axgn_Ex99

EXHIBIT 99.1

AxoGen, Inc. Reports

2017 Third Quarter Financial Results

Record Q3 Revenue of $16.0 million, representing 43% growth over prior year

ALACHUA, FL – November 1, 2017 – AxoGen, Inc. (NASDAQ: AXGN), a global leader in developing and marketing innovative surgical solutions for the repair of peripheral nerve damage, today reported financial results and business highlights for the third quarter ended September 30, 2017.

Third Quarter 2017 Financial Results and Recent Business Highlights

Revenue of $16.0 million, up 43% compared to $11.2 million in the third quarter of 2016

Gross margin of 84.4% compared to 84.9% in the third quarter of 2016

Net loss for the third quarter of 2017 is $2.1 million, or $0.06 per share, compared with a net loss of $2.3 million, or $0.08 per share, in the third quarter of 2016

Adjusted EBITDA loss of $433,000 compared to Adjusted EBITDA loss of $779,000 in Q3 2016

“We are pleased with another successful quarter, including record revenue of 16.0 million,” said Karen Zaderej, President and Chief Executive Officer. “It is gratifying to see surgeons expanding use of our product portfolio in oral and maxillofacial procedures. In addition, we see increased adoption by hand surgeons in response to data in mixed and motor nerve repair, as well as long gap nerve repair.”

Additional Third Quarter and Recent Operational Highlights

Increased active accounts in the third quarter to 563, up 36% from 414 in Q3 2016

Ended the quarter with 53 direct sales reps and 20 independent distributors

A RANGER® Registry data subset presented at the American Society for Surgery of the Hand (ASSH) annual meeting demonstrated favorable results for the Avance® Nerve Graft in mixed, motor, and long gap nerve repairs when compared to historical autograft outcomes

Surgeon demonstrations at the American Association of Oral and Maxillofacial Surgeons (AAOMS) meeting increased OMF surgeon awareness of AxoGen’s comprehensive platform for nerve repair, including solutions to address nerve damage in the jaw resulting from either surgical injuries or reconstruction following benign tumor removal or similar

procedures. Recent clinical data show that repair of these injuries with the AxoGen portfolio can provide meaningful recovery in 87 to 94 percent of these patients

Conducted four national education symposia in the third quarter, and 12 year-to-date; these surgeon lead symposia highlight recent data and emerging best practices in peripheral nerve repair

Increased the number of clinical presentations related to our surgical portfolio by three to a total of 21 year-to-date

Added one peer reviewed clinical publication for our surgical portfolio for a total of 53

Continued market development activities in potential expansion applications, including breast reconstruction neurotization and neuropathic pain associated with lower limb total joint replacement

Ended the quarter with $22.0 million in cash, a reduction of $1.8 million from the end of Q2 2017.

Ended the quarter with $25 million of total bank debt, unchanged from the end of Q2 2017

“We are encouraged by the increasing number of peripheral nerve repair data presentations at scientific meetings, added Zaderej. “The clinical evidence supporting meaningful recovery associated with our Avance® Nerve Graft is compelling. This data, along with the library of evidence on the full AxoGen portfolio, help build awareness and surgeon confidence in our platform for nerve repair.”

2017 Financial Guidance

Management reiterates 2017 annual revenue will grow at least 40% over 2016 revenue and gross margins will remain above 80%.

Introducing 2018 Financial Guidance

Management expects that 2018 revenue will grow at least 40% over 2017 revenue and gross margins will remain above 80%.

Upcoming Events

Members of the AxoGen management team will participate at the following upcoming conferences and events:

Second Annual AxoGen Analyst and Investor Day in New York City on November 20

29th Annual Piper Jaffray Healthcare Conference in New York City on November 28

Guggenheim 5th Annual Healthcare Conference in Boston on December 13

The Trout Group Annual 1-on-1 Management Access Event in San Francisco, January 9–11, 2018 (to request a meeting, please contact axogenevents@troutgroup.com).

2018 Combined Meeting of the American Association for Hand Surgery, American Society for Peripheral Nerve, and American Society of Reconstructive Microsurgery in Phoenix, January 10-16, 2018

The Company will host its second annual Analyst and Investor Day on Monday, November 20 in New York City. Join AxoGen executives and surgeon thought leaders for a discussion of the company’s comprehensive platform for nerve repair and the emerging nerve repair market. Those interested in attending the event can RSVP at axogenevents@troutgroup.com.

