Why this medical tech ASX share could rocket today

This dual-listed stock shot up 7% overnight in the US. So could it do the same in Australia on Thursday?
The post Why this medical tech ASX share could rocket today appeared first on The Motley Fool Australia. –

The AVITA Medical Inc (ASX: AVH) share price will be keenly watched when the ASX opens on Thursday after some big news overnight pushed its US shares up 7%.

The company provides regenerative medical technology, with its ReCell spray-on skin for burn patients its flagship product.

Overnight Avita revealed that US authority Centers for Medicare & Medicaid Services (CMS) approved ReCell for a transitional pass-through payment device category code that will provide payment for “procedures that are performed in hospital outpatient facilities and ambulatory surgical centres”.

What does this mean?

A prominent fund manager told The Motley Fool that it’s a huge boost for the adoption of ReCell in the US market.

“Doctors will get reimbursed for the cost of the device when they use it for burns treatments outside a hospital setting.”

Avita shares on the NASDAQ rocketed overnight

The company, founded by 2005 Australian of The Year Dr Fiona Wood, is listed on both the ASX and the NASDAQ.

In what could be an omen for the Australian market, AVITA Medical Inc (NASDAQ: RCEL) shares shot up 7.12% in overnight trade.

The news will be some relief to shareholders, who have had their faith sorely tested in the past 18 months.

After reaching as high as $16.30 in February 2020 before the COVID-19 crash struck, Avita’s ASX shares have sunk 73% since then.

Avita’s ASX shares closed Wednesday at $4.43.

Avita chief executive Dr Mike Perry said the CMS approval could be a precursor for future subsidies.

“This device code lays the reimbursement foundation for the soft tissue repair indication we are working towards, which has a serviceable addressable market valuation of US$450 million.”

Despite its recent struggles, Avita shares continue to be a favourite among analysts.

According to CMC Markets, 5 of 6 analysts rate it as a “strong buy”.

Montgomery Fund portfolio manager Joseph Kim in July told The Motley Fool it’s a stock he would hold on for 5 years.

“It’s going to take time. And there’s always going to be people that won’t use it because they’re just stuck in their ways,” he said.

“But then, ultimately, as a doctor with the duty of care, you’ve got to provide the best outcome to your patients. I think from that perspective, I’m pretty optimistic now.”

The post Why this medical tech ASX share could rocket today appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Megaport (ASX:MP1) share price outperforms All Tech Index by 14% over the past month

How did the Westpac (ASX:WBC) share price perform in October?

What’s going on with the Federal Reserve and how might it impact ASX shares?

Here’s what happened to the Telstra (ASX:TLS) share price in October

Afterpay (ASX:APT) share price on watch after Square takeover update

Motley Fool contributor Tony Yoo owns shares of Avita Medical Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!