Axogen, Inc.

Good morning, everyone. Joining me on today's call is Michael Dale, Axigen's Chief Executive Officer and Director, and Nir Noor, Chief Financial Officer, and Jens Kemp, Chief Marketing Officer. Michael will discuss fourth quarter 2024 financial results, and Jens will provide a high-level introduction to Axigen's new strategic plan. Nir will then provide an analysis of our financial performance and guidance and discuss our outlook for the year, followed by a question and answer session. Today's call is being broadcast live via webcast, which is available on the investor section of Axigen's website. Following the end of the live call, a replay will be available in the investor section of the company's website at www.axigeninc.com. Before we get started, I'd like to remind you that during the conference call, the company will make projections and forward-looking statements. Forward-looking statements, which are usually identified by the use of words such as objective, will, believe, expect, estimate, should, guidance, intend, projects, or other similar phrases include but are not limited to statements relating to financial guidance, including revenue, margins, cash flow, future profitability, expectations for growth, estimated total addressable market opportunities, timing for future product and application launches, marketing opportunities within existing and new markets, and the company's expectations for approval of the biological license application of advanced nerve graft, including the anticipated timing of approval and the assumption that advanced nerve graft will be designated as a reference product for any future biosimilar nerve graft and that such designation will provide marketplace exclusivity. Forward-looking statements are based on current beliefs and assumptions and are not guarantees of future performance and are subject to risks and uncertainties, including without limitation the risk and uncertainties reflected in the company's SEC filings, including its Form 10-K and 10-Q. The forward-looking statements are representative only as of the date that they are made, and except as required by applicable law, the company assumes no responsibility to publicly update or revise any forward-looking statements. In addition, for a reconciliation of non-GAAP measures, please refer to today's press release and the corporate presentation on the Investors section of the company's website. Now, I'll turn the call over to Michael.

Thank you, Operator, and thank you to everyone who is joining us today as we discuss our 2024 fourth quarter and full-year financial results. 2024 was a solid year of key accomplishments for Oxygen. We are pleased with our progress as a team And while we have work ahead of us to realize Actogen's full potential, we are entering 2025 with increased confidence across all parts of the business. On my first call as CEO last November, we established three near-term priorities for the business. Number one, successfully complete the submission of our BLA application. Number two, meet our established revenue guidance for the year. And lastly, develop a new strategic plan for the business, engaging all employees and and key external stakeholders in the process. These were, in each case, highly relevant commitments we made to all stakeholders, and the successful completion of these commitments explain in part our increased confidence as we enter the new year. Regarding future expectations for Oxygen, I am excited to introduce our new strategic priorities today and look forward to providing details about our new plans during our March 4th Investor Day event. The insights and opportunities identified from our strategic planning exercise explain the other part of why we are entering 2025 with increased confidence. Before I address financial results, I would like to provide background for anyone who might be new to our story. Whenever we reference Axigen's nerve repair algorithm, we are referring to a broad product portfolio designed to address the needs of common nerve injuries, including bridging the gap resulting from transected nerves, nerve protection for non-transsected but injured nerves, and termination of nerves when there is no opportunity for reconnection or reconstruction. Depending on the clinical situation, one or many permutations of oxygen's nerve algorithm may be necessary to ensure the best possible patient outcome. Now to our financial results. Our full year 2024 revenue was $187.3 million dollars a 17.8% increase compared to 2023. In 2024, we saw broad-based growth across all of the markets we serve, which comprises extremities, oral, maxillofacial, and head and neck, and breast. For each market, positive performance was driven by improved commercial execution of our growth strategy focused on driving adoption of our nerve repair algorithm and development of high-potential accounts. EBITDA was similarly positively impacted by our improved sales productivity and resource allocation. Now turning to our fourth quarter results, revenue increased to $49.4 million, up 15.1% compared to the prior year. Like the year, fourth quarter performance reflected broad-based growth driven by adoption of our nerve repair algorithm across all clinical applications. We continue to execute our strategy to focus and deepen our presence in high potential accounts, which are primarily characterized by the following criteria. Larger hospitals, including level one trauma centers and or academic affiliated hospitals with a high number of nerve repair procedures. And lastly, already trained microsurgeons. We aim to drive growth in these types of accounts through targeted expansion of nerve repair indications by building on the existing experience in nerve repair in the account, the inherent potential of the account to grow based on size and procedure volume, and by expanding adoption of our nerve repair algorithm to other surgical specialties. We believe our focus on these high potential accounts is the reason for our improvement in sales productivity. Next, I would like to address the status of the biologics license approval, also referred to as BLA, for advanced nerve graft. As a reminder, a BLA approval will complete the regulatory transition of advanced nerve graft from a 361 tissue product to a 351 biological product. Importantly, we believe advanced will be designated as the reference product for potential biosimilars, providing 12 years of market exclusivity. We submitted the BLA in the third quarter of 2024 and continue to engage regularly with the FDA as part of the application review process. Consistent with prior guidance, we expect BLA approval in September. I would now like to turn it over to our Chief Marketing Officer, Jens Kemp, so that he can share and highlight key insights and priorities resulting from our strategic planning exercise. Our investments and market development priorities Over the next four years, we'll be guided by this plan, and the Axigen team is excited about our opportunities. As mentioned, we will discuss the plan in detail during our Investor Day on March 4th. Thank you, Mike.

