AxoGen, Inc. (NASDAQ:AXGN) Q2 2023 Earnings Call Transcript

Karen Zaderej: Sure. Happy to. Well, the scheduled procedures have been growing at a faster rate than trauma has for a number of years. And at least as we’ve seen the information, but it’s been very hard for us to break that data out with clear specificity, because there’s a significant overlap in our core accounts. The majority of our core accounts are both emergent and scheduled procedures. And so we’ve put together some aided tools here that we can now break it out and give you some color and insights into the growth. And the growth is actually multiple areas of scheduled procedures, but it is led by breast and OMF. Those are both areas that we have, frankly, a little more history and longevity. And, in particular, in breast, we’ve highlighted the tools that we’ve built that help with patient activation that we’re now looking to expand into other areas of scheduled procedures and that we think that will be impactful in those procedures.

Other benefits actually of these scheduled procedures as compared to emergent trauma and we’re still very dedicated to emergent trauma. I don’t want you really think that we’re not. But there are some benefits that we’ve seen in the scheduled procedures. Not surprisingly, they’re much more predictable. That they’re coming in advance. They don’t drop in on the day or the day after an injury occurs. There’s something that’s scheduled weeks in advance. Patients have time to think about what’s important to them, Surgeons can think about the algorithm that they’re going to do and typically have a more repeatable algorithm of repair once they make a change. As you noted, they also typically have a higher average selling price of AxoGen products used in the procedures a total case mix than what, again, a routine trauma would.

Absolutely, the Axoguard products are used in these procedures. We see multiunit sales in many of these procedures. So for example, in a breast reconstruction, there would typically be a long Avance Graft as well as typically these surgeons do a connector-assisted repair to make sure that, that connection is and then coaptation is well protected. So we do see Axoguard and Avance used in our scheduled procedures.

Dave Turkaly: Great. Thank you for that. And I guess if we look at the new – the HA product, I think that was Protector. But, I mean, should we assume that that’s, again, a higher ASP and that over time that, that would be your core product? There wouldn’t be a reason ever to, let’s say, not use the one with HA over time, would there?

Karen Zaderej: Right now, we see that surgeons may have an application choice that they may choose to use one versus the other. We think HA+ is particularly targeted in areas where you need to have a lot of excursion of the nerve relative to the tissue around it, so around major joints. So an example would be a cubital tunnel repair. That’s a decompression of the nerve right over your elbow. And obviously, you have a lot of movement as you move your arm in that situation. So the HA provides a nice gliding surface in the early stages of recovery as well as helping to separate the tissues. And then over time, just like in our classic Axoguard Nerve Protector, the Axoguard remodels into a sleeve around the nerve. And so we think there’s a real application in places like the cubital tunnel, but we think surgeons may choose to have the classic Axoguard in places where they don’t need that much excursion.

And so for example, we see Axoguard used frequently in our oral maxillofacial cases where there’s not a lot of excursion on the tissue, and Axoguard will be a fine application for that, the – the traditional Axoguard Protector.

Dave Turkaly: Got it, thank you.

Operator: Thank you. Our next questions come from the line of Ryan Zimmerman with BTIG. Please proceed with your questions.