BTIG launched coverage of Avita Medical (NASDAQ:RCEL) with a “buy” rating and $10 price target. The stock closed at $8.32 on March 2.
Avita’s RECELL system produces a suspension of spray-on-skin cells using a small sample of a patient’s own skin.
“With a multitude of clinical data showing efficacy, improved cost-effectiveness over competitor products and lower donor site requirements relative to standard of care, Avita’s initial foray in the U.S. inpatient burn market is underway and encouraging,” writes analyst Ryan Zimmerman.
“More exciting is the broad array of potential treatment applications RECELL may be able to target combined with the technological simplicity of the product,” which requires about 30 minutes of treatment at the bedside, he added.
Mr. Zimmerman said Avita has targeted future indications, including outpatient burns, pediatric scalds, trauma and vitiligo, which collectively represent a more than $2-billion opportunity, and “these are just the areas Avita has publicly discussed. We see RECELL’s potential as being even larger when we consider potential applications in wound, aesthetics, and cell therapy, a call option today,” he added.
With shares primarily traded on the Australia Stock Exchange and a NASDAQ-listed American depositary receipt, Avita is a “discovery story for U.S. investors but we believe when investors look deeper, they will see a regenerative medicine company that is on the precipice of significant growth, Mr. Zimmerman said.
