AxoGen, Inc. (NASDAQ:AXGN) Q4 2022 Earnings Call Transcript

Chris Pasquale: Given the fact that its mid-March and I was hoping that you could provide some thoughts on first quarter. Historically, you get about 22% of full year revenue in the first quarter of the year. Do you expect a similar seasonality in ’23? And any other considerations we should take into account in terms of how the year is going to come together?

Karen Zaderej: Yes, I think we are returning to typical seasonality. We have these overlays in the past of COVID and hospitals being shut down and then staffing challenges. But we are seeing, again, in this pattern, while they’re still constrained in OR capacity, we’re seeing a return to what I think are more predictable patterns. And so we would expect our big step up in revenue to be during the times of more activities where people unfortunately have more injuries, which is our summer months. So we see a step up in second quarter, another step up in third quarter as our bigger growth periods with things being more level in Q1 and Q2. So I don’t want to give guidance for the Q1 so far, but I think our patterns are certainly being more predictable.

Chris Pasquale: How do you think about the revenue potential for the Nerve Cap product and whether you get some incremental commercial momentum post the REPOSE results?

Karen Zaderej: Yes. I think we published the pilot results from the Nerve Cap product, and we’re quite pleased with the pilot data that we own And again, it’s a smaller uncontrolled series. We’re completing the randomized portion of that study now. But I think what we’ve seen is that this concept of surgically managing neuroma is something that has a significant impact to patients. And so we’re working through really educating surgeons on the ability to use Nerve Cap in a variety of applications. And those would include things from amputations of digits, fingers, toes through some surgical procedures in the orthopedic space where you need to cut nerves to access the joint or the surgery that you’re trying to get to, but sometimes those patients end up in chronic pain. And we think we have applications to all of those, and now there’ll be an opportunity to educate surgeons on the benefit they can provide their patients with that surgery.

Chris Pasquale: Thanks.

Operator: Our next question comes from the line of Kyle Rose with Canaccord Genuity. Please proceed with your questions.

Kyle Rose: Great. Thanks for taking the questions. Just wanted to – as we think about guidance in 2023, how should we be thinking about the growth of the underlying new – or active accounts and core account growth? And I guess, put another way, how much of the growth in ’23 comes from volume versus price and mix? And if you could just break out those dynamics, that would be helpful.

Pete Mariani: Yes. I – if you apply revenue guidance of 11% to 15%, I think we’ve been successful at taking price over the last several years, and we would continue to expect as we sort of low single-digit price again in 2023. We’ve also had some mix impact in revenue here in the fourth quarter and in some previous quarters. The way we think about the mix impact is more flattish in the coming years. So the rest of that based on where you put your model, the rest of that would be in units. And I think that’s – we’ve had 11% unit growth in this quarter and similar Q3. So that’s the way we kind of think about it from a unit and price perspective. What was the first part of your question…

Karen Zaderej: Yes. And it’s more…

Pete Mariani: Given core accounts…

Karen Zaderej: Just in current accounts.