AVITA Medical Inc (RCEL) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the AVITA Medical Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Caroline Corner. Please go ahead.

美好的一天，謝謝你的支持。歡迎來到 AVITA Medical 2022 年第四季度收益電話會議。 （操作員說明）請注意，今天的會議正在錄製中。我現在想把會議交給今天的發言人 Caroline Corner。請繼續。

Thank you, operator. Welcome to AVITA Medical's Fourth Quarter 2022 Earnings Call. Before we begin, let me remind you that this call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements, including statements regarding the markets in which AVITA Medical operates, trends, demand and expectations for its products and technology, its expected financial conformance expensive position in the market. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by the forward-looking statements.

謝謝你，運營商。歡迎來到 AVITA Medical 2022 年第四季度財報電話會議。在我們開始之前，讓我提醒您，本次電話會議將包括 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述。本次電話會議上做出的與歷史事實無關的所有陳述都應被視為前瞻性——展望聲明，包括有關 AVITA Medical 經營的市場、趨勢、需求和對其產品和技術的期望、其預期的財務合規性在市場中的昂貴地位的聲明。這些陳述既不是承諾也不是保證，涉及已知和未知的風險和不確定性，這些風險和不確定性可能導致實際結果、業績或成就與前瞻性陳述明示或暗示的任何結果、業績或成就存在重大差異。

Please review AVITA Medical's most recent filings with the SEC, particularly the risks described in AVITA Medical's annual report on Form 10-K for the year ended December 31, 2022, for additional information. Any forward-looking statements provided during this call, including projections for future performance, are based on management's expectations as of today. AVITA Medical undertakes no obligation to update these statements, except as required by applicable law. AVITA Medical's press release for fourth quarter 2020 results is available on its website, www.AVITAmedical.com, under the Investors Section and includes additional details about its financial results.

請查看 AVITA Medical 向 SEC 提交的最新文件，特別是 AVITA Medical 截至2022年12月31日止年度的10-K 表格年度報告中描述的風險，以獲取更多信息。本次電話會議期間提供的任何前瞻性陳述，包括對未來業績的預測，均基於管理層截至今日的預期。除非適用法律要求，否則 AVITA Medical 不承擔更新這些聲明的義務。 AVITA Medical 的 2020 年第四季度業績新聞稿可在其網站 www.AVITAMedical.com 的投資者部分獲取，其中包括有關其財務業績的更多詳細信息。

AVITA Medical's website also has the latest SEC filings, which you are encouraged to review. A recording of today's call will be available on AVITA Medical website by 5:00 p.m. Pacific Time today. Joining me on today's call are Jim Corbett, Chief Executive Officer; and Sean Ekins, Acting Chief Financial Officer. I'll now turn the call over to Jim for his comments.

AVITA Medical 的網站也有最新的 SEC 文件，我們鼓勵您查看這些文件。今天的通話錄音將於下午 5:00 之前在 AVITA Medical 網站上提供。今天太平洋時間。與我一起參加今天電話會議的還有首席執行官 Jim Corbett；以及代理首席財務官 Sean Ekins。我現在將電話轉給吉姆徵求他的意見。

Thank you, Caroline. Good afternoon, everyone, and thank you for joining us today. I will begin today's call by discussing highlights for the fourth quarter and full year as well as our expectations and guidance for 2023. Sean will then provide more detailed commentary on our financial performance before opening the call to Q&A.

謝謝你，卡羅琳。大家下午好，感謝您今天加入我們。我將通過討論第四季度和全年的亮點以及我們對 2023 年的預期和指導來開始今天的電話會議。然後，肖恩將在開始問答電話會議之前就我們的財務業績提供更詳細的評論。

To begin with, we had a strong top line commercial revenue performance with $9.4 million in Q4 2022, which is a 37% increase over the same period in the prior year. For the full year 2022, our commercial revenue was $34.1 million, which was a 36% increase over the prior year. As a reminder, commercial revenue includes all global revenue and excludes the $100,000 BARDA revenue recognized in the quarter and $400,000 for the year.

首先，我們在 2022 年第四季度的商業收入表現強勁，達到 940 萬美元，比去年同期增長 37%。 2022 年全年，我們的商業收入為 3410 萬美元，比上年增長 36%。提醒一下，商業收入包括所有全球收入，不包括本季度確認的 100,000 美元 BARDA 收入和全年 400,000 美元。

I'd like to personally congratulate our field sales team for their successful 2022. I'd like to provide an update on the initial priorities I discussed on our third quarter call. With respect to our 2 pending applications with the FDA, our PMA supplement for soft tissue was submitted on the 9th of December, and our PMA application for Vitiligo was submitted on the 16th. Both submissions independently have breakthrough device designation. As such, we have expedited review for both programs, which have each met or exceeded the primary endpoints in their respective studies used to support the applications. The 180-day review cycle would imply June approvals.

我想親自祝賀我們的現場銷售團隊在 2022 年取得的成功。我想提供有關我在第三季度電話會議上討論的初步優先事項的最新情況。關於我們向 FDA 提出的 2 項未決申請，我們的軟組織 PMA 補充劑於 12 月 9 日提交，我們的白斑病 PMA 申請於 16 日提交。兩項提交均獨立獲得突破性設備稱號。因此，我們加快了對這兩個項目的審查，這兩個項目在各自用於支持申請的研究中都達到或超過了主要終點。 180 天的審查週期意味著 6 月批准。

Notably, the soft tissue PMA supplement, which significantly broaden our existing burns market and allow us to leverage our existing burns infrastructure. Our team has developed the commercial plans to maximize the soft tissue opportunity and to drive synergies between burns and soft tissue repair, which will drive our growth over the next 3-plus years. These synergies are significant and important.

值得注意的是，軟組織 PMA 補充劑顯著拓寬了我們現有的燒傷市場，並使我們能夠利用現有的燒傷基礎設施。我們的團隊制定了商業計劃，以最大限度地利用軟組織機會並推動燒傷和軟組織修復之間的協同作用，這將推動我們在未來 3 年多的時間裡實現增長。這些協同作用非常重要。

First, soft tissue repair utilizes the same inpatient reimbursement and outpatient codes as burns. As such, both in-hospital reimbursement through a DRG and outpatient reimbursement through a transitional pass-through code will be effective immediately upon FDA approval for soft tissue indications.

