Avita Medical drops after lowering revenue expectations

The news: Medical technology company Avita's shares plunged after it lowered expectations for quarterly and full-year revenue amid slower demand for its spray-on skin repair products.

The numbers: Avita said commercial revenue for the March quarter is likely to be in the range of USD11 million to USD11.3 million, below its previous estimate of USD14.8 million-USD15.6 million. Full-year revenue is now forecast to be at the lower end of the USD78.5 million to USD84.5 million guidance. Avita shares tumbled more than 13% to $3.89 in early trading on the ASX.

The context: The Nasdaq and ASX-listed firm attributed the weaker performance to a slower-than-expected conversion rate of new accounts for its expanded label of full-thickness skin defects. The group said it added 22 new accounts for the product in the first quarter, below its projected rate of 15 new accounts per month. It will report quarterly results on 13 May.

"In light of the challenges encountered in the first quarter of 2024, we are intensifying our efforts to drive growth," chief executive Jim Corbett said in a statement to the ASX.