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What changed in Axogen, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Axogen, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+664 added−708 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-26)

Top changes in Axogen, Inc.'s 2025 10-K

664 paragraphs added · 708 removed · 300 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

158 edited+41 added−66 removed169 unchanged
Biggest changeRisks Related to Our Business and Strategy • Approximately 60% of our total revenues are from sales of Avance Nerve Graft and any adverse decision from the FDA would negatively impact our operations and financial condition. • Our revenue growth depends on our ability to increase distribution and sales to existing customers and develop new customers, domestically and abroad, and there can be no assurance that these efforts will result in significant increases in sales. • Our revenue depends on a limited number of products. • We are highly dependent on the continued availability of our facilities and could be harmed if we continue to experience operating challenges with our APC Facility or if any of our facilities are unavailable for any prolonged period of time. • There may be significant fluctuations in our operating results. • Macroeconomic trends, such as the inflationary pressure, and political instability could continue to have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments. • Our operating results could be adversely impacted if we are unable to effectively manage and sustain our future growth or scale our operations. • We have a history of net losses and have not consistently experienced positive cash flow from operations, and our ability to achieve consistent positive cash flow will depend on increasing revenue from distribution of our products, which may not be achievable. • Failure to successfully manage the transition associated with the recent management changes could have an adverse impact on our business. • Loss of key members of management, who we need to succeed, could adversely affect our business. • Our success will be dependent on continued acceptance of our products by the medical community. • Delays, interruptions, or the cessation of production by our third-party suppliers, including products supplied by single suppliers, of important materials may prevent or delay our ability to manufacture or process the final products. • Technological change and competition for newly developed products could reduce demand for our products. • We may not be successful in our efforts to build a pipeline of additional product candidates. • We must maintain high quality processing of our products. • Our revenue depends upon prompt and adequate reimbursement from public and private insurers and national health systems. • Negative publicity concerning methods of donating human tissue and screening of donated tissue may reduce demand for our products and negatively impact the supply of available donor tissue. • The failure of third parties to perform many necessary services for the commercialization of our products, including services related to recovery/acquisition, sterilization, distribution, and transportation, would impair our ability to meet commercial demand. • We are dependent on our relationships with independent agencies to generate a material portion of our revenue. • If we do not manage product inventory in an effective and efficient manner, it could adversely affect profitability. • We may be unsuccessful in commercializing our products outside the U.S. • We may seek to expand our business in ways that could result in diversion of resources and extra expenses. • We may be subject to future product liability litigation, which could be expensive, and our insurance coverage may not be adequate. • We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability and tensions, Russia's ongoing invasion of Ukraine and illegal annexation of Ukrainian territories, and record inflation and could materially and adversely affect our business, financial condition and results of operations. • Changes in U.S. trade policy, threats of international tariffs, and changes to the U.S. political landscape may adversely affect our business, results of operations, financial condition, and prospects. • Our results of operations could be negatively affected by potential fluctuations in foreign currency exchange rates.
Biggest changeRisks Related to Our Business and Strategy • Approximately 60% of our total revenues are from sales of Avance Products and any adverse decision from the FDA would negatively impact our operations and financial condition. • Portions of the FDA-approved indication for Avance were granted under the FDA’s accelerated approval program, and continued approval for these indications is contingent upon our timely completion of required post-marketing confirmatory studies. • Our revenue growth depends on our ability to increase distribution and sales to existing customers and develop new customers, domestically and internationally, and there can be no assurance that these efforts will result in significant increases in sales. • We are highly dependent on the continued availability of our facilities and could be harmed if we continue to experience operating challenges with our APC Facility or if any of our facilities are unavailable for any prolonged period of time. 28 Table of Contents Axogen, Inc. • If our estimates of the TAM for peripheral nerve repair and reconstruction are inaccurate, our growth prospects and financial performance could be materially adversely affected. • Our revenue depends upon prompt and adequate reimbursement from public and private insurers and national health systems. • Our operating results could be adversely impacted if we are unable to effectively manage and sustain our future growth or scale our operations. • Our success will be dependent on continued acceptance of our products by the medical community. • If we do not manage product inventory in an effective and efficient manner, it could adversely affect profitability. • There may be significant fluctuations in our operating results. • We have a history of net losses and have not consistently experienced positive cash flow from operations, and our ability to achieve consistent positive cash flow will depend on increasing revenue from distribution of our products, which may not be achievable. • Loss of key members of management, who we need to succeed, could adversely affect our business. • Delays, interruptions, or the cessation of production by our third-party suppliers, including products supplied by single suppliers, of important materials may prevent or delay our ability to manufacture or process the final products. • Technological change and competition for newly developed products could reduce demand for our products. • We may not be successful in our efforts to build a pipeline of additional product candidates. • We may be subject to future product liability litigation, which could be expensive, and our insurance coverage may not be adequate. • We are currently operating in a period of economic uncertainty and capital markets volatility driven in part by growing geopolitical tensions and evolving global security risks, any of which could materially and adversely affect our business, financial condition and results of operations.
We believe any current or future competitors face the following important barriers to market entry as it relates to its peripheral nerve repair products. Our intellectual property (“IP”), and that of our partners, including patents, patents-pending, trade secrets, and unique, internal subject matter expertise, is believed to be an important barrier for our Avance Nerve Graft and Axoguard products.
We believe any current or future competitors face the following important barriers to market entry as it relates to its peripheral nerve repair products. Our intellectual property (“IP”), and that of our partners, including patents, patents-pending, trade secrets, and unique, internal subject matter expertise, is believed to be an important barrier for our Avance Products and Axoguard products.
Additionally, we have a policy that supports employees who are veterans that participate in Honors Guards, who are selected from partnerships with veteran organizations and participating companies and attend by invitation, and military funerals, the Honor Guards. Further, some of our recruitment efforts are to engage with the next generation of scientists and engineers through targeted awareness and internship programs.
Additionally, we have a policy that supports employees who are veterans that participate in Honors Guards, who are selected from partnerships with veteran organizations and participating companies and attend, by invitation, military funerals. Further, some of our recruitment efforts are to engage with the next generation of scientists and engineers through targeted awareness and internship programs.
We police and enforce our marks. We possess trade secrets and material know-how in the following general subject matters: nerve and tissue processing, nerve repair, product testing methods, and pre-clinical and clinical expertise. We have registered copyrights for training tools and artistic renderings. Additionally, we entered into the Distribution Agreement and Supply Agreement with Evergen for the Axoguard products.