Conference Call

The Company will host a conference call and webcast for the investment community today at 4:30 p.m. ET. Investors interested in participating by phone are invited to call toll free at 1-877-407-0993 or use the direct dial-in number 1-201-689-8795. Those interested in listening to the conference call live via the Internet can do so by visiting the Investors page of the Company’s website at www.axogeninc.com and clicking on the webcast link on the Investors home page.

Following the conference call, a replay will be available on the Company’s website at www.axogeninc.com under Investors.

About AxoGen

AxoGen (AXGN) is the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about helping to restore nerve function and quality of life to patients with peripheral nerve injuries by providing innovative, clinically proven and economically effective repair solutions for surgeons and health care providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day, people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Damage to a peripheral nerve can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain.

AxoGen's platform for nerve repair features a comprehensive portfolio of products, including Avance® Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site, AxoGuard® Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves, AxoGuard® Nerve Protector, a porcine submucosa ECM product used to wrap and protect injured peripheral nerves and reinforce the nerve reconstruction while preventing soft tissue attachments, and Avive® Soft Tissue Membrane, a minimally processed human umbilical cord membrane that may be used as a resorbable soft tissue covering to separate tissue layers and modulate inflammation in the surgical bed. Along with these core surgical products, AxoGen also offers AcroVal® Neurosensory & Motor Testing System and AxoTouch® Two-Point Discriminator. These evaluation and measurement tools assist health care professionals in detecting changes in sensation, assessing return of sensory, grip, and pinch function, evaluating effective treatment interventions, and providing feedback to patients on nerve function. The AxoGen portfolio of products is available in the United States, Canada, the United Kingdom, and several other European and international countries.

Cautionary Statements Concerning Forward-Looking Statements

This Press Release 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 estimates of trends and economic factors in the markets in which we are active, as well as our business plans. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "continue," "may," "should," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. The

forward-looking statements may include, without limitation, statements regarding our assessment on our internal control over financial reporting, our growth, our 2017 and 2018 guidance, product development, product potential, financial performance, sales growth, product adoption, market awareness of our products, data validation, our visibility at and sponsorship of conferences and educational events. The forward-looking statements are subject to risks and uncertainties, which may cause results to differ materially from those set forth in the statements. Forward-looking statements in this release should be evaluated together with the many uncertainties that affect AxoGen's business and its market, particularly those discussed in the risk factors and cautionary statements in AxoGen's filings with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those projected. The forward-looking statements are representative only as of the date they are made and, except as required by law, AxoGen assumes no responsibility to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, we use the non-GAAP financial measures of EBITDA, which measures earnings before interest, income taxes, depreciation and amortization, and Adjusted EBITDA which further excludes non-cash stock compensation expense. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of AxoGen’s GAAP financial measures to the corresponding non-GAAP measures should be carefully evaluated.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity and that both management and investors benefit from referring these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the performance of our business.

Contacts:

AxoGen, Inc.

Peter J. Mariani, Chief Financial Officer

InvestorRelations@AxoGenInc.com

The Trout Group – Investor Relations

Brian Korb

646.378.2923

bkorb@troutgroup.com

AXOGEN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2017 (unaudited)		December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	22,041,097	$	30,014,405
Accounts receivable, net		10,200,560		8,052,203
Inventory		6,698,943		5,458,840
Prepaid expenses and other		571,912		511,804
Total current assets		39,512,512		44,037,252
Property and equipment, net		1,763,840		1,494,247
Intangible assets		951,473		828,979
	$	42,227,825	$	46,360,478
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Borrowings under revolving loan agreement	$	4,000,000	$	4,025,023
Accounts payable and accrued expenses		7,072,530		7,002,165
Current maturities of long term obligations		21,596		20,899
Deferred revenue, current		43,576		33,282
Total current liabilities		11,137,702		11,081,369
Long Term Obligations, net of current maturities and deferred financing fees		20,356,698		20,265,745
Deferred lease		105,261		—
Deferred revenue		76,027		92,215
Total liabilities		31,675,688		31,439,329
Shareholders’ equity (deficit):
Common stock, $.01 par value; 50,000,000 shares authorized; 33,393,804 and 33,008,865 shares issued and outstanding		333,938		330,088

