In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Axogen Inc (NASDAQ:AXGN) reported a 17.4% increase in revenue for the first quarter of 2025, reaching $48.6 million, driven by double-digit growth across all target markets.
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The company successfully increased average account productivity by 24% in high potential accounts, surpassing their target of 21%.
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Axogen Inc (NASDAQ:AXGN) is on track with its biologics license application (BLA) for advanced nerve graft, expecting approval in September, which will secure 12 years of market exclusivity.
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The company has made strategic hires across sales, marketing, and market access teams to strengthen its commercial infrastructure.
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Axogen Inc (NASDAQ:AXGN) continues to see strong external validation with eight new peer-reviewed publications citing clinical use or discussion of its products.
Negative Points
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Gross margin decreased to 71.9% from 78.8% in the same period last year, impacted by higher costs at the new facility and increased inventory reserves.
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The company is running behind its original hiring and training plan for expanding the breast re-sensation sales team, although it expects to be on track by the end of the second quarter.
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Operating expenses decreased slightly, but the company still reported a net loss of $3.8 million for the quarter.
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The BLA process limits Axogen Inc (NASDAQ:AXGN)'s ability to make significant process improvements until after approval, affecting potential gross margin improvements.
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There is a risk of disruption in hospital access or product availability due to potential PNT committee approvals required for the biologics designation.
Q & A Highlights
Q: Once the advanced nerve graft product is approved as a biologic, will customer accounts need to undergo a new validation process before continuing its use? A: (Jens Kemp, Chief Marketing Officer) Based on our research and customer conversations, we do not expect major changes in ordering, shipment, or reimbursement pathways. Some institutions may require approval from PNT committees, but we do not anticipate significant disruptions to hospital access or product availability.
Q: The gross margin was below expectations. Can you explain the impact of inventory write-offs and the expected gross margin trend for the rest of the year? A: (Nir Nawor, Chief Financial Officer) The write-offs were significant for Q1, driven by process improvements for better detection. We expect improvements throughout the year, with some BLA-related expenses impacting Q3. The gross margin should improve as we implement process improvements post-BLA approval.