Axogen, Inc. · NASDAQ:AXGN
Axogen — Q4 2020 Earnings Presentation
41 slides from Axogen's earnings presentation, Feb 22, 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
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 83.2% Gross Margin for the quarter ended December 31, 2020 80.8% Gross Margin for the year ended December 31, 2020 U.S. $ in millions Delivering strong, consistent revenue growth & gross margins revolutionizing the science of nerve repair™ Operational Highlights • Revenue growth of 15% for Q4 and
Slide 7: How are nerves injured?
revolutionizing the science of nerve repair™ 7 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 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 f laps (15,000 pat ients) $10,200 $250M Tot
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) 11revolutionizing 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: Avance Nerve Graft and Axoguard connector
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 and risk of secondary surgery • Causes traction injury • High risk of recurrence 37 BURYING IN MUSCLE/
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 • Provides
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 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 22: Focus on building awareness among clinicians and patients
22 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 23: Emphasis on education
23 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 24: Strong commitment to developing clinical evidence
24 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 25: Growing body of clinical evidence
25 P I L L A R 3 *Total number as of December 31, 2020 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
Slide 26: 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™ 26 • 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 27: 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™ 27 “Safa et al., A Propensity Matched Cohort Study on Outcomes from Processed Nerve Allograft and Nerve Autograft in Upper Extremity Nerve Rep
Slide 28: Avance performed comparably to autograft for outcomes and facility 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™ 28 “Styron et al., Nerve Repair Hospital Index Procedure Costs – Allograft vs. Autograft Repair Type” Presented at the A
Slide 29: 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™ 29 • Early outcomes from a single center study, as part of the Sensation-NOW registry • 36 breast reconstructions that included:
Slide 30: REPOSE pilot study analysis demonstrates improvement in 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™ 30February 22, 2021 15-subject, single arm pilot phase evaluati
Slide 31: Focused sales execution, increasing market penetration
31 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 32: Medicare reimbursement for nerve repair procedures
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 33: 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™ 33February 22, 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 34: Expand the opportunity in nerve repair
34 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 35: Platform for nerve repair across multiple applications
35 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 36: Balance sheet and capital structure
36 Balance Sheet Highlights December 31, 2020 Cash, Cash Equivalents, and Investments $110.8 million Total Long-term Debt $35.0 million* Capital Structure (shares) December 31, 2020 Common Stock 40,618,766 Common Stock Options, RSUs, PSUs 5,299,389 Common Stock and Common Stock Equivalents 45,918,15
Slide 37: Executive team
Executive team 37 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 38: Axogen is the preeminent nerve repair company
Axogen is the preeminent nerve repair company with a foundation for long-term sustainable growth 38 ✓ 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 39: 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 39revolutionizing the science of nerve repair ™
Slide 40: Footnotes
40 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 41: Footnotes
41 Footnotes 37. 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. 38. Laborde K, et al. Results of surgical treatment of painful neuromas of the hand.