首先，軟組織修復使用與燒傷相同的住院報銷和門診代碼。因此，通過 DRG 進行的住院報銷和通過過渡傳遞代碼進行的門診報銷都將在 FDA 批准軟組織適應症後立即生效。

Second, of the nearly 150 burn centers that we are presently approved to sell in, approximately half are also either Level 1 or Level 2 trauma centers, which means that these hospitals will have immediate access to the expanded label upon approval. Additionally, we will be adding approximately 1,000 hospital call points that are Level 1 and Level 2 trauma centers to our current 150 or so hospital call points.

其次，在我們目前獲准銷售的近 150 個燒傷中心中，大約一半也是 1 級或 2 級創傷中心，這意味著這些醫院將在獲得批准後立即使用擴展標籤。此外，在我們目前約 150 個醫院呼叫點的基礎上，我們將增加大約 1,000 個一級和二級創傷中心的醫院呼叫點。

Third, within the U.S. inpatient burn market, we are configured to only call on the U.S. burn centers where 70% of the RECELL eligible cases are treated. The expansion into Level 1 and Level 2 trauma centers positions our sales force to capture the remaining 30% of the burn market. In the second quarter, we will begin calling on these trauma centers. We will use this opportunity to begin promoting RECELL for burns in these level 1 and level 2 trauma centers and begin seeking value analysis committee approval that will allow for a more rapid soft tissue repair launch in July.

第三，在美國住院燒傷市場，我們被配置為只拜訪美國燒傷中心，那裡有 70% 的 RECELL 合格病例得到治療。向 1 級和 2 級創傷中心的擴展使我們的銷售人員能夠佔領剩餘 30% 的燒傷市場。在第二季度，我們將開始拜訪這些創傷中心。我們將利用這個機會開始在這些 1 級和 2 級創傷中心推廣用於燒傷的 RECELL，並開始尋求價值分析委員會的批准，這將允許在 7 月更快地啟動軟組織修復。

Together, these synergies offer us the unique opportunity to prepare for the full commercial launch of soft tissue on July 1, 2023, as we should have immediate access to our expanded indications and that approvals in many of these hospitals already upon PMA supplement approval.

總之，這些協同作用為我們提供了一個獨特的機會，可以為 2023 年 7 月 1 日軟組織的全面商業發布做準備，因為我們應該可以立即獲得我們擴大的適應症，並且在許多這些醫院中已經獲得 PMA 補充批准。

Further, during the second quarter, we will initiate the planned expansion of our U.S. field sales organization. Currently, we have 30 field salespeople that we will be expanding to approximately 70 field sales people, which includes both direct sales and clinical roles. This is ahead of the expected June approval of our PMA supplement for soft tissue repair, such that the team is in place and trained at launch. This will result in a peak operating expense as a percent of revenue in Q3 2023.

此外，在第二季度，我們將啟動美國現場銷售組織的擴張計劃。目前，我們有 30 名現場銷售人員，我們將擴大到大約 70 名現場銷售人員，其中包括直接銷售和臨床角色。這比預期的 6 月批准我們用於軟組織修復的 PMA 補充劑提前，這樣團隊就位並在發佈時接受培訓。這將導致 2023 年第三季度營業費用佔收入的百分比達到峰值。

I emphasize that our contribution margin on new field sales professional is breakeven with approximately 5 RECELL kits sold per month per individual. Currently, the average productivity of a direct sales rep exceeds 20 kits per month. This is what I like to call weaponizing our gross profit to enhance market adoption and penetration where the sales force expansion pays for itself quickly.

我強調，我們對新現場銷售專業人員的邊際貢獻是收支平衡的，每個人每月售出大約 5 個 RECELL 套件。目前，直銷代表的平均生產力超過每月 20 個套件。這就是我喜歡將我們的毛利潤武器化以提高市場採用率和滲透率的方式，在這種情況下，銷售人員的擴張可以迅速收回成本。

For the vitiligo indication, we expect PMA approval in June 2023 as well. We are in process of pursuing in-office reimbursement through the AMA CPT code process. It is our goal to secure Medicare reimbursement by January 2025. During the interim period, we will be implementing cash pay for vitiligo patients and physician-sponsored studies to build our podium presence for an intended commercial launch in January 2025.

對於白癜風適應症，我們預計 PMA 也會在 2023 年 6 月獲得批准。我們正在通過 AMA CPT 代碼流程尋求在職報銷。我們的目標是到 2025 年 1 月確保 Medicare 報銷。在此期間，我們將為白癜風患者和醫生贊助的研究實施現金支付，以便為 2025 年 1 月的預期商業發佈建立我們的領獎台。

During our last call, I also commit to providing an update on our automation program. By way of background, currently, the disaggregation of cells from the autologous sample is done manually and requires frequent training by our field sales team. Our automation device is designed to automate that disaggregation, which will require less training by our sales team and operating room staff and will allow us to better leverage selling time by our field organization. We plan to submit our PMA supplement application to the FDA by June 30 of this year. Just like with soft tissue, we will be subject to the 180-day review cycle, and we project approval by January 2024.

在我們上次通話中，我還承諾提供有關我們自動化程序的更新。作為背景，目前，自體樣本中細胞的分離是手動完成的，需要我們的現場銷售團隊進行頻繁培訓。我們的自動化設備旨在使這種分解自動化，這將需要我們的銷售團隊和手術室員工進行更少的培訓，並使我們能夠更好地利用現場組織的銷售時間。我們計劃在今年 6 月 30 日前向 FDA 提交我們的 PMA 補充申請。就像軟組織一樣，我們將接受 180 天的審查週期，並在 2024 年 1 月之前獲得項目批准。

As reported in Q4, we have begun our launch in Japan through our partner, COSMOTEC. Early returns are very positive. These sales are recognized in U.S. dollars, and we will report Japan revenues in our footnotes in the foreign revenue line. During 2023, we expect that Japan will account for over 90% of those international revenues. With respect to our broader international strategy, it remains on our agenda to communicate our strategy during the November Q3 earnings call. With respect to 2023 guidance, as communicated, we will be providing updated annual and quarterly guidance every quarter. Our annual revenue guidance for 2023 is expected to be in the range of $49 million to $51 million, which would be at midpoint of guidance, 47% growth over 2022.

