The company producing a spray-on skin treatment developed by Australian of the Year Fiona Wood is all but certain to receive a first strike when shareholders meet on Friday.
Avita Medical's two biggest shareholders say they will vote against the loss-making biotech's remuneration report, citing concerns over the pay of chief executive Bill Dolphin and company performance.
A strike will be recorded if more than 25 per cent of shares are voted against the remuneration report.
Australian Ethical Investments and Bioscience Managers control almost 28 per cent of Avita stock. If the company records a second strike next year, it must ask shareholders if they wish to spill the board.
Bioscience Managers, which owns about 7.7 per cent of Avita, said it was likely Avita would need to raise capital in the next 12 months.
"Shareholders are increasingly frustrated that a great technology is being poorly served by the management of the company," Bioscience Managers investment director Bronwyn Dilley said on Wednesday.
"Shareholders are also tired of seeing high short-term incentives, paid in cash, to a CEO who is presiding over mediocre performance."
On Sunday, Australian Ethical Investments said it would vote its 20 per cent stake in Avita against the remuneration report.
Avita chairman Dalton Gooding said the company "welcomes feedback from all its shareholders".