AVITA Medical, Inc. (RCEL): Business Model Canvas [Dec-2025 Updated]

You're looking at AVITA Medical, Inc. (RCEL) and seeing that familiar biotech tension: a truly innovative, high-margin product-Spray-On Skin™ Cells-clashing with the messy reality of scaling up a direct sales force in the U.S. Honestly, the Q3 2025 numbers show a fantastic 81.3% gross margin, but the near-term focus is clearly on hitting that $70 million to $74 million revenue guidance while navigating reimbursement clarity and managing $23.0 million in quarterly operating costs. We've broken down the entire nine-block Business Model Canvas below, mapping out exactly where their value proposition delivers savings-like that ~$42,000 per-patient hospital stay reduction-against the operational hurdles they must clear to reach sustained profitability, so read on for the full, precise picture.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Key Partnerships

You're mapping out AVITA Medical, Inc.'s operational backbone, and the Key Partnerships block is where the outsourced expertise and financing muscle really show up. It's not just about what AVITA Medical, Inc. makes; it's about who helps them make it, move it, and fund it. Honestly, these relationships are critical, especially when you're managing a complex portfolio like RECELL, Cohealyx, and PermeaDerm.

The relationship with Stedical Scientific, Inc. is a prime example of leveraging external capabilities for product commercialization in the United States. AVITA Medical, Inc. now handles the manufacturing of the PermeaDerm biosynthetic wound matrix at its facility in Ventura, California, effective March 17, 2025. This is governed by a new Contract Manufacturing Agreement and an amendment to the existing Exclusive Distribution Agreement. Under these revised terms, AVITA Medical, Inc. retains 60% of the average sales price from PermeaDerm sales, remitting 40% to Stedical Scientific after deducting manufacturing costs. This is a shift from the prior 50% split for each party.

Financing is another area where external partners are essential. The credit facility with affiliates of OrbiMed Advisors, LLC provides necessary debt financing. You need to track these covenants closely. As specified for the period ending December 31, 2025, the trailing 12-month revenue covenant was amended to $70 million. This was part of a deal that also involved adding $500,000 to the original $40,000,000 principal balance of the Credit Agreement.

For international market access, AVITA Medical, Inc. relies on focused, regional expertise. Revolution Surgical Pty Ltd serves as the exclusive distributor for the RECELL product platform, which includes RECELL GO (pending regulatory approval), across Australia and New Zealand. This partnership, announced in November 2024, marks the reintroduction of RECELL technology to its place of origin, Australia.

Data generation and adoption rely heavily on clinical validation through key opinion leaders (KOLs) and clinical trial centers. For instance, clinical insights supporting the Cohealyx dermal matrix were recently published in the Journal of Surgery (Akpunonu et al., 2025), featuring a case series conducted at The Ohio State University Wexner Medical Center. This kind of partnership helps drive adoption, especially as RECELL is currently being rolled out across approximately 136 US burn centers.

Here's a quick look at the key financial and operational terms tied to these partnerships:

Partner Entity	Product/Service Focus	Key Financial/Term Detail	Effective Date/Status
Stedical Scientific, Inc.	PermeaDerm Distribution/Manufacturing	AVITA retains 60% of ASP; Stedical receives 40% (post-mfg costs)	Amended March 17, 2025
OrbiMed Advisors, LLC	Credit Facility/Debt Financing	TTM Revenue Covenant of $70 million for Q4 2025	As per Sixth Amendment
Revolution Surgical Pty Ltd	RECELL Distribution (Oceania)	Exclusive distributor for Australia and New Zealand	Agreement announced November 2024
The Ohio State University Wexner Medical Center	Clinical Data Generation (KOL)	Case series published evaluating Cohealyx	Publication in 2025

The company's focus on expanding its portfolio through these external arrangements is clear. For example, the preliminary revenue for the third quarter ending September 2025 was approximately $17 million, with full-year 2025 revenue forecasted between $76 million and $81 million. These numbers reflect the commercial execution supported by these key alliances.

