CORPORATE PRESENTATION

Transcription

1 As of March 5, 2015 CORPORATE PRESENTATION NASDAQ: AXGN It s time to rethink nerve repair! 1

2 Safe Harbor Statement This Presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of These statements are based on management s current expectations or predictions of future conditions, events or results based on various assumptions and management s estimates of trends and economic factors in the markets in which we are active, as well as our business plans. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, projects, forecasts, may, should, variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements may include, without limitation, statements regarding product development, product potential, regulatory environment, sales and marketing strategies, capital resources or operating performance. The forward-looking statements are subject to risks and uncertainties, which may cause results to differ materially from those set forth herein. Forward-looking statements in this presentation should be evaluated together with the many uncertainties that affect the Company s business and its market, particularly those discussed in the risk factors and cautionary statements in the Company s filings with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those projected. The forward-looking statements are representative only as of the date they are made, and the Company assumes no responsibility to update any forward-looking statements, whether as a result of new information, future events or otherwise. It s time to rethink nerve repair! 2

3 AxoGen Overview Focus on Executing Sales & Marketing Strategy To Drive Shareholder Value Exclusively focused on peripheral nerve repair solutions Addressing a $1.6B+ current market opportunity Comprehensive product portfolio addresses all surgical peripheral nerve reconstruction needs Barriers to competitive entry & growing body of clinical data Strong revenue, 2014 Revenue $16.8 million, 54% growth vs 2013 High gross margins: 80% 2014 Long term expansion potential beyond current market It s time to rethink nerve repair! 3

4 Providing options for surgeon & patients Nerve injuries can happen to anyone More than 1.4 million Americans will experience a nerve injury in ,2 More than 900,000 will require a surgical intervention 1,2 AxoGen products are used to repair patients of all ages and all walks of life AxoGen Patient Story: Jajuan 10 year old aspiring football player & video game lover Laceration in hand caused loss of sensation and numbness Nerve and tendon injury repaired by Dr. Joshua Abzug, Baltimore, MD Nerve gap bridged with Avance Nerve Graft Sensory recovery underway It s time to rethink nerve repair! 4 1 National Hospital Ambulatory Medical Care Survey Noble, et al., Analysis of Upper and Lower Extremity Peripheral Nerve Injuries in a Population of Patients with Multiple Injuries, Journal of Trauma, Vol 45, 2008

5 Need for Options in Nerve Repair Nerves are Injured in Many Ways Causes of Nerve Injuries Lacerations, power tool / saw accidents, motor vehicle accidents, battle field injuries, gunshot wounds, natural/other disasters Surgical injuries Nerve compression: Carpal & cubital tunnel revision, blunt trauma, previous surgery AxoGen Patient Story: Anna College student and athlete having routine wisdom tooth removal Lingual nerve severed during procedure resulting in numbness of tongue Repaired by Dr. Shahrokh Bagheri, Atlanta, GA and protected with AxoGuard Nerve Protector Sensory recovery underway It s time to rethink nerve repair! 5

6 Need for Options in Nerve Repair Peripheral Nerve Injuries Impact Quality of Life Impact of Peripheral Nerve Injuries Pain chronic, stabbing, radiating, debilitating Numbness and Loss of Sensation Partial or Full Loss of Movement AxoGen Patient Story: Frankie 12 year old male, injured in an ATV rollover 7+cm defect in ulnar nerve Parents did not want risk of comorbidities associated with autograft repair Repaired with Avance Nerve Graft & 2 AxoGuard Nerve Connectors Return of fine motor skills in fingers underway, planning to join the military It s time to rethink nerve repair! 6

7 Peripheral Nerves & Goals of Repair Peripheral Nerves are Capable of Regeneration with Appropriate Guidance & Protection Peripheral Nerves provide the pathways for both motor and sensory signals between the central nervous system and target organs, regulating movement and sensation. Example of axonal regeneration after injury Goals of repair Restore muscle function and sensation Prevent neuroma / chronic pain Cross section of a peripheral nerve illustrating the nerve bundles containing individual axons Successful nerve regeneration requires Scaffold to direct, support growth No tension on the repair site Protection from soft tissue attachments It s time to rethink nerve repair! 7

