Avita launches capital raising for spray-on skin

Avita Medical (ASX:AVH) has announced a placement and share purchase plan to raise up to $10 million.

The regenerative medicine company plans to use the proceeds from the capital raising to help fund commercialisation efforts for its ReCell Spray-On Skin technology in the US.

ReCell is a cell harvesting, processing and delivery technology for using the patient's own skin cells to treat wounds and other skin defects.

Avita Medical is in the midst of a phase III trial for the technology to accompany its submission with the FDA to sell the product in the market.

ReCell is already TGA approved in Australia, has a CE Mark in Europe and SFDA cleared in China.

Avita Medical will conduct the capital raising in three stages: a first tranche placement of $4 million; a second tranche placement of at least $2.3 million; and then a non-underwritten share purchase plan for existing investors.

Octa Phillip Bioscience Managers has already committed to invest $3 million in the company, while Australian Ethical Investment will invest a further $1.5 million.

To accompany its investment, Octa Phillip has nominated managing director Jeremy Curnock Cook and chief investment officer Matt McNamara to join the Avita board.

Avita said the raising will ensure it has enough cash to see it through the US approval process for ReCell.

The proceeds will be put towards expanding sales and marketing efforts for the product, and funding more studies involving the use of ReCell in chronic wounds as well as plastic, reconstructive and aesthetic procedures.

The company will also use the funds to support development efforts for the next generation of its product line.

Avita Medical (ASX:AVH) shares fell 7.14% in Wednesday's trading to $0.130.