Avita Medical, Inc. Common Stock Canaccord Genuity's 46th Annual Growth Conference

Thanks. Thank you. Good morning, everyone.

It is good to be with you. Again, Cary Vance, the President, CEO of AVITA Medical. I have been the CEO for about 10 months and excited about what is happening at the company and sharing that with you today. AVITA Medical is a hospital-based acute wound care company. That is important distinction between ourselves that we call on hospitals and acute wound care locations, as opposed to the chronic care space in offices. That is an important distinction of where we play and where we do not play. Our products are repeat use, and so we build a book of business with facilities and physicians that use our products on the same patient.

We have three products, and I will talk about those in a minute, but essentially, those three products are used on the same patient, the same hospital, same physician, which makes it highly efficient for our salespeople and effective in terms of synergies in our portfolio. We are focused on approximately 200 centers in the U.S., about 120 burn centers, about 55 to 60 level 1 trauma centers, and then opportunistic about another, say, 20, where you might have a reconstructive cosmetic surgeon that uses our technology as well. We have a $1.3 billion addressable market for our portfolio in the U.S., about the same addressable market outside the U.S. as well. Again, joined the company as CEO after serving on the board for a few years, last October.

You can see the growth path over the last couple of quarters that we have reported out from $17.6 million to $19.3 million to $21.7 million. If you go back and look at transcripts of earnings from last November, February, and May, we have been pretty consistent about what we expect to stabilize the business, to understand and put it on an organic growth trajectory, quarter-over-quarter sequential growth. That is what has happened over the last couple of quarters, and you can expect that to continue to happen, and we will talk more about that. In the U.S., we have just started to break out our portfolio and the different products. We have U.S. RECELL, international RECELL, so internationally, we only sell RECELL, and then Cohealyx and PermeaDerm. You can see we are growing in all three product lines, both U.S. and internationally.

We raised our guidance as a result of our growth path from $80 million to $85 million to now $86 million to $89 million this year, and that's what's expected. Importantly, also, as we grow revenue in sequential quarters and we hold operating expenses consistent, we hold margins consistent, we expect to be cash flow breakeven in the fourth quarter of this year. This breaks it down again beyond revenue to margin expenses, net loss. We're a very simple business. We have three product lines. Consistent high margin business, consistent operating expenses. You can see they went down year-over-year, but stayed pretty much consistent quarter-over-quarter. We expect that to continue for several quarters ahead. We don't expect that we'll need to add OPEX as we grow. We're built to grow, and we'll talk more about how that is the case especially from a commercial standpoint.

You can see the kind of dramatic reduction in use of cash. Again, we expect that to continue as we grow in revenue and hold consistent our OPEX. We have as of the end of the second quarter, $11 million in cash available as well. These are the three product lines for those of you that aren't familiar. If you think about a patient that comes in, I'll start from the bottom, actually. A patient comes in with either a large burn or a traumatic wound. That wound needs to be cleaned and excised, and then our PermeaDerm product is used as a biosynthetic dressing, a temporizer. It's transparent, so you put it over the wound to protect the wound, to assess the wound before you make some decisions about how you're going to close the wound itself. Cohealyx is a dermal matrix.

That is used as you're preparing the wound bed. If you have that wound, what you're trying to do is vascularize the wound and get it ready for grafting. You need that well vascularized and prepared. We have Cohealyx, and then RECELL is used either by itself to spray on skin cells or in conjunction with a split-thickness skin graft or meshed skin graft. Within the RECELL portfolio, we have three products. One is our manual RECELL product, which people continue to use, those that have refined the technique to using RECELL, and then RECELL GO, which is an automated version, and then RECELL GO mini, which is a smaller version for smaller wounds.

This is an example of a woman who had initial treatment that failed, and then the use of RECELL not only helped her to heal very effectively in terms of an outcome, but you can see the return of pigmentation, which is a key feature and benefit from using RECELL versus a skin graft. On the right side, you can see that not only did revenues increase in RECELL, but volume increased as well. You can see quarter-over-quarter from Q1 to Q2 how that happened. We developed RECELL GO mini to address smaller wounds, and that's exactly what it did and has done. You can see the size wounds that RECELL GO is addressing.

The way that you expand from large wounds or large burns to smaller wounds is, some of it is education, some of it is them understanding the advantages from an economic and outcome standpoint, but also some of it is product driven, and RECELL GO addresses that need that they have. It is important, reimbursement is always key to traction in the marketplace. Over the last year and a half or 2, we have gone through kind of a stopgap in terms of getting physicians paid. About a year and a half ago, CMS delegated that to Medicare Administrative Contractors in the U.S. That was somewhat of a temporary way for them dealing with reimbursement. We will talk more about that later, but essentially January 1st of 2027, it does go to a simplified nationwide reimbursement, which all our clinicians and hospitals are very excited about.

Essentially, not only do clinicians use our 3 products to provide better outcomes, to assess the wound bed, to prepare the wound bed, to treat the wound itself for healing and closure, but there is an economics to it for our company. 2 years ago, if you had a certain patient that would come in, we could offer them RECELL, and that would be an effective way of healing that wound. But now we can offer all 3 products depending on what the patient needs or the clinician needs. You can either use PermeaDerm as a temporizer to cover the wound, you can use PermeaDerm plus RECELL, or you can use all 3 products to cover the wound, protect the wound, assess the wound, prepare the wound bed, vascularize the wound bed, and then spray the wound bed for healing.

You can see the resulting revenue that can come from the same patient, same physician, same hospital. For our salespeople, it is very efficient. They are in these cases. They are having conversations with physicians about using it, all 3 products on different types of patients as needed. Right now, we have about 25 hospitals in the U.S. that use all 3 of our products, which is very encouraging. We are a data-driven company. Some of the data is clinical, and some of it is economic. Both are important to our clinicians in the hospitals as they assess using our products. The data on the left shows a 36% reduction in length of stay for patients that use RECELL versus a split-thickness skin graft.

You can see the impact that it has on the amount of time the patient is there, how soon they get to go home, but also for the hospital in terms of how long they have to take care of that acute wound patient. From a Cohealyx standpoint, what we are looking for too is speed. Speed to graft readiness. The study shows that up to 20 days difference between us and the competition in other dermal matrices, as little as 5 days in wound bed readiness. PermeaDerm is fairly straightforward. As a temporizer, we compete against Allograft or cadaver skin, and so having that be comparable and in some ways very advantageous in terms of handling and visualization, but also in terms of just straight cost in using PermeaDerm versus cadaver skin.

We have a couple endpoints to our clinical data around safety, but also around cost and workflow. Essentially, the company is built to grow. It's a very simple company, and I think as CEO, I've tried to keep it simple and very focused. Focused on our markets, focused on our customers, focused on what makes a difference to them in terms of their patients from a clinical perspective, from an economic standpoint, from a workflow standpoint. Make our products really easy to buy and really easy to use and make the company really easy to grow. With that, I'll take questions.