Burns treatment company Avita Medical (ASX:AVH) rose this morning after gaining further regulatory approval from the FDA.

The company has a rapid cell harvesting device called RECELL which works as a ‘spray-on’ and allows patients to be treated without having to send a biopsy to a lab.

While the American regulator gave RECELL the initial green light in September 2018 it was only for severe thermal burns in patients 18 years and over.

Today the FDA has given it approval to use it in all sizes of acute full-thickness thermal burn wounds as well as in patients under 18 (although it is still restricted for patients under a month old).

CEO Mike Perry said he was pleased with the decision, noting that nearly a quarter of burn cases in the USA occurred in children under 16.

“The RECELL system is becoming the standard of care in burn treatment and we are committed to pursuing and realising the full potential of this innovative regenerative technology platform to address other clinical indications where significant unmet need exists,” he said.

Shares rose by over 14 per cent this morning.

Avita Medical (ASX:AVH) share price chart


A long history

Recell was first developed in the 1990s by a Perth based burns specialist and first came to prominence after the Bali bombings when it was used to treat repatriated Australians.

Despite Recell’s inventor, Fiona Wood, winning Australian of the Year in 2005 there were several years where the company did not appear to be going anywhere.

But in 2018 everything changed after a successful clinical trial and the subsequent FDA green light.

Ever since, the company has been selling its tech in the US and has never looked back.

In the March quarter of 2021 it made US$8.8 million – 126 per cent more than the US$3.6 million made in prior corresponding period – and was used by 147 burns surgeons.

Despite its success Avita was one of the poorer performers on the ASX in 2020, in the same year it formally re-domiciled to America and made the NASDAQ its primary listing – a move it hoped would unlock value and win it attention from US healthcare investors.

While its NASDAQ shares flatlined as well in recent months, news of the FDA approval sent shares up 7 per cent overnight.

Avita (NDQ:RCEL) shares in the past week