Axogen, Inc. · NASDAQ:AXGN
Axogen — Investor Presentation (January 2023)
47 slides from Axogen's investor presentation, Jan 9, 2023
Slide 1: Corporate presentation
January 9, 2023 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 Nerv
Slide 5: A comprehensive platform for addressing nerve injuries
Connection Protection Termination 5 A comprehensive platform for addressing nerve injuries revolutionizing the science of nerve repair®
Slide 6: Axogen is the preeminent nerve repair company
Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth 6 • Exclusively focused on peripheral nerve repair with a differentiated platform • 10+ years of demonstrated clinical outcome consistency • Featured in 215 peer-reviewed clinical publications • Over 75,
Slide 7: Targeted nerve markets (U.S.)
Targeted nerve markets (U.S.) 7 Trauma $1.9B Breast $250M OMF $300M Carpal & Cubital Tunnel $270M U.S. potential procedural estimates >900,000** • Trauma: > 700,000 • Carpal Tunnel Revisions & Cubital Tunnel: 130,000 • Oral Maxillofacial (OMF): 56,000 • Breast Neurotization Procedures: 15,000 *$2.7B
Slide 8: Delivering strong, consistent revenue growth & gross margins
8 Delivering strong, consistent revenue growth & gross margins Operational Highlights** • Q4 Preliminary revenue growth of 16% over Q4 2021.* • Full-year 2022 revenue is expected to be approximately $138.5 million, a 12% increase compared to 2021.* • Total Core Accounts increased 1% sequentially to
Slide 9: Guidance
Guidance 9 2022 Annual Financial Guidance – Updated 1/9/2023 • Full-year 2022 revenue is expected to be approximately $138.5 million, compared to guidance range of $137.5 million to $140 million. – Represents approximately 12% growth over 2021 revenue excluding the impact of $4.1 million of Avive re
Slide 10: Traditional transection repair options are suboptimal
Traditional TRANSECTION repair options are suboptimal 10 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 11: Processed human nerve allograft for bridging nerve gaps
11 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 12: Traditional compression repair options are suboptimal
Traditional COMPRESSION repair options are suboptimal 12 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 vascularized flap • Barrier to attachment to s
Slide 13: Axogen solution for compression repair
13 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 process33 • Minimizes soft tissue
Slide 14: Traditional stump neuroma options are suboptimal
Traditional STUMP NEUROMA options are suboptimal 14 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 36 BURYING IN MUSCLE/
Slide 15: Axogen solution for stump neuroma
15 Axogen solution for STUMP NEUROMA Proprietary small intestine submucosa (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 o
Slide 16: Avance IP and regulatory barriers to competitive entry
16 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 Axogen has Enforcement Discretion from FDA allowing continued s
Slide 17: Independent publication of nerve meta analysis
Independent Publication of Nerve Meta Analysis Provides the Strongest Clinical and Economic Evidence To-Date of the Performance of Avance® Nerve Graft Across All Gap Lengths and Nerve Types 17 • Analyzed 35 peer-reviewed studies with 711 allograft, 670 autograft, and 178 conduit repairs, over four d
Slide 18: RECON study design
RECONSM: A Multicenter, Prospective, Randomized, Subject & Evaluator Blinded Comparative Study of Nerve Cuffs & Avance Nerve Graft Evaluating Recovery Outcomes for the Repair of Nerve Discontinuities 18 Safety & efficacy non- inferiority comparison of Avance vs conduit Evaluated upper extremity digi
Slide 19: RECON study demographics
RECON Study Demographics: Balanced across both groups 19 Conduit Avance Overall Subjects, n 108 112 220 Female (%) 28.7% 30.4% 29.5% Male (%) 71.3% 69.6% 70.5% Age, years Median 39.5 36.0 37.0 Min, Max 18, 69 18, 68 18, 69 Nerve Injury Gap Length, mm 12.9 13.4 13.1 19revolutionizing the science of n
Slide 20: RECON study topline results
RECON Study Topline Results 20 Statistical superiority demonstrated at increasing gap lengths ✓ Avance demonstrated statistical superiority for return of sensory function (measured by static two-point discrimination) as compared to conduits in gaps greater than 12 mm (p-value 0.021). ✓ Avance demons
Slide 21: Axogen Processing Center (APC)
21 Axogen Processing Center (APC) • Expected transition to our new biologics processing center in the first half of 2023. • Supports BLA requirements and long-term growth revolutionizing the science of nerve repair®
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 • Increasing omnichannel engagement with clinicians and patients • Continuing clinical conference participation both virtually and in-person as appropriate • Ongoing patient ambassador program • Garnering positive media attention • Growing
Slide 24: Emphasis on education
24 P IL L A R 2 Emphasis on education • In-person and virtual national education programs • Customized multimodal learning programs to specific surgeon groups for advanced learning • Ongoing interactive webinar series covering the principles of nerve repair • Train more than three-quarters of all ha
Slide 25: Strong commitment to developing clinical evidence
Outcomes from RANGER Registry 48,49 25 P IL L A R 3 Strong commitment to developing clinical evidence RANGER® Registry Study: Enrollment Ongoing • Multi-center clinical study in PNR with >2,700 enrolled to date • Overall meaningful recovery rates of 82-84%; comparable to autograft MATCH® Registry St
Slide 26: Focused sales execution, increasing market penetration
26 P IL L A R 4 Focused sales execution, increasing market penetration P IL L A R 3 E x e c u te S a le s P la n Sales execution focused on driving results • Continue driving penetration in Active and Core Accounts • Approximately 5,100 potential U.S. accounts perform nerve repair • 968 Active Accou
