FDA approves Avita’s premarket approval supplement for Recell, shares rise 13%

Key takeaways:

• The expanded approval of Recell includes full-thickness skin defects such as wound injuries after traumatic avulsion, surgical excision or resection.
• After the approval, Avita shares rose 13% at $16.60.

The FDA has approved Avita Medical’s premarket approval supplement for the use of its Recell System for the treatment of full-thickness skin defects, according to a press release.

Recell, a system which uses a small amount of a patient’s skin to prepare Spray-On Skin Cells, was first FDA-approved in 2018 for the treatment of severe burns. Recell was limited to treating partial-thickness burns on its own or treating full-thickness burns in combination with autografting.

Now, Recell’s premarket approval supplement expands the use of Recell to include full-thickness skin defects, such as wound injuries after traumatic avulsion, surgical excision or resection.

“This is a landmark approval representing an inflection point for Avita Medical,” Jim Corbett, CEO of Avita Medical, said in the release. “The FDA approval now offers surgeons a best-in-class treatment option for a multitude of severe wounds within inpatient and outpatient settings.”

According to the release, this approval was supported by results from Avita’s pivotal trial for soft tissue repair and reconstruction. In this study, Recell exhibited statistically noninferior healing rates with statistically significant donor sparing, meaning less skin was used to achieve the same outcomes as conventional autografting.

This expanded indication may increase the company’s market opportunity at least five times. In fact, after the company announced its approval on June 8, Avita Medical shares went up 13% at $16.60, according to Dow Jones Newswires.

The company has scheduled a commercial launch of Recell for July 1.