8 The AxoGen Family of Products Comprehensive portfolio of nerve repair products. Thousands of implants to date Currently distributed in the US and 7 other countries It s time to rethink nerve repair! 8

9 The Market for Nerve Repair The Nerve Repair Market is Large with Opportunity for Expansion AxoGen is currently focused on Extremity Trauma Carpal Tunnel Revision Oral Maxillofacial Upper Extremity Head and Neck Torso with future expansion opportunities in Lower Extremity Lower Limb Surgery Facial Reconstruction Breast Reconstruction Prostatectomy Pain Management Regeneration Enhancement It s time to rethink nerve repair! 9

10 Currently Targeted Nerve Markets (US) AxoGen Current Target Markets $1.6 billion 1 In millions Carpal Tunnel Revision $160 Oral $129 Extremity Market $1.3 billion 1 In millions Nerve Repair Transected with Gap $668 $483 Nerve Protection $1,312 $161 Extremity Approximately 900K Procedures Annually in US: Extremity 719,000 2 Carpal Tunnel 100,000 3 Oral 68,000 4 Nerve Repair Transected No Gap 1. Market sizes are an estimate of AxoGen based upon the number of nerve repair procedures it believes are performed and applying its average sales price to the particular procedure for which an AxoGen product could be used. 2. Noble, J et al, Analysis of Upper and Lower Extremity Peripheral Nerve Injuries in a Population of Patient with Multiple Injuries ; The Journal of Trauma: Injury, Infection, and Critical Care Vol. 45. No. 1 (2008) - National Hospital Ambulatory Medical Care Survey: 2008 Emergency Department Summary Tables Analysis of the Peripheral Nerve Repair Market in the United States ; Kurt Brattain, MD, Magellan Medical Technology Consultants, Inc., Minneapolis, Minnesota. 3. University of Maryland Medical Center, Carpal Tunnel Syndrome Surgery. 4. The Prophylactic Extraction of Third Molars: A Public Health Hazard: Jay W. Friedman, DDS, Health Policy and Ethics; Peer Reviewed; Friedman American Journal of Public Health; September 2007, Vol 97, No. 9, pp Journal of Oral Implantology, Vol. XXXVI/No. Five/2010; Inferior Alveolar Nerve Injury in Implant Dentistry: Diagnosis, Causes, Prevention, and Management ; Ahmed Ali Alhassani, BDS - Nerve Injuries after Dental Injection: A Review of the Literature ; Clinical practice, July/August 2006, Vol. 72, No. 6, Miller H. Smith, BMedSc, DDS; Kevin E. Lung, BSc, DDS, MSc, FRCD(C). It s time to rethink nerve repair! 10

11 Strong Competitive Barriers IP and Unique Regulatory Framework Avance Nerve Graft 6 issued U.S. patents; 4 pending U.S. patent applications; 3 issued international patents and 9 pending international patent applications Regulatory path US: Biologic Transition Process November 2010: Enforcement Discretion letter from FDA allowing continued sales under controls applicable to HCT/P with agreed transition plan to Biologic (BLA) BLA requires a phase III clinical trial; SPA approved by FDA Regulatory path ex-us: Country by country Registration completed in Austria, Canada, Israel, Italy, Singapore, Switzerland and the United Kingdom. AxoGuard Nerve Connector & AxoGuard Nerve Protector FDA 510(k) Clearance, CE Mark and Health Canada Approval Patents held by Cook Biotech, AxoGen exclusive WW license for nerve It s time to rethink nerve repair! 11

12 Traditional Peripheral Nerve Repair Options Transected Nerves Suture Direct suture repair of no-gap injuries Common repair method May result in tension to the repair leading to ischemia Concentrates sutures at the coaptation site Autograft Traditional Gold Standard despite several disadvantages Secondary surgery Loss of function & sensation at harvest site 27% complication rate including infection, wound healing and chronic pain 1 Limited availability of graft length & diameter Hollow-Tube Conduit Convenient off the shelf option; limited efficacy and use Provides only gross direction for re-growth Limited to small gaps 34%-57% failure rate >5mm gaps 2 Semi-rigid and opaque material limits use & procedure visualization Repair depends on fibrin clot formation 1. Rappaport,et al., Am J Surg Weber, et al., Plas and Recon Surg 2000, Wangensteen et al., Hand 2009 It s time to rethink nerve repair! 12

