AVITA Medical Receives Expanded FDA Approval

AVITA Medical (ASX:AVH,OTCQX:AVMXY) announced on Thursday (August 9) that the US Food and Drug Administration (FDA) has approved a significant increase in testing for the Recell Autologous Cell Harvesting Device.

Approval was granted through the Compassionate Use Investigational Device Exemption program, and expands AVITA’s investigational program to include up to 108 patients and 26 US burn centers.

The device has the potential to allow medical professionals to use a patient’s cell samples to create a suspension, called a Regenerative Epidermal Suspension, and use it to regenerate wounded skin.

In the trials, the device is being tested on patients with insufficient healthy skin available for conventional skin-grafting treatments, or whose treating physicians believe there is no suitable alternative treatment.

While the program will give these types of patients access to the device, AVITA CFO Dale Sander explained to the Investing News Network via phone that his team expects the approved labeling to be for any patient with a thermal burn that would be a candidate for skin grafting. In other words, future uses will not be limited to uses seen in the clinical trial.

The expansion of the program comes after recent presentations from AVITA, such as the six Recell presentations it completed at the American Burn Association 50th Annual Meeting. The company saw increased demand from burn centers for participation in the compassionate use program.

“Often there can be more pain from the donor site than the burn site because the burn site has temporary nerve damage. But in the healthy site where the donor skin was taken from the nerves are fully present,” Sander said. “The healing of those donor sites and the associated pain with those sites is what requires the use of pain-relieving drugs; it results in a great deal of hospitalization from patients.”

Reducing the donor skin required contributes overall to lowering healthcare costs for patients and for the healthcare system as a whole.

In one case study done in the UK, there were up to 42-percent savings for patients with up to 20-percent total body surface area burns. In another case study, necessary patient hospital stay duration was shortened from 119 to 71 days, meaning patients healed faster while lower seeing healthcare costs. 

AVITA’s FDA premarket approval for the burn injuries treatment was submitted in September 2017, and is currently under review by the regulatory agency. AVITA expects the review to be completed during Q3 2018, followed by US approval and market launch in Q4.

In addition to the anticipated approval, the company expects to begin an Australian Recell pediatric scalds study and two US pediatric burn clinical trials, both in Q3.

“The product has very unusual characteristics in that the data shows that we do provide a patient benefit while reducing the cost of treatment for those patients, which is a very unusual profile,” Sander said.

The device uses the company’s patented and proprietary collection and application technology. Its pipeline includes chronic wounds and aesthetics, aside from burns, and AVITA is also working towards developing devices for cell therapy and cell-based gene therapy — targets that have yet to be disclosed.

Its devices work by using a Regenerative Epithelial Suspension from the patient’s own skin cells. As mentioned, this procedure can be used for patients who aren’t able to go through skin grafting — a process used in 75 percent of cases with burn patients. The two procedures have equivalent long-term outcomes, but with Recell the likelihood of the donor site healing is 4.4 times higher compared to the current standard of care.

Investor takeaway

AVITA’s share price increased by 2.96 percent by market close on Thursday, the day of the news.

Its share price may not be reflecting it, but 2018 has been a year with an abundance of positive news for the company. Such news includes burn clinical trials in China funded by the Chinese government and the acquisition of a manufacturing facility for Recell to support the US launch.

In the fall, AVITA may have a better indication of the timeline for other indications and respective clinical trials, such as with chronic wounds. The company currently has data for venous leg ulcers, diabetic foot ulcers and the autoimmune disease vitiligo — the market for this indication is quite large in Asia.

The US burn market is the largest in the world, making it a key market for the company as it comes close to approval and market launch.

Investors interested in AVITA can look forward to BARDA procurement — the US Biomedical Advanced Research and Development Authority, a contract valued at US$79.2 million — and multiple publications and presentations to be presented on Recell’s pivotal trial results, also by the end of the year.

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Securities Disclosure: I, Gabrielle Lakusta, hold no investment interest in any of the companies mentioned.

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.