AxoGen NASDAQ: AXGN President and CEO Michael Dale said the company’s growth strategy remains centered on developing the market for peripheral nerve repair, while recent reimbursement wins are expected to be positive but have not yet been quantified.
Speaking during a company event, Dale said he was drawn to AxoGen because peripheral nerve function represents a “credible health condition” with a large underserved patient population and because the company’s Avance platform offers what he described as a differentiated solution relative to existing standards of care.
“It’s a solution that based upon benefit versus risk as compared to existing options, is genuinely superior,” Dale said.
Dale said AxoGen has gone through a traditional strategic planning process involving employees, the board, customers and investors. He emphasized that the company is operating from a single plan that has been discussed across those stakeholder groups.
Reimbursement Wins Seen as Positive, but Timing Remains Unclear
Asked about recently announced reimbursement gains and their effect on revenue for the rest of 2026 and beyond, Dale said the company is still working to understand the magnitude and timing of the benefit.
“We know it’s all gonna be good,” Dale said, while adding that the company has not yet quantified the impact.
He said the process does not work like a “light switch.” After a favorable coverage decision, providers must be informed, and then hospitals or other healthcare providers may need to negotiate contracts with payers based on the new coverage policy.
Dale also said Aetna is the last significant payer that has not yet made a decision. He said AxoGen has made formal submissions and requests for evaluation under payer-specific review processes. Based on Aetna’s schedule, Dale said the company hopes to hear something by the end of June, although he noted there is no guarantee or obligation for Aetna to respond.
On a gap-length restriction in an Avance policy, Dale said AxoGen engaged with the payer immediately after seeing it. He said the practical impact is still unknown and could either be a complicating factor or a non-event. Dale said the policy references the RECON study but not other clinical studies or the biologics approval status from the FDA. He also called a pre-approval requirement impractical because the relevant procedures are emergent and the gap length is not known until surgery is underway.
CMS Reclassification Has Not Yet Flowed Through Results
Dale addressed a CMS outpatient reimbursement reclassification that took effect Jan. 1, 2026, and resulted in an approximately 40% rate increase. He said the change did not appear in first-quarter results because nerve procedures had previously been economically unattractive in those settings, leaving a limited existing activity base.
“Now that there is a positive economic situation allowing for such procedures to happen, it will happen, but it’s literally beginning as we speak,” Dale said.
He said hospitals must first become aware of the reimbursement change, then determine contracting and logistics, including which physicians will move cases into those settings. Dale said the company expects to have more clarity toward the end of the year about where procedures are moving.
Company Maintains Double-Digit Growth View
AxoGen reported 27% growth in the first quarter and guided to at least 20% growth for the full year. Dale said there was no single factor behind the growth, describing it as the continuation of previously disclosed elements of the company’s plan.
He said the first quarter had an easier comparison than later quarters and that the middle of the year is typically the largest period of activity for the company. Dale said AxoGen is trying to remain prudent while continuing to expand its platform and activities.
“You should look at Axogen as an asset vehicle, as a market development exercise over a period of three to five years that will be able to generate continuous double-digit growth,” Dale said. “There’s no change whatsoever in our viewpoint in that regard.”
Gross Margin Expected to Bottom in Q2
On gross margin, a company representative identified by Dale as Lindsey said AxoGen expects the second quarter to include an influx of more expensive product tied to the transition from a tissue product to a biologics license application, or BLA, in the fourth quarter of last year.
The representative said the second quarter should be the low point for gross margin and should fall at the low end of the company’s 74% to 76% full-year guidance range. Gross margin is expected to increase from there, with further improvement expected in 2027 from initiatives at the company’s facility, including Lean initiatives, yield improvements and new system implementations.
Prostate Nerve Repair Data Expected in Second Half
Dale said AxoGen expects clinical data in the second half related to a prostate nerve repair pilot. He emphasized that the data set is not from a controlled study and will not be a published experience. The work is being done with key opinion leaders and experienced robotic prostate surgeons.
The primary measures are erectile function and incontinence, with the goal of determining whether the procedure is teachable and can be performed well. Dale said the company expects to have a clinical trajectory by year-end that will help determine whether to develop a go-to-market plan.
In closing, Dale said investors should continue to judge the company as a market development exercise across heterogeneous care pathways that share a common focus on peripheral nerve repair. He said AxoGen’s value proposition offers potential quality-of-life and health benefits with what he characterized as low risk.
About AxoGen NASDAQ: AXGN
AxoGen, Inc is a Florida-based medical technology company that develops and commercializes surgical solutions for peripheral nerve damage. Founded in 2002 and headquartered in Alachua, Florida, the company focuses on restoring nerve function and improving patient outcomes through innovative biologic and engineered products. AxoGen's offerings address a range of traumatic and iatrogenic injuries, offering alternatives to traditional nerve autografts.
The company's core product portfolio includes the Avance® Nerve Graft, a decellularized human nerve allograft designed to bridge nerve gaps without the need for a secondary harvest site, and the Axoguard® Nerve Connector and Protector devices, which facilitate nerve coaptation and protect repaired sites from surrounding scar tissue.
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