Valencia-based Avita Medical Inc. has received FDA approval for a version of its second-generation Recell skin cell harvesting device designed to treat small-scale wounds.
Avita’s original device, which received federal Food and Drug Administration approval in 2018, sprays on regenerated skin cells to burn wounds, lesions and certain other skin defects. Last May, the company received FDA approval for a second-generation device that streamlines the regeneration and spray-on processes to allow clinicians to treat a greater number of patients.
On Dec. 23, Avita received FDA approval for a version of the Recell device that treats small-scale wounds. According to the company’s announcement, this addresses a critical need in the full-thickness skin defect market, which includes a high volume of smaller wounds.
“By introducing a treatment option specifically for smaller wounds, we are expanding the accessibility of Recell to a wider range of patients,” Jim Corbett, Avita’s chief executive, said in the company’s announcement.
“We believe this addition will drive greater adoption across trauma centers, where smaller wounds are common, and support our broader growth strategy,” he added.
Rollout of the so-called “Recell-Mini” device will begin with trauma and burn centers that currently treat smaller wounds during the first quarter of 2025, the announcement said.
Investors sent Avita shares up 20% in the two weeks following this FDA approval announcement.
But then Avita shares came crashing down after the company lowered its 2024 revenue forecast and extended out reaching profitability another quarter, until the fourth quarter of this year.
In this announcement after market close on Jan. 7, Avita estimated its revenue at about $64.3 million for 2024, down from its previous forecast of $68 million to $70 million. The company cited a combination of factors, including some of its hospital customers lowering their inventory levels at the end of their fiscal year.
“While this type of behavior is common at year-end, the extent was more pronounced than we had anticipated, contributing to less revenue in the quarter,” the company said.
The share price tumbled 36% on Jan. 8 to $8.94 and traded in that lower range at least through Jan. 17.