We police and enforce our marks. We possess trade secrets and material know-how in the following general subject matters: nerve and tissue processing, nerve repair, product testing methods, and pre-clinical and clinical expertise. We have registered copyrights for training tools and artistic renderings. Additionally, we entered into the Distribution Agreement and Amended Supply Agreement with Evergen for the Axoguard products.
In addition, under the Federal Lanham Act and similar state laws, competitors, and others can initiate litigation relating to advertising claims. Facilities Listing and Registrations All of our facilities are properly registered with the FDA as tissue or medical device establishments. The FDA has broad post-market and regulatory enforcement powers.
In addition, under the Federal Lanham Act and similar state laws, competitors, and others can initiate litigation relating to advertising claims. Facilities Listing and Registrations All of our facilities are properly registered with the FDA as drug, tissue or medical device establishments. The FDA has broad post-market and regulatory enforcement powers.
Evergen is the contract manufacturer for our Axoguard Nerve Cap product, and we are responsible for the regulatory compliance, distribution, and sale of this product. We are the specification developer and authorization holder of the HA+ product, which is classified by the FDA as a Class II device.
Evergen is the contract manufacturer for our Axoguard Nerve Cap product, and we are responsible for the regulatory compliance, distribution, and sale of this product. We are the specification developer and authorization holder of the Axoguard HA+ Nerve Protector product, which is classified by the FDA as a Class II device.
The Compensation Committee of our Board of Directors has oversight over human capital management. Available Information Our website address is http://www.axogeninc.com. We have included our website address as an inactive textual reference only.
The Compensation Committee of our Board of Directors (the “Board”) has oversight over human capital management. Available Information Our website address is http://www.axogeninc.com. We have included our website address as an inactive textual reference only.
Tissue Recovery and Processing Facilities We partner with other FDA registered tissue establishments and AATB accredited recovery agencies or recovery agencies in compliance with FDA, state and international regulations and AATB standards for human tissue recovery.
Tissue Recovery and Biologic Processing Facilities We partner with other FDA registered tissue establishments and AATB accredited recovery agencies or recovery agencies in compliance with FDA, state and international regulations and AATB standards for human tissue recovery.
Axoguard Nerve Protector has the following advantages: • Processed porcine submucosa ECM used to reinforce a coaptation site, wrap a partially severed peripheral nerve or protect peripheral nerve tissue; • Creates a protective layer that isolates and protects the peripheral nerve in a traumatized wound bed; • Remodels to form a new soft tissue layer; • Easily conforms and provides 360-degree wrapping of damaged peripheral nerve tissue; • Allows the body's natural healing process to repair the nerve; P9 Table of Conten t • Minimizes the potential for soft tissue attachments and peripheral nerve entrapment by physically isolating the nerve during the healing process; • Allows peripheral nerve gliding; • Strong and flexible, plus easy to suture; • Is available in five different widths and two different lengths to address a variety of peripheral nerve repair situations; and • Stored at room temperature with a minimum of 24-month shelf life.
Axoguard Nerve Protector has the following advantages: • Processed porcine submucosa ECM used to reinforce a coaptation site, wrap a partially severed peripheral nerve or protect peripheral nerve tissue; • Creates a protective layer that isolates and protects the peripheral nerve in a traumatized wound bed; • Remodels to form a new soft tissue layer; • Easily conforms and provides 360-degree wrapping of damaged peripheral nerve tissue; • Allows the body’s natural healing process to repair the nerve; • Minimizes the potential for soft tissue attachments and peripheral nerve entrapment by physically isolating the nerve during the healing process; • Allows peripheral nerve gliding; • Strong and flexible, plus easy to suture; • Is available in five different widths and two different lengths to address a variety of peripheral nerve repair situations; and • Stored at room temperature with a minimum of 24-month shelf life.
P26 Table of Conten t Failure by us or our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or other federal or state authorities, which may include any of the following sanctions, among others: • Warning letters, fines, injunctions, consent decrees and civil penalties; • Customer notifications, repair, replacement, refunds, recall or seizure of our products; • Operating restrictions, partial suspension, or total shutdown of production; • Suspension or termination of our clinical trials; • Refusing our 510(k), de novo classification request, PMA or BLA for new products, new intended uses, or modifications to existing products; • Withdrawing or suspending pre-market approvals that have already been granted; and • Criminal prosecution.
Failure by us or our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or other federal or state authorities, which may include any of the following sanctions, among others: • Warning letters, fines, injunctions, consent decrees and civil penalties; • Customer notifications, repair, replacement, refunds, recall or seizure of our products; • Operating restrictions, partial suspension, or total shutdown of production; • Suspension or termination of our clinical trials; • Refusing our 510(k), de novo classification request, PMA or BLA for new products, new intended uses, or modifications to existing products; • Withdrawing or suspending pre-market approvals that have already been granted; and • Criminal prosecution.
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC before making an investment decision regarding our common stock.
Further discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC before making an investment decision regarding our common stock.
Clinical trials under an IND typically are conducted in three sequential phases, but the phases may overlap or be combined. In our case, we believe that the phase 3 clinical trial study for Avance Nerve Graft represents the only prospective clinical data that will be required to evaluate safety and effectiveness.
Clinical trials under an IND typically are conducted in three sequential phases, but the phases may overlap or be combined. In our case, we believe that the Phase III clinical trial study for Avance Nerve Graft represents the only prospective clinical data that will be required to evaluate safety and effectiveness.
Department of Justice ("DOJ") has previously alleged that the marketing and promotional practices of pharmaceutical and medical device manufacturers including the off-label promotion of products or the payment of prohibited kickbacks to doctors violated the FCA resulting in the submission of improper claims to federal and state healthcare entitlement programs such as Medicaid.
Department of Justice (“DOJ”) has previously alleged that the marketing and promotional practices of pharmaceutical and medical device manufacturers including the off-label promotion of products or the payment of prohibited kickbacks to doctors violated the FCA resulting in the submission of improper claims to federal and state healthcare entitlement programs such as Medicaid.
Revenue from the distribution of our nerve repair products, Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, Axoguard Nerve Cap and Avive+ Soft Tissue Matrix in the U.S. is the main contributor to our total reported sales and have been the key component of our growth to date. Nerves can be damaged in several ways.
