Good day, and thank you for standing by. Welcome to AVITA Medical First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today's conference is being recorded. I would now hand the conference over to your first speaker for today, Jessica Ekeberg. Please go ahead.

Thank you, operator. Welcome to AVITA Medical's first quarter 2025 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.avitamedical.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 uncertainties 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 to those joining us here in the US, and good morning to our colleagues and investors in Australia. We entered 2025 stronger, sharper and more strategically prepared than ever before. There's more to do, but the foundation we've built gives us the opportunity to accelerate and deliver against the full potential of our expanded platform. Let's turn to slide 3. We are no longer a single product run-only company. Today, we are a fully integrated, multi-product platform positioned to lead in therapeutic acute wound care. With this transformation, our US addressable market has expanded from roughly $500 million to more than $3.5 billion annually. That's a seven-fold increase that materially reshapes our long-term growth trajectory. Revenue for the first quarter increased 67% over the first quarter of the prior year. It's a strong indicator of the traction we're gaining. We see the quarter as a launch readiness phase, gearing up to fully reignite our growth in Q2 and beyond, powered by a portfolio that is now fully ready to scale. Let me walk you through, how our expanded portfolio has come together and how we're positioning the organization to capitalize on it effectively. In February, we launched RECELL GO mini, a targeted innovation designed specifically for trauma centers, treating smaller wounds. Let me step back for a moment and explain why we've created it. Our original RECELL system was developed to treat large burns, covering up to 10% total body surface area or about 1,920 square centimeters. However, data from our pivotal trial to support our pre-market approval of full-thickness skin defects for trauma and early market observations made it clear, most traumatic wounds are significantly smaller, typically well under 480 square centimeters or less than 2.5% total body surface area that is treated by…

Thank you, Jim. For the three months ended March 31 2025, our commercial revenue was $18.5 million, representing a 67% increase compared to the same period in 2024. This growth was driven primarily by the continued deployment and ongoing adoption of RECELL GO within existing burn centers as well as expansion of new accounts targeting trauma centers. We acknowledge that we have had two quarters where our revenue has been flat. However, as Slide 5 shows, over the last five years our growth has been impressive with approximately 47% compound annual growth rate through the end of 2025, assuming the midpoint of our revenue guidance for this year. As Jim indicated, we are on the precipice of recharging this historical growth rate in the coming quarters. Early indicators from the February launch of RECELL GO mini and April launch of Cohealyx continue to suggest that these products will meaningfully contribute to revenue growth throughout 2025 alongside the increasing momentum from PermeaDerm sales. Gross profit margin for the first quarter was 84.7% down from 86.4% during the same period of 2024. Note that the gross margin for RECELL products only was 86.4% for the quarter, which we believe will remain in this range for future quarters. The decrease in the overall gross margin percentage from the prior year was primarily caused by volume discounts a higher inventory reserve and product mix. As the percentage of our revenue derived from new products increases we will continue to see a small degradation of our overall gross margin percentage while increasing our gross margin dollars and operating dollars. As we have disclosed, we share the average sales price for Cohealyx at 50% and for PermeaDerm at 60%. These distribution arrangements are highly beneficial to us. However, it is inevitable because of the revenue-sharing nature…

Thank you. [Operator Instructions] Our first question coming from the line of Brooks O'Neil with Lake Street Capital Markets.

Good afternoon, everyone. I guess I'll start. I have a sense that you've said a limited commercial launch of Cohelix occurred in Q1, can you share anecdotally any response, impressions, performance you've witnessed of that product and say to you about the pending full launch that's occurring now.

Sure, Cam, Brooks. Thanks for the question. So first of all, we -- you may recall that the preclinical work demonstrated a graft readiness at seven days, which is quite almost seven to 14 days faster than other dermal matrixes that we studied in that same preclinical work. What we experienced in the limited market release was really us gathering case data to help support commercialization April 1, is we actually validated that experience. And there was a case that's in the news put out by Ohio State, where they had a seven-day graft-ready experience with Cohelix. And it was -- that is consistent with the -- a couple of dozen cases that we did there in Q1. In Q1, we didn't have a broad full SKU array of sizes. So we were limited to treat certain number of -- certain size of cases. On April 1, we are fully stocked, including the 700 square centimeter sheets. So we're fully ready to go. So the third thing is Cohelixon our post-market study is in the majority ready to enroll. They've been through IRB. And right now, they're screening patients and preparing to enroll. So during the year, we'll get access to that data as well. So since that time, we've had a number of early commercial adoption cases where they've been through VAC already, shorter than we were experiencing, frankly, with RECELL GO times. So we're really excited about how Cohelix is going. The organization is trained. And as you heard, we reconfigured the sales organization as well because, of course, Cohelix gets sold at the first stage of a 2-stage procedure. And we want our reps there as well as when RECELL GO or RECELL GO mini is being used with a split-thickness skin graft. So, a lot of info. So sorry about that, but there's a lot to say about Cohealyx.

Great. That was very helpful, Jim. So the other question, I want to ask is just, obviously, RECELL GO mini and the expansion of the product into the Level 1 and Level 2 trauma centers. I'm curious if you could give us just any sense for whether that's working and what the response is.

