HHS adds $8m, reups contract with Avita Medical

Avita Medical (ASX:AVH) said yesterday that the U.S. Department of Health and Human Services extended its contract with the company to the tune of an extra $8 million to support the U.S. market approval and launch of its ReCell autologous cell harvesting device.

The ReCell device is designed to use the patient’s own skin cells to treat a variety of skin issues, including burns, reconstructive and cosmetic procedures, the company said.

“This welcome infusion of significant non-dilutive capital to fund our activities in the US, which we would otherwise have had to fund ourselves, greatly supports Avita Medical on its commercial journey. We are particularly excited about the health economics support, which we hope will enable us to show how innovative approaches such as ours can both help burn victims and save money as these are the key drivers to support our reimbursement efforts,” CEO Adam Kelliher said in a press release.

The company said the additional funds will support the company’s premarket approval application for ReCell, as well as for funding new initiatives to explore the benefits of ReCell for treating burns at U.S. burn centers under the company’s investigational device exemption.

Funds will also be used to bolster personnel at the company’s Northridge, Calif.-based location, with staff focused on regulatory, supply chain, quality systems, clinical support and reimbursement.

The company said it is in “close communication” with BARDA on the progress of its FDA approval, which it hopes will complete in the 3rd quarter of 2017.

Avita originally won the contract last September, bringing in $53.9 million in contracts from the Biomedical Advanced Research and Development Authority for development and procurement of Avita’s ReCell.

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.

The contract also provides BARDA with “surge capacity”, according to Avita, which would allow the department to stockpile up to 25,000 of the devices.

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