Revenue from the distribution of our Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, Axoguard Nerve Cap and Avive+ Soft Tissue Matrix in the U.S. is the main contributor to our total reported sales and have been the key component of our growth to date. Nerves can be damaged in several ways.
Pursuant to the Nerve End Cap Supply Agreement dated June 27, 2017, as amended on April 6, 2020 and August 4, 2023, (the "Amended Supply Agreement"), Evergen is the exclusive contract manufacturer of the Axoguard Nerve Cap and both parties have provided the other party the necessary licenses to their technologies for operation of the Amended Supply Agreement.
Pursuant to the Nerve End Cap Supply Agreement dated June 27, 2017, as amended on April 6, 2020 and August 4, 2023, (the “Amended Supply Agreement”), Evergen is the exclusive contract manufacturer of the Axoguard Nerve Cap and both parties have provided the other party the necessary licenses to their technologies for operation of the Amended Supply Agreement.
Our direct sales force continues to be supplemented by independent sales agencies that represent approximately 10% of our total revenue. We believe that near-term growth can be supported first through expanded productivity of our existing sales force as they go into more depth with existing accounts and then by adding additional accounts.
Our direct sales force continues to be supplemented by independent sales agencies that represent approximately 8% of our total revenue. We believe that near-term growth can be supported first through expanded productivity of our existing sales force as they go into more depth with existing accounts and then by adding additional accounts.
Government Regulation Overview Our products are subject to regulation throughout their lifecycle by the FDA, as well as other federal and state regulatory bodies in the U.S. and comparable authorities in other countries. In addition, our Avance Nerve Graft must comply with the standards of the tissue bank industry’s accrediting organization, the AATB.
Government Regulation Overview Our products are subject to regulation throughout their lifecycle by the FDA, as well as other federal and state regulatory bodies in the U.S. and comparable authorities in other countries. In addition, our Avance Products must comply with the standards of the tissue bank industry’s accrediting organization, the AATB.
HA+ was cleared for market under 510(k) K223640 on April 7, 2023, and a second 510(k) K231708 regulatory clearance was obtained on October 12, 2023, expanding the indication for use of HA+. The products are classified by the FDA under 21 CFR § 882.5275 (Nerve Cuff, product code: JXI).
Axoguard HA+ Nerve Protector was cleared for market under 510(k) K223640 on April 7, 2023, and a second 510(k) K231708 regulatory clearance was obtained on October 12, 2023, expanding the indication for use of Axoguard HA+ Nerve Protector. The products are classified by the FDA under 21 CFR § 882.5275 (Nerve Cuff, product code: JXI).
A BLA must also contain extensive Chemistry, Manufacturing and Controls ("CMC") and other manufacturing information, as well as labeling information. The applicant must pass an FDA pre-approval inspection of the manufacturing facility or facilities at which the biological product is produced to assess compliance with the FDA’s current cGMP requirements.
A BLA must also contain extensive Chemistry, Manufacturing and Controls (“CMC”) and other manufacturing information, as well as labeling information. The applicant must pass an FDA pre-approval inspection of the manufacturing facility or facilities at which the biological product is produced to assess compliance with the FDA’s current cGMP requirements.
While selected trauma and surgical procedures are dedicated to the repair of nerves, most of the incidence of nerve repair is a step in a larger trauma or surgical procedure. Current Procedural Terminology ("CPT") codes exist for surgeons to code for nerve repair; however, we believe the data substantially underestimates the total number of nerves repaired.
While selected trauma and surgical procedures are dedicated to the repair of nerves, most of the incidence of nerve repair is a step in a larger trauma or surgical procedure. Current Procedural Terminology (“CPT”) codes exist for surgeons to code for nerve repair; however, we believe the data substantially underestimates the total number of nerves repaired.
However, due to our limited resources, our smaller size, and our relatively early stage, we believe we may face competitive challenges from larger entities and market factors that could negatively impact our growth, including competitors’ introduction of new products and competitors’ bundling of products to achieve pricing benefits. (See “Item 1A.
However, due to our limited resources, our smaller size, and our relatively early stage, we believe we may face competitive challenges from larger entities and market factors that could negatively impact our growth, including competitors’ introduction of new products and competitors’ bundling of products to achieve pricing benefits. See Item 1A.
We register our human tissue products in each individual E.U. country and our distributor in the UK has import authority for our human tissue product. It is expected that licensed UK establishments that import or export tissues or cells will need written agreements with the relevant E.U. licensed establishments to continue importing and exporting with the E.U.
We register our human tissue products in each individual E.U. country and our distributor in the U.K. has import authority for our human tissue product. It is expected that licensed U.K. establishments that import or export tissues or cells will need written agreements with the relevant E.U. licensed establishments to continue importing and exporting with the E.U.
Finally, commitments to obtain informed consent from the research subjects, to obtain review of the study by an independent institutional review board ("IRB"), and to adhere to the investigational new drug regulations. Once the IND is submitted, the sponsor must wait 30 calendar days before initiating any clinical trials.
Finally, commitments to obtain informed consent from the research subjects, to obtain review of the study by an independent institutional review board (“IRB”), and to adhere to the investigational new drug regulations. Once the IND is submitted, the sponsor must wait 30 calendar days before initiating any clinical trials.
Among other things, these regulations require manufacturers, including third party manufacturers to: • Follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the manufacturing process; • Comply with labeling regulations and FDA prohibitions against the false or misleading promotion or the promotion of products for uncleared, unapproved or off-label uses, or indications; • Comply with requirements to obtain clearance or approval for certain changes affecting the product, including changes to the product’s manufacturing, labeling, or intended use; • Report to the FDA certain adverse events, adverse reactions, and deviations; • Comply with post-approval restrictions or conditions, including post-approval study commitments and post-market safety and annual reporting requirements; • Follow post-market surveillance regulations that may apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; and • Follow requirements to issue notices of correction or removal, or conduct market withdrawals, or recalls where quality or other issues arise.
Among other things, these regulations require manufacturers, including third party manufacturers to: • Follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the manufacturing process; • Comply with labeling regulations and FDA prohibitions against the false or misleading promotion or the promotion of products for uncleared, unapproved or off-label uses, or indications; • Comply with requirements to obtain clearance or approval for certain changes affecting the product, including changes to the product’s manufacturing, labeling, or intended use; 23 Table of Contents Axogen, Inc. • Report to the FDA certain adverse events, adverse reactions, and deviations; • Comply with post-approval restrictions or conditions, including post-approval study commitments and post-market safety and annual reporting requirements; • Follow post-market surveillance regulations that may apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; and • Follow requirements to issue notices of correction or removal, or conduct market withdrawals, or recalls where quality or other issues arise.