You should track the performance milestones tied to these agreements, as they directly impact AVITA Medical, Inc.'s financial flexibility and product reach. The Stedical agreement, for instance, had an initial term of five years with an option to renew for an additional five years, contingent upon meeting specified minimums.

The use of KOLs and clinical centers is also evidenced by the recent New Technology Add-on Payment (NTAP) reimbursement secured from the Centers for Medicare & Medicaid Services (CMS) for RECELL use in acute, non-burn trauma and surgical full-thickness wounds, effective October 1, 2025, through September 30, 2026. This reimbursement can be up to $4,875 per use, easing hospital budget barriers.

The key operational elements supported by these partnerships include:

• Securing manufacturing scale for PermeaDerm in the U.S.
• Establishing exclusive market entry in Australia and New Zealand.
• Maintaining debt financing with specific revenue thresholds.
• Generating real-world evidence for portfolio adoption.

Finance: confirm the actual TTM revenue reported for Q3 2025 relative to the $73 million covenant set for that quarter by next Tuesday.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Key Activities

You're looking at the core engine room of AVITA Medical, Inc. (RCEL) as they navigate a complex reimbursement landscape and push for broader adoption of their multi-product platform. The Key Activities here are all about execution: making the devices, proving their value through research, getting paid for them, and getting them into the hands of clinicians across the globe.

Manufacturing and Quality Control of the RECELL System and RECELL GO

Manufacturing and quality control are foundational, especially when dealing with autologous cell harvesting devices. While specific production volume numbers aren't public, the activity supports a portfolio that includes the flagship RECELL System and the newer RECELL GO. The company also holds exclusive U.S. rights for Cohealyx™, a collagen-based dermal matrix, and PermeaDerm®, a biosynthetic wound matrix, meaning manufacturing and supply chain management must now coordinate these complementary products to support the full-thickness wound workflow.

Direct Sales Force Training and Commercialization Focus on ~200 U.S. Centers

The commercial focus in the U.S. has been streamlined to maximize impact following organizational transformation. As of the third quarter ended September 30, 2025, AVITA Medical was concentrating its efforts on approximately 200 key U.S. burn and trauma centers. This targeted approach supports the adoption of the core RECELL System, the newer RECELL GO mini™ (launched in February 2025 for smaller wounds), and the nationwide launch of Cohealyx™ on April 1, 2025. This shift is designed to enable scalable, long-term growth across the expanded portfolio, which targets a U.S. market opportunity now estimated at more than $3.5 billion.

Clinical Research to Expand Indications and Generate Real-World Evidence

Generating robust clinical evidence is a critical activity to drive utilization, especially when seeking favorable reimbursement. AVITA Medical has been active in presenting data that reinforces the clinical value proposition of the RECELL technology. This activity is essential for proving the economic benefit alongside the clinical one. Here are some key metrics from recent data presentations:

Clinical Metric/Evidence Source	Observed/Reported Data Point
Hospital Stay Reduction (Deep Partial-Thickness Burns vs. Traditional Grafting)	36% shorter stay (EBA Congress '25 and U.S. registry analysis)
Global Systematic Review Patient Count	Over 99 studies involving more than 8,000 patients across 13 countries
U.S. Registry Analysis Discharge Home Rate (vs. STSG)	83% discharged home vs. 70% for Split-Thickness Skin Grafting (STSG)
Estimated Cost Savings Per Patient (U.S. Registry Analysis)	Greater than $42,000 per patient
Donor Skin Reduction (Global Review)	Up to 97.55% reduction in donor site size

Navigating and Securing Medicare Administrative Contractor (MAC) Reimbursement Clarity

