AxoGen, Inc. First Quarter Revenue Increases 64% Over Prior Year to $8.1 Million

ALACHUA, Fla., May 04, 2016 (GLOBE NEWSWIRE) -- AxoGen, Inc. (NASDAQ:AXGN), a leader in developing and marketing innovative surgical solutions for peripheral nerve injuries, today reported financial results for the first quarter ended March 31, 2016 and recent corporate developments.

First Quarter and Recent Highlights

  • First quarter revenue of $8.1 million increased approximately 64% over the prior year
  • Gross margin increased to 82.7% compared to 80.1% in the first quarter of 2015
  • Commercially launched AcroValTM Neurosensory & Motor Testing System (NSMTS) allowing physicians to electronically measure, map and monitor patient’s nerve function both prior to and following nerve repair
  • Use of AxoGen’s portfolio of products to repair iatrogenic nerve injuries was featured at the 2016 American College of Oral and Maxillofacial Surgeons (ACOMS) Annual Scientific Conference
  • Year to date over 130 surgeons have completed one of AxoGen’s national education events

“Execution of our strategic initiatives continue to deliver solid results,” commented Karen Zaderej, President and Chief Executive Officer.  “Our revenue growth reflects the expanding adoption of our AxoGen portfolio of products in nerve repair.  The growing demand continues to be driven by increased market awareness, surgeon education and other peer-to-peer physician interaction that is reinforcing AxoGen’s position as the pre-eminent choice for surgeons when considering nerve repair.” 

2016 First Quarter Financial Results

For the first quarter ended March 31, 2016, revenue increased to $8.1 million, or approximately 64% over the first quarter last year.  Gross profit in the quarter of $6.7 million, increased by approximately 69% to 82.7% of revenue, compared to 80.1% of revenue in the first quarter of 2015.

Operating expenses for the quarter totaled $9.3 million, an increase of approximately 43% compared to the first quarter of 2015.  The increase primarily reflects increased investment in commercial and product development activities, including investments to expand the Company’s sales footprint, increase physician education courses and expand awareness of AxoGen’s current product portfolio and development of future products.   

Operating loss was $2.6 million compared to an operating loss of $2.5 million for the same quarter last year. Net loss was $3.7 million, or $0.12 per share compared to a net loss of $3.6 million, or $0.16 per share in the year-ago first quarter. The weighted average common shares outstanding for the 2016 first quarter were approximately 30.0 million compared to 22.5 million shares in the first quarter of 2015.

2016 Guidance

Management is reaffirming that full year 2016 revenue will approach $39 million, and is now increasing the full year 2016 gross margin outlook from the previously stated high 70 percent range, to approaching  80 percent.   

Conference Call

The Company will host a conference call and webcast for the investment community at 4:30 PM 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 joining via the webcast, should visit

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

About AxoGen, Inc.

AxoGen (AXGN) is a leading medical technology company dedicated to peripheral nerve repair. AxoGen's portfolio of regenerative medicine products is available in the United States, Canada and several other countries and includes 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, and 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. Along with these core surgical products, AxoGen also offers AxoTouchTM Two-Point Discriminator and AcroValTM Neurosensory & Motor Testing System. These evaluation and measurement tools assist healthcare 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.

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" 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 growth, our 2016 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.

Tables to Follow

Three Months ended March 31, 2016 and 2015
    2016           2015
Revenues 8,111,759         $ 4,951,316  
Cost of goods sold   1,405,591           982,881  
Gross profit   6,706,168           3,968,435  
Costs and expenses:                  
Sales and marketing   6,205,875           3,932,522  
Research and development   978,340           671,036  
General and administrative   2,144,757           1,908,581  
Total costs and expenses   9,328,972           6,512,139  
Loss from operations    (2,622,804 )          (2,543,704 )
Other expense:                  
Interest expense   (1,003,027 )         (994,748 )
Interest expense – deferred financing costs   (30,810 )         (33,746 )
Other expense   (19,450 )         (3,003 )
Total other expense   (1,053,287 )         (1,031,497 )
Net loss (3,676,091 )       $ (3,575,201 )
Weighted Average Common Shares outstanding – basic and diluted   29,994,066           22,517,361  
Loss Per Common share – basic and diluted (0.12 )       $ (0.16 )

    March 31,          
2016 December 31,
(unaudited) 2015
Current assets:              
Cash and cash equivalents   20,948,752        $   25,909,500  
Accounts receivable     5,290,581         4,782,989  
Inventory     4,515,940         3,933,960  
Prepaid expenses and other     699,039         424,925  
Total current assets     31,454,312         35,051,374  
Property and equipment, net     1,294,941         970,870  
Intangible assets     747,482         678,082  
   $   33,496,735        $   36,700,326  
Liabilities and Shareholders’ Equity (Deficit)              
Current liabilities:                
Accounts payable and accrued expenses   3,750,606          $   3,695,127  
Current deferred revenue     14,118           14,118  
Total current liabilities     3,764,724           3,709,245  
Note Payable – Revenue Interest Purchase Agreement     24,804,453             24,701,693  
Long Term Deferred Revenue     88,401           93,797  
Total liabilities     28,657,578           28,504,735  
Shareholders’ equity (deficit):                
Common stock, $.01 par value; 50,000,000 shares authorized; 30,035,576 and 29,984,591 shares issued and outstanding     300,356           299,846  
Additional paid-in capital     111,687,571           111,368,424  
Accumulated deficit    (107,148,770 )        (103,472,679 )
Total shareholders’ equity     4,839,157           8,195,591  
  $   33,496,735        $   36,700,326  

Three Months ended March 31, 2016 and 2015
  2016       2015
Cash flows from operating activities:                  
Net loss $ (3,676,091       $ (3,575,201
Adjustments to reconcile net loss to net cash used for operating activities:                  
Depreciation   78,856           41,898  
Amortization of intangible assets   16,016           11,772  
Amortization of deferred financing costs   30,810           33,746  
Provision for bad debt   80,651           --  
Share-based compensation   182,955           368,249  
Interest added to note payable   71,950           183,273  
Change in assets and liabilities:                  
Accounts receivable   (588,243         (289,280
Inventory   (581,980 )         (124,278 )
Prepaid expenses and other   (274,114 )         (150,579 )
Accounts payable and accrued expenses   55,479           992,078  
Deferred revenue   (5,396 )         (5,396 )
Net cash used for operating activities   (4,609,107         (2,513,718
Cash flows from investing activities:                  
Purchase of property and equipment   (402,927 )         (6,288 )
Acquisition of intangible assets   (85,416         (32,051
Net cash used for investing activities   (488,343         (38,339 )
Cash flows from financing activities:                  
Proceeds from issuance of common stock   --             13,772,133  
Debt issuance costs    --            (180,142 )
Proceeds from exercise of stock options   136,702           --  
Net cash provided by financing activities   136,702           13,591,991  
Net increase (decrease)  in cash and cash equivalents   (4,960,748 )         11,039,934  
Cash and cash equivalents, beginning of year   25,909,500           8,215,791  
Cash and cash equivalents, end of period $ 20,948,752         $ 19,255,725  
Supplemental disclosures of cash flow activity:                  
Cash paid for interest $ 900,410         $ 803,607  

AxoGen, Inc.
Peter J. Mariani, Chief Financial Officer

EVC Group
Michael Polyviou/Doug Sherk – Investor Relations

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Source: AxoGen, Inc.