1. AVITA Medical faces investigation for possible securities law violations. 2. Backlog in provider claims for Recell has negatively impacted demand. 3. Company's stock dropped by approximately 21% following negative financial news. 4. Claims backlog has created uncertainty among providers regarding payments. 5. Investors are being urged to come forward with any relevant information.
The significant backlog of claims and subsequent stock price drop indicate serious operational issues, reminiscent of prior declines in biotech stocks facing regulatory setbacks. Historical precedent shows that unresolved legal or operational challenges can severely hamper investor confidence, perpetuating downward pressure on stock prices.
The investigation and backlog issue directly affect RCEL's operational outlook, which will likely alter investor sentiment significantly. Given the current litigation climate and impact on financial results, investors must be attuned to these developments.
The immediate effects of the claims backlog and stock drop are likely to persist, influencing investor sentiment in the near term. Biotech stocks often react quickly to operational concerns, making any positive turnaround vital to regain confidence and recovery.
The law firm of Kirby McInerney LLP reminds investors its investigation on behalf of AVITA Medical, Inc. ("AVITA" or the "Company") (NASDAQ:RCEL) investors concerning the Company's possible violation of the federal securities laws or other unlawful business practices.
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What Happened?
On August 7, 2025, AVITA released its second quarter 2025 financial results, revealing "a six-month backlog in unpaid provider claims for Recell procedures impacted first-half demand." The Company explained that contractors assigned by the Centers for Medicare & Medicaid Services to determine pricing of the Company's wound care product, Recell, "neither assigned a price or assigned an inadequate price and failed to adjudicate claims in a timely manner." As a result, "claims accumulated from January through June, creating a significant backlog of unpaid claims and inadequately paid claims to providers for Recell procedures. This lack of resolution created uncertainty among providers regarding payment expectations and timelines, which led to a reduction in Recell utilization during the first half of the year."
On this news, the price of AVITA's shares declined by $1.13 per share, or approximately 21%, from $5.38 per share on August 7, 2025 to close at $4.25 on August 8, 2025.
What to Do Next?
If you acquired AVITA securities, have information, or would like to learn more about this investigation, contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs' law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars.
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Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com