So, first of all, we had our -- although, the product was approved at the end of December, our first inventory was in early February. So that was our first promotion time. We've had a fair -- I would say, a good response from existing VAC approved accounts that were in the trauma area that we had converted last year who've taken in inventory for RECELL GO mini. It's a real important distinction that those patients are way in the majority under that 2.5% total body surface area that RECELL GO mini covers, which is 480 square centimeters. So the response is good and you know what else we've noticed is we -- with the portfolio as we now have it with PermeaDerm and Cohealyx and RECELL GO mini, there's more opportunities to provide value to the trauma surgeon. So it is making a difference on our selling activity.

Great. Thank you very much. I'll jump back in queue.

Okay. Thanks.

Thank you. [Operator Instructions] Our next question coming from the line of Josh Jennings with TD Cowen. Your line is now open.

Hi. This is Eric on for Josh. Thank you guys for taking the question. Thank you for all the commentary on Cohealyx. That's very helpful. And it sounds like that rollout is off to a nice start. I was hoping we could talk about any potential revenue contributions from that launch that we should be assuming within the guidance for 2025. And maybe beyond that, just wondering if you have any target attachment rates that you're working towards where folks are using Cohealyx in concert with the RECELL platform.

That is a good question. We're not quite ready to give guidance on that mix. I will tell you, it is expected by us to be a material contributor. We think in fact, it is likely that by Q3 that we'll be breaking out the non-RECELL sales as a consequence, just to give you some directional guidance, if that's helpful.

That is, yeah. Thank you for showing that. And maybe secondly, just thinking about the sales force here, just looking at where revenues need to be by the end of this year to reach guidance. I was just wondering if you think you have the sales force in place now to reach those targets or if that's something that needs to be looked at, at some point here?

No. Actually, we feel very good about our staffing level. We reconfigured because if you recall, we were -- structurally, we had, I think, 59 sales positions and 29 clinical specialist positions. And those clinical specialist positions were attached to sales reps, right? And the model very much was heavily a sales service model. And in a two-stage procedure, the sales rep -- I mean, the clinical specialists, not the sales rep would be present. And of course, during the initial stage, there was no explicit reason why our rep would be present. So what we did is we have a number of very large accounts where we kept the clinical specialist model. We converted the roles of clinical specialists into a -- essentially a sales associate level, we call them market development specialists, but they have a sales role. And so now our sales coverage is about approximately 70 -- and their goal is to be a selling team that is in Stage 1 of the procedure, when a dermal matrix is potentially used and then to also be there when the split-thickness skin graft is used with RECELL, and be there when the dressing that could be PermeaDerm would be applied. So it's a much more selling-oriented model and we trained on that during the first quarter, and early in April. So that is something that we've been preparing with this portfolio expansion.

Understood. That makes sense. And if I could squeeze one last question, maybe for David here. Just thinking about the cadence of revenues through the rest of this year, should we be expecting just steady sequential increases through 2Q, 3Q, 4Q or is this going to be more heavily weighted towards those end of the year quarters as some of the new offerings in the pipeline begin to contribute?

Yeah. I think that -- thank you for the question. I appreciate that. The way we model it, is there's more just sequential growth every quarter, with some weighted towards the back end. You can imagine that as we get more VAC approvals especially for Cohealyx, which is going to be a major contributor for us for this year and into next year. So as we get more VAC approvals with Cohealyx, that will be towards the back end of the year that, that will take off. But overall, kind of an even sequential growth is what we're looking to do for the rest of the year.

Okay. That’s really helpful. Thank you for the questions.

Thank you. Our next question coming from the line of Chris Kallos with MST Access. Your line is now open. Q – Chris Kallos: Thank you for taking my call. Hi, Jim. I just wanted to ask some clarifying point on the vitiligo initiative. So could you just maybe just clarify, where exactly that stands at the moment, in terms of pursuing reimbursement?

Yeah, Chris, I can. Good to hear from you. So, what we've done is, we have made a decision to pause spending on vitiligo because of, the uncertainty of achieving reimbursement in the -- it's called the office-based lab setting, which is a physician's office. That's where the market desire to treat is and RECELL is not reimbursed for vitiligo is there, only in the hospital. And as a consequence of our expanded opportunity in therapeutic acute wound care and the big opportunity we have there, we've decided that the best use of our resources is to build that market. So as of now, we don't have a plan to -- that we can define for solving vitiligo. And -- so we don't have a plan that we can define. And therefore, we've suspended spending as a consequence until we identify a path. Q – Chris Kallos: Reimbursement agencies?

I'm sorry. Q – Chris Kallos: And that would include ongoing discussions, now been suspended with reimbursement agencies?

Since we talk with them on other reimbursement matters, we'll be talking to them about this. So it's not an absolute zero. But I'd say, that there should be no revenue dependence in any future estimates for the company on vitiligo, until we come forth with some defined plan. Q – Chris Kallos: Understood. Thanks a lot. Thanks for clarifying. Thanks, Jim.

Thanks, Chris.

Thank you. And I'm showing no further questions in the Q&A queue, at this time. I will now turn the call back over to Mr. Jim Corbett for any closing remarks.

Thank you, operator and thanks to those of you listening. We really appreciate your interest in AVITA Medical. I hope you have the time to join the AVITA showcase, reminding you that you can go to our website, click on the Investor tab and register for it, which is scheduled for next Tuesday, US time. And we hope to see you there. We think we've got a really interesting program for you and thank you very much.

This concludes today's conference call. Thank you for your participation and you may now disconnect.