Securing clear and predictable payment pathways is a major operational focus, especially given the significant headwinds faced in the first half of 2025 due to a temporary gap in MAC payments, which led to an estimated 20% drop in RECELL demand. A key success in this area was the Centers for Medicare & Medicaid Services (CMS) approval for New Technology Add-on Payment (NTAP) reimbursement for the RECELL System when used for acute, non-burn trauma and surgical full-thickness wounds. This approval is effective from October 1, 2025, through September 30, 2026. The supplemental reimbursement amount is up to $4,875 per case. This reimbursement clarity is vital, as the company had to adjust its full-year 2025 revenue guidance down to a range of $70 million to $74 million and pushed its GAAP profitability target to Q3 2026 due to these payment disruptions.

The reimbursement navigation activities include:

• Securing the NTAP for the Breakthrough Device indication.
• Advocating for the finalization of the proposed maximum NTAP payment of $4,875 per case.
• Working toward the resolution of the MAC claims backlog, with multiple MACs initiating payments in July 2025 and resolution expected in Q3 2025.
• Managing covenant compliance, having secured a waiver for the Q3 trailing 12-month revenue covenant of $70 million as of November 5, 2025.

European Market Entry and Launch of RECELL GO Following CE Mark Approval

Expanding internationally is a core activity to diversify revenue streams outside the U.S. reimbursement challenges. AVITA Medical achieved a significant milestone when RECELL GO received the CE Mark under the European Union Medical Device Regulation (EU MDR) on September 14 or 15, 2025. This certification clears the way for commercialization across Europe and other CE Mark-recognizing markets. The initial commercial rollout is set to begin in select key European countries, specifically Germany, Italy, and the United Kingdom, in collaboration with local burn centers and clinical partners. This launch leverages the existing use of the RECELL System in Europe.

Key European Market Entry Facts:

• Product: RECELL GO, a point-of-care device for creating Spray-On Skin Cells.
• Approval Date: September 2025 (CE Mark).
• Initial Launch Markets: Germany, Italy, and the United Kingdom.

The company ended Q3 2025 with $23.3 million in cash, cash equivalents, and marketable securities as of September 30, 2025, which supports these ongoing operational activities. Finance: draft 13-week cash view by Friday.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Key Resources

You're looking at the core assets AVITA Medical, Inc. (RCEL) relies on to execute its strategy in late 2025. These aren't just things on a balance sheet; they are the proprietary engines driving the business.

Patented RECELL System Technology and Next-Generation Devices

The foundation is the patented and proprietary RECELL System technology, which originated from the work of Professor Fiona Wood and Marie Stoner in Australia. This technology lets clinicians create Spray-On Skin Cells from a small sample of the patient's own skin right at the point-of-care. The regenerative skin cell suspension includes keratinocytes, fibroblasts, and melanocytes, all key for skin regeneration. The RECELL platform, which includes the newer RECELL GO device, has treated over 30,000 patients globally as of June 2025. The RECELL GO builds on the original RECELL System by improving procedural consistency and surgical team coordination, which supports adoption in high-volume centers. Furthermore, the RECELL GO mini received FDA approval in December 2024, specifically to optimize treatment for smaller wounds common in trauma centers.

Regulatory Approvals and Market Access

Market access is heavily dependent on regulatory clearance, and AVITA Medical, Inc. holds key approvals in the United States. The RECELL System is FDA-approved for the treatment of thermal burn wounds and full-thickness skin defects. Additionally, the RECELL System has FDA approval for the repigmentation of stable depigmented vitiligo lesions. The RECELL System, excluding RECELL GO, also has TGA registration in Australia, PMDA approval in Japan, and CE Mark approval in Europe. The RECELL GO itself secured a major milestone with CE Mark approval under the EU Medical Device Regulation in September 2025, enabling commercialization in Europe, starting with Germany, Italy, and the United Kingdom.

