.4 million, compared to $14.1 million in the same period last year. This growth was driven primarily by accelerated adoption of the RECELL GO system in trauma centers targeting full-thickness skin defects. For the full year, commercial revenue rose 29% to $64 million, underscoring the company’s expanding market penetration.
In tandem with these financial results, AVITA Medical executed a fourth amendment to its credit agreement with OrbiMed Advisors, LLC. This amendment adjusts the trailing 12-month revenue covenants for upcoming quarters, easing targets from $73 million for Q1 2025 to $103 million by Q1 2026, before returning to the original $115 million covenant thereafter. As part of this amendment, AVITA issued warrants to OrbiMed to purchase 145,180 common shares at a nominal exercise price, reflecting a strategic alignment with its lender amid growth initiatives.
Product Approvals and Commercial Milestones
December 2024 marked significant regulatory milestones for AVITA Medical with FDA clearance of Cohealyx™, a collagen-based dermal matrix, and approval of RECELL GO® mini. These approvals expand the company’s therapeutic acute wound care portfolio, positioning it to address a broader range of wound types and sizes.
Looking ahead, AVITA plans to roll out RECELL GO mini across burn and trauma centers in early 2025 and aims to launch full commercialization of Cohealyx by April 1, 2025. The company is also preparing for a CE mark approval for RECELL GO in the European Union by mid-2025, with readiness to meet anticipated supply demands.
Financial Outlook and Operational Efficiency
AVITA Medical projects commercial revenue for 2025 to be between $100 million and $106 million, representing a robust growth rate of approximately 55% to 65% over 2024. The company expects to generate free cash flow in the second half of 2025 and achieve GAAP profitability by the fourth quarter.
Operational efficiencies are already evident, with a $4.1 million reduction in operating expenses in Q4 2024 compared to Q3, driven by streamlined sales and marketing costs and reduced research and development expenses. CFO David O’Toole highlighted this trend as a key factor in the company’s path toward profitability.
Balance Sheet and Capital Structure
As of December 31, 2024, AVITA held approximately $35.9 million in cash, cash equivalents, and marketable securities. The company’s long-term debt stands at $42.2 million, reflecting the credit facility with OrbiMed. The issuance of warrants as part of the credit amendment provides OrbiMed with potential equity upside while supporting AVITA’s capital flexibility during its growth phase.
Despite a net loss of $11.6 million in Q4 2024, up from $7.1 million in the prior year period, the company’s expanding revenue base and improving margins suggest a trajectory toward financial sustainability.
Strategic Positioning in Therapeutic Acute Wound Care
CEO Jim Corbett emphasized the company’s strengthened position following recent product approvals, noting that AVITA’s suite of advanced technologies is optimized to accelerate wound healing and patient recovery. This strategic positioning is expected to drive long-term growth and market share gains in a competitive medical device landscape.
Bottom Line?
AVITA Medical’s amended credit terms and strong revenue growth set the stage for a pivotal 2025, but execution on product rollouts and market adoption will be critical.
Questions in the middle?
- Will AVITA meet its ambitious 2025 revenue and profitability targets amid competitive pressures?
- How will the warrant issuance to OrbiMed impact shareholder dilution and investor sentiment?
- What are the risks and timelines associated with the EU CE mark approval for RECELL GO?