INTERVIEW: Business Is Personal For Avita CEO Kelliher

Australian-listed Avita Medical Ltd., which has incubated its ReCell skin regeneration technology for more than 20 years, is suddenly close to seeing the therapy put to the wide-scale use it was intended for - helping victims of burns and other wounds grow back their skin quickly and without significant scarring - thanks to a new $54m contract with the US government.

Invented by pioneering surgeon and past Australian of the Year Professor Fiona Woods, who runs the burns unit at Royal Perth Hospital and is a non-executive director of Avita, the spray-on skin treatment was a first-line treatment for victims of the Bali terrorist bombings in 2002.

More recently, this year Avita donated ReCell kits and expertise to treat nearly 500 victims of an explosion at a water park festival in Taiwan.

ReCell works by a tiny sample of the victim’s healthy skin being immersed in a proprietary regenerative epithelial suspension inside a specialized kit. The suspension enables cell signaling associated with wound healing and the new skin is created in minutes at the point of care, ready to be sprayed on the affected area without delay.

Yet delay is something Avita has been all too familiar with. However, that is about to change as 2015 has been a pivotal year for the company after treading water for too long. The appointment of Kelliher as CEO in April was overdue after chief financial officer Tim Rooney had kept the seat warm for 16 months before returning to his role.

Additionally, the past 10 months has seen Avita extend its grip on patents worldwide for ReCell, commence enrolling patients in a key US burns study and then last week it was granted up to $54m in progressive payments under a Biomedical Advanced Research and Development Authority (BARDA) contract, to make the US better prepared “to mitigate the medical consequences from potential chemical, biological, radiation and nuclear threats”.

The US FDA has also recently approved the expansion of its Compassionate Use Investigational Device Exemption program for ReCell to twice as many patients (24) as originally permitted, for those who have insufficient healthy skin available for standard skin grafting. It also allows the application of ReCell to cases beyond burns.

‘Business As Usual’

Kelliher admitted to PharmAsia News that while the subtext of the BARDA deal might sound sinister, it was just business as usual for an organisation tasked with ongoing efforts to ensure the US is optimally-placed to respond to public health emergencies through the adoption of validated “medical countermeasures” such as ReCell.

“BARDA will fund the final clinical trial of ReCell in the US and pay for the remainder of activity needed for FDA approval, which we expect to get in 2017, plus train medics to use the kits in field hospital scenarios,” Kelliher said.

“You couldn’t ask for more on the way to launching in the US.”

ReCell already has marketing approval in Europe, Australia and China. So far, more than 6,000 of Avita’s kits have been used to treat burns patients worldwide.

The BARDA deal includes an upfront $17m to complete enrolment in the US pivotal study and will help underwrite the creation of a stockpile of 5,000 kits for the US army.

Fascinating Backstory

Working in the “war industry” was not something New-Zealand born Kelliher had envisaged after his 14-year stint reporting from the frontlines for wire service UPI, The Times of London and BBC TV.

“After one bad day in Croatia, I decided I didn’t want to go back to wars. My employer was happy for me to work out of the newsroom, but when I was assigned to cover a story about a collector of Smurf dolls, I knew I had to move on,” said Kelliher, who four years ago bought the Scottish Isle of Taransay in the Outer Hebrides as a base for his family of six.

That transaction followed Kelliher selling two omega-3 based nutraceutical companies he founded in the Middle East after he quit journalism.

“I left London to return to the Arab World for a marketing job in a supplements company. After a year, that company was sold and I was forced to make another career change,” Kelliher said.

“There I was, stuck in Jordan, with Israel on one side and Iraq on the other…then I thought…I will start my own business selling supplements, after all, I had written a marketing plan for the Middle East already.”

In 2007, he sold his supplements company Equazen to Galencia of Switzerland, and three years ago, he sold his omega-3 based company Equateq to BASF Corp. He then took two years off to help his wife look after his growing family and to plan his next entrepreneurial move.

“I was on the lookout for a venture that had already tasted early-stage success but needed something extra to fulfil its potential. I had already done this twice with each of my former businesses,” Kelliher said.

“I was drawn to Avita because I could see it was in a bit of a mess, with previous managements having cocked up things like training medics to use the ReCell kits.

“It was also obvious that it would not be a monumental job to turn the good ship Avita around, so I accepted the challenge.”

Kelliher said it was a lack of commercial skills and sufficient clinical evidence that had been holding Avita back.

“It seems that previously, the company would just hand a box over to medics and expect them to know how to use it. We will focus more on the training side.”

Specialists’ Resistance

A “resistance from orthodox” skin graft specialists also played a part in Avita’s slow growth.

“The problem was probably that the company was wrongly marketing ReCell as a replacement for skin grafts. We will reposition the product to be an adjunct to, not replacement of, traditional burns and wound treatments.”

But the time it has taken to get a toe in the FDA door have not been wasted. Over the years, the product has been made more efficient. Previously, it would take weeks to grow new skin from a graft in the kit.

Today, it takes just half an hour, optimizing the 10-hour window during which grafts will “take” more effectively, plus, in the past where up to 12 devices may have been needed to treat someone with severe burns, nowadays just six devices can treat burns to 60% of the body.

Kelliher said that the time recovering in hospital has been slashed by months where ReCell has been applied, partly because of the reduction in associated infections. Additionally, the wounds do not need to be bandaged at all, nor dressed every day as happens with traditional skin grafts.

Other Applications

Avita is already well-advanced in exploring other potential applications using ReCell, including treatment of diabetics with venous leg ulcers that won’t heal and pigmentation conditions such as vitiligo – made famous by pop singer sufferer Michael Jackson – plus removal of tattoos, sunburn damage and acne scarring.

However, Kelliher agreed that when the product eventually gains worldwide acceptance, the next evolution will be to introduce it to the cosmetic-pharmaceuticals industry, which is where the big profits await.

In the meantime, Avita will be concentrating on its pivotal US study and exploring options for either a dual listing on the NASDAQ and Australian Securities Exchange, or even moving the company fully offshore to take advantage of greater capital opportunities in the US.