Financial Strength and Liquidity

You need to know where the company stands in terms of immediate capital. As of September 30, 2025, AVITA Medical, Inc. reported cash, cash equivalents, and marketable securities totaling $23.3 million. This figure followed an equity raise of $13.8 million net after expenses in August 2025, which brought the available cash to $29.5 million at that time. The net use of cash showed improvement, coming in at approximately $6.2 million for the third quarter of 2025, which is better than the $10.1 million used in the second quarter. Here's a quick look at the recent cash position:

Metric	As of June 30, 2025 (USD million)	As of September 30, 2025 (USD million)
Cash, Cash Equivalents, and Marketable Securities	15.7	23.3
Net Cash Use for the Quarter (USD million)	10.1	6.2

The company is focused on execution and aligning spending with growth priorities, evidenced by operating expenses decreasing by 24%, or $7.2 million, to $23.0 million in Q3 2025 compared to the prior year period.

Specialized Commercial and Clinical Infrastructure

The ability to sell and support the RECELL platform requires specialized human capital. AVITA Medical, Inc. maintains specialized, trained direct sales and clinical support teams focused on driving consistent and predictable utilization across burn, trauma, and surgical settings. The new Interim Chief Executive Officer, Cary Vance, stated his focus would be on execution and building the use of RECELL®, which directly points to the importance of these commercial and clinical personnel in achieving that goal. This infrastructure is essential for expanding adoption and ensuring clinicians are proficient with the point-of-care technology. If onboarding takes 14+ days, churn risk rises, so the quality of the clinical support team is defintely a critical asset.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Value Propositions

You're looking at the core value AVITA Medical, Inc. (RCEL) delivers, which centers heavily on its flagship Spray-On Skin™ Cells technology, known as RECELL. This is autologous cellular therapy designed to transform acute wound care by using a patient's own skin to create the necessary cells right at the point of care. Honestly, the shift from traditional grafting to this method is where the real financial story is.

The primary clinical value proposition is clear: reduced donor skin requirements and faster healing for patients. For deep partial-thickness burns, RECELL treatment requires 97.5 per cent less skin compared to traditional split-thickness skin grafts (STSG). This directly translates into less pain at the donor site and improved donor site healing.

The economic savings are what really move the needle for hospital administrators. Real-world data from a U.S. national burn registry study involving 741 adults with deep partial-thickness burns showed compelling results when comparing RECELL to STSG.

Metric	Value Proposition Data (RECELL vs. STSG)	Source Context
Hospital Length-of-Stay (LOS) Reduction	36 per cent reduction	Based on an average 5.6 day reduction
Per-Patient Economic Savings	More than $42,000 in savings	Calculated using an average US hospital bed cost of $7,554 per day
Hospital Efficiency Gain	Capacity to treat up to 13 additional patients per bed annually	Direct result of reduced LOS

Beyond the core RECELL platform, AVITA Medical, Inc. is actively building out a more comprehensive portfolio to capture more value across the full-thickness wound reconstruction workflow. This diversification helps buffer against single-product reliance and expands the total addressable market (TAM). The U.S. TAM for the company has grown from $455 million in 2019 to over $3.5 billion in 2025 through this product and indication expansion.

The complementary products, Cohealyx and PermeaDerm, are starting to contribute to this broader platform strategy. You can see the traction in the early 2025 figures, which is defintely encouraging for portfolio health:

• Other Wound Care products (including Cohealyx and PermeaDerm) contributed 7.39 per cent of total revenue in 2QFY25.
• This represented a significant increase from just 0.03 per cent of total revenue in 1QFY25.
• Cohealyx, a dermal matrix, is positioned to be placed into the wound bed first, followed by RECELL cells, and then PermeaDerm as a protective cover.
• For a typical 10 per cent Total Body Surface Area (TBSA) burn, PermeaDerm is estimated to generate approximately $2,000 in revenue per patient procedure.

