Axogen, Inc. · NASDAQ:AXGN
Axogen — Q2 2021 Earnings Presentation
44 slides from Axogen's earnings presentation, Aug 4, 2021
Slide 1: Corporate presentation
As of June 30, 2021 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 a large market opportunity • Differentiated platform for nerve repair, anchored by Avance® Nerve Graf
Slide 6: Delivering strong, consistent revenue growth & gross margins
6 78.9%* Gross Margin for the quarter ended June 30, 2021 U.S. $ in millions Delivering strong, consistent revenue growth & gross margins revolutionizing the science of nerve repair™ Q2 Operational Highlights • Revenue growth of 52% compared to Q2 2020 • Executing our strategy of driving adoption in
Slide 7: Guidance Update
Guidance Update revolutionizing the science of nerve repair™ 7August 04, 2021 August 2021 Updating annual financial guidance • Full-year 2021 revenue will be in the range of $134.5m to $137.5m • Full-year 2021 gross margin is expected to remain above 80% This guidance reflects our optimism in the bu
Slide 8: How are nerves injured?
revolutionizing the science of nerve repair™ 8 How are nerves injured?
Slide 9: Current targeted nerve markets (U.S.)
Current targeted nerve markets (U.S.) 9 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 Neurotization Procedures: 15,000(18) *$2.7B estimate does not include p
Slide 10: 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 11: Trauma total addressable market
11 Trauma total addressable market revolutionizing the science of nerve repair™
Slide 12: Trauma total addressable market (continued)
Trauma total addressable market (continued) 12revolutionizing the science of nerve repair™
Slide 13: Traditional transection repair options are suboptimal
Traditional TRANSECTION repair options are suboptimal 13 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 14: Processed human nerve allograft for bridging nerve gaps
14 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 15: Traditional compression repair options are suboptimal
Traditional COMPRESSION repair options are suboptimal 15 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 16: Axogen solution for compression repair
16 Axogen solution 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 tissue
Slide 17: Traditional stump neuroma options are suboptimal
Traditional STUMP NEUROMA options are suboptimal 17 TRACTION NEURECTOMY Nerve placed in traction and cut to allow for retraction • Simply resecting the nerve results in subsequent neuroma formation and risk of secondary surgery • Causes traction injury • High risk of recurrence35 BURYING IN MUSCLE/B
Slide 18: Axogen solution for stump neuroma
18 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 19: Axogen's comprehensive platform for addressing nerve injuries
Axogen’s comprehensive platform for addressing nerve injuries revolutionizing the science of nerve repair™ Connection Protection Termination
Slide 20: Avance IP and regulatory barriers to competitive entry
20 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 21: Unique Avance technology creates barriers to competitive entry
Unique Avance technology creates barriers to competitive entry revolutionizing the science of nerve repair™ 21 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 22: Market development strategy
22 Market development strategy B ui ld M ar ke t A w ar en es s Ed uc at e Su rg eo ns , D ev el op A dv oc at es G ro w B od y of C lin ic al E vi de nc e Ex ec ut e Sa le s Pl an Ex pa nd P ro du ct P ip el in e + A pp lic at io ns revolutionizing the science of nerve repair™
Slide 23: Focus on building awareness among clinicians and patients
23 Focus on building awareness among clinicians and patients B ui ld M ar ke t A w ar en es s G ro w B od y of C lin ic al E vi de nc e Ex ec ut e Sa le s P la n Ex pa nd P ro du ct P ip el in e + A pp lic at io ns • Increased multi-channel engagement with clinicians and patients • Continuing clinic
Slide 24: Emphasis on education
24 PI LL A R 2 Emphasis on education B ui ld M ar ke t A w ar en es s Ed uc at e Su rg eo ns , D ev el op A dv oc at es G ro w B od y of C lin ic al E vi de nc e Ex ec ut e Sa le s P la n Ex pa nd P ro du ct P ip el in e + A pp lic at io ns • Converted national education programs to virtual platform
Slide 25: Strong commitment to developing clinical evidence
25 PI LL A R 3 Strong commitment to developing clinical evidence B ui ld M ar ke t A w ar en es s Ed uc at e Su rg eo ns , D ev el op A dv oc at es G ro w B od y of C lin ic al E vi de nc e Ex ec ut e Sa le s P la n Ex pa nd P ro du ct P ip el in e + A pp lic at io ns RANGER® Registry Study: Enrollm
Slide 26: Growing body of clinical evidence
26 PI LL A R 3 *Total number as of June 30, 2021 for the Axogen portfolio of surgical implant products. Certain publications contain data on multiple applications. Growing body of clinical evidence B ui ld M ar ke t A w ar en es s Ed uc at e Su rg eo ns , D ev el op A dv oc at es G ro w B od y of C
Slide 27: 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™ 27 • Peer-reviewed publication from the MATCH cohort of the RANGER Registry • Includes outcomes from 110 subjects with 162 nerve injuries; 113 were repaired with Avance Nerve
