Axogen, Inc. · NASDAQ:AXGN
Axogen — Investor Presentation (January 2021)
38 slides from Axogen's investor presentation, Jan 11, 2021
Slide 1: Corporate presentation
As of December 31, 2020 nasdaq: axgn Corporate presentation
Slide 2: Safe harbor statement
2 This presentation contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or predictions of future conditions, events, or results based on various assumptions and management's estimate
Slide 3: The Axogen platform for nerve repair
3 The Axogen platform for nerve repair revolutionizing the science of nerve repair™
Slide 4: The function of nerves
4 The function of nerves Nerves are like wires • Transfer signals across a network • If cut, data cannot be transferred • If crushed, short circuits and data corruption may occur The peripheral nervous system is a vast network from every organ to and from the brain • Sensory • Motor • Autonomic revo
Slide 5: Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth
Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth 5 Exclusively focused on peripheral nerve repair across an expanding set of applications addressing large market opportunity Differentiated platform for nerve repair, anchored by Avance® Nerve Graft
Slide 6: Delivering strong, consistent revenue growth & gross margins
6 83.0% Gross Margin for the quarter ended September 30, 2020 U.S. $ in millions Delivering strong, consistent revenue growth & gross margins revolutionizing the science of nerve repair™ Operational Highlights The company estimates that Q4 revenue includes less than $1m in revenue from previously de
Slide 7: How are nerves injured?
revolutionizing the science of nerve repair™ 7 How are nerves injured? Transections Traumatic nerve injuries e.g., Motor vehicle accidents, power tool accidents, battlefield injuries, gunshot wounds, surgical injuries, neuromas in continuity Repair Compression Carpal, cubital, tarsal tunnel revision
Slide 8: Current targeted nerve markets (U.S.)
Current targeted nerve markets (U.S.) 8 Trauma $1.9B Breast $250M OMF $300M Carpal & Cubital Tunnel $270M U.S. potential procedural estimates >900,000** • Trauma: > 700,000(1,2,3,4) • Carpal Tunnel Revisions & Cubital Tunnel: 130,000(5,6,7,8) • OMF: > 55,000(9,10,11,12,13,14,15,16,17) • Breast Neuro
Slide 9: Estimated $2.7B value of market opportunity in existing applications
Annual Incidence(a) Weighted Average Procedure Value Total Addressable Market Trauma 700,000(b) $2,725(C) $1,900M Carpal and Cubital Tunnel 130,000 $2,100 $270M Oral and Maxillo-Facial (OMF) 56,000 $5,400 $300M Breast Reconstruction Neurotization 24,500 flaps (15,000 patients) $10,200 $250M Totals >
Slide 10: Trauma total addressable market
10 Trauma total addressable market revolutionizing the science of nerve repair™
Slide 11: Trauma total addressable market (continued)
Trauma total addressable market (continued) 11 revolutionizing the science of nerve repair™
Slide 12: Traditional transection repair options are suboptimal
Traditional TRANSECTION repair options are suboptimal 12 SUTURE Direct suture repair of no-gap injuries • Common repair method • May result in tension to the repair leading to ischemia • Concentrates sutures at the coaptation site AUTOGRAFT Traditional method despite several disadvantages • Secondar
Slide 13: Axogen solutions for transection repair
13 25 µm Processed human nerve allograft for bridging nerve gaps Clinically studied off-the-shelf alternative • A biologically active nerve therapy with more than ten years of comprehensive clinical evidence • 82-84% meaningful recovery in sensory, mixed and motor nerve gaps in multi-center study22
Slide 14: Traditional compression repair options are suboptimal
Traditional COMPRESSION repair options are suboptimal 14 VEIN WRAPPING Autologous vein • Barrier to attachment to surrounding tissue • Requires extra time and skill to perform spiral wrapping technique • Second surgery site HYPOTHENAR FAT PAD Autologous vascularization flap • Barrier to attachment t
Slide 15: Axogen solutions for compression repair