Finance: draft 13-week cash view by Friday.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Customer Relationships

You're focused on driving adoption in a highly specialized, capital-intensive environment. The relationship AVITA Medical, Inc. (RCEL) builds with its customers is not transactional; it's deeply embedded in the clinical workflow, which is why their model leans heavily on dedicated, high-touch support.

Dedicated, high-touch, consultative sales and clinical support model

The commercial organization is built around experienced medical sales representatives and former burn and trauma nurses, designed to offer clinical case support directly at the point of care. This consultative approach is necessary because the adoption curve for a novel device like RECELL requires significant clinical champions. As of the planned expansion in early 2024, the commercial organization was targeted to reach 108 personnel, up from 70 in mid-2023, supporting a total employee base of 260 as of late 2025.

The value proposition delivered through this model is quantifiable, which helps drive the relationship forward. Real-world U.S. registry data shows that using RECELL leads to a 36% reduction in length of hospital stay and approximately $42,000 in per-patient cost savings for adult patients with deep partial thickness burns up to 30% total body surface area. This concrete financial and clinical benefit is the core of the consultative pitch.

However, the relationship is also shaped by product mix. When you look at the gross margin, partnership products like Cohealyx and PermeaDerm return only 50% to 60% of the average sales price to AVITA Medical due to revenue-sharing terms, which impacts the overall gross profit margin, which stood at 81.2% in Q2 2025.

Direct engagement with surgeons and hospital Value Analysis Committees (VACs)

Gaining access to a hospital's procedure room requires navigating the Value Analysis Committee (VAC) approval process, which is a critical hurdle for new medical technology. Surgeons typically follow an adoption curve, starting with larger burns where the economic and clinical value is most apparent. The company's strategy targets approximately 200 key U.S. burn and trauma centers, representing an addressable market segment of roughly $1.3 billion.

The impact of institutional hurdles on customer demand is real. A temporary gap in Medicare Administrative Contractor (MAC) payments in early 2025 caused a visible drop in product demand, with RECELL revenue declining by approximately $5 million across the top ten hospital accounts when comparing the second half of 2024 to the first half of 2025. The initial phase of new reimbursement coverage was expected to begin in the fourth quarter of 2025.

Here's a snapshot of the financial context surrounding these key accounts:

Metric	Value (Late 2025 Context)	Reference Point
Target U.S. Centers	Approximately 200	Burn and Trauma Centers
Market Penetration	Approximately 5%	Of the $1.3 Billion Segment
H1 2025 Revenue Decline in Top 10 Accounts	Approximately $5 million	Sequential Decline vs. H2 2024
RECELL-Only Gross Margin (Q2 2025)	84.3%	Quarterly Product Performance

Training and certification programs for clinical staff on device use

The complexity of the RECELL system means that training is not optional; it's integral to the relationship and ensuring positive patient outcomes. The fact that many burn center employees move on to other positions limits the ability to increase adoption, as the company is then required to train a new group of nurses and personnel critical to implementation. This underscores the need for robust, repeatable training programs.

The clinical support model is designed to help staff move through the learning curve efficiently. For instance, with Cohealyx, one of the partnership products, clinical results show it achieves autograft readiness in as little as five days. This rapid result helps reinforce the value of the entire integrated portfolio to the clinical staff you are training.

• Focus on clinical staff competency for device use.
• Address staff turnover by maintaining scalable training modules.
• Reinforce clinical value: 36% reduction in hospital stay.
• Support new product adoption like RECELL GO mini.

Long-term partnership focus with key burn and trauma centers

AVITA Medical, Inc. (RCEL) views its relationship with the 200 highest-value U.S. centers as a long-term commitment, aiming for deeper penetration within those existing accounts. The growth in commercial revenue in Q2 2025, which rose 21% year-over-year to $18.4 million, was largely driven by deeper penetration within customer accounts.