While eight years have passed since the adoption of E.U. MDR, the E.U. MDR's transitional provisions were amended in 2023 to give manufacturers and notified bodies more time to conduct the necessary conformity assessment procedures and to avert shortages of devices needed for the E.U. healthcare systems.
While nine years have passed since the adoption of E.U. MDR, the E.U. MDR’s transitional provisions were amended in 2023 to give manufacturers and notified bodies more time to conduct the necessary conformity assessment procedures and to avert shortages of devices needed for the E.U. healthcare systems.
Our distribution rights are worldwide in the field of the peripheral and central nervous system but excluding use of the products in the oral cavity for endodontic and periodontal applications and OMF surgery solely as they relate to dental, soft or hard tissue repair, or reconstruction.
Our distribution rights are worldwide in the field of the peripheral and central nervous system but excluding use of the products in the oral cavity for endodontic and periodontal applications and oral maxillofacial surgery solely as they relate to dental, soft or hard tissue repair, or reconstruction.
Phase 3 clinical trials usually further evaluate clinical efficacy and test further for safety in an expanded patient population. Phase 3 clinical trials usually involve comparison with placebo, standard treatments, or other comparators. Usually, multiple well-controlled large phase 3 or pivotal clinical trials demonstrating safety and efficacy are required to support a BLA.
Phase III clinical trials usually further evaluate clinical efficacy and test further for safety in an expanded patient population. Phase III clinical trials usually involve comparison with placebo, standard treatments, or other comparators. Usually, multiple well-controlled large Phase III or pivotal clinical trials demonstrating safety and efficacy are required to support a BLA.
HA+ can be used to: • Separate and protect the nerve from the surrounding tissue during the healing process; • Minimize risk of soft tissue attachments and entrapment in compressed peripheral nerves; • Protect peripheral nerves in a traumatized wound bed; and • Provide tension relief when used in aiding a coaptation.
Axoguard HA+ Nerve Protector can be used to: • Separate and protect the nerve from the surrounding tissue during the healing process; • Minimize risk of soft tissue attachments and entrapment in compressed peripheral nerves; • Protect peripheral nerves in a traumatized wound bed; and • Provide tension relief when used in aiding a coaptation.
Because a sponsor often needs to ship an investigational drug or biological product to clinical investigators in many states, it must seek an exemption from that legal requirement. The Investigational New Drug ("IND") application is the means through which the sponsor obtains this exemption from the FDA.
Because a sponsor often needs to ship an investigational drug or biological product to clinical investigators in many states, it must seek an exemption from that legal requirement. The Investigational New Drug (“IND”) application is the means through which the sponsor obtains this exemption from the FDA.
The potential for products competitive with Axogen’s Axoguard line of products, including our Axoguard Nerve Connector and Axoguard Nerve Protector, is further encumbered by the additional IP protections related to their methods of manufacture, as discussed further below in the Trade Secrets section.
The potential for products competitive with Axogen’s Axoguard line of products, including our Axoguard Nerve Connector and Axoguard Nerve Protector, is further encumbered by the additional IP protections related to their methods of manufacture, as discussed further below in the Trademarks, Trade Secrets and Copyrights section below.
In the second quarter of 2014, Axogen’s Quality System became accredited to International Organization for Standardization ("ISO") 13485 for Receipt, Handling, Storage and Distribution of Axoguard Nerve Connector and Axoguard Nerve Protector. We intend to maintain this accreditation on an ongoing basis.
In the second quarter of 2014, Axogen’s Quality System became accredited to International Organization for Standardization (“ISO”) 13485 for Receipt, Handling, Storage and Distribution of Axoguard Nerve Connector and Axoguard Nerve Protector. We intend to maintain this accreditation on an ongoing basis.
Given the significant additional pre-market and post-market requirements imposed by the E.U. MDR, the overall impact of these new rules could have a material, adverse effect on our international revenue and expenses. The UK left the E.U. in January 2020.
Given the significant additional pre-market and post-market requirements imposed by the E.U. MDR, the overall impact of these new rules could have a material, adverse effect on our international revenue and expenses. The U.K. left the E.U. in January 2020.
The packaging also provides protection during shipment and storage and a reservoir for the addition of sterile fluid to aid in thawing the product. Avance Nerve Graft thaws in less than 10 minutes, and once thawed, it is ready for implantation.
The packaging also provides protection during shipment and storage and a reservoir for the addition of sterile fluid to aid in thawing the product. Avance Nerve Graft thaws in less than ten minutes, and once thawed, it is ready for implantation.
Introduction of our products into foreign markets is subject to meeting the appropriate regulatory standards of particular countries and any appropriate regional regulation or directive. In addition to regulatory approval, reimbursement approval is necessary to achieve material product adoption in most countries.
Further Introduction of our portfolio of products into foreign markets is subject to meeting the appropriate regulatory standards of particular countries and any appropriate regional regulation or directive. In addition to regulatory approval, reimbursement approval is necessary to achieve material product adoption in most countries.
The primary objective of the study is to evaluate the safety and efficacy of Avance Nerve Graft for non-inferiority and if met, superiority, of static two-point discrimination, a measure of sensory function, at twelve months as compared to nerve cuffs.
The primary objective of the study is to evaluate the safety and efficacy of Avance Nerve Graft for non-inferiority and if met, superiority, of static two-point discrimination, a measure of sensory function, at 12 months as compared to nerve cuffs.
Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for or recommending a good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs.
In particular, the federal Anti-Kickback Statute (the “Anti-Kickback Statute”) prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for or recommending a good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs.
We have historically provided education on peripheral nerve repair through in-person national programs, including our “Advances and Best Practices in Nerve Repair” as well as local and regional educational events. In 2024, we offered multiple educational programs including virtual and in-person surgeon education programs.
We have historically provided education on peripheral nerve repair through in-person national programs, including our “Advances and Best Practices in Nerve Repair” as well as local and regional educational events. In 2025, we offered multiple educational programs including virtual and in-person surgeon education programs.
