AVITA Medical and Regenity Biosciences Partner to Advance Wound Care
AVH (AVH) Share Update July 2024 Wednesday 31st
AVITA Medical Expands Portfolio with New Dermal Matrix
AVITA Medical, Inc. (NASDAQ: RCEL, ASX: AVH) has announced a significant partnership with Regenity Biosciences to enhance its wound care portfolio with a unique collagen-based dermal matrix.
Instant Summary:
- Exclusive multi-year agreement with Regenity Biosciences.
- AVITA Medical to hold exclusive marketing, sales, and distribution rights.
- Product pending 510(k) clearance by the FDA.
- Potential new standard of care for wound treatment.
- Initial term of the agreement is five years, with an automatic extension of an additional five years.
Strategic Partnership
AVITA Medical, a leader in regenerative medicine, has entered into an exclusive multi-year development and distribution agreement with Regenity Biosciences. This partnership grants AVITA Medical the exclusive rights to market, sell, and distribute a new collagen-based dermal matrix, which will be manufactured by Regenity. This product is currently pending 510(k) clearance from the FDA, expected in the fourth quarter of 2024.
Product and Market Expansion
The new dermal matrix is designed to generate dermal-like tissue in full-thickness wounds through rapid cell repopulation and revascularization. AVITA Medical plans to integrate this product with its existing RECELL technology to potentially establish a new standard of care, improving patient outcomes. The company aims to market this product not only in the U.S. but also in the European Union, Australia, and Japan.
Clinical Studies and Future Plans
Following 510(k) clearance, AVITA Medical will initiate multiple clinical studies to evaluate the synergies between the new dermal matrix and RECELL. These studies will compare the new product with existing dermal matrices and aim to demonstrate improved time to grafting and wound closure. AVITA Medical expects to complete these studies by 2025.
Financial Terms
The initial term of the agreement is five years, with an automatic extension of an additional five years, contingent upon meeting certain criteria. AVITA Medical will make a $2.0 million payment upon receipt of 510(k) clearance and up to an additional $3.0 million payment by January 4, 2026, contingent on positive clinical study results. Revenue sharing from sales of the product will start at 50% of its average sales price for the first two years, increasing to 60% in subsequent years.
This partnership is expected to significantly enhance AVITA Medical's product portfolio and market position in the wound care industry. The integration of Regenity's collagen-based dermal matrix with RECELL could set a new standard of care, potentially leading to increased market share and revenue growth. The financial commitments and revenue-sharing model indicate a strong belief in the product's success.
Investor Reaction:
Analysts are likely to view this partnership positively, given the potential for improved patient outcomes and market expansion. The pending 510(k) clearance and subsequent clinical studies will be critical milestones to watch. Investor sentiment may be cautiously optimistic, awaiting further developments and study results.
Conclusion:
Investors should keep an eye on the 510(k) clearance and the results of the upcoming clinical studies. The successful commercialization of the new dermal matrix could significantly boost AVITA Medical's market position and financial performance. Staying informed about these developments will be crucial for making informed investment decisions.