The company's strategy is to build durable momentum by ensuring these key centers see consistent value, which is why the reimbursement environment is so crucial to the relationship; delays in payment processing directly cut into demand. The goal is to capture more of the estimated $1.3 billion acute wound care segment by maximizing utilization across the existing customer base before aggressively pursuing new accounts. This focus on utilization within established accounts is what defines the long-term partnership approach.

Finance: draft 13-week cash view by Friday.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Channels

You're looking at how AVITA Medical, Inc. moves its products to the customer base as of late 2025. The focus is heavily weighted toward the United States, but international expansion is starting to materialize.

The financial context for the channels in 2025 shows a significant shift in expected performance versus initial guidance, which impacts resource allocation across these routes to market.

Metric	2025 Q3 Actual	2025 Full Year Guidance (Revised Nov 2025)	2025 Full Year Guidance (Initial)
Commercial Revenue	$17.1 million	$70 million-$74 million	$100 million to $106 million
US Revenue Share (Q2 2025)	N/A	N/A	97.17% of total revenue

Direct sales force for U.S. burn and trauma centers.

• The U.S. market is the core channel, accounting for approximately 97.17% of total revenue in the second quarter of 2025.
• The sales force model underwent a strategic realignment in early 2025, shifting to a selling-oriented model with regions consolidated and headcount reduced.
• The strategy is now focused on multi-product selling across the expanded acute wound care portfolio, including RECELL, Cohealyx, and PermeaDerm.
• The company launched Cohealyx nationwide on April 1, 2025, utilizing this existing direct sales infrastructure.
• Management aimed to save approximately $2.5 million per quarter in operating expenses while increasing selling capacity through this realignment.

Exclusive distribution agreements for international markets (e.g., ANZ).

• The Australian and New Zealand (ANZ) market is typically serviced through established distribution channels, though specific revenue contribution for late 2025 is not explicitly detailed in the latest reports.
• International expansion gained momentum in the third quarter of 2025 when RECELL GO received the CE Mark under the EU MDR in September 2025.
• This regulatory approval enables planned launches in key European markets, specifically Germany, Italy, and the U.K.

Hospital procurement and supply chain systems.

• Product adoption is channeled through hospital Value Analysis Committees (VACs), which saw delayed reviews impacting Q3 2025 revenue.
• The company is navigating Medicare Administrative Contractors (MACs) reimbursement, as the lack of national clinical payment rates for new Category 1 CPT codes caused disruption earlier in 2025.
• By the third quarter of 2025, all seven regional MACs had published or confirmed provider reimbursement rates, which is expected to remove a barrier to RECELL use moving forward.
• The company secured a waiver for its Q3 revenue covenant and an amendment lowering the Q4 2025 revenue covenant under its credit agreement due to these headwinds.

Clinical conferences and peer-to-peer education.

• AVITA Medical utilized virtual events for peer-to-peer education, hosting the Acute Wound Care Showcase 2025 on May 13, 2025, featuring case insights from surgeons and nurses.
• Investor relations activities included an Investor Webinar Briefing on August 13, 2025, and another scheduled for November 12, 2025.
• The company also presented at the Morgan Stanley 23rd Annual Global Healthcare Conference on September 8, 2025.

Finance: Review Q4 2025 operating expense run-rate against the Q3 2025 actual of $23 million.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Customer Segments

You're looking at the core customer base for AVITA Medical, Inc. (RCEL) as of late 2025. The strategy is clearly focused on high-value acute care settings, but the portfolio expansion means the net is cast wider now.

U.S. Burn and Trauma Centers (the primary target market)

The commercial strategy is tightly focused on the most significant revenue generators in acute wound care. AVITA Medical, Inc. is concentrating its efforts on approximately 200 key U.S. burn and trauma centers. These centers represent an addressable market segment estimated at roughly $1.3 billion in the acute wound care space. To be fair, the company currently serves only about 5% of this specific segment, showing the runway for growth within this core group. The broader U.S. market opportunity, following the introduction of RECELL GO mini and Cohealyx, has expanded to more than $3.5 billion.