Risk Factors – Our operations must comply with FDA and other governmental requirements." Research and Development We are committed to advancing the field of peripheral nerve repair and providing the most comprehensive portfolio of solutions for peripheral nerve injuries.
Risk Factors – Our operations must comply with FDA and other governmental requirements. Research and Development We are committed to advancing the field of peripheral nerve repair and offer the most comprehensive portfolio of solutions for peripheral nerve injuries.
Tissue products are not currently regulated under the CE Mark We are responsible for all regulatory filings for Avance Nerve Graft. To obtain international approvals, we prepare the product filing documentation and submit this documentation to the MOH for a country.
Tissue Products Are Not Currently Regulated Under the CE Mark We are responsible for all regulatory filings for Avance Products. To obtain international approvals, we prepare the product filing documentation and submit this documentation to the MOH for a country.
RECON results demonstrated statistical superiority for return of sensory function, as measured by static two-point discrimination, as compared to conduits in gaps greater than 12 mm (p-value REPOSE We are conducting a multicenter, prospective, randomized, and subject blinded study of Axoguard Nerve Cap as compared to neurectomy for the treatment of systematic neuroma.
RECON results demonstrated statistical superiority for return of sensory function, as measured by static two-point discrimination, as compared to conduits in gaps greater than 12mm (p-value REPOSE We are conducting a multicenter, prospective, randomized, and subject blinded study of Axoguard Nerve Cap as compared to neurectomy for the treatment of systematic neuroma.
The following regulations apply to the IND application process: • 21 CFR Part 201 Drug Labeling • 21 CFR Part 312 Investigational New Drug Application • 21 CFR Part 314 IND and NDA Applications for FDA Approval to Market a New Drug (New Drug Approval) • 21 CFR Part 316 Orphan Drugs • 21 CFR Part 50 Protection of Human Subjects • 21 CFR Part 54 Financial Disclosure by Clinical Investigators • 21 CFR Part 56 Institutional Review Boards • 21 CFR Part 58 Good Lab Practice for Nonclinical Laboratory Studies Biological Product License Application Pa thway Th e BLA is a request for permission to introduce, or deliver for introduction, a biological product into interstate commerce (21 CFR Part 601.2).
The following regulations apply to the IND application process: • 21 CFR Part 201 Drug Labeling • 21 CFR Part 312 Investigational New Drug Application • 21 CFR Part 314 IND and NDA Applications for FDA Approval to Market a New Drug (New Drug Approval) • 21 CFR Part 316 Orphan Drugs • 21 CFR Part 50 Protection of Human Subjects • 21 CFR Part 54 Financial Disclosure by Clinical Investigators • 21 CFR Part 56 Institutional Review Boards • 21 CFR Part 58 Good Lab Practice for Nonclinical Laboratory Studies Biological Product License Application Pathway The BLA is a request for permission to introduce, or deliver for introduction, a biological product into interstate commerce (21 CFR Part 601.2).
Avance Nerve Graft Performance We have worked with leading institutions, researchers, and surgeons to support innovation in the field of surgical peripheral nerve repair. We believe our RANGER study is the largest multi-center clinical study conducted in peripheral nerve gap repair with over 2,800 enrolled repairs. We have completed the RECON study.
Avance Nerve Graft Performance We have worked with leading institutions, researchers, and surgeons to support innovation in the field of surgical peripheral nerve repair. We believe our RANGER study is the largest multi-center clinical study conducted in peripheral nerve gap repair with more than 2,800 enrolled repairs. We have completed the RECON study.
In connection with our Avance Nerve Graft, per Section 351(k)(7) and 351(i)(4) of the PHS Act, from the date of BLA approval, we believe we will have a period of 12 years of exclusivity in the U.S. from commercial competition from biosimilars using Avance Nerve Graft as t he reference product.
In connection with Avance, per Section 351(k)(7) and 351(i)(4) of the PHS Act, from the date of BLA approval, we believe we will have a period of 12 years of exclusivity in the U.S. from commercial competition from biosimilars using Avance Nerve Graft as the reference product.
The steps for obtaining FDA approval of a BLA to market a biological product in the U.S. include: • Completion of pre-clinical laboratory tests, animal studies, and formulation studies under the FDA’s good laboratory practices regulations; • Submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin and which must include independent IRB approval at each clinical site before the trials may be initiated; • Performance of an adequate and well-controlled clinical trial in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication; • Submission to the FDA of a BLA, which contains detailed information about the CMC for the product, reports of the outcomes and full data sets from the clinical trials, and proposed labeling and packaging for the product.
The steps for obtaining FDA approval of a BLA to market a biological product in the U.S. include: • Completion of pre-clinical laboratory tests, animal studies, and formulation studies under the FDA’s GLP regulations; • Submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin and which must include independent IRB approval at each clinical site before the trials may be initiated; 19 Table of Contents Axogen, Inc. • Performance of an adequate and well-controlled clinical trial in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication; • Submission to the FDA of a BLA, which contains detailed information about the CMC for the product, reports of the outcomes and full data sets from the clinical trials, and proposed labeling and packaging for the product.
COVERED COVERED is a prospective, multi-center clinical case series evaluating HA+ in first revision cubital tunnel decompression. Enrollment in COVERED started in the fourth quarter of 2023. Post-Market Regulatory Requirements There are numerous regulatory requirements that apply after a product is cleared or approved.
COVERED COVERED is a prospective, multi-center clinical case series evaluating Axoguard HA+ Nerve Protector in first revision cubital tunnel decompression. Enrollment in COVERED started in the fourth quarter of 2023. Post-Market Regulatory Requirements There are numerous regulatory requirements that apply after a product is cleared or approved.
Avance Nerve Graft provides the following key advantages: • A three-dimensional bioscaffold for bridging a peripheral nerve gap; • A biologically active nerve therapy with more than 10 years of comprehensive clinical evidence; • No patient donor-nerve surgery, therefore no comorbidities associated with a secondary surgical site; • Available in a variety of diameters up to 5mm to meet a range of anatomical needs; • Available in a variety of lengths up to 70mm to meet a range of gap lengths; • Decellularized and cleansed ECM; • Implanted without the need for immunosuppression, remodels into patient’s own tissue; • Structurally supports the body’s own regeneration process; • Handles similar to an autograft, and is flexible and pliable; • Alleviates tension at the repair site; • Three-year shelf life; and • Supplied sterile.
