Avita raises $12m for US debut of Recell device

Avita Medical (ASX:AVH) said yesterday that it raised $12.3 million to back the U.S. launch of its Recell wound treatment.

Melbourne- and Valencia, Calif.-based Avita said the A$16 million round, raised from a consortium of institutional and “sophisticated” investors led by Bell Potter, consists of two tranches: $9.8 million (A$12.8 million) that’s slated to close June 12, and a $2.5 million (A$3.3 million) tranche that must be approved at the company’s July shareholders meeting.

The A50¢-per-share price is a -3.8% discount to Avita’s June 1 closing price and a -6.3% discount to its 30-day volume-weighted average price, the company said.

Avita said it expects the FDA to complete a review of Recell’s pre-market approval bid during the third quarter, “followed by U.S. approval and market launch.”

“We appreciate the support of our shareholder group and the investors in this institutional placement as we proceed toward a transformative series of events for Avita, including the U.S. market launch of the Recell device,” CEO Dr. Michael Perry said in prepared remarks. “Proceeds from this placement will ensure that we are positioned to take full advantage of the expected upcoming PMA approval of the Recell device in the U.S., including establishment of our marketing and sales team, scale-up of manufacturing capabilities and expansion of research and development in areas such as pediatric burns, aesthetics and chronic wounds. The extensive series of clinical data presented at the recent ABA and ISPOR conferences strongly supports the value of Recell in the treatment of severe burns, and we have an exceptional commercial opportunity resulting from the unique combination of improved patient outcomes and substantial health economic benefits.”

“We are pleased to move toward the completion of this institutional placement to ensure that resources are in hand to strengthen our position and ensure that we are fully enabled to take advantage of opportunities facing us, including the upcoming U.S. launch of the Recell device,” added CFO Dale Sander. “We note that the issue price of this institutional placement is higher than that of our last financing round, and is within the range at which our shares have traded for the past 30 days.”

($1 = A$1.30310)

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