Here's a quick look at the market focus:

Metric	Value	Context
Key U.S. Target Centers	200	Primary focus for acute wound care portfolio utilization.
Target Acute Wound Care Market Size (US)	$1.3 billion	Estimated value of the highest-value burn and trauma center segment.
Current Penetration in Target Segment	5%	Indicates the current share of the $1.3 billion segment served.
Total Expanded U.S. Addressable Market	$3.5 billion+	Market size including trauma centers and smaller wounds post-new product launches.

Surgeons specializing in plastic surgery, trauma, and wound care

The customer segment here is defined by the institutions and the procedures they perform, which directly translates to the specialists using the technology. The clinical evidence base, including a national retrospective analysis of over 6,000 patients treated with RECELL, is built to influence these providers. The focus on integrating the multi-product platform-RECELL, Cohealyx, and PermeaDerm-is designed to fit smoothly into existing workflows for these specialists.

Patients with acute thermal burns, trauma wounds, and vitiligo

The patient population drives the clinical need, and AVITA Medical, Inc. has treated over 30,000 patients globally with its portfolio to date. The primary focus remains on acute needs, evidenced by the 6,000+ patient retrospective analysis on RECELL in burn care. For vitiligo, however, the commercialization efforts were paused due to reimbursement uncertainty, and management guided to no revenue dependence from this indication in the near term.

Key patient-related statistics include:

• Total patients treated globally (across portfolio): Over 30,000.
• RECELL real-world patients analyzed: Over 6,000.
• Vitiligo revenue contribution: Zero near-term expectation.
• Cohealyx pre-clinical data suggests closure as early as 7 days in full-thickness wounds.

International hospitals and clinics in approved markets (EU, ANZ)

Geographic diversification is a clear goal, supported by regulatory milestones. The RECELL GO system secured CE Mark approval under the EU Medical Device Regulation. This approval paves the way for European launch starting with specific countries.

The initial international rollout targets include:

• Germany
• Italy
• United Kingdom

The company has also closed distribution agreements across 16 European and Asian countries, indicating a broader international footprint beyond the initial EU launch sites.

Finance: draft updated customer segment mapping to new Q3 2025 revenue run-rate by next Tuesday.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Cost Structure

You're looking at the cost side of AVITA Medical, Inc.'s operations as of late 2025, and honestly, it's a story of high-margin product sales battling significant fixed and variable overhead. The cost structure is heavily influenced by the nature of their medical device business and the ongoing commercial build-out.

The cost of goods sold (COGS) for the device itself is a factor, but the pricing power is evident in the resulting gross margin. For the third quarter ended September 30, 2025, AVITA Medical reported a strong gross profit margin of 81.3%. To be fair, this was a slight dip from 83.7% in Q3 2024, driven by a product mix shift that included higher contributions from lower-margin products like Cohelix and PermeaDerm, alongside inventory adjustments. Still, the core RECELL franchise margin remained robust at 83.6% for the quarter.

Operating expenses are where the bulk of the cash burn happens, though management has been aggressively tackling this. Total operating expenses for Q3 2025 were $23.0 million, a significant year-over-year reduction of $7.2 million, or 24%. This reduction reflects ongoing cost-cutting initiatives, including an annualized reduction of approximately $10 million stemming from the commercial field transformation initiated in Q2.

You can break down those operating expenses into the key functional areas:

• Sales, General, and Administrative (SG&A) costs are tied directly to the direct sales force and administrative overhead.
• Research and Development (R&D) spending supports new indications and product enhancements.