Additional paid-in capital		136,048,305		132,474,884
Accumulated deficit		(125,830,106)		(117,883,823)
Total shareholders’ equity		10,552,137		14,921,149
	$	42,227,825	$	46,360,478

AXOGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three and Nine Months ended September 30, 2017 and 2016

(unaudited)

	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2017		2016		2017		2016
Revenues	$	16,046,253	$	11,205,224	$	43,455,390	$	29,698,866
Cost of goods sold		2,504,278		1,697,443		6,697,127		4,637,446
Gross profit		13,541,975		9,507,781		36,758,263		25,061,420
Costs and expenses:
Sales and marketing		9,466,496		7,090,059		27,515,266		20,076,297
Research and development		1,795,292		1,118,358		4,727,551		3,033,521
General and administrative		3,778,612		2,481,051		10,659,756		7,362,063
Total costs and expenses		15,040,400		10,689,468		42,902,573		30,471,881
Loss from operations		(1,498,425)		(1,181,687)		(6,144,310)		(5,410,461)
Other expense:
Interest expense		(577,941)		(1,089,134)		(1,639,874)		(3,255,574)
Interest expense – deferred financing costs		(46,110)		(31,748)		(136,711)		(95,254)
Other expense		(1,603)		(2,804)		(25,388)		(22,871)
Total other expense		(625,654)		(1,123,686)		(1,801,973)		(3,373,699)
Net loss	$	(2,124,079)	$	(2,305,373)	$	(7,946,283)	$	(8,784,160)
Weighted Average Common Shares outstanding – basic and diluted		33,286,211		30,152,279		33,146,546		30,075,715
Loss Per Common share – basic and diluted	$	(0.06)	$	(0.08)	$	(0.24)	$	(0.29)

AXOGEN, INC.

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

Three and Nine Months ended September 30, 2017 and 2016

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2017		2016		2017		2016
Net loss	$	(2,124,079)	$	(2,305,373)	$	(7,946,283)	$	(8,784,160)
Depreciation and amortization expense		128,963		95,543		346,839		263,133
Amortization expense of intangible assets		18,753		16,017		60,459		48,050
Income Taxes		—		—		23,974		21,427
Interest expense		577,941		1,089,134		1,639,874		3,255,574
Interest expense - deferred financing costs		46,110		31,748		136,711		95,254
EBITDA - non GAAP	$	(1,352,312)	$	(1,072,931)	$	(5,738,426)	$	(5,100,722)

Non Cash Stock Compensation Expense		919,026		293,575		2,491,992		1,046,364
Adjusted EBITDA - non GAAP	$	(433,286)	$	(779,356)	$	(3,246,434)	$	(4,054,358)

AXOGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months ended September 30, 2017 and 2016

(unaudited)

	2017		2016
Cash flows from operating activities:
Net loss	$	(7,946,283)	$	(8,784,160)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation		346,839		263,133
Amortization of intangible assets		60,459		48,050
Amortization of deferred financing costs		136,711		95,253
Provision for bad debt		83,733		80,934
Share-based compensation		2,491,992		1,046,364
Interest added to note payable		—		199,124
Change in assets and liabilities:
Accounts receivable		(2,232,090)		(2,302,701)
Inventory		(1,240,103)		(1,036,859)
Prepaid expenses and other		(60,108)		(260,786)
Accounts payable and accrued expenses		70,365		864,267
Deferred liabilities		99,367		5,727
Net cash used for operating activities		(8,189,118)		(9,781,654)

Cash flows from investing activities:
Purchase of property and equipment		(616,432)		(612,974)
Acquisition of intangible assets		(182,953)		(157,491)
Net cash used for investing activities		(799,385)		(770,465)

Cash flows from financing activities:
Borrowing on revolving loan		41,553,210		—
Payments on revolving loan		(41,578,233)		—
Repayments of long term debt		(15,589)		—
Debt issuance costs		(29,472)		—
Proceeds from exercise of stock options		1,085,279		645,864
Net cash provided by financing activities		1,015,195		645,864

Net decrease in cash and cash equivalents		(7,973,308)		(9,906,255)
Cash and cash equivalents, beginning of year		30,014,405		25,909,500
Cash and cash equivalents, end of period	$	22,041,097	$	16,003,245

Supplemental disclosures of cash flow activity:
Cash paid for interest	$	1,631,795	$	3,031,528