Avita Medical Ltd. (ASX: AVH), the regenerative medicine company, announced today financial results for the third quarter and nine months ending March 31, 2011. The following provides accrual-basis supplementary information to that provided in the Quarterly Appendix 4C cash basis accounting.

Revenues for the third quarter of 2011 ending March 31, 2011, were $948,251, an increase of 29% compared to the same period in 2010. Revenues for the nine months of fiscal 2011 ending March 31, 2011, were $3,171,679, an increase of 18% compared to the same period in 2010.

“Sales of our ReCell Spray-On-Skin regenerative product have shown strong growth, not only year-to-year and quarter-to-quarter but also in consecutive quarters,” said William Dolphin, Ph.D., CEO of Avita Medical. “ReCell is an easy-to-use bedside kit that is now available to clinicians in Australia, France, Germany, Portugal, Russia, The Netherlands and the United Kingdom.”

Revenues from the sale of ReCell through 31 March, 2011, were 147% of sales from the same period last year and 173% of the previous quarter. Revenues from sale of ReCell represent an increasing proportion of total sales, from less than 12% of sales revenues in 3Q10 to approximately 30% of sales revenues in 3Q11. Management expects this trend to continue, with regenerative products contributing an increasing proportion of sales revenues.

“We have a strong commitment to cost containment and improved efficiencies,” added Dr. Dolphin, “which has enabled Avita to maintain gross margins at approximately 75% for the year to date. While we have increased headcount, R&D expenses and sales & marketing expenses in fiscal year 2011, operating losses for the year-to-date were $1,095,007, a 37% decrease compared to an operating loss of $1,773,128 for the same period last year. The improved operating performance is due to a combination of increased sales, improved manufacturing efficiencies and decreased administrative and operational expenses.

“Avita has continued to make excellent progress since its re-launch in July 2008. We are successfully achieving the targets and goals set out in the company’s initial 3-year strategic plan and will be implementing our next 3-year plan commencing in July 2011. We will continue our investment in reinvigorated sales and marketing efforts, particularly overseas where we expect to see strong returns and high growth in the coming quarters. This will continue to be a year of growth for the company, establishing Avita and ReCell as a market leader in the field of regenerative medicine,” concluded Dr. Dolphin.

More than 3,500 patients have been treated with ReCell for treatment of burns, hypo- and hyper-pigmentation (e.g., Vitiligo, a common skin pigmentation disease), scar revisions (e.g., acne), and aesthetic skin rejuvenation procedures (e.g., wrinkle removal). Use of ReCell has been clinically demonstrated to improve outcomes, reduce morbidity, and reduce length of hospital stay and patient care costs.

ABOUT RECELL® SPRAY-ON SKIN™

ReCell allows in-theatre preparation of a spray-on suspension consisting of cells derived from a small (2x2cm), thin (0.15-0.20mm) biopsy of the patient’s own skin that is sufficient to cover an area up to 80 times the size of the biopsy. The ReCell suspension contains undifferentiated basal keratinocytes, melanocytes, fibroblasts and Langerhans cells. The metabolically responsive epithelial cells migrate across the wound surface, leading to regeneration of skin of normal color and texture. ReCell requires only a minimal donor site and is immediate available as a cell-based spray at the patient’s bedside.

ReCell^® is patented, CE-marked for Europe, TGA-registered in Australia, and SFDA-cleared in China. ReCell^® is not available for sale in the United States; in the U.S. ReCell^® is an investigational device limited by federal law to investigational use.

ABOUT AVITA MEDICAL LTD.

Avita Medical () is a publicly listed medical technology company that develops and distributes regenerative and tissue-engineered products for the treatment of a broad range of wounds, scars and skin defects. Using patented and proprietary tissue-culture, collection and application technology, the company is able to provide innovative treatment solutions derived from a patient’s own skin. The company’s lead product, ReCell^® Spray-On Skin, has been designed for use in a wide variety of burns, plastic, reconstructive and cosmetic procedures.

This news release may include forward-looking statements that involve risks and uncertainties. You can identify these statements by the use of words such as “anticipate”, “estimate”, “expect”, “project”, “potential”, “intend”, “plan”, “believe”, “target”, “may”, “assume” or similar expressions. These forward-looking statements speak only as at the date of this release and are based on management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Avita Medical that could cause actual results to differ materially from such statements. Avita Medical makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release. This document is intended to provide background information only and does not purport to make any recommendation upon which you may reasonably rely without taking further and more specific advice.