Avita Medical, Inc.

Good day and thank you for standing by. Welcome to the Avita Medical second quarter conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jessica Eckberg, Director of Investor Relations.

Thank you, operator. Welcome to Aveda Medical's second quarter 2024 earnings call. Joining me on today's call are Jim Corbett, Chief Executive Officer, and David O'Toole, Chief Financial Officer. Today's earnings release and presentation are available on our website, www.evitamedical.com under the investor relations section. Before we begin, I'd like to remind you that this call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are neither promises nor guarantees and involve known and unknown risks and insurgencies that could cause actual results to differ materially from any expectations expressed or implied by the forward-looking statements. Please review our most recent filings with the SEC for comprehensive descriptions of the risk factors. Any forward-looking statements provided during this call are based on management's expectations as of today. I will now turn the call over to Jim for his comments.

Thank you, Jessica. Good afternoon, and thank you for joining us today. I will begin today's call by discussing our financial and business results for the second quarter, followed by our priorities and outlook for the remainder of 2024. Following this update, I will turn the call over to David, who will provide commentary on our financial performance for the quarter before opening the call to Q&A. During the quarter, we focused on addressing the challenges we faced in the first quarter by implementing an enhanced coverage strategy and other strategic initiatives focused on execution. Our commitment to these efforts and sustaining growth are reflected in our second quarter commercial revenue of $15.1 million, which was at the higher end of our previously provided guidance range of $14.3 million to $15.3 million. Additionally, one week ago, we entered into an exclusive multi-year development and distribution agreement with Regenity Biosciences. Through this agreement, following 510K approval by the FDA, we will hold the marketing, sales, and distribution rights to an Aveda medical labeled collagen-based dermal matrix manufactured by Regenity. I will discuss it in more detail later in the call. To further support our growth and strategic initiatives, we have significantly strengthened our management team, with the addition of Robin Vandenberg as Senior Vice President of U.S. Commercial Sales. Robin, who joins us from a distinguished career at Smith & Nephew, is an accomplished executive with a proven ability to drive new product adoption and growth across multiple specialties, making her the ideal leader of our sales organization. She officially joined us earlier this week, and we were confident that her vision and industry experience will be instrumental in expanding our market presence with the ResellGo driving adoption of our portfolio products and accelerating growth. In addition to implementing enhanced coverage strategies, we are beginning to yield results from our full thickness skin defect launch. As presented on slide three of our earnings presentation, we have become more efficient with both the VAC approval process and closing new accounts. In the second quarter, we added 31 new accounts, all of which placed orders. Moreover, we had an additional six accounts receive VAC approval but have not yet ordered, for a total of 37 accounts for the quarter. As a reminder, new accounts are launching with ResellGo from the gate, eliminating the need for conversion. In terms of our pipeline for full-fledged skin defects, we have 52 accounts in the evaluation stage and 37 accounts in the decision stage. For a total in VAC as of July 31st of 89 accounts with a healthy pipeline of additional prospects for the rest of the year. In addition, we have 19 facilities that are in VAC for Permioderm. With that, let's turn our attention to Resell Go. In 2022, I outlined three initial priorities for Aveda Medical, which included a commitment to a next-generation resell device, now known as ResellGo. For those new to the story, the prior version was a single-use, battery-operated manual system used to prepare spray-on skin cells capable of covering a wound area of up to 1920 square centimeters, or approximately 10% total body surface area. Resell-Go prepares the same spray-on skin cells and treats the same wound area, but features an evolutionary design with two components, a multi-use AC-powered processing device and a preparation kit containing a single-use cartridge, disaggregation head, the Resell enzyme, and other components. The Resell-Go processing unit controls the pressure applied to the donor skin to disaggregate the cells and precisely regulates soak time to optimize cell yield and viability. The standardizing of the process produces consistent results. Additionally, these enhancements streamline the preparation and simplify the user interface, reducing the training burden on medical staff and on our field team. On May 29, we received FDA approval for ResoGO for the treatment of thermal burns and full-fitness skin defects. Demonstrating our unwavering commitment to patient care and rapid response, we shipped the first Resell Go the next