Avance Nerve Graft provides the following key advantages: • A three-dimensional bioscaffold for bridging a peripheral nerve gap; • A biologically active nerve therapy with more than 17 years of comprehensive clinical evidence; • No patient donor-nerve surgery, therefore no comorbidities associated with a secondary surgical site; • Available in a variety of diameters up to 5mm to meet a range of anatomical needs; • Available in a variety of lengths up to 70mm to meet a range of gap lengths; • Decellularized and cleansed ECM; • Implanted without the need for immunosuppression, remodels into patient’s own tissue; • Structurally supports the body’s own regeneration process; • Handles similar to an autograft, and is flexible and pliable; • Alleviates tension at the repair site; • Three-year shelf life; and • Supplied sterile. 6 Table of Contents Axogen, Inc.
We developed, filed several patent applications, and, on April 7, 2023, obtained FDA 510(k) regulatory clearance for HA+ and a second 510(k) regulatory clearance expanding the indication for use of HA+ on October 12, 2023. These devices are made with Evergen’s ECM material.
We developed, filed several patent applications, and, on April 7, 2023, obtained FDA 510(k) regulatory clearance for Axoguard HA+ Nerve Protector and a second 510(k) regulatory clearance expanding the indication for use of Axoguard HA+ Nerve Protector on October 12, 2023. These devices are made with Evergen’s ECM material.
We believe that biologic licensing, which typically entails multiple clinical trials and takes many years, would be required for any future competitive peripheral nerve allograft. The FDA provided updated guidance, "Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use" in November 2017, which it revised in July 2020.
We believe that biologic licensing, which typically entails multiple clinical trials and takes many years, would be required for any future competitive peripheral nerve allograft. The FDA provided updated guidance, “Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use” in November 2017, which it revised in July 2020.
We procure and process our tissue for the Avance Nerve Graft in the U.S. and market the Avance Nerve Graft in Canada, the UK, and certain other countries under compliance with the individual country regulations. We conduct a regulatory review at the time of submission of the product dossier.
We procure and process our tissue for the Avance Products in the U.S. and market the Avance Nerve Graft in Canada, the U.K., and certain other countries under compliance with the individual country regulations. We conduct a regulatory review at the time of submission of the product dossier.
P8 Table of Conten t Axoguard Nerve Connector has the following advantages: • Processed intact porcine ECM with an open, porous structure that allows for cell infiltration and remodeling; • Designed as a coaptation aid for tensionless repair of transected or severed peripheral nerves; • Alleviates tension at the repair site; • Remodels into the patient’s own tissue; • Reduces the number of required sutures (versus direct repair with suture); • Allows surgeon to move sutures away from the repair site which may minimize inflammation and aid nerve regeneration; • Reduces potential for fascicular mismatch; • Allows visualization of underlying peripheral nerve ends; • Available in seven different diameters and two different lengths to address a variety of nerve repair situations; • Strong and flexible, easy to suture; and • Stored at room temperature with a minimum of 18-month shelf life for the sizes with 6-layers and 24-month shelf life for those with 5-layers.
Axoguard Nerve Connector has the following advantages: • Processed intact porcine ECM with an open, porous structure that allows for cell infiltration and remodeling; • Designed as a coaptation aid for tensionless repair of transected or severed peripheral nerves; • Alleviates tension at the repair site; • Remodels into the patient’s own tissue; • Reduces the number of required sutures (versus direct repair with suture); • Allows surgeon to move sutures away from the repair site which may minimize inflammation and aid nerve regeneration; • Reduces potential for fascicular mismatch; • Allows visualization of underlying peripheral nerve ends; • Available in seven different diameters and two different lengths to address a variety of nerve repair situations; • Strong and flexible, easy to suture; and • Stored at room temperature with a minimum of 18-month shelf life for the sizes with six-layers and 24-month shelf life for those with four-layers.
Axoguard Nerve Connector and Axoguard Nerve Protector In August 2008, we entered into an agreement with Evergen, amended in February 2012, October 10, 2014, February 26, 2018, and August 4, 2023 (the “Distribution Agreement”), to distribute its ECM technology in the form of the Surgisis ® Nerve Cuff, the form of a nerve wrap or patch, or any other mutually agreed to configuration.
Axoguard Nerve Connector and Axoguard Nerve Protector On August 27, 2008, we entered into an agreement with Evergen, as amended on February 24, 2012, October 10, 2014, February 26, 2018, and August 4, 2023 (the “Distribution Agreement”), to distribute its ECM technology in the form of the Surgisis ® Nerve Cuff, in the form of a nerve wrap or patch, or any other mutually agreed to configuration.
The short-term disability offering pays 100% of the employee’s bi-weekly earnings for the first eight weeks of disability and 66.67% for the remaining disability period, up to twelve weeks.
The short-term disability offering pays 100% of the employee’s bi-weekly earnings for the first eight weeks of disability and 66.67% for the remaining disability period, up to 12 weeks.
Axoguard Nerve Cap and HA+ We developed, filed several patent applications, and, on August 8, 2017, obtained FDA 510(k) regulatory clearance for the Axoguard Nerve Cap.
Axoguard Nerve Cap and Axoguard HA+ Nerve Protector We developed, filed several patent applications, and, on August 8, 2017, obtained FDA 510(k) regulatory clearance for Axoguard Nerve Cap.
P18 Table of Conten t Avive+ Soft Tissue Matrix Regulation We launched Avive+ Soft Tissue Matrix in the second quarter of 2024 after engagement with the FDA through the Tissue Reference Group Rapid Inquiry Program, which resulted in feedback that the product appears to be regulated solely under section 361 of the PHS Act and the regulations in 21 CFR Part 1271.
Avive+ Soft Tissue Matrix Regulation We launched Avive+ Soft Tissue Matrix in the second quarter of 2024 after engagement with the FDA through the Tissue Reference Group Rapid Inquiry Program, which resulted in feedback that the product appears to be regulated solely under Section 361 of the PHS Act and the regulations in 21 CFR Part 1271.
European Regulation 2023/607 extended the transitional P28 Table of Conten t period according to the risk class of the legacy device until December 2027 or December 2028 if certain requirements are fulfilled (i.e., agreement with a notified body for conformity assessment in place, or a competent authority has granted a derogation from the conformity assessment procedure).
