Axogen, Inc. · NASDAQ:AXGN
Axogen — Q1 2021 Earnings Presentation
44 slides from Axogen's earnings presentation, May 5, 2021
Slide 1: Corporate presentation
As of March 31, 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
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 83.3% Gross Margin for the quarter ended March 31, 2021 U.S. $ in millions Delivering strong, consistent revenue growth & gross margins revolutionizing the science of nerve repair™ Operational Highlights • Revenue growth of 28% for Q1 • Executing our strategy of driving adoption in our largest mar
Slide 7: Guidance Update May 5, 2021
Guidance Update May 5, 2021revolutionizing the science of nerve repair™ 7 May 2021 Reinitiating annual financial guidance • Full-year 2021 revenue will be in the range of $133m to $136m • Full-year 2021 gross margin is expected to remain above 80% We expect that the incidence of trauma will increase
Slide 8: How are nerves injured?
revolutionizing the science of nerve repair™ 8 How are nerves injured? Transection Traumatic nerve injuries e.g., motor vehicle accidents, power tool accidents, battlefield injuries, gunshot wounds, surgical injuries, neuromas in continuity Connect Compression Carpal, cubital, tarsal tunnel revision
Slide 9: Current targeted nerve markets (U.S.)
Current targeted nerve markets (U.S.) 9 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 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 f laps (15,000 pat ients) $10,200 $250M Tot
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 solutions for compression repair
16 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 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 recurrence 39 BURYING IN MUSCLE/
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 u il d M a rk e t A w a re n e s s E d u c a te S u rg e o n s , D e v e lo p A d v o c a te s G ro w B o d y o f C li n ic a l E v id e n c e E x e c u te S a le s P la n E x p a n d P ro d u c t P ip e li n e + A p p li c a ti o n s revolutionizing the science of n
Slide 23: Focus on building awareness among clinicians and patients
23 Focus on building awareness among clinicians and patients B u il d M a rk e t A w a re n e s s • Increased multi-channel engagement with clinicians and patients • Continuing clinical conference participation virtually • Ongoing patient ambassador program • Garnering positive media attention • Gro
Slide 24: Emphasis on education
24 P I L L A R 2 Emphasis on education B u il d M a rk e t A w a re n e s s E d u c a te S u rg e o n s , D e v e lo p A d v o c a te s • Converted national education programs to virtual platforms • Providing customized multimodal learning programs to specific surgeon cohorts for advanced learning •
Slide 25: Strong commitment to developing clinical evidence
25 P I L L A R 3 Strong commitment to developing clinical evidence B u il d M a rk e t A w a re n e s s E d u c a te S u rg e o n s , D e v e lo p A d v o c a te s G ro w B o d y o f C li n ic a l E v id e n c e RANGER® Registry Study: Enrollment Ongoing • The largest multi-center clinical study in
Slide 26: Growing body of clinical evidence
26 P I L L A R 3 *Total number as of March 31, 2021 for the Axogen portfolio of surgical implant products. Certain publications contain data on multiple applications. Growing body of clinical evidence B u il d M a rk e t A w a re n e s s E d u c a te S u rg e o n s , D e v e lo p A d v o c a te s G
Slide 27: Avance Nerve Graft repairs 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 comparable 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
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 for chronic neuropathic pain
Axogen sponsored REPOSESM pilot study analysis demonstrates clinically significant improvement for subjects with chronic neuropathic pain when using Axoguard Nerve Cap® following neurectomy61 revolutionizing the science of nerve repair™ 31May 5, 2021 15-subject, single arm pilot phase evaluating red
Slide 32: Focused sales execution, increasing market penetration
32 P I L L A R 4 Focused sales execution, increasing market penetration B u il d M a rk e t A w a re n e s s E d u c a te S u rg e o n s , D e v e lo p A d v o c a te s G ro w B o d y o f C li n ic a l E v id e n c e E x e c u te S a le s P la n Sales execution focused on driving results • Continue
Slide 33: Medicare reimbursement by nerve repair procedure code
64912 Nerve allograft repair2 5432 $ 4 , 5 6 6 $ 5 , 5 0 8 $ 5 , 7 0 0 2 5 % $ 1 , 9 2 0 $ 3 , 4 2 2 $ 3 , 7 8 8 9 7 % 64910 Conduit or vein allograft repair2 5432 $ 4 , 5 6 6 $ 5 , 5 0 8 $ 5 , 7 0 0 2 5 % $ 2 , 6 1 3 $ 3 , 1 3 3 $ 3 , 8 0 2 4 5 % 64885 Autograft repair (head and neck ≤4cm) 5432 $ 4
Slide 34: 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™ 34May 5, 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 Schedule (MP
Slide 35: Expand the opportunity in nerve repair
35 P I L L A R 5 Expand the opportunity in nerve repair B u il d M a rk e t A w a re n e s s E d u c a te S u rg e o n s , D e v e lo p A d v o c a te s G ro w B o d y o f C li n ic a l E v id e n c e E x e c u te S a le s P la n E x p a n d P ro d u c t P ip e li n e + A p p li c a ti o n s Interna
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 March 31, 2021 Cash, Cash Equivalents, and Investments $97.2 million Total Long-term Debt $35.0 million* Capital Structure (shares) March 31, 2020 Common Stock 40,705,840 Common Stock Options, RSUs, PSUs 6,152,283 Common Stock and Common Stock Equivalents 46,858,123 Balan
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, Clinical & Translational Sciences Angiotech, PRA Intl Mike Donovan VP, Operations Zimmer Brad Ottinger General Cou
Slide 39: Axogen is the preeminent nerve repair company
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: Awards and index 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 40revolutionizing the science of nerve repair ™
Slide 41: Historical Active and Growth Accounts
Historical Active and Growth Accounts 731 762 791 797 825 789 875 893 919 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 212 236 246 244 243 228 248 269 274 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Active accounts typically contribute ≈85% of t
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 39. Mitchell A Pet, 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. 40. Laborde K, et al. Results of surgical treatment of painful neuromas of the hand.
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