正如第四季度報導的那樣，我們已經開始通過我們的合作夥伴 COSMOTEC 在日本推出產品。早期回報非常積極。這些銷售額以美元確認，我們將在國外收入行的腳註中報告日本的收入。到 2023 年，我們預計日本將佔這些國際收入的 90% 以上。關於我們更廣泛的國際戰略，在 11 月第三季度的財報電話會議上傳達我們的戰略仍然在我們的議程上。關於 2023 年指南，正如所傳達的那樣，我們將每季度提供更新的年度和季度指南。我們對 2023 年的年度收入指導預計在 4900 萬美元至 5100 萬美元之間，處於指導的中點，比 2022 年增長 47%。

For the first quarter of 2023, we expect commercial revenues to be between $10 million and $11 million. At the midpoint of this guidance, we would be up over 40% over the prior year. As I have outlined, 2023 will be the year of inflection for AVITA Medical, transforming our business to encompass multiple indications and dramatically expanding our growth trajectory. Our regulatory and commercial teams are making great strides, and I look forward to updating you on our progress on future calls. With that, I'd like to turn it over to Sean Ekins acting Chief Financial Officer.

對於 2023 年第一季度，我們預計商業收入將在 1000 萬美元至 1100 萬美元之間。在此指引的中點，我們將比上一年增長 40% 以上。正如我所概述的那樣，2023 年將是 AVITA Medical 的轉折之年，將我們的業務轉變為涵蓋多種適應症，並顯著擴大我們的增長軌跡。我們的監管和商業團隊正在取得長足進步，我期待著在未來的電話會議上向您通報我們的最新進展。有了這個，我想把它交給肖恩埃金斯代理首席財務官。

Thank you, Jim. In the 3 months ended December 31, 2022, our commercial revenue, which excludes BARDA revenue increased by 37% to $9.4 million compared to $6.8 million in the same period in 2021. Total revenue, which includes BARDA revenue increased by 36% to $9.5 million compared to $6.9 million in the same period in 2021. Gross profit margin was 86% compared to 88% for the fourth quarter of 2021. Total operating expenses for the quarter increased by 2% to $15 million compared to $14.8 million in the same period in 2021.

謝謝你，吉姆。在截至 2022 年 12 月 31 日的三個月中，我們的商業收入（不包括 BARDA 收入）增長了 37%，達到 940 萬美元，而 2021 年同期為 680 萬美元。包括 BARDA 收入在內的總收入增長了 36%，達到 950 萬美元與 2021 年同期的 690 萬美元相比。毛利率為 86%，而 2021 年第四季度為 88%。本季度總運營費用增長 2% 至 1500 萬美元，而 2021 年同期為 1480 萬美元2021.

The increase in operating expenses is attributable to increased selling expenses, pre-commercialization costs and salaries and benefits, partially offset by lower research and development and share-based compensation expenses.

營業費用的增加是由於銷售費用、商業化前成本以及工資和福利的增加，部分被較低的研發和基於股份的補償費用所抵消。

Higher selling costs are attributable to increased commissions, travel costs and training events associated with increased sales activity, increased pre-commercialization costs are driven by activities related to future resale launches in soft tissue repair and vitiligo.

更高的銷售成本歸因於與銷售活動增加相關的佣金、差旅費用和培訓活動的增加，預商業化成本的增加是由與軟組織修復和白斑病未來轉售發布相關的活動推動的。

Higher salaries and benefits are driven by the expansion of our workforce to support the overall operation. Research and development costs were lower due to the following: -- the pediatric burn study was closed for enrollment. Soft tissue repair and vitiligo trial participants were in a less costly fall phases this period compared to more costly recruitment and treatment phases in the prior period, along with lower expenses for sponsored research agreements toward pipeline development.

為支持整體運營而擴大員工隊伍推動了更高的薪水和福利。研發成本較低的原因如下： -- 兒科燒傷研究已停止招募。與前期成本更高的招募和治療階段相比，軟組織修復和白斑病試驗參與者在這一時期處於成本更低的秋季階段，同時用於管道開發的讚助研究協議的費用也更低。

In addition, we had lower development expenses in the current year from ongoing development of next-generation devices for automated preparation of Spray-On Skin cells as we are currently in a lower-cost project phase compared to the prior year. Share-based compensation expenses were lower due to reversal in the current period of a previously recognized expense for unvested awards related to the termination of a former Executive Officer.

此外，由於我們目前處於與上一年相比成本較低的項目階段，因此我們在本年度的開發費用較低，因為我們正在開髮用於自動製備噴塗皮膚細胞的下一代設備。基於股份的補償費用較低，原因是在本期逆轉了先前確認的與前執行官解僱相關的未歸屬獎勵費用。

Net loss decreased by 37% to $5.4 million or $0.21 per share compared to a net loss of $8.5 million or $0.34 per share in the same period in 2021. Adjusted EBITDA loss decreased by 39% to $4 million compared to a loss of $6.5 million in the same period in 2021.

淨虧損減少 37% 至 540 萬美元或每股 0.21 美元，而 2021 年同期為淨虧損 850 萬美元或每股 0.34 美元。調整後的 EBITDA 虧損減少 39% 至 400 萬美元，而 2021 年同期虧損 650 萬美元2021年同期。

For the full year ended December 31, 2022, our commercial revenue increased by 36% to $34.1 million compared to $25.1 million in the same period in 2021. The growth in commercial revenues was largely driven by deeper penetration within individual customer accounts, along with the commencement of commercial sales with our partner, COSMOTEC in Japan.

截至 2022 年 12 月 31 日的全年，我們的商業收入增長了 36%，達到 3410 萬美元，而 2021 年同期為 2510 萬美元。商業收入的增長主要是由於個人客戶賬戶的更深入滲透，以及與我們的合作夥伴 COSMOTEC 在日本開始商業銷售。

Total revenue increased by 4% to $34.4 million compared to $33 million in the same period in 2021. Gross profit margin was 82%, relatively flat compared to the same period in 2021. Total operating expenses increased by 10% to $59.1 million compared to $53.6 million in the same period in 2021. The increase in operating expenses is attributable to higher salaries and benefits, pre-commercialization costs, selling costs, share-based compensation expenses, partially offset by lower research and development expenses. Higher salaries and benefits were primarily a result of the expansion of our commercial team, along with an increase in our workforce to support the overall operations.

