Guess which ASX healthcare stock is jumping 7% on US FDA approval news

AVITA Medical Inc (ASX: AVH) shares are having a strong start to the day.

In morning trade, the ASX healthcare stock is up over 7% to $4.10.

Why is this ASX healthcare stock jumping?

Investors have been buying the regenerative medicine company's shares after it made a big announcement.

According to the release, the United States Food and Drug Administration (FDA) has approved its premarket approval (PMA) supplement for RECELL GO mini.

The company notes that as a line extension of the existing RECELL GO system, the RECELL GO mini disposable cartridge is designed specifically to treat smaller wounds up to 480 square centimetres. This compares to the standard RECELL GO disposable cartridge, which treats an area of 1,920 square centimetres.

Why the mini version?

Management points out that RECELL GO mini addresses a critical need in the full-thickness skin defect market, which includes a high volume of smaller wounds.

As part of the RECELL GO platform, RECELL GO mini uses the same multi-use processing device as the standard disposable cartridge. However, it features a modified cartridge that is optimised for smaller skin samples. This reduces resource use and minimises waste.

The company feels that this design provides an entry point for clinicians who may not have previously used the RECELL GO platform for smaller wounds, enabling broader accessibility and use in trauma and burn centres.

The ASX healthcare stock's CEO, Jim Corbett, was pleased with the news. He said:

The FDA approval of RECELL GO mini strengthens our ability to provide clinicians with fit-for-purpose solutions that meet the diverse needs of patients with full-thickness wounds. By introducing a treatment option specifically for smaller wounds, we are expanding the accessibility of RECELL to a wider range of patients. We believe this addition will drive greater adoption across trauma centers, where smaller wounds are common, and support our broader growth strategy.

What's next?

The company notes that it expects RECELL GO mini to serve as a growth driver within the broader RECELL GO platform, further advancing the ASX healthcare stock's strategy to expand its impact on patient care.

Its rollout will begin with trauma and burn centres that currently treat smaller wounds during the first quarter of 2025.

Following today's gain, this ASX healthcare stock is now trading largely flat year to date. Though, it remains down by a sizeable 65% over the past five years.

The post Guess which ASX healthcare stock is jumping 7% on US FDA approval news appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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