Slide 28: Avance Nerve Graft recovery rates comparable to nerve autograft
Recent study finds Avance Nerve Graft (allograft) clinical outcomes recovery rates comparable to nerve autograft revolutionizing the science of nerve repair™ 28 “Safa et al., A Propensity Matched Cohort Study on Outcomes from Processed Nerve Allograft and Nerve Autograft in Upper Extremity Nerve Rep
Slide 29: Avance performed comparably to autograft for outcomes and facility procedure costs
Recent studies find Avance Nerve Graft performed comparably to nerve autograft for both clinical outcomes and facility procedure costs revolutionizing the science of nerve repair™ 29 “Styron et al., Nerve Repair Hospital Index Procedure Costs – Allograft vs. Autograft Repair Type” Presented at the A
Slide 30: First publication on breast neurotization outcomes with Avance Nerve Graft
First publication on breast neurotization outcomes with Avance Nerve Graft demonstrated greater return of protective sensation revolutionizing the science of nerve repair™ 30 • Early outcomes from a single center study, as part of the Sensation-NOW registry • 36 breast reconstructions that included:
Slide 31: REPOSE pilot study analysis with Axoguard Nerve Cap
Axogen sponsored REPOSESM pilot study analysis demonstrates clinically significant improvement for subjects with chronic neuropathic pain when using Axoguard Nerve Cap® following neurectomy59 revolutionizing the science of nerve repair™ 31August 04, 2021 15-subject, single arm pilot phase evaluating
Slide 32: Focused sales execution, increasing market penetration
32 PI LL A R 4 Focused sales execution, increasing market penetration B ui ld M ar ke t A w ar en es s Ed uc at e Su rg eo ns , D ev el op A dv oc at es G ro w B od y of C lin ic al E vi de nc e Ex ec ut e Sa le s Pl an Ex pa nd P ro du ct P ip el in e + A pp lic at io ns Sales execution focused on
Slide 33: CPT code reimbursement: hospital outpatient and ambulatory surgery center
CPT Code Descriptor C-APC Hospital Outpatient (HOPD) Ambulatory Surgery Center (ASC) 2019 2020 2021 2022 Proposed 3Y % Change 2019 2020 2021 2022 Proposed 3Y % Change 64912 Nerve allograft repair2 5432 $4,566 $5,508 $5,700 $5,851 28.1% $1,920 $3,422 $3,788 $3,899 103.1% 64910 Conduit or vein allogra
Slide 34: 2022 CMS Physician Fee Schedule
2022 Center for Medicare and Medicaid Services (CMS): Physician Fee Schedule (PFS) revolutionizing the science of nerve repair™ 34August 04, 2021 • Proposed 2022 physician fees decreased for most services (not just nerve repair). • In late December 2020, congress passed legislation to override the p
Slide 35: Expand the opportunity in nerve repair
35 PI LL A R 5 Expand the opportunity in nerve repair B ui ld M ar ke t A w ar en es s Ed uc at e Su rg eo ns , D ev el op A dv oc at es G ro w B od y of C lin ic al E vi de nc e Ex ec ut e Sa le s P la n Ex pa nd P ro du ct Pi pe lin e + A pp lic at io ns International Expansion Product Pipeline Fu
Slide 36: Platform for nerve repair across multiple applications
36 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 37: Balance sheet and capital structure
37 Balance Sheet Highlights June 30, 2021 Cash, Cash Equivalents, and Investments $106.2 million Total Long-term Debt $50.0 million* Capital Structure (shares) June 30, 2021 Common Stock 41,337,108 Common Stock Options, RSUs, PSUs 5,672,964 Common Stock and Common Stock Equivalents 47,010,072 Balanc
Slide 38: Executive team
Executive team 38 Karen Zaderej Chairman, CEO, & President J&J (Ethicon) Peter J. Mariani Executive Vice President and Chief Financial Officer Guidant, Lensar, Hansen Erick DeVinney VP, Peripheral Nerve Science and Clinical Innovation Angiotech, PRA Intl Mike Donovan VP, Operations Zimmer Brad Ottin
Slide 39: 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 39 • Exclusively focused on peripheral nerve repair across an expanding set of applications addressing a large market opportunity • Differentiated platform for nerve repair, anchored by Avance® Nerve Gra
Slide 40: nasdaq: axgn 40revolutionizing the science of nerve repair™
nasdaq: axgn 40revolutionizing the science of nerve repair™
Slide 41: Historical Active and Core Accounts
Historical Active and Core Accounts Active accounts typically contribute ≈85% of total revenue Top 10% of active accounts typically contribute ≈35% of total revenue Active Accounts 6 orders in the last 12 months Core accounts typically contribute ≈60% of total revenue Core Accounts ≥$100,000 revenue
Slide 42: Footnotes
42 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 43: Footnotes
43 Footnotes 1. Gruber H, et al. Practical experience with sonographically guided phenol instillation of stump neuroma: predictors of effects, success, and outcome. Am J Roentgenol. 2008;190(5):1263-1269. 2. Fallat L. Cryosurgery or sclerosing injections: which is better for neuromas. Podiatry Today
Slide 44: Axogen comprehensive portfolio of products
Axogen comprehensive portfolio of products • Avance® Nerve Graft – Regulatory Classification: Avance Nerve Graft is processed and distributed in accordance with U.S. Food and Drug Administration (FDA) requirements for Human Cellular and Tissue- based Products (HCT/P) under 21 CFR Part 1271 regulatio