Avita Medical (NASDAQ:RCEL) executives told investors they are focused on making the business more predictable and execution-driven in 2026, following what they described as a headwind-heavy 2025 that included reimbursement disruption, a sales force reconfiguration, and repeated amendments tied to revenue covenants under a prior credit facility.
2026 outlook: “progressive” growth and tighter forecasting
Chair and interim CEO Cary described the company’s fourth-quarter priorities as centered on disciplined execution across cash management, headcount, quota-setting, and forecasting. He said the company’s objective is “progressive revenue growth” in 2026, supported by what he called a bottoms-up view of quarterly performance.
Cary said the company grew about 11% in 2025 despite disruptions, and expects 12% to 19% growth in 2026. Finance leader David added that Avita has historically grown at a compound annual growth rate of about 32%, and said management’s goal is to return to growth “somewhere north of 20%,” with longer-term aspirations in the 20% to 30% range.
Margins, operating expense reductions, and cash use
David said gross margin was 82.1% for 2025 and 81% in the fourth quarter. He attributed the year’s results to inventory reserves booked during the year that he said would not recur, as well as a continuing product-mix impact tied to revenue-sharing arrangements for newer products.
He noted that Cohealyx and PermeaDerm include partner revenue-share economics, describing a 50/50 ASP split for Cohealyx and a 60/40 split for PermeaDerm. As those products scale, management expects some margin impact, though David said the company expects RECELL products to grow faster in 2026. He guided to 83% to 85% gross margin for 2026, citing RECELL product margins around 86%.
On expenses, David said Avita removed about $2.5 million per quarter beginning in the second quarter of last year and eliminated $10 million annually across the sales organization, G&A, and R&D following a commercial transformation. Fourth-quarter operating expenses were $24.7 million, including about $1.2 million of one-time severance; he said normalized operating expenses are expected to be $23 million to $24 million, including roughly $3 million of non-cash items such as stock-based compensation.
David also highlighted reduced quarterly cash use, from $10.1 million earlier in 2025 to $5.1 million in the fourth quarter. He warned of an uptick in the first quarter due to employee benefits resets, payroll taxes, and bonus payments, but said management expects cash use to trend down as revenue grows, with an eventual move toward cash flow break-even. The company did not provide timing guidance for break-even.
Reimbursement update and a revamped sales focus
Cary said reimbursement disruption was a key issue in 2025, and updated investors on Medicare Administrative Contractor (MAC) rate publications. He said six of seven MACs have now published rates, and he expects the remaining contractor to publish after engagements with representatives in the covered states.
In response to a question about standardized Medicare payment rates for chronic wound care, Cary said the referenced change was primarily relevant to chronic wounds, while RECELL is reimbursed under CPT codes and the company has been navigating physician payment through the MAC process.
Operationally, Cary reiterated that Avita reduced the size and cost of its sales force while repositioning representatives geographically. He said the company is focused on 200 key accounts, including 120+ burn centers and 50–60 Level 1 trauma centers, with the intent to concentrate on utilization growth within accounts where relationships already exist.
Three-product platform: utilization and adoption through VAC reviews
Cary emphasized the company’s “three-product platform,” consisting of RECELL, RECELL GO, Cohealyx, and PermeaDerm, and said the commercial goal is to expand RECELL usage by case type and wound size, increase the number of using physicians inside existing accounts, and track utilization as a key internal metric.
For the newer products, he said adoption often requires Value Analysis Committee (VAC) review. He stated that approximately 55 accounts currently have Cohealyx in a VAC process, which he said typically takes two to five months. He added that Avita is seeing roughly “about a dozen” accounts come out of VAC each quarter, though he said timing varies. Cary said RECELL does not require VAC review at this point, describing it as already completed.
Management also discussed two ongoing 40-patient post-market studies—one each for Cohealyx and PermeaDerm—which Cary said are expected to publish toward the end of the year but are already being used commercially in presentations and sales discussions.
New credit facility resets covenants; vitiligo deprioritized
David said Avita replaced its prior OrbiMed credit facility—entered into in 2023 and burdened by what he described as unachievable revenue covenants—with a new agreement led by Perceptive Advisors. The company entered into a $60 million facility and drew $50 million at close. He said the purpose was to “reset the revenue covenants” and reduce recurring amendments and waivers that created distraction in 2025.
He cited examples including a first-quarter 2026 trailing twelve-month revenue covenant of $68.5 million and a full-year 2026 revenue covenant of $73 million, which he said is below the company’s 2026 guidance range. The facility also lowered the cash covenant from $10 million to $5 million. David said the transaction added about $6 million net to the balance sheet, but described that as not the primary objective.
In the Q&A, Cary said Avita has deprioritized its vitiligo commercial effort despite FDA approval for stable vitiligo, citing reimbursement as “uncertain” and “too low” to justify prioritizing a broader go-to-market push until economics improve.
Management also said it is not seeking an acquisition, with Cary stating the company is focused on building value as an independent business and is “not interested” in M&A discussions.
About Avita Medical (NASDAQ:RCEL)
Avita Medical, Inc (NASDAQ: RCEL) is a regenerative medicine company focused on the development and commercialization of cell‐based therapies for acute and chronic wounds. Its flagship technology, the ReCell® Autologous Cell Harvesting Device, enables clinicians to create a suspension of a patient’s own skin cells at the point of care. The system is designed to accelerate wound healing, minimize donor‐site requirements and reduce scarring for patients suffering from burns, traumatic wounds and a variety of surgical and reconstructive procedures.
Founded in 2009 and headquartered in Carlsbad, California, Avita Medical has secured regulatory clearances in key markets, including CE mark approval in the European Union and 510(k) clearance from the U.S.
