Shares in regenerative medicine company AVITA Medical Inc (ASX: AVH) closed https://www.businessnewsaustralia.com/19 per cent lower today after the company revised down its full-year revenue guidance due to a slowdown in sales during December.

The Perth-founded AVITA, which primarily markets treatments for thermal burn wounds and full-thickness skin defects, is forecasting sales of about $64.3 million for the year – down from the previously forecast range of between $68 million and $70 million.

The sales performance is still up 29 per cent on the previous year, but it has pushed out AVITA’s cashflow break-even and profitability target out by three months to the December quarter of this year.

The news led to a spike in selling by investors who pushed AVITA shares 84c, or https://www.businessnewsaustralia.com/19.3 per cent, lower to $3.5https://www.businessnewsaustralia.com/1 as more than 2.3 million shares changed hands.

The trading rout wiped $https://www.businessnewsaustralia.com/1https://www.businessnewsaustralia.com/10 million from the value of the company, pushing it down to $462 million.

AVITA expects commercial revenue of about $https://www.businessnewsaustralia.com/18.4 million in the December quarter, representing growth of about 30 per cent from the same period in 2023.

“The revision in fourth-quarter guidance is attributable to a combination of factors, with slower-than-expected purchasing activity being the primary driver,” says the company.

“Several of the company’s hospital accounts adjusted their inventory levels at the end of their fiscal year, resulting in reduced purchasing during December.

“While this type of behaviour is common at year-end, the extent was more pronounced than we had anticipated, contributing to less revenue in the quarter.”

AVITA is expecting a resumption of normal purchasing activity for these accounts in the first quarter of this year, with deferred purchases from the fourth quarter rolling over.   

Despite the hiccup at the end of last year, AVITA Medical’s CEO Jim Corbett remains confident in the group’s long-term growth prospects as it continues to scale.

“Our strategic investments in our people and new products position us to continue to drive significant growth and sustainable success,” says Corbett.

“We are focused on executing our plan, delivering value to our shareholders, and improving patient outcomes.”

AVITA notes that long-term growth will be supported by an expanded sales force and new products, including the 2024 launch of PermeaDerm, a biosynthetic, transparent wound matrix.

In June 2023, AVITA Medical achieved a “breakthrough approval” with the US Food and Drug Administration (FDA) after gaining pre-market approval for its RECELL system to treat vitiligo, an autoimmune disease that causes discoloration of the skin.

In June, last year the company received FDA approval for its next-generation device RECELL GO, followed by FDA approval in December for RECELL GO mini, designed to treat smaller wounds.  The company says RECELL GO will continue to drive adoption in both new and existing accounts.

The FDA last month also cleared Cohealyx, a new collagen-based dermal matrix branded by AVITA Medical and co-developed with Regenity Biosciences.

The company says RECELL GO and Cohealyx are central to its growth strategy and its broader business potential.

Meanwhile, AVITA Medical is forecasting its commercial revenue to pick up pace in FY25, which aligns with the calendar year.

The company is targeting revenue between $https://www.businessnewsaustralia.com/100 million and $https://www.businessnewsaustralia.com/106 million for the year, representing growth of 55 per cent to 65 per cent compared with 2024.

Formerly known as Clinical Cell Culture, AVITA is listed on the NASDAQ as well as the ASX and is now headquartered in California.

However, its cornerstone RECELL product was developed by Perth surgeon Fiona Wood and used to treat victims of the Bali bombings in 2002. The company’s share registry is listed in Perth.