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AxoGen Idea Proposal (AXGN)

AxoGen Idea Proposal (AXGN)

Will new leadership and a more aggressive sales effort help AxoGen capture more of its Total Addressable Market?

Report Available: April 3, 2019


Blueshift’s initial research found AXGN, a leader in the development and commercialization of technologies for peripheral nerve regeneration and repair, bringing on new executive leadership, hiring additional sales professionals, and preparing referral and educational tools to address an expanding market that now includes surgical treatment of chronic neuropathic pain. AXGN has initiated new sales and marketing strategies to expand its business in 2019 and regain favor with investors after lowering guidance from 40% to 30% for 2019 and facing allegations of sales reporting misconduct in a report from Seligman Investments.



  1. AXGN experienced a 38% revenue jump in Q4, however it missed both revenue and earnings expectations. Full-year revenue was up 39%. Q4 highlights and accomplishments included a 20% YY increase in active accounts from 591 to 712, increasing sales representation to 17 independent distributors and 85 direct sales reps, growing the number of clinical publications to 77, and conducting six national education courses. However, AXGN lowered its 2019 guidance to revenue between $109 million and $114 million, reflecting 30% growth compared to previous guidance of 40% growth. AXGN expects gross margins above 80%. The company also said it expects 115 direct sales reps by the end of the year.
  2. In Nov. 2018, AXGN announced that its TAM for peripheral nerve repair grew to $2.7 billion, up from earlier estimates of $2.2 billion. The market expansion is being driven by an increase in use of connector assisted nerve repair in trauma cases. The company also expects increased market opportunities due to surgeons and patients seeking a solution for chronic neuropathic pain. AXGN also expects three new clinical studies this year and the launch of its AxoGuard Nerve Cap during the second half of 2019.
  3. AXGN announced positive news in January regarding one of its clinical trials. The RECON Study, supporting AXGN’s Biologic License Application (BLA) Submission for Avance® Nerve Graft reached its current enrollment milestone of 170 subjects. RECON is a phase three pivotal study comparing Avance Nerve Graft to manufactured conduits. In September 2018, the FDA granted a Regenerative Medicine Advance Therapy (RMAT) designation for Avance Nerve Graft. The RMAT designation provides access to a streamlined approval process for regenerative medicine technologies and ensures continued informal meetings with the FDA.
  4. In Dec. 2018, Seligman Investments issued a report titled “An Overhyped, Cash-Burning Reverse Merger At 12X Revenue.” The report alleges that “[a] number of former [AxoGen] employees allege channel stuffing [at AxoGen], given that the company’s consignment model creates potential for abuse, as well as alleging questionable revenue recognition practices.” Further, the report states that “allegations additionally include misleading operating metrics, with one former rep implying that the company’s definition of ‘active accounts’ may overstate the actual number by a factor of ten.” The report has hit AXGN’s stock hard and, with the company in the middle of a sales and marketing overhaul, it remains to be seen if the ship can be righted.
  5. Since June 2018, AXGN has been adding to its executive leadership in the marketing, sales, and commercial development disciplines in an effort to retool and invigorate its sales effort. Greg Davault was hired as V.P. of Marketing, Christopher Crisman was brought on as V.P. of Sales, and Eric A. Sandberg joined AXGN as Chief Commercial Officer.


How is AXGN’s sales and marketing overhaul affecting sales? How frequently are medical professionals seeing AXGN sales reps? How does this compare to years past? How are surgeons using AXGN products? Are those use cases growing? With positive results from AXGN’s products sometimes taking a year to be effective, are surgeons tempering its use? How do surgeons view AXGN’s technology? How does it compare to alternative treatments? Is AXGN gaining market share? Is there anything special or unique about the AXGN technology? What are physicians and medical professionals looking for from AXGN products vs. the competition? What kind of patient and/or practice are AXGN products best suited for?  To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Physicians and Medical Professionals, the Surgical Supply Sales Channel, Competitors, and Industry Specialists.


Companies: AxoGen Inc. (AXGN), Baxter International, Inc. (BAX), Integra LifeSciences Holding Corporation (IART), Stryker Corporation (SYK)


Research Begins: March 18, 2019



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