European Regulation 2023/607 extended the transitional period according to the risk class of the legacy device until December 2027 or December 2028 if certain requirements are fulfilled (i.e., agreement with a notified body for conformity assessment in place, or a competent authority has granted a derogation from the conformity assessment procedure).
As an FDA registered tissue establishment, we use both our own personnel and subcontractors for recovery/acquisition, storage, testing, processing, and sterilization of the donated peripheral nerve tissue and placental tissues. Additionally, we and our subcontractors, have contracted with independent Good Manufacturing Practice ("GMP") and Good Laboratory Practice compliant laboratories to perform testing for product release.
As an FDA registered tissue establishment, we use both our own personnel and subcontractors for recovery/acquisition, storage, testing, processing, and sterilization of the donated peripheral nerve tissue and placental tissues. Additionally, we and our subcontractors, have contracted with independent current Good Manufacturing Practice (“cGMP”) and Good Laboratory Practice (“GLP”) compliant laboratories to perform testing for product release.
Satisfaction of FDA approval requirements for biologics typically takes several years and the actual time P20 Table of Conten t required may vary substantially based on the type, complexity, and novelty of the product. We cannot be certain that any BLA approvals for our products will be granted on a timely basis, or at all.
Satisfaction of FDA approval requirements for biologics typically takes several years and the actual time required may vary substantially based on the type, complexity, and novelty of the product. We cannot be certain that any BLA approvals for our products will be granted on a timely basis, or at all.
We also similarly make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% shareholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings P30 Table of Conten t are provided to us by those persons.
We also similarly make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% shareholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons.
Manufacturing of Our Medical Device Classified Products Manufacturing for the Axoguard Product Line Axoguard Nerve Connector, Axoguard Nerve Protector, HA+, and Axoguard Nerve Cap (the "Axoguard Product Line") is manufactured by Cook Biotech Incorporated (acquired on January 31, 2024 by RTI Surgical, Inc. and rebranded on December 17, 2024 as Evergen) , in West Lafayette, Indiana (“Evergen”), which was established in 1995 to develop and manufacture implants utilizing porcine ECM.
Manufacturing of Our Medical Device Classified Products Manufacturing for the Axoguard Product Line Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, and Axoguard Nerve Cap (collectively, the “Axoguard Product Line”) are manufactured by Cook Biotech Incorporated (acquired on January 31, 2024 by RTI Surgical, Inc. and rebranded on December 17, 2024 as Evergen), in West Lafayette, Indiana (“Evergen”), which was established in 1995 to develop and manufacture implants utilizing porcine ECM.
Medical devices must be registered with the MHRA if they are being placed in the UK market after May 1, 2021. Evergen is responsible for appointing the UK Responsible Person and registering Axoguard Nerve Connector and Axoguard Nerve Protector in the UK.
Medical devices must be registered with the MHRA if they are being placed in the U.K. market after May 1, 2021. Evergen is responsible for appointing the U.K. Responsible Person and registering Axoguard Nerve Connector and Axoguard Nerve Protector in the U.K.
P29 Table of Conten t Our products, as well as the chemicals used in processing these products, are handled and disposed of in accordance with country-specific, federal, state, and local environmental regulations. Since 2007, we have used outside third parties to perform all biohazard waste disposal. We contract with independent, third parties to perform sterilization of our allografts.
Our products, as well as the chemicals used in processing these products, are handled and disposed of in accordance with country-specific, federal, state, and local environmental regulations. Since 2007, we have used outside third parties to perform all biohazard waste disposal. We contract with independent, third parties to perform sterilization of our allografts.
Estimating the Total Addressable Market for nerve repair is challenging as there is not a simple data source for the incidence of peripheral nerve issues. This is further complicated by the fact that nerves can be injured through a variety of traumatic and surgical injuries and can impact a patient from head to toe.
Estimating the TAM for nerve repair is challenging as there is not a simple data source for the incidence of peripheral nerve issues. This is further complicated by the fact that nerves can be injured through a variety of traumatic and surgical injuries and can impact a patient from head to toe.
We believe the exclusion does not limit our identified OMF market, but expansion into certain additional OMF market areas could be limited to our other products not subject to the Distribution Agreement. The Distribution Agreement terminates on December 31, 2030.
We believe the exclusion does not limit our identified oral maxillofacial market, but expansion into certain additional oral maxillofacial market areas could be limited to our other products not subject to the Distribution Agreement. The Distribution Agreement terminates on December 31, 2030.
P16 Table of Conten t Because the requirements of the biomaterials used in peripheral nerve repair can vary based on the severity and location of the damaged nerve, the size and function of the nerve, surgical technique, and patient preference, our peripheral nerve repair products compete against both autograft materials (nerve in the case of a bridging repair and vein or fat in the case of a nerve protection repair), and a limited number of off-the-shelf alternatives for repairing and protecting.
Because the requirements of the biomaterials used in peripheral nerve repair can vary based on the severity and location of the damaged nerve, the size and function of the nerve, surgical technique, and patient preference, our peripheral nerve repair products compete against both autograft materials (nerve in the case of a bridging repair and vein or fat in the case of a nerve protection repair), and a limited number of off-the-shelf alternatives for repairing, protecting and nerve termination.
Adoption of the AdvaMed or PhRMA Codes by a medical device P27 Table of Conten t manufacturer is voluntary, and while the OIG and other federal and state healthcare regulatory agencies encourage its adoption, they do not view adoption of these codes as proof of compliance with applicable laws.
Adoption of the AdvaMed or PhRMA Codes by a medical device manufacturer is voluntary, and while the OIG and other federal and state healthcare regulatory agencies encourage its adoption, they do not view adoption of these codes as proof of compliance with applicable laws.
Competitive aspects of our products focus on their overall value proposition and suitability for specific applications and can include composition and structure of the material, ease of use, clinical evidence, handling, and price. Our major competitors' products include off-the-shelf repair options in hollow-tube conduits, coaptation aids and bio-absorbable wraps.
Competitive aspects of our products focus on their overall value proposition and suitability for specific applications and can include composition and structure of the material, ease of use, clinical evidence, handling, and price. Our major competitors’ products include off-the-shelf repair options in hollow-tube conduits, coaptation aids and bio-absorbable wraps. 15 Table of Contents Axogen, Inc.
The guidance clarified the FDA's position that any processing that alters the biological characteristics of peripheral nerve tissue would be considered more than minimal manipulation, and therefore require a BLA prior to marketing. Clinical Trials Clinical trials are a category of clinical research designed to evaluate and test new interventions, medications, or procedures.