與 2021 年同期的 3300 萬美元相比，總收入增長 4% 至 3440 萬美元。毛利率為 82%，與 2021 年同期相比持平。總運營費用增長 10% 至 5910 萬美元，而 2021 年同期為 53.6 美元2021年同期為百萬美元。運營費用的增加是由於工資和福利、商業化前成本、銷售成本、基於股份的補償費用增加，部分被研發費用減少所抵消。更高的薪水和福利主要是由於我們的商業團隊的擴張，以及我們為支持整體運營而增加的員工人數。

In addition, we incurred severance costs in the current year associated with the termination of a former Executive Officer. Higher pre-commercialization costs are driven by activities related to future reset launches in soft tissue repair and vitiligo. Higher selling costs are attributable to increased commissions, travel costs and training events due to increased sales activity.

此外，我們在本年度發生了與解僱前執行官相關的遣散費。更高的預商業化成本是由與未來軟組織修復和白斑病重置啟動相關的活動推動的。更高的銷售成本歸因於銷售活動增加導致的佣金、差旅費和培訓活動的增加。

Share-based compensation expenses were higher in the current year driven by new equity grants, partially offset by a reversal of a previously recognized expense from vested awards related to the termination of a former Executive Officer. Research and development costs were lower due to the following. The pediatric burn study was closed for enrollment, soft tissue repair and vitiligo trial participants were in less costly follow-up phases in this period compared to more costly recruitment and treatment phases in the prior period and a lower expense for sponsored research towards pipeline development in the current period. This is partially offset by higher development expenses in the current year from ongoing development of next-generation devices for an automated preparation of Spray-On Skin sales as compared to the prior year due to early prototype development and testing.

在新的股權授予的推動下，本年度基於股份的補償費用較高，部分被先前確認的與前執行官解僱相關的既得獎勵費用的逆轉所抵消。由於以下原因，研發成本較低。兒科燒傷研究已結束招募，軟組織修復和白斑病試驗參與者在此期間處於成本較低的後續階段，與前期成本較高的招募和治療階段相比，贊助研究的管道開發費用較低當前期間。由於早期原型開發和測試，與上一年相比，與上一年相比，用於自動準備皮膚噴塗銷售的下一代設備的持續開發導致本年度更高的開發費用部分抵消了這一點。

Net loss was $26.7 million or $1.07 per share compared to a net loss of $25.1 million or $1.03 per share in the same period in 2021. Adjusted EBITDA loss was $19 million compared to a loss of $18.1 million in the same period in 2021. A table reconciling non-GAAP measures is included in today's press release for reference. With that, we thank you for your time. And now I'll turn the call back to the operator for your questions.

淨虧損為 2670 萬美元或每股 1.07 美元，而 2021 年同期為淨虧損 2510 萬美元或每股 1.03 美元。調整後的 EBITDA 虧損為 1900 萬美元，而 2021 年同期為虧損 1810 萬美元。表格協調非 GAAP 措施包含在今天的新聞稿中以供參考。有了這個，我們感謝您的時間。現在我會把電話轉回給接線員來回答你的問題。

(Operator Instructions) Please stand by while we compile the Q&A roster. Our first question comes from the line of Joshua Jennings of Cowen.

（操作員說明）在我們編制問答名冊時請稍候。我們的第一個問題來自 Cowen 的 Joshua Jennings。

Good afternoon. Congrats on the strong finish to (technical Difficulty 0:16:25] confidence in the outlook and the call for inflection in 2023. Jim and Sean. One was hoping to ask about guidance, full year and first quarter to start. And if there's any way you can maybe help us think through your outlook for the core burn business, RECELL burn business and the growth you anticipate and then maybe any assumptions for soft tissue contributions for the full year. And then for the first quarter, just it's a nice sequential step up. If you can just remind us about seasonality trends in the burn market in the United States. And is there some seasonality tailwinds? Or is this just momentum from Q4 carrying into these first 2 months of '23 already and giving the (inaudible) that nice sequential step-up in Q1. And I would follow up.

下午好。祝賀（技術難度 0:16:25）對前景的信心和對 2023 年拐點的呼籲的強勁結束。吉姆和肖恩。有人希望詢問指導，全年和第一季度開始。如果有您可以通過任何方式幫助我們思考您對核心燒傷業務、RECELL 燒傷業務和您預期的增長的展望，然後可能對全年軟組織貢獻的任何假設。然後是第一季度，這是一個很好的連續加強。如果你能提醒我們美國燃燒市場的季節性趨勢。是否有一些季節性順風？或者這只是從第四季度開始進入 23 年前兩個月的勢頭，並給出（聽不清）在第一季度的良好順序升級。我會跟進。

Thanks, Josh. That was a very distinct single question. Let me take it on. I'm just teasing. So first of all, with regard to the burn business, let's start with that. We saw sequential growth Q4 to Q1, clearly. And that does not reflect seasonality. I'll just give you some data. And if you look at claims data for the last 3 years by quarter contribution to the year and you average them, the average burn admits that are RECELL eligible sound like this, 25, 25, 26, 24. So the very minor changes between Q4 and Q3, and its 1-point in terms of annual admit. So there's really not a seasonality reality that we can define from the claims data. So what we're therefore seeing is growth and penetration. So that's the first element, I think, to your question.

謝謝，喬希。這是一個非常獨特的單一問題。讓我來承擔。我只是在開玩笑。所以首先，關於刻錄業務，讓我們從它開始。我們清楚地看到了第四季度到第一季度的連續增長。這並不反映季節性。我只是給你一些數據。而且，如果您按季度對年度的貢獻查看過去 3 年的索賠數據，然後對它們進行平均，則平均燒傷承認符合 RECELL 條件的數字聽起來像這樣，25、25、26、24。因此，第四季度之間的變化非常小和Q3，以及它在年度錄取方面的1分。因此，我們確實無法從索賠數據中定義季節性現實。因此，我們因此看到的是增長和滲透。所以我認為這是你問題的第一個要素。

What we expect to see through the course of the year, Q1 and Q2 is continued adoption and the number of users who use it multiple times per month increasing as we -- as our evidence continues to grow, the experience with burn surgeons continues to get validated in terms of tissue sparing and healing and early exit from the hospital. That's really taking its own -- its course and our field sales team has done a really terrific job.

