Avita Medical sheds respiratory biz for $2.64m

Avita Medical (ASX:AVH) said today it sold its respiratory business to Medical Developments International for $2.64 million.

The division includes Avita’s Breath-A-Tech and Funhaler asthma spacers designed to optimize the use of medicinal puffers, marketed in Australian pharmacies.

“The sale of our respiratory business will enable Avita Medical to fully concentrate on our core regenerative medicine wound-care business, presented through our ReCell autologous cell harvesting device. We anticipate 2016 will be a busy year, and certainly the proceeds of this transaction will help support our declared clinical and commercialization goals,” CEO Adam Kelliher said in a press release.

Avita said it hopes to close the purchase by early February next year. The deal is comprised of $2.2 million in cash plus 125,000 shares in Medical Developments International escrowed for 6 months or $440,000 cash.

In September, Avita Medical said it won $53.9 million in contracts from the Biomedical Advanced Research and Development Authority for development and procurement of Avita’s ReCell autologous cell harvesting device.

The 5-year contract will provide an initial $16.9 million to support the company’s pursuit of FDA premarket approval for its ReCell device, and to procure more than 5,000 of the devices to establish an inventory to handle mass casualty scenarios that involve burn injuries, Avita Medical said.

Under the contract, Avita also has the opportunity to receive up to $37 million upon execution of specific contract options to further support clinical studies and post-market surveillance that could be potentially required by the FDA to expand the device to the pediatric population, the company said.

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