AVITA Medical, Inc.

What they do

AVITA Medical commercializes RECELL, an autologous cell harvesting device that creates a Spray-On Skin suspension for thermal burns and full-thickness skin defects. The company also distributes PermeaDerm, a biosynthetic wound matrix, and Cohealyx, a collagen-based dermal matrix, both in the U.S. It sells primarily to about 200 U.S. burn and trauma centers and generates additional international revenue through distributors.

Revenue drivers

• RECELL — Core product, generated $18.5 million in Q2 2026, about 85% of total quarterly revenue; growth driven by reimbursement stabilization and RECELL GO mini adoption.
• Cohealyx — Collagen-based dermal matrix launched April 2025; Q2 2026 revenue of $1.7 million, growing 16% sequentially, supported by interim clinical data showing faster grafting readiness.
• PermeaDerm — Biosynthetic wound matrix; Q2 2026 revenue of $0.6 million, small but growing, positioned as an alternative to allograft.
• International — Distributor-led sales outside the U.S.; described as consistent and complementing domestic growth, but revenue size not separately disclosed.

Recent performance

Q2 2026 revenue was a record $21.7 million, up 18% year-over-year and 13% sequentially. Gross margin was 81.9%, up 70 basis points year-over-year. Operating expenses fell 6% year-over-year to $24.6 million. Net cash use improved to about $3.2 million in Q2, from $9.9 million in Q1 2026. Cash and marketable securities were about $11.1 million at quarter end.

Strategy

Management is executing a focused commercial strategy on about 200 high-volume U.S. burn and trauma centers. Priorities include expanding RECELL adoption in trauma and surgical wounds, driving Cohealyx adoption as a dermal matrix, repositioning PermeaDerm as an allograft alternative, and growing RECELL GO mini use for smaller wounds. The company also plans to publish clinical data for Cohealyx and PermeaDerm, and expand internationally through distributors after regulatory approvals. Management emphasizes improving operating leverage, generating positive cash flow, and achieving long-term profitability.

Risks

• Ongoing losses and going concern risk — The company had a cumulative deficit of $408.4 million through December 31, 2025, and expects losses to continue until revenue covers operating expenses.
• Reimbursement delays — In 2025, CMS shifted pricing responsibility for RECELL's CPT code to regional MACs; delays in setting rates temporarily slowed clinician use, and future policy changes could reduce demand.
• Debt covenants and liquidity — The company has significant debt secured by substantially all assets, and negative shareholder equity of -$27.8 million as of June 30, 2026, which may restrict business activities.
• Dependence on distributor agreements — PermeaDerm and Cohealyx are sourced through exclusive agreements with Stedical and Regenity, respectively; any supply or contract disruption would hurt revenue.

Outlook

Management raised full-year 2026 revenue guidance to $86 million to $89 million, from $80 to $85 million, representing 20-24% growth over 2025's $71.6 million. The company expects to reach cash flow breakeven in Q4 2026, and begin generating cash thereafter. Proposed CMS 2027 payment updates, if adopted, would set national physician payment for RECELL and increase facility rates, which could support further adoption.