Axogen, a Tampa-based regenerative medicine company dedicated to creating nerve repair solutions, has had an eventful August.
Axogen’s board of directors announced Aug. 8 that a new CEO would foster their increased focus on commercial expansion and profitability. An earnings call that day highlighted a 25.6% year-over-year increase in second-quarter revenue to $47.9 million, gross margins decreasing by 73.8% and a new nerve product.
The company’s stock price surged to a 52-week high Aug. 16, hitting $11.42 as investors are increasingly confident in its medical technology market position. Nir Naor, chief financial officer, believes Axogen can continue growing like a startup while relying on a 17-year track record.
“We still consider ourselves a heavily under-penetrated company with massive potential for further growth,” Naor told the Catalyst. “Even here in the United States, let alone internationally, where we are very heavily under-penetrated.”
Newly appointed CEO Michael Dale succeeds Karen Zaderej, who will serve as an advisor for nine months. Zaderej led the company since its 2006 inception.
Dale pledged to “build upon our strong foundation by establishing the necessary objectives, strategies and processes to attain profitability, standard-of-care status and ensure the fulfillment of our mission” in the announcement.
That mission includes developing and commercializing peripheral nerve regeneration and repair technologies. Those connect the central nervous system to organs and limbs.
Axogen features a portfolio of products used to help patients recover from traumatic injuries, breast reconstruction and oral and maxillofacial surgery. Naor said the company experienced early top-line growth, and the spotlight is now on commercial execution and bottom-line performance.
Axogen recently submitted its Biologics License Application (BLA) with the Food and Drug Administration (FDA) for its Avance Nerve Graft product and expects to complete the process in the fall. In addition, Naor said Zaderej announced her retirement earlier this year.
Naor believes Dale’s 30-year history leading “transformative, high-technology companies” with a commercial focus will help Axogen achieve new heights. The FDA’s approval of the new product should eventually aid those efforts.
“One of our challenges is (insurance) reimbursement,” Naor explained. “We are still considered by various private payers as experimental or investigational.”
Nir Naor, chief financial officer.
Axogen’s financial performance continues to improve. While its net loss was $1.9 million in the second quarter, that is down from $6.7 million in 2023. The company’s cash, cash equivalent and investment balance was up from $23.6 million in March to $27.1 million in June.
The Avance Nerve Graft is the company’s flagship product. It is the only biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves.
Naor explained that the BLA “basically means turning our flagship product from human tissue to biologics,” created from any living cell. Approval will aid insurance reimbursement and ensure Axogen has an additional 12 years of exclusivity.
The company also offers the Axoguard Nerve Connector, the Axoguard HA+ Nerve Protector for long-term treatments, the Axoguard Nerve Cap and Avive + Soft Tissue Matrix, which launched in June.
Naor said the Avance Nerve Graft’s BLA process “took a lot of our resources.” Approval, expected in mid-2025, will allow Axogen to invest in new products.
The products restore feeling and function and mitigate pain associated with nerve damage. Related procedures provide sensation for women undergoing breast reconstruction following a mastectomy.
Naor said the medical devices can also mitigate phantom pain from amputated organs. “I’m happy with our innovations,” he continued. “If we think of ourselves as category builders and pioneers, we need to be at the forefront of innovation.”
Naor considers Tampa the company’s operational headquarters, with manufacturing and distribution based in Alachua, near the University of Florida in Gainesville. He noted Tampa Bay’s growth and increased cost efficiency over traditional life science hubs like Boston, New York and San Francisco.
While innovation will remain a focus, Naor noted its flagship product has “an impeccable track record of safety and consistency” over the past 17 years. He said the company is “somewhere in the middle” between a startup and a 30-year-old corporation.
“This is the way I look at Axogen,” Naor added. “It’s a company with a solid track record – but still ample potential for further growth.”
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