Avita taps investors for $17m

The company commercialising an innovative spray-on burns treatment co-developed by medical entrepreneur Fiona Wood has launched a $17 million capital raising.

Perth-based Avita Medical has raised $4.5 million through the placement of 101 million shares at 4.5 cents each, and plans to raise a further $12.4 million by way of a one-for-2.8 rights issue at the same price.

The price represents a 33.6 per cent discount to Avita’s 30-day volume-weighted average price.

The funds will be used as Avita works with US government research agency, the Biomedical Advanced Research and Development Authority, towards commercialising its ReCell regenerative medicine devices in the US market.

The technology was developed by Dr Wood, who will be a guest keynote speaker at Business News’s upcoming Success & Leadership breakfast on November 28. Click here for details.

“This fundraising is expected to underpin Avita through key milestones, including initial BARDA product procurement, US FDA approval, and the launch of ReCell in the US burns market,” chief executive Mike Perry said.

“What we consider compelling for investors is the strength of our clinical data from the two US trials of 131 patients at 12 leading US burn centres demonstrating that use of the ReCell device results in significantly less donor skin harvesting, relative to standard care, for treatment of burn injuries.

“The data has revealed a 97.5 per cent reduction in donor skin harvested for treatment of second-degree burn injuries, while also showing a 4.4 times greater likelihood of donor site healing for those patients after just one week.

“In our US FDA pivotal trial for third-degree burns we achieved the co-primary endpoints, along with data exhibiting a 32 per cent reduction in the use of donor skin, with no safety concerns.”

Bell Potter Securities managed the placement and is fully underwriting the rights issue.

Avita shares were 23.5 per cent lower to 6.5 cents each at 1:30pm.