我們希望在今年第一季度和第二季度看到的是繼續採用，並且每月多次使用它的用戶數量隨著我們的增加而增加——隨著我們的證據不斷增加，燒傷外科醫生的經驗不斷增加在組織保留和癒合以及早期出院方面得到驗證。這真的很成功——它的課程和我們的現場銷售團隊做得非常出色。

What happens as we move, and I'm staying on burns for a second -- into the second half, depending on your math, of the burn market, which is about 10,000 of the 35,000 admits are in soft tissue repair. And they are in -- excuse me, 1/3 of them are in level 1 and 2 trauma centers, okay? That 10,000 cases, we have not been comparing to call on. So one of our expectations as we move through the year is that adoption will come our way because, of course, our sales team will be calling on those physicians with the very strong accumulated evidence and commercial experience we've had focusing only on burn centers. So that's a really big driver for the year in the burns market.

當我們移動時會發生什麼，我在燒傷上停留一秒鐘——根據你的數學，進入燒傷市場的下半場，在 35,000 名承認的人中，大約有 10,000 人從事軟組織修復。他們在——對不起，其中 1/3 在 1 級和 2 級創傷中心，好嗎？那10,000例，我們一直沒有比較來調用。因此，我們在這一年中的一個期望是採用我們的方式，因為當然，我們的銷售團隊將拜訪那些積累了非常有力的證據和商業經驗的醫生，我們只專注於燒傷中心.所以這是今年燒傷市場的一個非常大的推動力。

We're feeling increasingly comfortable with our soft tissue repair PMA supplement in terms of timing we're having a very productive interaction with the FDA. We're not getting surprises of any type. And we -- as you know, are on the Breakthrough Device designation path. And that is, of course, giving us expedited review, and we don't stop the clock unless there's a material deficiency. So that has caused us to bet, so to speak, on that June approval and July 1 readiness. So with that readiness, during Q2, we're expanding, as I mentioned, our field force from approximately 30 to 70. So during the second half, we'll build increasing momentum in soft tissue repair, it will have a curve associated with it. For example, we will have soft tissue repair indication available and VAC approved in virtually half of the burn centers, which are Level 1 and Level 2 qualified.

就我們與 FDA 進行非常富有成效的互動的時間而言，我們對我們的軟組織修復 PMA 補充劑感到越來越滿意。我們沒有得到任何類型的驚喜。我們——如您所知，正處於突破性設備指定路徑上。當然，這就是給我們加速審查，除非存在實質性缺陷，否則我們不會停止計時。所以這讓我們打賭，可以說，6 月的批准和 7 月 1 日的準備就緒。因此，隨著準備就緒，在第二季度，正如我提到的，我們正在將現場力量從大約 30 擴大到 70。所以在下半年，我們將在軟組織修復方面建立越來越大的勢頭，它將有一條與它。例如，我們將在幾乎一半的燒傷中心提供軟組織修復適應症和 VAC 批准，這些燒傷中心具有 1 級和 2 級資格。

We'll also begin the VAC process during Q2 in a number of Level 1 and 2 trauma centers using burns as our indication for that process. The bit uncertain at the moment, exactly how many we'll get through VAC during Q2, which certainly will have a running start. And our sales team will be fully in place and trained for that July 1 launch. So we'll scale up during the second half in soft tissue. And of course, what will really be exciting, quite honestly, is our exit rate in Q4 because it's going to really position us for high growth in 2024.

我們還將在第二季度在許多 1 級和 2 級創傷中心開始 VAC 流程，使用燒傷作為我們對該流程的指示。目前有點不確定，我們將在第二季度通過 VAC 獲得多少，這肯定會有一個良好的開端。我們的銷售團隊將為 7 月 1 日的發布全面到位並接受培訓。所以我們將在下半年擴大軟組織的規模。當然，老實說，真正令人興奮的是我們在第四季度的退出率，因為它將真正使我們在 2024 年實現高增長。

Thanks for walking us through that. I appreciate it. And just a follow-up on the build-out of the sales team. Just was hoping to better understand and where you're recruiting these reps from? And are there any challenges to getting to that 70 number in Q2? Or do you feel like that's a pretty straight shot based on experience to date?

感謝您引導我們完成這些。我很感激。只是跟進銷售團隊的建設。只是希望更好地了解您從哪裡招募這些代表？在第二季度達到 70 個數字是否有任何挑戰？還是根據迄今為止的經驗，您覺得這是一個非常直接的鏡頭？

Thanks, Josh. It is a qualitative evaluation on my part, but I don't mind sharing with it. First of all, we have a very strong pipeline of candidates. I think the success that AVITA has been experiencing in the marketplace translates well the expanding indications that we have and that are coming, that translates well in terms of recruiting. The fact that we are well capitalized and have the capital to execute a growth strategy is very appreciated because a lot of companies don't have that. So our early returns are that we've largely filled the management roles that we're expanding into or have identified them. We've begun interviewing the salespeople. We have a great pipeline of really high-quality candidates. They're coming from a number of places, but they come from related wound care companies. They come from MedSurg type background. So we want salespeople who are experienced and comfortable in the OR, and we're finding really a strong pipeline of candidates. So we're quite confident that we're going to get our team in place and have adequate time to train them.

謝謝，喬希。這是我的定性評估，但我不介意與它分享。首先，我們有非常強大的候選人渠道。我認為 AVITA 在市場上取得的成功很好地轉化了我們已經和即將到來的不斷擴大的跡象，這在招聘方面也很好地轉化了。事實上，我們資本充足，有資本執行增長戰略，這是非常值得讚賞的，因為很多公司都沒有。因此，我們的早期回報是，我們已經在很大程度上填補了我們正在擴展或已經確定的管理角色。我們已經開始採訪銷售人員。我們擁有大量真正高質量的候選人。他們來自很多地方，但他們來自相關的傷口護理公司。他們來自 MedSurg 類型的背景。因此，我們需要在 OR 中經驗豐富且舒適的銷售人員，並且我們正在尋找真正強大的候選人渠道。因此，我們非常有信心讓我們的團隊就位，並有足夠的時間來培訓他們。

It is a big scale up for us. And our commercial team is really stepping into this one. So it's really kind of inspiring to watch them do it.

