Axogen, Inc. Q3 FY2024 earnings call

• Michael Dale started by discussing third quarter performance, his reasons for joining Axogen, and priorities including completing BLA submission, meeting revenue guidance, and developing a new strategic plan.
• Revenue was $48.6M, up 18% year-over-year; adjusted EBITDA $6.5M vs $2.4M. Broad-based revenue growth across the portfolio.
• Focus on high potential accounts (larger hospitals, trained microsurgeons) to drive growth through targeted expansion of nerve repair indications and expanding adoption of nerve repair algorithm to other surgical specialties.
• Sponsored professional education programs like National Resensation Breast Program and regional surgeon education programs. Presented novel data on nerve damage and completed Avance Nerve Graft BLA rolling submission with FDA accepting for review.

Revenue for the third quarter was $48.6 million, an increase of approximately 18% compared to the previous year. Adjusted EBITDA was $6.5 million versus $2.4 million last year. Revenue performance was broad-based, reflecting growth across the portfolio. Both revenue and EBITDA were positively impacted by improved sales productivity and commercial execution. Revenue growth was driven by broad-based growth across the portfolio, including an increase in nerve reconstruction cases in targeted clinical applications and growth from nerve protection procedures. Revenue contribution was from various segments such as upper extremity trauma, mandible reconstruction, breast neurotization, and nerve protection procedures.

• Maintaining full year 2024 revenue guidance in the range of $182 million to $186 million.
• Full year gross margin expected to be at the high end of the 74% to 76% range.
• Reaffirming net cash flow positive cumulatively from April 1 through year-end.

• Hospital staffing issues.
• Regulatory process and approvals.
• Surgeon and product adoption.
• Market awareness of our products.

Q: Congrats on the new position, Mike. Wanted to ask about the decision to just reiterate the full year guide...

A: Michael Dale explained that the commitment was to demonstrate predictability and meet public guidance, hence no adjustments to guidance.

Q: Chris Pasquale asked about the outlook for the fourth quarter and conservatism...

A: Michael Dale said demonstrating predictability through the end of the year while working on plans was important.

Q: Michael Sarcone asked about guide assumptions and underlying environment...

A: Nir Naor mentioned potential supply chain interruptions as a factor for the guide range.

Q: Caitlin Cronin asked about BLA and Advisory Committee...

A: Michael Dale spoke about FDA acceptance of the filing and no plans for an Advisory Committee.

Q: Mike Kratky asked about BLA approval impact...

A: Michael Dale explained strategic importance of BLA approval for standard of care pursuits.

Q: Jayson Bedford asked about Avive+ launch...

A: Michael Dale talked about Avive+ progress and favorable reception.

Q: Ross Osborn asked about strategic focus on growth vs cash...

A: Michael Dale said growth and cash focus are not mutually exclusive.

Q: Dave Turkaly asked about biggest surprise since joining...

A: Michael Dale talked about market development still being early.

Q: David Turkaly asked about prostate opportunity...

A: Michael Dale generalized about opportunities in non-trauma areas