13 AxoGen Solutions for Transected Nerves 25 µm Processed human nerve allograft for bridging nerve gaps Clinically studied off-the-shelf alternative 87% meaningful recovery in sensory, mixed and motor nerve gaps in multi-center study 1 Eliminates need for an additional surgical site & risks of donor nerve harvest 1 Can reduce OR time Structural support for regenerating axons Cleansed and decellularized extracellular matrix (ECM) Offers the benefits of human peripheral nerve micro-architecture & handling Revascularizes and remodels into patient s own tissue similar to autologous nerve 2 Available in a variety lengths (up to 70mm) and diameters (up to 5mm) Only minimally processed porcine ECM for connector-assisted coaptation Alternative to direct suture repair Can reduce surgery time by as much as 40% 3 Reduces the risk of forced fascicular mismatch 7 Alleviates tension at critical zone of regeneration Disperses tension across repair site 8 Moves suture inflammation away from coaptation face 3 Revascularizes and remodels into patient s own tissue 4,5,6,9 It s time to rethink nerve repair! 13 1.Brooks Miscrosurg.2012;32: Whitlock Muscle & Nerve, 2009;6: Boechstyns, Jhand Surg. 2013;38: Badylak, et al., 1998, J Biomater Sci Polym Ed 9(8): Hodde, et al., 2007, J Mater Sci Mater Med 18(4): Nihsen, et al., 2008, Adv Skin Wound Care 21(10): Brushart Exp Neurol. 1987;97: Schmidhammer J Trauma. 2004;56(3): Data on file at AxoGen, Inc.

14 Traditional Peripheral Nerve Protection Options Compressed and Transected Nerves Vein Wrapping Autologous vein Hypothenar Fat Pad Flap Autologous vascularized flap Collagen Wraps Off the-shelf Barrier to attachment to surrounding tissue Requires extra time and skill to perform spiral wrapping technique Second surgical site Barrier to attachment to surrounding tissue Only wraps part of the nerve circumference Increases procedure time Semi-rigid material limits use Degrades over time and does not provide a lasting barrier to soft tissue attachments Sotereanos DG, et al., Microsurgery 1995 Lippincott and Williams It s time to rethink nerve repair! 14

15 AxoGen Solutions for Nerve Protection Only minimally processed porcine extracellular matrix for wrapping and protecting injured peripheral nerve Protects repair site from surrounding tissue Minimizes soft tissue attachments 1 Allows for diffusion of nutrients through the material 2 Allows nerve gliding Minimizes risk of entrapment 1 Creates a barrier between repair and surrounding tissue bed 1 ECM revascularizes and remodels into patient s own tissue, does not degrade 2, 3, 4,5 Easy to use Semi-translucent to allows visualization of underlying nerve Conforms to nerve It s time to rethink nerve repair! 15 1.Kokkalis, J Recon MicroSurg.2011;27(1): Nihsen, et al., 2008, Adv Skin Wound Care 21(10): Badylak, et al., 1998, J Biomater Sci Polym Ed 9(8): Hodde, et al., 2007, J Mater Sci Mater Med 18(4): Data on file at AxoGen, Inc.

16 Pioneering Sales & Marketing Strategy Strong Forward Momentum and Growth 4 PILLAR APPROACH FOR DRIVING BUSINESS RESULTS Build Market Awareness Educate Surgeons, Develop Advocates Grow Body of Clinical Evidence Execute Sales Plan It s time to rethink nerve repair! 16

17 Build Market Awareness Continuing focus on building awareness among Surgeons, Patients & Investors Participated in major clinical conferences Technical exhibits Podium presentations Sponsored surgeon panels Garnered Positive Media Attention Local and National television Wall Street Journal, SF Chronicle It s time to rethink nerve repair! 17