15 Axogen solutions for COMPRESSION repair Minimally processed porcine extracellular matrix for wrapping and protecting injured peripheral nerve Protects repair site from surrounding tissue • Processing results in an implant that works with the body’s natural healing process32 • Minimizes soft tissu
Slide 16: Traditional stump neuroma options are suboptimal
Traditional STUMP NEUROMA options are suboptimal 16 TRACTION NEURECTOMY Nerve placed in traction and cut to allow for retraction • Simply resecting the nerve results in subsequent neuroma formation • Causes traction injury • High risk of recurrence37 BURYING IN MUSCLE/BONE Traditional method of neur
Slide 17: Axogen solution for stump neuroma
17 Axogen solution for STUMP NEUROMA Proprietary SIS matrix designed to separate the nerve end from the surrounding environment to protect it from mechanical stimulation and reduce painful neuroma formation. Protects and isolates • Reduces the development of symptomatic or painful neuroma formation
Slide 18: Axogen's comprehensive platform for addressing nerve injuries
Axogen’s comprehensive platform for addressing nerve injuries Connection Protection Termination revolutionizing the science of nerve repair™
Slide 19: Avance IP and regulatory barriers to competitive entry
19 Avance IP and regulatory barriers to competitive entry Avance nerve graft is processed and distributed in accordance with US FDA requirements for Human Cellular and Tissue-based Products (HCT/P) Avance nerve graft Issued U.S. Patents 6,696,575 9,572,911 6,972,168 9,597,429 7,402,319 9,690,975 7,7
Slide 20: Unique Avance technology creates barriers to competitive entry
Unique Avance technology creates barriers to competitive entry revolutionizing the science of nerve repair™ 20 Progress toward Biologics License Application (BLA) for Avance nerve graft • Received Regenerative Medicine Advanced Therapy (RMAT) designation for Avance Nerve Graft in September 2018 – Hi
Slide 21: Market development strategy
21 Market development strategy Build Market Awareness Educate Surgeons, Develop Advocates Grow Body of Clinical Evidence Execute Sales Plan Expand Product Pipeline + Applications revolutionizing the science of nerve repair™
Slide 22: Focus on building awareness among clinicians and patients
22 Focus on building awareness among clinicians and patients Build Market Awareness • Increased multi-channel engagement with clinicians and patients • Continuing clinical conference participation virtually • Ongoing patient ambassador program • Garnering positive media attention • Growing social me
Slide 23: Emphasis on education
23 PILLAR 2 Emphasis on education Build Market Awareness Educate Surgeons, Develop Advocates • Converted national education programs to virtual platforms • Providing customized multimodal learning programs to specific surgeon cohorts for advanced learning • Interactive webinar series underway coveri
Slide 24: Strong commitment to developing clinical evidence
24 PILLAR 3 Strong commitment to developing clinical evidence Build Market Awareness Educate Surgeons, Develop Advocates Grow Body of Clinical Evidence RANGER® Registry Study: Enrollment Ongoing • The largest multi-center clinical study in peripheral nerve repair with >2,200 Avance nerve repairs enr
Slide 25: Growing body of clinical evidence
25 PILLAR 3 *Total number as of September 30, 2020 for the Axogen portfolio of surgical implant products. Certain publications contain data on multiple applications. Growing body of clinical evidence Build Market Awareness Educate Surgeons, Develop Advocates Grow Body of Clinical Evidence 138 Peer R
Slide 26: Avance Nerve Graft repairs found to be significantly better than conduit repairs
Avance Nerve Graft repairs found to be significantly better than conduit repairs revolutionizing the science of nerve repair™ 26 • Peer-reviewed publication from the MATCH cohort of the RANGER Registry • Includes outcomes from 110 subjects with 162 injuries. 113 were repaired with Avance Nerve Graft
Slide 27: Recent study presentations find Avance Nerve Graft comparable to nerve autograft
