Avita Medical (ASX:AVH) (OTC:AVMXY) is taking the steps to expand and eventually enter the US market. This regenerative medical company will relocate to a brand new central hub in Los Angeles. It’s currently working on obtaining FDA clearance, while still treating a selected number of burn patients with its lead products ReCell.
They currently hold a “Buy” recommendation from investor trading site 4-traders. Similarly, a recommendation from the Financial Times said: “the consensus forecast amongst 2 polled investment analysts” suggests the company will outperform the market.
Over a one-year period, the company’s ASX share price has gone down 4.76 percent, however, in 2016, Avita saw two spikes in its stock thanks to positive announcements from their advancements in the US. Recently the company announced the FDA had approved an expansion of its Compassionate Use Investigational Device Exemption (IDE) program for ReCell, which has now treated 36 patients in the US.
“Under the compassionate use protocol, investigational use of ReCell may be granted in cases where the patient’s treating physician believes that there is no suitable alternative treatment,” said a statement from Avita.
INN sat down with Avita’s CEO Adam Kelliher about the benefits of their technology and the unique position the company is in, in terms of competition. Continue reading below for the full transcript of our conversation. It has been edited for clarity and brevity.
INN: Could you tell me a little bit about Avita Medical and what sets it apart from its competitors?
Adam Kelliher: We have a unique approach towards wound closure, in that we deploy a skin regeneration method by which we can restore the epithelial layer, the top layer of skin. This approach can be deployed for burns, chronic wounds, and various aesthetic applications. There are, of course, many different approaches in the wound-care space, such using a dermal matrix or advanced dressings. But where we stand apart is that we have a means by which surgeons can rapidly create a suspension of skin cells, which can then be applied to the wound to trigger healing.
INN: What is the end goal of your RES technology?
Kelliher: Regenerative Epithelial Suspension can be applied to most open wounds. Specifically for burns, our goal is to be the mainstream go-to device, to be used whenever a burn needs closure and healing. By applying a patient’s own cells back on to the wound bed, we usually see a much better outcome. And we can get patients out of hospitals faster, and have a reduced amount of follow-up procedures, so there are strong economic benefits too. Ultimately we give patients their own skin back. These big advantages make it a very different approach from just using cultured skin, synthetic sheets, cadaver donors or even a classic meshed skin graft. Of course, these key advantages also are evident when we use our approach for chronic wounds, such as venous leg ulcers and diabetic foot ulcers, and supporting repigmentation.
INN: Can you tell me why investors should get into the regenerative medicine market?
Kelliher: Regenerative medicine is a rapidly emerging space and a very exciting space. The autologous route, of using a patient’s own healing mechanism to heal themselves, ultimately means the solution comes from within. This typically means there is no toxicity nor side effects, which can be an issue in some biotech offerings. So it’s an area of great promise. Specifically for Avita, with our focus on the very defined area of burns, this is a significant market opportunity. By defining this healing process, through clinical data, we can give great certainty to the approach. And this should make it highly remunerative in terms of sales, and attractive to any savvy investor.
INN: What are the top three things investors should be looking for when they’re looking at a biotech company?
Kelliher: The two most obvious initial questions to be asked are: Is it safe? And is it effective? Beyond that, the third question would probably be to assess how risky the proposition is from a regulatory perspective. For Avita, we think a lot of these risks have been mitigated because we’re using a very, very simple explicable mechanism, of delivering a patient’s cells back to their wound to support healing. So we believe we comfortably address the key three questions in terms of being safe, effective and really non-speculative. All this will translate into a much simpler and safer regulatory pathway.
INN: Could you tell me about some of the competitors that you keep an eye on?
Kelliher: It’s extremely rare to be in a position where there is no competition, and certainly the wound healing space is a busy sector, with some very effective and innovative approaches. There is a lot of competition in the dermal matrix sector, and many companies say they have the best method in terms of outcome and ease of application. The great thing about our product ReCell™ is that we can usually marry in with those approaches as an adjunctive treatment. A surgeon can put down a dermal sheet and then we can apply our suspension of cells on top of that sheet. ReCell delivers the final finishing step to help a patient grow their own skin back. So we see how we can marry with most of the key wound care approaches to give a better outcome. We like to see ourselves as being another tool in the surgeon’s toolbox.
From the perspective of a patient care pathway, everyone pretty much has to go through the same steps. If somebody has a dreadful wound, it needs to be debrided in terms of getting rid of necrotic and damaged tissue. Once it is prepared, depending on the wound depth, it might be appropriate to apply a cellular matrix or a graft. At this point, you could use ReCell to put a suspension of skin cells on top. And then there are a number of innovative dressings that can be applied. So Avita has a very defined and unique place on the patient care pathway.
INN: Thank you so much for your time today.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.