On August 8, 2024, Axogen Inc (AXGN, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Axogen Inc, a leader in the development and commercialization of technologies for peripheral nerve regeneration and repair, reported a significant increase in revenue but faced challenges with its gross margin.
Company Overview
Axogen Inc is engaged in the science, development, and commercialization of technologies for peripheral nerve regeneration and repair. The company provides clinically and economically effective repair solutions for surgeons and healthcare providers. Its product portfolio includes Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard Nerve Cap, and Avive Soft Tissue Membrane. Axogen's products are available in the United States, Canada, Germany, the United Kingdom, Spain, South Korea, and several other countries.
Q2 2024 Financial Performance
Axogen Inc reported second-quarter revenue of $47.9 million, a 25.6% increase compared to the same period in 2023. This figure surpassed the analyst estimate of $43.39 million. However, the company's gross margin decreased to 73.8%, down from 77.7% in the second quarter of 2023. The net loss for the quarter was $1.9 million, or $0.04 per share, compared to a net loss of $6.7 million, or $0.16 per share, in the second quarter of 2023. This result fell short of the analyst estimate of -$0.12 per share.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $47.9 million | $38.2 million |
| Gross Margin | 73.8% | 77.7% |
| Net Loss | $1.9 million | $6.7 million |
| Adjusted Net Income | $2.0 million | -$1.3 million |
| Adjusted EBITDA | $5.6 million | -$0.2 million |
Operational Highlights
Axogen Inc reported several operational achievements, including an 18.7% increase in Core Accounts, totaling 412. Revenue from Core Accounts represented approximately 65% of the total revenue for the second quarter. The company also ended the quarter with 117 direct sales representatives, up from 115 in the previous quarter and the same period last year.
In May, Axogen submitted the complete non-clinical data package for the Biologics License Application (BLA) of Avance Nerve Graft® to the FDA. The company anticipates completing the rolling submission of the BLA in the third quarter of 2024, with potential approval expected by mid-2025. Additionally, Axogen successfully launched Avive+ Soft Tissue Matrix™ in June, observing positive trends in surgeon adoption and new use cases in targeted applications.
Financial Position
As of June 30, 2024, Axogen Inc had a balance of $27.1 million in cash, cash equivalents, and investments, compared to $23.6 million on March 31, 2024. The company's total assets stood at $188.9 million, with total liabilities amounting to $93.2 million. Shareholders' equity was reported at $95.7 million.
Commentary and Outlook
"We are pleased with our strong revenue growth, bottom line performance, and overall results this quarter as we continue to execute on our commercial strategy to drive focus in high potential accounts and increase sales rep productivity," commented Karen Zaderej, Chairman, CEO, and President of Axogen, Inc. "This aligns with our goal of leveraging top-line growth to improve profitability and cash flow."
Conclusion
Axogen Inc's Q2 2024 financial results highlight significant revenue growth and improved bottom-line performance. However, the decrease in gross margin and the net loss per share falling short of analyst estimates indicate areas for improvement. The company's ongoing initiatives, including the BLA submission for Avance Nerve Graft® and the launch of new products, position it well for future growth and profitability.
Explore the complete 8-K earnings release (here) from Axogen Inc for further details.