18 Educate Surgeons & Develop Advocates Increased emphasis on education & hands-on training Launched AxoGen Professional Education Program Educate on best practices, science of nerve repair Continued Surgeon Advocacy and Speakers Bureau National and International Key Opinion Leaders Data presentations, panel events and publications The course was an outstanding experience! Definitely one of the best hands-on practical courses I have taken. It will have a direct impact on the way that I treat certain clinical problems. Ignatius Roger, MD, New York Hospital Queens (NY Presbyterian) Plastic & Reconstructive Surgery, Hand Surgery Attended AxoGen Best Practices Nerve Course for Upper Extremity Nerves Excellent course! Should be offered to all oral maxillofacial surgeons who would consider microsurgery in their practice. Alexander E. Pazoki, DDS, MD, FACS, University of Maryland Maxillofacial Surgery, Oral & Maxillofacial Oncology, Microvascular Reconstructive Surgery Attended AxoGen Best Practices Nerve Course for Trigeminal Nerve It s time to rethink nerve repair! 18

19 Clinical Data - RANGER Study Largest Multi-center Study in Peripheral Nerve Reconstruction Injuries Achieving Meaningful Recovery by Nerve Type 1 Injuries Achieving Meaningful Recovery by Gap length 1 100% 100% 75% 50% 25% 88% 83% 67% 87% Meaningful Recovery 1, 2, 3 75% 50% 25% 90% 98% 85% 100% 80% 87% 0% Sensory Mixed It s time to rethink nerve repair! 19 Motor Open enrollment observational study First data milestone 12 centers, 25 surgeons, 132 nerve injuries No graft-related complications Peer reviewed publications Brooks, et al. Microsurgery, January 2012 Cho, et al. Journal of Hand Surgery, November % 5-14 mm mm mm Expanded data milestone presented at 5th Vienna Symposium on Surgery of Peripheral Nerves, March centers, 36 surgeons, 431 repairs enrolled 85% meaningful recovery 1 1 Includes repairs with qualitative outcomes data 2 Meaningful recovery defined at S3-S4 and M3-M5 from the works of (Kim and Kline), (Frykman and Gramyk) and (Kallio). 3 Brooks, et al. Microsurgery, January 2012

20 % Successful Recovery RANGER % Successful Recovery RANGER RANGER Study Results Compare Favorably to Other Repairs Comparison to Historical Reference Literature Study Nerve Injury Types Test Article RANGER Study (Brooks, et al, 2012; Cho, et al, 2012) Autograft Studies Sensory, Mixed and Motor Nerve Injuries Positive Outcomes* Avance Nerve Graft 87% Weber, et al., 2000 Sensory Nerves Direct Repair and Autograft 86% Kim and Kline Frykman and Gramyk, 1991 Frykman and Gramyk, 1991 Sensory and Mixed Nerves Sensory Nerves Direct Suture and Autograft 67-86% Autograft for Digital Nerve Injury under 5 cm 80% Mixed Nerves Direct Suture and Autograft 75-78% Kallio, et al., 1993 Sensory Nerves Autograft and Direct Repair 70% Conduit Studies Haug, et al., 2013 Sensory Nerves NeuraGen Type 1 Bovine Collagen Tube 40% Weber, et al., 2000 Sensory Nerves Neurotube PGA tube 74% Wangensteen and Kalliainen, 2009 Sensory, Mixed and Motor Nerve Injuries NeuraGen Type 1 Bovine Collagen Tube 43% * As reported, based on individual study parameters for acceptable recovery: M3-M5, S3-S4 by MRCC Autograft vs. Avance Nerve Graft Motor Recovery Outcomes in Mixed and Motor Nerves Conduit vs. Avance Nerve Graft Overall Recovery Outcomes % n=111 Frykman & Gramyk 67% n=85 Kallio 43% n=85 Wangensteen, Kalliainen 75% n=118 Kim & Kline 4 89% n=59 78% n=21 Ranger Registry RANGER Registry It s time to rethink nerve repair! 20