Slide 27: Expand the opportunity in nerve repair
27 P IL L A R 5 Expand the opportunity in nerve repair P IL L A R 4 P IL L A R 3 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 Breast Neurotization Loss of breast sensation affects Quality of Life Urology Prostatectomy OMF Iatrogenic nerve injuries, mandible tumor resections affects
Slide 28: Balance sheet and capital structure
28 Balance Sheet Highlights December 31, 2022 (Estimated) Cash, Cash Equivalents, and Investments $55.0 million Total Long-term Debt $50.0 million* Capital Structure (shares) September 30, 2022 Common Stock 42,272,223 Common Stock Options, RSUs, PSUs 6,998,426 Common Stock and Common Stock Equivalen
Slide 29: Committed to our patients, communities and sustainable ways
Committed to our patients, the communities we serve, and our pursuit of advancing the science of nerve repair in ethical and sustainable ways Diversity, Equity, and Inclusion - Being the Company where exceptional people want to work Cybersecurity – Data Privacy, Training, and Policies Compliance - Q
Slide 30: Executive team
Executive team 30 Erick DeVinney VP, Peripheral Nerve Science and Clinical Innovation Angiotech, PRA Intl Mike Donovan VP, Operations Zimmer Ivica Ducic, M.D., Ph.D. Medical Director Washington Nerve Institute Angelo Scopelianos, Ph.D. Chief Research & Development Officer J&J Peter J. Mariani Execut
Slide 31: Axogen is the preeminent nerve repair company
Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth 31 • Exclusively focused on peripheral nerve repair with a differentiated platform • 10+ years of demonstrated clinical outcome consistency • Featured in 215 peer-reviewed clinical publications • Over 75
Slide 32: Appendix
Appendix • Key Clinical Data • Historical Core and Active Accounts • CMS outpatient and ASC reimbursement rates • Total Addressable Market • Axogen product portfolio and indications for use 32revolutionizing the science of nerve repair®
Slide 33: Avance Nerve Graft significantly better than conduit repairs
Avance Nerve Graft repairs found to be significantly better than conduit repairs 33 • 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 Graft and 49 were repaired with manufactured
Slide 34: Avance recovery rates comparable to nerve autograft
Study finds Avance Nerve Graft (allograft) clinical outcomes recovery rates comparable to nerve autograft 34 “Safa et al., A Propensity Matched Cohort Study on Outcomes from Processed Nerve Allograft and Nerve Autograft in Upper Extremity Nerve Repairs”49 Presented at American Society for Surgery of
Slide 35: Avance comparable to autograft in outcomes and facility costs
Studies find Avance Nerve Graft performed comparably to nerve autograft for both clinical outcomes and facility procedure costs 35 “Styron et al., Nerve Repair Hospital Index Procedure Costs – Allograft vs. Autograft Repair Type” Presented at the American Society for Surgery of the Hand (ASSH), Octo
Slide 36: Breast neurotization outcomes with Avance Nerve Graft
First publication on breast neurotization outcomes with Avance Nerve Graft demonstrated greater return of protective sensation 36 • Early outcomes from a single center study, as part of the Sensation-NOW registry • 36 breast reconstructions that included: 22 breast reconstructions with Resensation®
Slide 37: REPOSE pilot study analysis
Axogen sponsored REPOSESM pilot study analysis demonstrates clinically significant improvement for subjects with chronic neuropathic pain when using Axoguard Nerve Cap® following neurectomy60 37 15-subject, single arm pilot phase evaluating reduction in pain from baseline following surgical excision
Slide 38: 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 39: CMS outpatient and ASC reimbursement rates
CPT Code Descriptor C-APC Hospital Outpatient (HOPD) Ambulatory Surgery Center (ASC) 2022 2023 % Change 2022 2023 % Change 64912 Nerve allograft repair2 5432 $ 5,824 $6,179 6.10% $3,868 $4,125 6.64% 64910 Conduit or vein allograft repair2 5432 $ 5,824 $6,179 6.10% $3,881 $3,905 0.62% 64886 Autograft
Slide 40: 2023 CMS Final Physician Fee Schedule
2023 Center for Medicare and Medicaid Services (CMS): Final Physician Fee Schedule (PFS) 40January 8, 2023 CPT Codes to Descriptor Physician Fee Schedule (PFS) 2022 2023 % Change 64912 Nerve allograft repair $910 $886 -2.7% 64910 Conduit or vein allograft repair $790 $753 -4.7% 64885 to 64898* Autog
Slide 41: Estimated Total Addressable Market
Projected Incidence(a) Weighted Average Procedure Value Estimated Total Addressable Market Trauma Transection injuries >5mm (b) Other trauma injuries (c) 700,000 100% 203,000 29% 497,000 71% $2,715 $5,515 $1,570 $1,900M 100% $1,120M 59% $780M 41% Carpal and Cubital Tunnel 130,000 $2,100 $270M Oral a
Slide 42: Estimated Trauma total addressable market
42 Estimated Trauma total addressable market revolutionizing the science of nerve repair®
Slide 43: Trauma total addressable market (continued)
Trauma total addressable market (continued) 43revolutionizing the science of nerve repair®
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 regulations,
Slide 45: nasdaq: axgn 45revolutionizing the science of nerve repair®
nasdaq: axgn 45revolutionizing the science of nerve repair®
Slide 46: Footnotes
46 Footnotes Trauma Market Data: 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 Pop
Slide 47: Footnotes
47 Footnotes 38. Galeano M, et al. A free vein graft cap influences neuroma formation after nerve transection. Microsurgery. 2009;29(7):568-572. 39. Stokvis A. Surgical management of painful neuromas. Rotterdam, The Netherlands: Optima Grafische Communicatie; 2010. 40. Lin E, et al. Local administra