day. This swift action allowed clinicians, together with our team, to complete the first Resell Go case on May 31, just two days after FDA approval. And yes, the procedure was a success. This extraordinary effort was made possible by the dedication of our entire organization I want to thank each and every team member for their invaluable contributions. Now let's dive into what ResellGo means for our business. Please turn to slide four so you can see for yourself. For those of you participating by telephone, slide four has three images. In the first image, two ResellGo processing devices were used. One device has completed its multi-step process, while the other device had seven minutes left. Given that two single-use cartridges were necessary, we can assume that this patient had a burn injury of more than 10%, but less than 20% total body surface area, as one cartridge can treat up to approximately 10% total body surface area. In the second image, three devices were utilized for this case, indicating a burn injury of more than 20% but less than 30%. One cartridge had been fully processed, and those spray-on skin cells were ready for application, while the other two devices were still in use. And in the third image, four Reselco processing devices are operating simultaneously, suggesting a burn injury of more than 30%, but less than 40% total body surface area. If you find that compelling, please turn to slide five. Here, you see a burn center clinician proudly showcasing not one, not two, but six ResellGo processing devices that were used for a patient with more than 50%, but less than 60% total body surface area. It's hard to see because of her mask, but I can promise you, she is smiling, and so are we. For starters, ResellGo's advanced features not only streamline the preparation of spray on skin cells, but also significantly boost workflow efficiency in the operating room. A physician could start preparing a patient's burn wound for the application of spray on skin cells while the resell go device is processing the donor skin sample. Whereas with our prior resell device design, the physician would still be scraping cells from the first skin sample. Importantly, When the injury exceeds 10% total body surface area, like slide number five, multiple ReselGo processing devices can be used concurrently. This allows physicians to continue delicate and complex patient treatment while the machines are processing, significantly reducing operating room time for patients with major and severe burns and trauma injuries in critical condition. When you shorten the operating room time, a positive domino effect occurs. especially with large burn injuries. Following major burn injuries, patients lose the ability to regulate their core body temperature, placing them at high risk of hypothermia and other metabolic issues. As such, the ambient temperature in operating rooms for surgeries can be upwards of 100 degrees, most commonly around our average body temperature of 98 degrees, depending on the size of the injury and the patient's vitals. Compare that to the average temperature in an office space, which is between 70 to 74 degrees. Thus, shortening operating room time directly benefits the patient by reducing thermoregulatory and hypermetabolic danger. Most importantly, Result Go was not just designed with the clinicians in mind. It was designed for patients, as a reduction in operating time means patients spend less time with open wounds and less time under anesthesia. The faster patients exit the operating room, the faster patients start their healing journey. This is Resell Go. Resell Go, along with the ability to run multiple Resell Go devices simultaneously, ushers in a new era in the treatment of partial thickness and full thickness wounds. We believe integrating Resell Go into patient care empowers clinicians to expand treatment capabilities, reach more patients, and achieve optimal outcomes, thus drive a greater adoption and setting a new standard of care in wound care management. As discussed last quarter, we identified the need for a solution to treat smaller wounds, leading to the development of Resell Go Mini, designed to address small wounds up to 480 square centimeters or approximately 2.5% total body surface area or less. While resale is viewed as highly effective for large burns, it's primarily seen as a large burn solution, leading to underutilization for smaller wounds. Trauma and burden surgeons prioritize clinical utility and often perceive the use of the current large kit for smaller wounds as inefficient. Recognizing that a majority of full-fitness skin defects are smaller than 480 square centimeters, Resell Go Mini is poised to address the significant market need, offering a tailored solution for these smaller wounds. Regarding the timing of Resell Go Mini, we submitted a PMA supplement to the FDA on June 28. This version utilized the same multi-use processing unit as Resell Go, and features a cartridge designed for the smaller donor samples needed for smaller wounds. Importantly, this submission benefits from the same breakthrough device designation that was granted to our existing resale system, ensuring a prioritized 180-day interactive review period implying an approval date of December 27th. Before we move into our new DERMA