21 2 Point Discrimination Clinical Data - CHANGE Clinical Study Pilot Comparative Study of Avance Nerve Graft and Hollow Tubes 1 Avance Nerve Graft 100% Return of s2pd No Response Hollow-tube Conduit 25% Study Design 75% Mean Recovery of Static 2PD (PPP) Baseline Month 3 Month 6 Month 9 Month 12 Outcomes Conduit Avance Nerve Graft Prospective single-blind, randomized, comparison trial of recovery outcomes between hollow-tubes and Avance Nerve Graft Adults; Digital nerve injuries 5 to 20 mm Primary outcome static 2PD- a standardized measure of sensory density (lower is better sensory discrimination) 23 subjects with 31 repairs, randomized & enrolled in the study It s time to rethink nerve repair! 21 Follow-up on 18 subjects Treatment groups showed statistically significant difference at month 12 in static 2PD with greater recovery in the Avance Nerve Graft group Avance Nerve Graft group reported functional sensory outcomes at more consistent levels as compared to hollow -tube conduits. 1 Data presented - AAHS meeting 1/2014

22 Execute Sales Plan Expanded Reach, Focus on Sales Execution Expanded Reach: US Sales Team 29 direct sales professionals 23 independent distributors Available in 8 countries Focused Sales Execution: Breadth: grow account foot print Depth: utilization of all 3 product lines, increase penetration Quality: High and medium potential accounts Reorder rate It s time to rethink nerve repair! 22

23 Delivering Strong Growth Year over Year 52% Annual Revenue Growth $ in millions Quarter over Quarter 61% Revenue Growth $4.79 $2.98 Q Q It s time to rethink nerve repair! 23

24 Balance Sheet & Capital Structure Balance Sheet Highlights December 31, 2014 Cash and cash equivalents 1,2 $8,215,791 Term Loan $25,085,777 Capital Structure 2 December 31, 2014 Common Stock Common Stock Options Common Stock Warrants Fully Diluted 19,488,814 shares 2,733,812 shares 89,686 shares 22,312,312 shares 1. 12/31/2014 unaudited ending cash reflects the impact of $911,000 of financing expenses paid for a refinancing completed in November /30/2014 cash totaled $11.8 million. 2. In February, the Company issued 5,437,200 common stock shares in an equity raise for net proceeds of approximately $13.6 million. It s time to rethink nerve repair! 24

25 Oberland Capital/Three Peaks Financing Term Loan $25 million in debt, 6 year term Interest only quarterly payments at 9% plus the greater of LIBOR or 1% Principal due at end of 6 year term Company has option to draw an additional $7 million, April 1 to June 29, 2016, upon meeting certain conditions Secured by Company s assets Revenue Interest Agreement 10 year term at 3.75% of company revenues up to a maximum of $30 million in revenues for any 12 month period Company has pre-payment option, in whole or in part, at any time Common Stock Purchase $3.55 million in common stock purchased It s time to rethink nerve repair! 25

26 Leadership Team Karen Zaderej, MBA President & Chief Executive Officer J&J (Ethicon) Greg Freitag, JD, CPA General Counsel & SVP Business Development Pfizer, Guidant Lee Bob Johnston, MBA Chief Financial Officer Tutogen Medical, Ascension Orthopedics Jill Schiaparelli, MBA Chief Marketing Officer J&J (Ethicon, Ethicon Endo), ApaTech (Baxter) Shawn McCarrey SVP, Sales Bayer/Medrad/Possis John Engels, MBA VP & Founder University of FL, CACM Mark Friedman, PhD VP, Regulatory & Quality Assurance AtriCure, Enable Medical Erick DeVinney VP, Clinical & Translational Sciences Angiotech, PRA International AxoGen was founded by regenerative medicine pioneer, Jamie Grooms (RTI, Cryolife and Osteotech), and is headed by a seasoned executive team It s time to rethink nerve repair! 26

27 Investment Considerations Focus on Executing Sales & Marketing Strategy To Drive Shareholder Value Exclusively focused on peripheral nerve repair solutions Addressing a $1.6B+ current market opportunity Comprehensive product portfolio addresses all surgical peripheral nerve reconstruction needs Barriers to competitive entry & growing body of clinical data Strong revenue, 2014 Revenue $16.8 million, 54% growth vs 2013 High gross margins: 80% 2014 Long term expansion potential beyond current market It s time to rethink nerve repair! 27

28 NASDAQ: AXGN Recognitions Deloitte & Touche Fast 500 Frost & Sullivan 2014 Technology Innovation Award Russell MicroCap Index 2014 It s time to rethink nerve repair! AxoGen is exclusively dedicated to the $1.6 billion US nerve repair market Visit us at Follow us on