ASX Health Stocks: Avita tumbles 16pc as RECELL study results disappoint investors
Health & Biotech
Health & Biotech
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Shares in regenerative cells biotech Avita Medical (ASX:AVH) plunged by 16% this morning after top line results from its RECELL study disappointed investors.
The study was a pivotal trial evaluating the safety and effectiveness of Avita’s RECELL System in patients with soft-tissue injuries.
Specifically, it was a randomised, controlled trial evaluating the safety and effectiveness of RECELL when combined with meshed autograft, to see how it can reduce donor skin harvesting in soft-tissue reconstruction.
Injuries considered for the clinical trial included any full-thickness acute skin defect, such as degloving or peeled back skin injuries, road rash, surgical wounds, and flesh-eating disease.
Results of the primary end points were as follows:
The donor sparing endpoint was met, showing a superior ratio of treated injury area to donor site area (p<0.001) with RECELL versus control.
However, the healing endpoint did not reach pre-specified statistical non-inferiority. Observed values for healing with RECELL were the same or just slightly better than control.
Despite the outcome, Avita CEO Dr Mike Perry said the company will move forward with its plan for a PMA (pre-market approval) submission with the FDA later this year.
“Our study has shown statistically superior donor sparing and comparable healing rates for RECELL treatment of soft tissue injuries,” he said.
“The RECELL System has been used to effectively treat serious burn injuries, and we anticipate that the RECELL System will be well-positioned to treat patients with soft-tissue injuries, pending FDA review and approval.”
Separately, Avita also reported that its commercial revenue in Q2, which excludes BARDA revenue, was $8.2 million, a 23% increase compared to $6.7 million in the pcp.
Cynata Therapeutics (ASX:CYP) has completed a strategic review of its clinical development pipeline to ensure that its portfolio maximises commercial opportunities available.
Given the ongoing recruitment activities in the Phase 3 osteoarthritis trial and Phase 2 diabetic foot ulcer (DFU) trial, as well as the recent IND clearance for a proposed Phase 2 acute graft-versus-host disease (aGvHD), Cynata has decided to prioritise resources towards these three initiatives.
This means that it will terminate the current MEND respiratory distress clinical trial.
The MEND clinical trial commenced in August 2020 and enrolled the first patient in May 2021, initially targeting patients admitted to ICU with Covid-19.
Although patient recruitment was strong at first, the changing nature of the Covid-19 pandemic together with continuous pressure on healthcare systems, created delays in recruitment for the trial.
In addition, the introduction of new antiviral drugs and rapid uptake of Covid vaccines meant fewer patients migrating to ICU, further reducing the pool of eligible patients.
Given these circumstances, Cynata says continuing this trial would be imprudent.
“Our strategic portfolio review was intended to ensure that we focus the application of resources on only the most viable opportunities,” said Dr Ross Macdonald, Cynata’s CEO.
“Continuing to pursue the MEND trial no longer had alignment with that goal. The decision allows us to refocus our resources on, and maintain our commitment to, our other promising clinical programs.”
Respiratory devices specialist Resmed (ASX:RMD) increased its revenue for Q4 FY22 by 4% on pcp to $914.7 million.
For the full year, revenue increased by 12% to $3.6 billion. Gross margin grew 110bps to 57.1%, and diluted earnings per share was $5.30.
Looking ahead, Resmed says it expects to grow steadily throughout FY23 and beyond.
“We are investing in R&D to drive accelerated adoption of digital health solutions in sleep apnea, COPD, and outside-hospital care, as we progress towards our goal to improve 250 million lives in 2025,” said Mick Farrell, ResMed’s CEO.