AxoGen ((AXGN)) has held its Q3 earnings call. Read on for the main highlights of the call.
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AxoGen’s recent earnings call conveyed a generally positive sentiment, underscored by robust revenue growth and improved operational performance across all target markets. The company reported increased adoption and favorable gross margin trends, although it faced challenges in meeting high potential account goals and experienced an extended timeline for BLA approval. Despite these hurdles, the overall outlook remains optimistic due to strong financial results and strategic advancements.
Significant Revenue Growth
AxoGen reported a remarkable 23.5% increase in Q3 sales, reaching $60.1 million compared to the same period last year. This growth was primarily driven by the expanding adoption of nerve care solutions across all target markets, showcasing the company’s successful market penetration and product acceptance.
Gross Margin Improvement
The company achieved a gross margin increase to 76.6%, up from 74.9% in the previous year and 74.2% in the second quarter of 2025. This improvement was attributed to lower inventory write-offs and reduced shipping costs, reflecting enhanced operational efficiency.
Positive Adjusted EBITDA
AxoGen reported an adjusted EBITDA of $9.2 million for the quarter, with a margin improvement to 15.4% from 13.3% in the same period last year. This positive trend was driven by revenue growth and increased operating leverage, highlighting the company’s effective cost management strategies.
Surgeon Training and Adoption
The company successfully trained 97 surgeons in Extremities and 57 in OMF and head and neck year-to-date, surpassing its targets. Additionally, there was a 20% increase in surgeons performing breast resensation procedures, indicating growing acceptance and utilization of AxoGen’s solutions.
Increased Coverage and Reimbursement
AxoGen achieved significant progress in coverage and reimbursement, with noncoverage policies removed within the Blue Cross Blue Shield network and Medicare Advantage. This resulted in an estimated 1.1 million newly covered lives in Q3 and 18.1 million year-to-date, expanding the company’s potential market reach.
Below Target for High Potential Accounts
Approximately 64% of revenue growth was driven by high potential accounts, slightly below the planned target of 66%. This shortfall was impacted by the discontinuation of the case stock sales program, indicating a need for strategic adjustments in targeting high potential accounts.
Extended BLA Approval Timeline
The FDA extended the PDUFA goal date for the Avance Nerve Graft from September to December 5, 2025, due to a major amendment. This extension introduces uncertainty around the approval timing, posing a potential challenge for the company’s future plans.
Forward-Looking Guidance
AxoGen provided guidance for the fiscal year 2025, projecting a full-year revenue growth of at least 19%, equating to a minimum of $222.8 million. The company maintains a gross margin expectation between 73% and 75% and reported a positive net income of $0.7 million. With an adjusted EBITDA of $9.2 million and a margin improvement to 15.4%, AxoGen remains focused on achieving its strategic goals, including commercial expansion and clinical research. The anticipated decision on the biologics license application for the Avance Nerve Graft in December 2025 could secure 12 years of marketplace exclusivity, further strengthening the company’s market position.
In conclusion, AxoGen’s earnings call reflected a positive sentiment, driven by significant revenue growth and operational improvements. Despite challenges in meeting high potential account targets and the extended BLA approval timeline, the company’s strategic progress and financial performance remain strong. Investors can look forward to continued growth and potential market exclusivity in the coming years.