Repigmentation benefit
The potential versatility of ReCell, a ‘spray-on-skin’ medical device, has been demonstrated with positive results in the treatment of hypopigmented scars. Results from an 18-patient study showed that, after 12 months, the combination of ReCell and skin needling (a standard scar treatment) significantly improved repigmentation. The data lend support to using ReCell for the cosmetic surgery market and underscore broader potential for treating depigmentation, with an IDE submission planned in the US by Q414.
Better together
In the clinical study conducted in Germany, 18 participants had hypopigmented scars as a result of burns that had healed naturally. Some scars were untreated, some treated with needling, and some treated with a combination of needling and ReCell. After 12 months, the scars were assessed using the Mexameter device to detect levels of melanin in the skin. The combination of ReCell and needling produced statistically significant repigmentation of the scars vs baseline (needling alone did not). Skin needling (micro needles on a roller) is a common scar treatment that helps improve the texture of scar tissue, but often fails properly to restore pigmentation.
Wider implications
ReCell is being targeted towards three key uses: treating acute burns and wounds; healing chronic wounds (eg leg ulcers); and aesthetic uses in combination with cosmetic procedures, especially for the restoration of skin pigmentation. A pilot study was conducted in 10 patients with vitiligo or piebaldism at Amsterdam University, comparing a combination of ReCell+laser abrasion+UV therapy, vs abrasion+UV, vs UV alone. Positive results in mid-2014 would confirm ReCell’s potential to induce repigmentation in multiple settings and support a planned US submission in Q414.
Moving in the right direction
The encouraging data in hypopigmented scars is one of a number of key milestones in 2014 that could significantly advance ReCell and support Avitar Inc (OTC:AVTI) commercial plans for the product. The use of ReCell for burns and acute wounds is a key near-term opportunity, and a positive technology assessment by NICE in the UK (expected September 2014) is a potential catalyst, for Avita’s shares and ReCell’s prospects.
Valuation: US$31m EV
A modest US$31m EV (A$6.8m net cash at 31 December 2013) reflects the need to prove and enhance ReCell’s commercial potential. This could be boosted by positive clinical data, reimbursement decisions and fresh marketing initiatives.
To Read the Entire Report Please Click on the pdf File Below