matrix, I have a brief update on our international expansion efforts. We are making progress expanding into most of the European Union through third-party distribution partnerships. Over the last few weeks, we have executed distribution agreements in Belgium, Holland, Ireland, Italy, and in the United Kingdom, and four Nordic countries. Additionally, the countries of Spain and Portugal are on the near-term horizon. In regard to our European Union efforts, we expect to receive the CE mark for ResellGo this quarter. As demonstrated with our success in the U.S., we are fully prepared to meet the supply demands upon approval. Moving on to our portfolio of products. Last quarter, we showed you slide six, which reflects a broad continuum of clinical needs in burn, surgical, traumatic, and chronic wound care. While resell will remain the cornerstone of our portfolio, we have been actively exploring wound bed preparation and dermal replacement products to complement resell and address this full spectrum of clinical needs. To that end, we had a permioderm in the first quarter and now have an Aveda medical label dermal matrix in development with Regenity. Both Permuderm and the Dermal Matrix are compatible with Resell and each other, and both can be used alongside the treatment of many of our burn and bolt thickness cases to further aid in healing. Collectively, these products align with our vision to build a broad-based wound care company. To better understand our strategy with Regenity, I will provide an overview of Regenity and discuss our regulatory, clinical, and commercial plans for our dermal matrix. For more than 25 years, Regenity has been a leading global developer and manufacturer of proprietary bioresorbable materials used to repair and regenerate natural tissue and bone for a variety of clinical areas, including dental, spine, orthopedic, neurosurgery, ENT, advanced wound care, and nerve repair. Initially focused on collagen-based medical devices, Regenity has since expanded its platform to include versatile bioresorbable and biocompatible synthetic polymers, bioceramics, and other bioresorbable materials. Throughout its history, Regenity has successfully assisted med tech clients in securing regulatory approval for more than 70 product lines. After robust diligence and preclinical research, we have the animal data to demonstrate the effectiveness of a Regenity dermal matrix to promote cell growth in the wound bed. We expect 510 clearance in the fourth quarter, followed by an initial launch with the 510K indication. Regarding our clinical plans, immediately following clearance, we plan to initiate multiple post-market clinical studies to establish the unique synergies between our new dermal matrix and resell. These studies will include the evaluation of our new dermal matrix and other commercially available dermal matrices in full thickness wounds, followed by delayed treatment with a split-thickness skin graft plus resell and a two-stage procedure, which is the current standard of care, to demonstrate improved time to grafting and wound closure. clinical studies will evaluate the use of our new dermal matrix with immediate grafting together with resell and a single procedure aiming to establish a new standard of care. We expect to begin enrollment in both of these studies in the fourth quarter for completion in 2025. Let's revisit slide seven of our presentation which illustrates the complementary nature of ReCell, Permutaderm, and our new dermal matrix with the other potential additions to our portfolio. Here's an example of a full-thickness skin defect with concern for infection. In this instance, the dark blue layer represents dressings for wound bed preparation, a current focus. This product serves as a protective antimicrobial layer in the base of the wound bed to maintain an optimal healing environment. This layer can be used in every single patient. The green layer represents the new dermal matrix. This type of matrix aims to generate vascularized tissue, further supporting definitive closure. The light blue layer represents resell with a meshed split thickness skin graft. As you are aware, this procedure provides definitive closure using significantly less skin compared to traditional autographing. Lastly is the purple layer, which is the transparent Permioderm dressing optimized for protection and moisture management. By addressing the full spectrum of clinical needs across our portfolio, we believe that we can improve accessibility and reach more patients, which is our number one priority. Now, an update on TONE, which is our post-market study for Vitiligo. We have completed the six-month follow-ups and are on pace to have the research accepted for publication with the six-month TONE data and manuscript by the end of the fourth quarter. The same timeframe applies to the healthcare economic study associated with our Vitiligo initiative. In closing, we are taking advantage of our well-executed quarter and our momentum and remain committed to our efforts to expand our reach, drive increased adoption, and sustain growth with our indications, as well as our expanding portfolio, all with the goal of delivering value to our shareholders, our customers, and their patients and our employees. With that, I'll turn the call over to David.