Here's the quick math on the expense reduction by function for Q3 2025 compared to Q3 2024:

Expense Category	Q3 2025 Reduction Amount	Primary Driver
Sales and Marketing Expenses	$3.1 million decline	Lower salaries, benefits, stock-based compensation, and commissions
General and Administrative Expenses	$2.4 million decrease	Lower personnel and stock-based compensation costs
Research and Development Expenses	$1.7 million decline	Lower personnel cost and capitalization of costs for in-house developed software

Debt servicing and related costs fall under Other Expense, net, which is a key area to watch given the OrbiMed credit agreement. Other expense, net was $2.8 million in Q3 2025, a notable increase from $1.1 million in the prior-year period. This jump was primarily driven by non-cash charges of $2.2 million related to issuing 400,000 shares of common stock to OrbiMed for a fifth amendment executed in August, plus $0.9 million from the change in fair value of the debt. Furthermore, AVITA Medical agreed to a sixth amendment in November 2025, adding $500,000 to the principal balance as consideration for waiving the Q3 revenue covenant. Interest on the outstanding Loan Facility accrues at a rate per annum equal to the greater of the SOFR rate or 4.00% plus 8.00%.

The company is definitely managing the cost base aggressively, but the covenant compliance risk remains a factor in their financing costs. Finance: draft 13-week cash view by Friday.

AVITA Medical, Inc. (RCEL) - Canvas Business Model: Revenue Streams

You're looking at how AVITA Medical, Inc. brings in money across its growing portfolio, which has definitely shifted from being a single-product company to a multi-product platform. The revenue streams are centered on the sale of their core technology and newer complementary products, primarily within the U.S. acute wound care setting.

The primary revenue driver remains the Sales of the RECELL System (device and consumables) for burn and trauma. This system, which creates Spray-on Skin from a small skin sample, is expected to be the dominant source of revenue for the foreseeable future. The unit economics for this core business are strong; for instance, the gross margin for only RECELL products was reported at 86.4% in the first quarter of 2025.

The company has provided updated expectations for its top-line performance for the current fiscal year. AVITA Medical, Inc. has set its full-year 2025 commercial revenue guidance of $70 million to $74 million. This guidance was revised downwards from earlier expectations of $76 million to $81 million, and further down from an initial projection of $100 million to $106 million, due to slower reimbursement recovery and conservative utilization assumptions. As of September 30, 2025, the trailing twelve-month revenue stood at $72.4M.

Revenue diversification comes from the Sales of complementary products, PermeaDerm and Cohealyx. These products are integrated into the treatment workflow alongside RECELL. The overall gross margin percentage declines as revenue from these newer products increases because of partner profit-sharing arrangements.

Here's a look at the structure and potential value capture from these complementary products:

• RECELL GO is the expected long-term revenue driver.
• PermeaDerm, a biosynthetic wound matrix, is estimated to generate approximately $2,000 in revenue per patient procedure (for a 10% TBSA burn/wound).
• Cohealyx, a collagen-based dermal matrix, could generate an estimated $20,000 in revenue per patient procedure for the same 10% TBSA wound, though it is not used in every case.
• AVITA Medical retains a 60% revenue share for PermeaDerm and a 50% share for Cohealyx.

The company's multi-product platform now targets a U.S. market opportunity expanded to more than $3.5 billion, up from $455 million previously, with AVITA Medical currently serving about 5% of this segment as of late 2025.

The final component of the revenue stream involves International product sales through distribution agreements. The focus for growth has clearly shifted to the U.S. market, as international expansion has seen minimal traction. For context, in the second half of 2024, Europe generated only $1,000 in revenue.

You can see the recent quarterly revenue performance that informs the current guidance:

Period Ended	Commercial Revenue (USD)	Year-over-Year Growth
March 31, 2025 (Q1 2025)	$18.5 million	67%
June 30, 2025 (Q2 2025)	$18.4 million	21%
September 30, 2025 (Q3 2025)	$17.1 million	-13%

The gross margin comparison between the core product and the blended portfolio highlights the revenue mix impact:

Metric	Q3 2025 Gross Margin	RECELL Franchise Margin (Q3 2025)
Gross Margin Percentage	81.3%	83.6%