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

Brooks O’Neil: Well. Thank you. Good afternoon, everyone. I was hoping you might talk a little bit about what your expectations are with regard to sort of the dynamics in the soft tissue market, relative to your experience with large burns in terms of kind of number of cases that RECELL might be appropriate for, let’s say, per week or per month in the centers you’re going to attack. And how many kits per case. Some of those things would help us to get a good feel for sort of how you view the opportunity in soft tissue.

Jim Corbett: Yes. Thanks Brooks. Let me try and work through that thought, because there’s, a number of questions I think you raised. So first and foremost, in soft tissue repair and reconstruction which will be the label we believe, the cases themselves will utilize less RECELL kits per patient. So in large burns, it’s common for one or more kits to be used on a patient where in the soft tissue market that will happen quite less often. So that’s I think the first part of your question. The second is the number of patients to be treated. It’s in the order of 4x, available RECELL viable candidates relative to burns. So that is a really substantial increase. And there’s, a lot of different applications that we will have access to with this broader indication.

So in a Level 1 trauma center for example, there is a wide range of things that might — patients that might present themselves. For example, there will be burns patients who present that will happen. They won’t be the large greater than 30% TBSA burns, but there’ll be smaller burns, nonetheless need treatment. We’ll see necrotizing bacteria. We’ll see degloving. We’ll see abrasions. We’ll see acute wounds. So there’s so many applications which is on one hand a great market opportunity. It requires, on the other hand, extensive training and focus on the part of our sales team. So we really will be moving from the big accounts to the small. And the reason, of course, is when you camp out in the big accounts, you get access to all those indications and we allow our FDA submission for automation, so to speak, cook at FDA, so that by the time we’re moving to smaller Level 1 and 2 trauma centers in January 2024, we expect to have our automation program launched and ready to go and improved.

So it’s a — there’s going to be a constant evolution in our, both ability to get VAC approvals all the way to these broader indications to starting to move into smaller Level 1 and 2 trauma centers and everything benefiting from the absolute adrenaline injection of automation. So automation will make our sales team so much more productive.

Brooks O’Neil: Great. That’s really helpful. So let me just ask one more. I’m very intrigued by the comments you made about getting to breakeven with five kits per — I think you said a month, but I might have heard that wrong and the average being 20 kits. Do you envision the dynamics in soft tissue being the same in terms of an average salesman being able to sell 20 kits, or do you think they might be able to sell a lot more? And kind of what’s your expectation for how quickly people will get up to be average or better?