AVITA Medical, Inc. Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against AVITA Medical, Inc. (RCEL).

If you purchased or held AVITA Medical securities and suffered losses, you may be eligible to join this securities investigation and seek compensation.

About AVITA Medical

AVITA Medical is a medical technology company focused on developing and commercializing innovative devices for wound care and skin restoration. The company’s primary product, the RECELL system, is designed to treat acute wounds and burns by harnessing the regenerative properties of a patient’s own skin cells. AVITA Medical has highlighted the adoption of RECELL in both hospital and outpatient settings, positioning itself as a leader in therapeutic acute wound care.

The company has reported significant growth in recent periods, with management frequently touting record revenues and the successful launch of new products such as RECELL GO and Cohealyx. AVITA Medical’s leadership, including CEO Jim Corbett and CFO David O’Toole, has emphasized strategic partnerships and regulatory milestones as key drivers of its expansion in the wound care market (ir.avitamedical.com).

Potential Concerns Under Investigation

Lawyers are investigating whether AVITA Medical may have made misleading statements or omitted important information regarding its reimbursement processes and financial performance during the period from Nov. 1, 2024 through Aug. 7, 2025.

One focus of the investigation is AVITA Medical’s Aug. 7, 2025 disclosure that CMS-assigned contractors had failed to price RECELL, resulting in a six-month backlog of unpaid claims (www.biospace.com). Following this announcement, AVITA Medical’s stock price dropped approximately 21 percent, or $1.13 per share, closing at around $4.25 on Aug. 8, 2025. Trading volume spiked to about 1.7 million shares, signaling a significant market reaction (chartexchange.com). Analysts have noted that no other material news or market events occurred that day, suggesting the stock decline was directly tied to AVITA Medical’s disclosure.

Legal professionals may review whether AVITA Medical adequately disclosed the risks and potential impacts of the CMS billing issue prior to the Aug. 7, 2025 announcement. In earlier communications—including the Nov. 7, 2024 Q3 results, Feb. 13, 2025 Q4 update, and May 8, 2025 Q1 report—management highlighted strong revenue growth, product launches, and reaffirmed 2025 revenue guidance of $100–$106 million. However, these statements did not mention the emerging reimbursement gap or the pending backlog of unpaid claims, even though CMS had publicly announced new RECELL CPT codes in Nov. 2024 (ir.avitamedical.com) (ir.avitamedical.com) (ir.avitamedical.com). Lawyers may examine whether the company provided investors with sufficient information about the risk that Medicare contractors would delay or underpay claims, which ultimately led to a reported $10 million shortfall in RECELL revenue for the first half of 2025 (www.biospace.com).

Attorneys could also investigate if AVITA Medical’s management was aware of internal data indicating declining sales and unresolved billing issues before these were made public. For example, the company later acknowledged that RECELL revenue at its top 10 hospital accounts fell by about $5 million from the second half of 2024 to the first half of 2025—a significant drop that was not previously disclosed (www.biospace.com). Legal professionals may review whether shareholders were informed about these developments, especially since the issues affected AVITA Medical’s core business and had a material impact on total revenue.

The investigation may also consider the company’s motives and pressures. AVITA Medical faced significant pressure to meet revenue targets, as evidenced by the removal and waiver of a $73 million annual sales covenant in late 2024 and early 2025 (ir.avitamedical.com) (ir.avitamedical.com). Securities attorneys might examine if this created an incentive for executives to maintain an optimistic outlook despite internal knowledge of challenges.

Regarding insider activity, there is no evidence of suspicious sales by executives during the relevant period. In fact, CFO David O’Toole purchased shares in December 2024 and February 2025, and other insiders exercised stock awards rather than selling shares (www.insiderinsights.com) (www.insiderinsights.com).

The potential harm to investors is substantial. The 21 percent drop in share price following the Aug. 7, 2025 disclosure translates to an estimated $1.13 per share loss, which could result in aggregate losses of tens of millions of dollars depending on the number of shares affected (www.biospace.com) (chartexchange.com).

Your Rights and Next Steps

Investors who purchased AVITA Medical securities between Nov. 1, 2024 and Aug. 7, 2025 and suffered losses may have legal rights as part of this ongoing investigation. Lawyers are ready to help determine whether investors are eligible to participate in any potential class action that could arise from these events.

It is important to understand that this is currently an investigation, not a filed lawsuit. The process may lead to a class action if sufficient evidence of securities law violations is found. Investors who act promptly can help ensure their interests are protected and that they are included in any future recovery.

If you believe you were affected, gathering documentation of your AVITA Medical purchases, sales, and account statements can be helpful. Legal professionals can review your information and advise on the next steps.

You May Be Entitled to Compensation

Securities investigations are time-sensitive, and acting quickly can help preserve your rights. If you purchased AVITA Medical securities and suffered losses during the class period, you may be eligible to join any potential class action and seek compensation for your losses.

To participate in the investigation and learn more about your rights, complete the form below.