AVITA Medical, Inc. (NASDAQ:RCEL) Q4 2022 Earnings Call Transcript

So with that readiness, during Q2, we’re expanding, as I mentioned, our field force from approximately 30 to 70. So during the second half, we’ll build increasing momentum in soft tissue repair, it will have a curve associated with it. For example, we will have soft tissue repair indication available and VAC approved in virtually half of the burn centers which are Level 1 and Level 2 qualified. We’ll also begin the VAC process during Q2 in a number of Level 1 and 2 trauma centers using burns as our indication for that process. The bit uncertain at the moment exactly how many we’ll get through VAC during Q2, but certainly will have a running start. And our sales team will be fully in place and trained for that July 1 launch. So we’ll scale up during the second half in soft tissue.

And of course, what will really be exciting, quite honestly, is our exit rate in Q4, because it’s going to really position us for high growth in 2024.

Joshua Jennings: Thanks for walking us through that. I appreciate it. And just a follow-up on the build-out of the sales team. Just was hoping to better understand and where you’re recruiting these reps from? And are there any challenges to getting to that 70 number in Q2, or do you feel like that’s a pretty straight shot based on experience to-date? Thanks again for taking the questions.

Jim Corbett: Thanks Josh. It is a qualitative evaluation on my part, but I don’t mind sharing with it. First of all, we have a very strong pipeline of candidates. I think the success that AVITA has been experiencing in the marketplace, translates well the expanding indications that we have and that are coming that translates well in terms of recruiting. The fact that we are well capitalized and have the capital to execute a growth strategy is very appreciated, because a lot of companies don’t have that. So our early returns are that we’ve largely filled the management roles that we’re expanding into or have identified them. We’ve begun interviewing the salespeople. We have a great pipeline of really high-quality candidates. They’re coming from a number of places, but they come from related wound care companies.

They come from MedSurg type background. So we want salespeople, who are experienced and comfortable in the OR, and we’re finding really a strong pipeline of candidates. So, we’re quite confident that we’re going to get our team in place and have adequate time to train them. It is a big scale up for us. And our commercial team is really stepping into this one. So it’s really kind of inspiring to watch them do it.

Joshua Jennings: Excellent. Great to hear.

Operator: Okay. Thank you. Our next question comes from the line of Phillip Dantoin of Piper. Your line is now open.

Phillip Dantoin: Hey. This is Phil on for Matt. Thanks for taking our questions and congrats on the excellent quarter. I guess, just for starters given the expected inflection here in 2023 and your commentary how durable do you see this call it 45% growth in the 2024, 2025 time frame? And is it wrong to say that you’re exiting 2023 at nearly 50% growth? Thanks.

Jim Corbett: Yes. Thanks, Philip. First, at midpoint it’s 47% not 45%, just to make a fine point of it. I think, that implies a greater than 50% exit rate in Q4 you’re correct. So how durable do I think it is? I think it’s quite durable. The exit rate will cause us to have to expand more into 2024 as well in terms of our commercial coverage. So I think we have some very strong growth years ahead of us with soft tissue and burns on their own not adding to either an international expansion or a launch of the vitiligo in January 25.