這對我們來說是一個很大的擴展。我們的商業團隊確實正在涉足這一領域。所以看著他們這樣做真的很鼓舞人心。

Excellent -- great to hear.

太棒了——很高興聽到。

Okay. (Operator Instructions) Our next question comes from the line of Phillip Dantoin of Piper.

好的。 （操作員說明）我們的下一個問題來自 Piper 的 Phillip Dantoin。

This is Phil on for Matt. And congrats on the excellent quarter. I guess just for starters, given the expected inflection here in 2023 and your commentary, how durable do you see this, call it, 45% growth in the '24 -'25 time frame? And is it wrong to say that you're exiting 2023 at nearly 50% growth...

這是 Phil on for Matt。並祝賀出色的季度。我想對於初學者來說，考慮到 2023 年的預期拐點和您的評論，您認為這在 24 - 25 年的時間框架內增長 45% 的持久性如何？說您將以近 50% 的增長率退出 2023 年是錯誤的嗎……

Yes. Thanks, Philip. First, at midpoint, it's 47%, not 45%, just to make a fine point of it. I think that implies a greater than 50% exit rate in Q4, you're correct. So how durable do I think it is? I think it's quite durable. The exit rate will cause us to have to expand more into 2024 as well in terms of our commercial coverage. So I think we have some very strong growth years ahead of us with soft tissue and burns on their own, not adding to either an international expansion or a launch of the vitiligo in January 25.

是的。謝謝，菲利普。首先，在中點，它是 47%，而不是 45%，只是為了說明這一點。我認為這意味著第四季度的退出率超過 50%，你是對的。那麼我認為它有多耐用？我認為它非常耐用。退出率將導致我們不得不在 2024 年以及我們的商業覆蓋範圍內進行更多擴展。因此，我認為我們在軟組織和自身燒傷方面有一些非常強勁的增長，而不是在 1 月 25 日增加國際擴張或白斑病的推出。

That's really helpful. And I guess one more for me. On spend, given the rapid increase in the sales force here in Q2, what cash burn expected to look like? And how do you think about capitalization moving forward? I appreciate the commentary that OpEx should keep in Q3, but what should we be thinking about there?

這真的很有幫助。我猜還有一個適合我。在支出方面，鑑於第二季度這裡的銷售人員迅速增加，預計現金消耗情況如何？您如何看待未來的資本化？我很欣賞 OpEx 應該在第三季度保留的評論，但我們應該在那裡考慮什麼？

Well, clearly, we're making an investment in market growth. Now go back to our 83% gross profit and how we look at each of those investments. Contribution margin for a sales rep gets covered by 5 resale sales a month. So for us, that is from a -- looking at our burns experience, each rep averages well over 20 per month. So we do have an expectation about when they cross over, and it is -- without getting precise about it because it does have variability, it's a number of months, not a year that they will cross over. So I think from a cash burn point of view, we feel quite comfortable. For example, we're absent investments in Vitiligo or international, we expect to end '24 with an excess of $30 million of cash. So that will be after another expansion and another growth year. So we feel very comfortable with our capital position as it is today.

嗯，很明顯，我們正在對市場增長進行投資。現在回到我們 83% 的毛利潤以及我們如何看待這些投資中的每一項。銷售代表的邊際收益由每月 5 次轉售銷售所覆蓋。所以對我們來說，這是從——看看我們的燒傷經歷來看，每個代表平均每月超過 20 次。所以我們確實對他們何時跨越有一個期望，而且它是 - 沒有得到精確的因為它確實有可變性，他們會跨越幾個月，而不是一年。所以我認為從燒錢的角度來看，我們感覺很舒服。例如，我們缺少對 Vitiligo 或國際的投資，我們預計到 24 年底將擁有超過 3000 萬美元的現金。因此，這將是又一次擴張和又一個增長年。因此，我們對今天的資本狀況感到非常滿意。

Our next question comes from the line of Ryan Zimmerman of BTIG.

我們的下一個問題來自 BTIG 的 Ryan Zimmerman。

This is Saab on for Ryan. This next one is on the Japanese market and the partnership with COSMOTEC. Do you expect to meaningful contributions from the Japanese market in 2023? And how should we think about that given the guidance you've provided? Then I have a follow-up as well.

這是 Ryan 的 Saab。下一個是關於日本市場以及與 COSMOTEC 的合作夥伴關係。您預計 2023 年日本市場會做出有意義的貢獻嗎？鑑於您提供的指導，我們應該如何考慮？然後我也有一個後續行動。

Well, first of all, our early returns in Japan are going well. We've performed in the territory of in excess of hundreds of patients so far. That said, we do not have enough experience with them that we're giving specific guidance on Japan, although you'll note that it is, even at a couple of hundred in the short time it's been, we do expect a strong performance from Japan, remembering that we recognized 40% of the selling price. So on one hand it's a very high gross -- high operating profit type sale. It's also lower per case in revenue, but lower expense to produce. So I think in the coming quarter, my objective in my conversations with COSMOTEC is to be in a place where we can project forward our expectations for Japan. We're just not quite ready to express that in this moment.

好吧，首先，我們在日本的早期回歸進展順利。到目前為止，我們已經在超過數百名患者的領土上進行了表演。也就是說，我們沒有足夠的經驗來提供有關日本的具體指導，儘管你會注意到它是，即使在短時間內有幾百個，我們確實期望來自日本，記得我們承認40%的售價。因此，一方面，這是一個非常高的毛——高營業利潤類型的銷售。每箱收入也較低，但生產費用較低。因此，我認為在下個季度，我與 COSMOTEC 對話的目標是讓我們可以預測我們對日本的期望。我們現在還沒有準備好表達這一點。

That's very helpful. The next one is on vitiligo. You indicated that vitiligo is likely to still be approved in June of 2023, with insurance reimbursement established in January of 2025. Can you provide us any updates on conversations you've had with insurance payers as you look to establish reimbursement for vitiligo.

