Valencia-based regenerative medicine company Avita Medical Inc. has closed a debt facility of up to $90 million with New York health care investment firm OrbiMed Advisors.
The nondilutive capital provides financial flexibility to support portfolio expansion, global initiatives, and the further development and commercialization of approved skin restoration therapies.
Avita is developing devices and cellular therapies for skin restoration.
Its technology platform, which it calls “Recell,” harnesses the regenerative properties of a patient’s own skin to create skin cells that be sprayed onto burn wounds or other skin defects.
The idea is to reduce or eliminate the use of skin from donors. Avita received initial approval for its spray-on skin cell technology from the United States Food and Drug Administration in Sept. 2018 to treat certain types of burns. This past June, the agency approved expanding the use of Avita’s Recell to trauma wounds, chronic wounds, some surgical wounds, and some chronic skin conditions.
The company also issued OrbiMed a warrant to purchase 409,661 shares common stock, with an exercise price of nearly $11 a share.
“This transaction provides us with the capital to execute strategic growth initiatives as we continue to transform our business,” Jim Corbett, Avita’s chief executive, said in the announcement. “We believe this financing provides us with sufficient capital to meet our goals without the near-term need of equity financing and positions us to reach profitability during 2025.”
The company also gave a preliminary third-quarter financial snapshot. Preliminary commercial revenue was $13.5 million, a 50% increase compared to about $9 million for the same period last year. Gross margin for the third quarter was approximately 85%. Full results are expected to be released on Nov. 9.