Recent study presentations find Avance Nerve Graft (allograft) rates comparable to nerve autograft for both clinical outcomes and facility procedure costs revolutionizing the science of nerve repair™ 27 “A propensity Matched Cohort Study on Outcomes from Processed Nerve Allograft and Nerve Autograft
Slide 28: Focused sales execution, increasing market penetration
28 PILLAR 4 Focused sales execution, increasing market penetration Build Market Awareness Educate Surgeons, Develop Advocates Grow Body of Clinical Evidence Execute Sales Plan Sales execution focused on driving results • Continue driving penetration in active accounts and developing new active accou
Slide 29: CMS hospital outpatient and ASC reimbursement rates
CPT Code Descriptor C-APC Hospital Outpatient (HOPD) Ambulatory Surgery Center (ASC) 2019 2020 2021 2Y % Change 2019 2020 2021 2Y % Change 64912 Nerve allograft repair2 5432 $4,566 $5,508 $5,700 25% $1,920 $3,422 $3,788 97% 64910 Conduit or vein allograft repair2 5432 $4,566 $5,508 $5,700 25% $2,613
Slide 30: CMS physician fee adjustments continue to favor nerve allograft repair
CMS physician fee adjustments continue to favor nerve allograft repair revolutionizing the science of nerve repair™ 30 January 10, 2021 Note: PFS rates updated to reflect the Consolidated Appropriations Act (passed Dec-27, 2020) that modified the Calendar Year (CY) 2021 Medicare Physician Fee Schedu
Slide 31: Expand the opportunity in nerve repair
31 PILLAR 5 Expand the opportunity in nerve repair Build Market Awareness Educate Surgeons, Develop Advocates Grow Body of Clinical Evidence Execute Sales Plan Expand Product Pipeline + Applications International Expansion Product Pipeline Future Market Development Market Expansion Core Business rev
Slide 32: Platform for nerve repair across multiple applications
32 Platform for nerve repair across multiple applications Breast Neurotization Loss of breast sensation affects QOL Urology Prostatectomy OMF Iatrogenic nerve injuries, mandible tumor resections affects eating, speaking, intimacy Extremities (Trauma and Compression) Acute trauma, revision carpal tun
Slide 33: Balance sheet and capital structure
33 Balance Sheet Highlights September 30, 2020 Cash, Cash Equivalents, and Investments $106.7 million Total Long-term Debt $34.4 million* Capital Structure (shares) September 30, 2020 Common Stock 40,123,841 Common Stock Options, RSUs, PSUs 5,496,833 Common Stock and Common Stock Equivalents 45,620,
Slide 34: Executive team
Executive team 34 Karen Zaderej Chairman, CEO, & President J&J (Ethicon) Peter J. Mariani Chief Financial Officer Guidant, Lensar, Hansen Erick DeVinney VP, Clinical & Translational Sciences Angiotech, PRA Intl Mike Donovan VP, Operations Zimmer Brad Ottinger General Counsel, Chief Compliance Office
Slide 35: Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth
Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth 35 Exclusively focused on peripheral nerve repair across an expanding set of applications addressing large market opportunity Differentiated platform for nerve repair, anchored by Avance® Nerve Graft
Slide 36: Awards and recognition
nasdaq: axgn Deloitte Technology Fast 500: 2014, 2015, 2016, 2017, 2018, 2019 Russell 2000 Index: June 2016 DecisionWise Intl Employee Engagement Best Practices Award Winner: 2018 36 revolutionizing the science of nerve repair™
Slide 37: Footnotes
37 Footnotes 1. National Hospital Ambulatory Medical Care Survey: 2015 Emergency Department Summary Tables – Table 18. https://www.cdc.gov/nchs/data/nhamcs/web_tables/2015_ed_web_tables.pdf 2. Noble, et al.. Analysis of Upper and Lower Extremity Peripheral Nerve Injuries in a Population of Patients
Slide 38: Footnotes
38 Footnotes 37. Mitchell A Pet 1, Jason H Ko, Janna L Friedly, Douglas G SmithTraction Neurectomy for Treatment of Painful Residual Limb Neuroma in Lower Extremity Amputees J Orthop Trauma. 29 (9), e321-5 Sep 2015. 38. Laborde K, et al. Results of surgical treatment of painful neuromas of the hand.