To start, we believe Axigen's planned peripheral nerve repair market development priorities represents a $5 billion U.S. TAM opportunity with significant potential to improve patients' health and quality of life based on a superior benefit-to-risk value proposition. We believe Axigen's nerve repair product portfolio and expertise remain significant advantages which we can build upon over the next four years. Axigen's international presence is limited today, but we believe the market opportunity for nerve care outside the U.S. is just as large and attractive, and we look forward to taking concrete steps towards developing these markets in the coming years. Our objective for the four-year planning period will be to achieve a CAGR of 15% to 20% by executing on the following strategic priorities, which include, number one, we will prioritize investments towards markets with elective and planned procedures, which are characterized by a more efficient market development and customer creation process, resulting in more predictable and consistent revenue growth. Number two, We will advance the accessing algorithm towards standard of care in extremities. Our extremities business, which consists of traumatic and chronic nerve injuries in the upper and lower extremities, represents more than half of our business today. We have a large customer base, level one clinical evidence, and strong care well and societal relationships. Growth in this market has been impacted by commercial payer coverage policies, a challenging customer creation process, and a complex patient journey. To address these challenges and accelerate growth, we will execute on the following strategies, which include, we will continue to drive advocacy for advanced nerve graft as a standard of care option in extremity nerve reconstruction and work to expand coverage by leveraging the BLA approval, level one clinical evidence, and societal support. Next, we'll optimize the patient journey through education and therapy awareness of the referral base to drive more patients to our nerve surgeon customers. We'll continue to develop the market for nerve protection and expand our market development efforts to lower extremities. And finally, we'll continue to drive commercial excellence with higher sales productivity by execution of our high potential account strategy with a dedicated sales organization to drive focus and adoption of the Exogen nerve repair algorithm. Number three, we will establish leadership in the breast notization market and drive our resensation technique towards standard of care in breast reconstruction procedures. Axogen's resensation surgical technique is designed to address postmastectomy numbness, a significant consequence of breast cancer surgery, by restoring sensation to the breast as part of the reconstructive surgery. Breast nodalization represents a significant market opportunity and is Axogen's fastest growing business with a consistent, predictable, and scalable business model. To accelerate growth, we will focus on the following strategies, including significantly increasing investments in our breast commercial infrastructure to support growth. This includes growing our dedicated sales and marketing organization, as well as expanding our professional education capacity. We will expand surgeon education and training programs to increase surgeon activation and resensation procedure adoption. We will accelerate patient awareness and activation by increasing the quality and reach of our campaigns, while growing relationships with advocacy groups and healthcare providers. And finally, we will advance level one clinical evidence generation to expand coverage and drive societal support for standard of care. Number four, our all maxillofacial and head and neck business represents a large and attractive market opportunity for exogen, with high procedural concentration, in about 900 hospitals with strong overlap with our extremities' high potential accounts. Iatrogenic nerve injuries are common in OMF and head and neck surgical procedures, but are often not treated due to lack of surgeon education on available nerve repair options, as well as awareness of the quality of life impact for patients. To accelerate adoption of the axogen nerve repair algorithm in OMF and head and neck, and drive towards standard of care, we will execute on the following strategies. Expand surgeon education and training programs to grow the number of trained surgeons and care sites that incorporate oxygen's nerve repair algorithm in targeted OMF and head and neck procedures. We'll increase field-based market development support to raise brand awareness and KOL engagement to drive advocacy, best practice, and adoption in the head and neck market. We'll leverage the societal support in OMF and inclusion in the AA OMS Park Care Guidelines to drive societal support and standard of care designation for nerve repair in mandible reconstruction with key head and neck societies. And finally, we'll drive increased patient and surgeon awareness of the quality of life impact from nerve damage in OMF and head and neck surgical procedures. Number five, there are numerous large underdeveloped markets for nerve repair, and addressing these is an important long-term growth dryer for oxygen. We will invest in the development of those with substantial market potential and opportunity to improve patient outcomes. Our initial focus will be for nerve repair and protection during prostatectomy. Prostatectomy represents a large and attractive market opportunity due to a motivated patient population and a well-defined clinical problem that can be addressed with the Axigen nerve repair algorithm. Number six. We will increase our investment in innovation programs that aim to improve the standard of care nerve repair and in level one clinical evidence generation that meets payer requirements for coverage, advances support for standard of care designation, and drives consensus for incorporation of our nerve repair algorithm into clinical guidelines. Number seven, we will drive operational efficiencies in manufacturing by investing in systems and processes to optimize gross margin in the upcoming years And finally, we expect to maintain positive cash flows over the planning period sufficient to fund our organic growth initiatives consistent with our strategic plan. We look forward to providing more details on our upcoming investor day. Now I'll turn the call over to Nir to provide a review of our financial highlights and guidance.