這很有幫助。下一篇是關於白癜風的。您表示白癜風可能仍會在 2023 年 6 月獲得批准，保險報銷將於 2025 年 1 月確定。您能否向我們提供您在尋求建立白癜風報銷時與保險付款人進行的對話的任何更新。

Yes, you bet. Actually, we've had no formal conversations with payers at this time. They, of course, dedicate their time to products that are ready for market, and we are still a few months away from that. Our expectation is, of course, that what we're looking for is to establish RECELL as an in-office treatment alternative. So that is a process that is embedded in sort of the reimbursement world. So it's kind of a complex question to answer.

是的，你打賭。實際上，我們目前還沒有與付款人進行過正式對話。當然，他們將時間投入到準備上市的產品上，而我們離那還有幾個月的時間。當然，我們的期望是，我們正在尋找的是將 RECELL 確立為一種在辦公室治療的替代方案。所以這是一個嵌入在某種報銷世界中的過程。所以這是一個需要回答的複雜問題。

We haven't gone to private insurers yet, will, in fact, go to CMS first. So that will all happen post -- later this year.

我們還沒有去私人保險公司，事實上，我們會先去 CMS。所以這一切都將在今年晚些時候發生。

Our next question comes from the line of Brooks O'Neil of Lake Street Capital Markets.

我們的下一個問題來自 Lake Street Capital Markets 的 Brooks O'Neil。

I was hoping you might talk a little bit about what your expectations are with regard to, sort of, the dynamics in the soft tissue market relative to your experience with large burns in terms of, kind of, number of cases that RECELL might be appropriate for, let's say, per week or per month in the centers you're going to attack and how many kits per case. Some of those things would help us to get a good feel for sort of how you view the opportunity in soft tissue.

我希望你能談談你對軟組織市場動態的期望，相對於你在 RECELL 可能適用的案例數量方面的大面積燒傷經歷比方說，每週或每月在您要攻擊的中心以及每個案例中有多少工具包。其中一些事情將幫助我們更好地了解您如何看待軟組織中的機會。

Yes. Thanks, Brooks. Let me try and work through that thought because there's a number of questions I think you raised. So first and foremost, in soft tissue repair and reconstruction which will be the label, we believe, the cases themselves will utilize less RECELL kits per patient. So in large burns, it's common for one or more kits to be used on a patient where, in the soft tissue market, that will happen quite less often. So that's, I think, the first part of your question.

是的。謝謝，布魯克斯。讓我嘗試解決這個問題，因為我認為您提出了很多問題。因此，首先也是最重要的是，在軟組織修復和重建中，我們相信，病例本身將對每位患者使用更少的 RECELL 套件。因此，在大面積燒傷中，通常會在患者身上使用一個或多個套件，而在軟組織市場上，這種情況很少發生。所以我認為這是你問題的第一部分。

The second is the number of patients to be treated. It's in the order of 4x available RECELL viable candidates relative to burns. So that is a really substantial increase, and there's a lot of different applications that we will have access to with this broader indication. So in a Level 1 trauma center, for example, there is a wide range of things that patients that might present themselves. For example, there will be burns patients who present that will happen. They won't be the large greater than 30% TBSA burns, but there'll be smaller burns nonetheless need treatment. We'll see necrotizing bacteria. We'll see degloving. We'll see abrasions. We'll see acute wounds.

第二是要治療的病人數量。相對於燒傷，它大約是 4 倍可用的 RECELL 可行候選者。所以這是一個非常可觀的增長，並且我們將可以通過這種更廣泛的適應症獲得許多不同的應用程序。因此，例如，在 1 級創傷中心，患者可能會出現各種各樣的事情。例如，會有燒傷患者出現這種情況。它們不會是大於 30% 的 TBSA 燒傷，但會有較小的燒傷，但仍需要治療。我們會看到壞死細菌。我們會看到脫套。我們會看到擦傷。我們會看到急性傷口。

So there's so many applications, which is, on one hand, a great market opportunity. It requires, on the other hand, extensive training and focus on the part of our sales team. So we really will be moving from the big accounts to the small. And the reason, of course, is when you camp out in the big accounts, you get access to all those indications, and we allow our FDA submission for automation, so to speak, cook at FDA so that by the time we're moving to smaller Level 1 and 2 trauma centers in January 24, we expect to have our automation program launched and ready to go and improved.

所以有這麼多的應用程序，一方面，這是一個巨大的市場機會。另一方面，它需要對我們的銷售團隊進行廣泛的培訓和關注。所以我們真的將從大客戶轉向小客戶。當然，原因是當你在大客戶中安營扎寨時，你可以獲得所有這些跡象，我們允許我們的 FDA 提交自動化，可以這麼說，在 FDA 做飯，這樣到我們搬家的時候1 月 24 日到較小的 1 級和 2 級創傷中心，我們希望啟動我們的自動化程序並準備好進行改進。

So it's a -- there's going to be a constant evolution in our both ability to get VAC approvals all the way to these broader indications to starting to move into smaller Level 1 and 2 trauma centers and everything benefiting from the absolute adrenaline injection of automation. So automation will make our sales team so much more productive.

所以這是一個 - 我們獲得 VAC 批准的能力將不斷發展，一直到這些更廣泛的適應症，開始進入較小的 1 級和 2 級創傷中心，以及從絕對腎上腺素注入自動化中受益的一切。因此，自動化將使我們的銷售團隊更有效率。

Great. That's really helpful. So let me just ask one more. I'm very intrigued by the comments you made about getting to breakeven with 5 kits per, I think you said a month, but I might have heard that wrong. And the average being 20 kits -- do you envision the dynamics in soft tissue being the same in terms of an average salesman being able to sell 20 kits? Or do you think they might be able to sell a lot more? And kind of what's your expectation for how quickly people will get up to be average or better?

偉大的。這真的很有幫助。所以讓我再問一個。我對你關於每個 5 個套件達到收支平衡的評論很感興趣，我想你說的是一個月，但我可能聽錯了。平均是 20 個試劑盒——你認為軟組織的動態與普通推銷員能夠銷售 20 個試劑盒的情況相同嗎？或者你認為他們可能會賣得更多？您對人們達到平均水平或更好水平的速度有何期望？

Okay. Perfect. So for clarification, the metric I used was contribution margin for the cost of a rep is equivalent approximately to 5 RECELL kits. And that our current sales reps in Burns only are averaging in excess of 20. So just as baseline, that's where we are.

好的。完美的。因此，為了澄清起見，我使用的指標是銷售代表成本的邊際收益大約相當於 5 個 RECELL 套件。而且我們目前在伯恩斯的銷售代表平均超過 20 人。所以就像基準線一樣，我們就是這樣。

So first question is, do we expect that 5 to be the same for our expanded sales organization? The answer is yes. It's the same, you're selling virtually the same kit that is sold at the same price. So therefore, we manufacture it for the same. So the 83% gross profit works still in that equation.

所以第一個問題是，我們是否希望我們擴大後的銷售組織有 5 個相同？答案是肯定的。這是一樣的，您銷售的是幾乎相同的套件，而且價格相同。因此，我們同樣製造它。所以 83% 的毛利潤仍然適用於該等式。

Do we think that the market opportunity to be greater than 20 per month exists? Actually very much so. We expect that the potential is quite higher than that because, of course, the market cases, the patients that we are treating are approximately 4x the number that are in burn. So we think that opportunity is really rich. Now we have to execute, but that's a big opportunity for us. I think I got all your questions did I miss one?

我們認為每月大於20的市場機會存在嗎？實際上非常如此。我們預計潛力遠高於此，因為當然，市場案例，我們正在治療的患者大約是燒傷人數的 4 倍。所以我們認為機會真的很豐富。現在我們必須執行，但這對我們來說是一個很大的機會。我想我得到了你所有的問題，我錯過了一個嗎？

No, you did, Jim. Thanks a lot. And it's a pretty exciting opportunity, and I can't wait to see it unfold.

不，你做到了，吉姆。多謝。這是一個非常令人興奮的機會，我迫不及待地想看到它的展開。

Thanks, Brooks. Me, too.

謝謝，布魯克斯。我也是。

(Operator Instructions) Our next question comes from the line of Lyanne Harrison of Bank of America.

（操作員說明）我們的下一個問題來自美國銀行的 Lyanne Harrison。

Just a follow up on Brooks' question. I have one more on that. In terms of the ramp-up rate, it takes for a salesperson to get from 0 to 5 kits a month and then from 5 kits a month to 20 kits a month, what does that profile look like for the purposes of us looking at what the ramp-up might be for soft tissue?

只是跟進布魯克斯的問題。我還有一個關於那個。就提升率而言，銷售人員每月需要從 0 件增加到 5 件，然後從每月 5 件增加到每月 20 件，對於我們查看的目的而言，該配置文件是什麼樣的上升可能是針對軟組織的？

Yes, Lyanne, it's a really terrific question. We do have data on that. It's fairly variable. But on the front end of it, it is less than half a year. And on the longer end, it's well under a year. So it's variable, but we know its months. We know it's not years. So they pass that 5 pretty consistently in a short number of months and then they get more work. In fact, when we were launching with burns, it was actually harder. We were less proven at that time. And the market was narrower in terms of the indication we were pursuing. So we actually are very optimistic about the equation that you're describing. I'd like to give you a more precise answer, but I can -- suffice to say, its months, not a year. And I think that's probably is as tight as I can make that interval at the moment.

是的，Lyanne，這是一個非常棒的問題。我們確實有這方面的數據。這是相當多變的。但是在它的前端，也就不到半年的時間。從長遠來看，還不到一年。所以它是可變的，但我們知道它的月份。我們知道這不是幾年。因此，他們在短短幾個月內就非常穩定地通過了這 5 個測試，然後他們得到了更多的工作。事實上，當我們用燒傷發射時，它實際上更難。那時我們還沒有得到證明。就我們追求的適應症而言，市場範圍更窄。所以我們實際上對你描述的等式非常樂觀。我想給你一個更準確的答案，但我可以——可以說是幾個月，而不是一年。而且我認為這可能是我目前可以安排的時間間隔。

That's very helpful. And then just a follow-up, a question on gross margins. So obviously, seeing slightly -- gross margin slightly down this quarter, but over time, it's expanded significantly as volume increased. Do you have an expectation on target gross margin or where you might end up at the end of financial '23?

這很有幫助。然後只是一個跟進，一個關於毛利率的問題。很明顯，本季度毛利率略有下降，但隨著時間的推移，隨著銷量的增加，毛利率顯著擴大。您是否對目標毛利率有預期，或者您可能會在 23 世紀末達到什麼水平？

Yes. Actually, our gross margin has some variability to it. There are very -- we don't experience price competition, but we have volume-related discounts that come into play, particularly as you move through the end of the year. So that's one factor.

是的。實際上，我們的毛利率有一些變化。有非常 - 我們沒有經歷價格競爭，但我們有與數量相關的折扣發揮作用，特別是當你進入年底時。所以這是一個因素。

We've recently made some improvements of note in our manufacturing process very specifically kind of in the geek category, if you don't mind. But we had this process where we had to ship what's called cold chain in a package to control temperature. And in the last few months, we succeeded in establishing the data that made that cold chain shipping not necessary and removed rather substantial cost that we will see going forward. So I think we feel very confident about 2 things: our cost of goods improving and the stability of our average selling price, where it is mostly subject to volume discount versus price competition.

如果您不介意的話，我們最近對我們的製造過程進行了一些改進，特別是在極客類別中。但是我們有這個過程，我們必須在包裹中運送所謂的冷鏈以控制溫度。在過去的幾個月裡，我們成功地建立了數據，使冷鏈運輸變得沒有必要，並消除了我們將在未來看到的相當大的成本。所以我認為我們對兩件事非常有信心：我們的商品成本提高和我們平均售價的穩定性，這主要取決於批量折扣與價格競爭。

[Technical Difficulty 0:39:40] Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thank you very much.

[技術難度 0:39:40] 感謝您參加今天的會議。這確實結束了程序。您現在可以斷開連接。非常感謝。