The guidance clarified the FDA’s position that any processing that alters the biological characteristics of peripheral nerve tissue would be considered more than minimal manipulation, and therefore require a BLA prior to marketing. 20 Table of Contents Axogen, Inc. Clinical Trials Clinical trials are a category of clinical research designed to evaluate and test new interventions, medications, or procedures.
We also require consultants, advisors, and employees to assign their rights to any relevant IP arising out of their relationship with us to us. License Agreements We have previously entered into license agreements with the University of Florida Research Foundation (the "UFRF") and the University of Texas at Austin ("UTA").
We also require consultants, advisors, and employees to assign their rights to any relevant IP arising out of their relationship with us to us. License Agreements We have previously entered into license agreements with the University of Florida Research Foundation (the “UFRF”) and the University of Texas at Austin (“UTA”).
P19 Table of Conten t Investigational New Drug Application for Drugs and Biologics Federal law requires that a new drug be the subject of an approved marketing application and that a biological product be properly licensed before each is introduced or delivered for introduction into interstate commerce.
Investigational New Drug Application for Drugs and Biologics Federal law requires that a new drug be the subject of an approved marketing application and that a biological product be properly licensed before each is introduced or delivered for introduction into interstate commerce.
Our Avance Method is depicted as follows: P11 Table of Conten t Tissue Processing Our Avance Method comprises peripheral nerve tissue recovery/acquisition and testing, donor medical review and release, debridement and other processing steps, packaging, and sterilization to meet or exceed all applicable FDA, state, and international regulations and the American Association of Tissue Banks (“AATB”) standards.
Our Avance Method is depicted as follows: Biologic Tissue Processing Our Avance Method comprises peripheral nerve tissue recovery/acquisition and testing, donor medical review and release, debridement and other processing steps, packaging, and sterilization to meet or exceed all applicable FDA, state, and international regulations and the American Association of Tissue Banks (“AATB”) standards.
Even if a trial is completed, the results of clinical testing may not P24 Table of Conten t adequately demonstrate the safety and efficacy of the biological product or device, or may otherwise not be sufficient to obtain FDA approval to market the product in the U.S.
Even if a trial is completed, the results of clinical testing may not adequately demonstrate the safety and efficacy of the biological product or device, or may otherwise not be sufficient to obtain FDA approval to market the product in the U.S.
Axoguard Nerve Protector competes against off-the-shelf biomaterials such as reconstituted bovine collagen as well as the use of the patient’s own tissue such as vein and hypothenar fat pad wrapping. Axoguard Nerve Protector is provided sterile, for single use only, and in a variety of sizes to meet the surgeon’s needs.
Axoguard Nerve Protector competes against off-the-shelf biomaterials such as reconstituted bovine collagen as well as the use of the patient’s own tissue such as vein and hypothenar fat pad wrapping. Axoguard Nerve Protector is provided sterile, for single use only, and in a variety of sizes to meet the surgeon’s needs. 7 Table of Contents Axogen, Inc.
We are committed to advertising our opportunities on each state's job boards in order to reach an increasingly diverse population of candidates, and we conduct routine audits of our existing job postings, advertisements and candidate communications for gender coding, and update any gender specific language to gender neutral language.
We are committed to advertising our opportunities on each 27 Table of Contents Axogen, Inc. state’s job boards in order to reach an increasingly diverse population of candidates, and we conduct routine audits of our existing job postings, advertisements and candidate communications for gender coding, and update any gender specific language to gender neutral language.
See "Risk Factors - Clinical trials can be long, expensive and results are ultimately uncertain, which could jeopardize our ability to obtain regulatory approval and continue to market our Avance Nerve Graft product." RANGER The RANGER study is an observational study and is a utilization registry of Avance Nerve Graft.
See “Risk Factors - Clinical trials can be long and expensive, and results are ultimately uncertain.” , which could jeopardize our ability to obtain regulatory approval and continue to market our Avance Products. RANGER The RANGER study is an observational study and is a utilization registry of Avance Nerve Graft.
HA+ has the following advantages: • Processed porcine submucosa ECM layer is vascularized and remodeled by the patient into new site-specific tissue; • Double-sided HA+ gel coating to reduce friction and enhance nerve gliding through traumatic tissue beds; • Formulated for optimized handling and flexibility of surgical application—quick hydration, flat sheet configuration and is easy to suture if needed; • Allows the body's natural healing process to repair the nerve; • Minimizes the potential for soft tissue attachments and peripheral nerve entrapment by physically isolating the nerve during the healing process; • Allows peripheral nerve gliding; • Is available in five different sizes up to 4cm x 8cm to address a variety of peripheral nerve repair situations; and • Stored at room temperature with a minimum o f 24-mon th shelf life.
Axoguard HA+ Nerve Protector has the following advantages: • Processed porcine submucosa ECM layer is vascularized and remodeled by the patient into new site-specific tissue; • Double-sided HA+ gel coating to reduce friction and enhance nerve gliding through traumatic tissue beds; 8 Table of Contents Axogen, Inc. • Formulated for optimized handling and flexibility of surgical application—quick hydration, flat sheet configuration and is easy to suture if needed; • Allows the body’s natural healing process to repair the nerve; • Minimizes the potential for soft tissue attachments and peripheral nerve entrapment by physically isolating the nerve during the healing process; • Allows peripheral nerve gliding; • Is available in five different sizes up to 4cm x 8cm to address a variety of peripheral nerve repair situations; and • Stored at room temperature with a minimum of 24-month shelf life.
Specifically, all medical devices placed into the UK market had to be registered, subject to applicable grace periods, with the Medicines and Healthcare products Regulatory Agency ("MHRA"), will need to appoint a UK Responsible Person, and comply with additional product marking and conformity assessment requirements.
Specifically, all medical devices placed into the U.K. market had to be registered, subject to applicable grace periods, with the Medicines and Healthcare products Regulatory Agency (“MHRA”), will need to appoint a U.K. Responsible Person, and comply with additional product marking and conformity assessment requirements.
We believe that there is an opportunity to improve current approaches to peripheral nerve repair and that our approach will solidify our position as a leader in the field of peripheral nerve repair products. The following provides the key elements of our sales and marketing strategy.
We believe that there is an opportunity to improve current approaches to peripheral nerve repair and that our approach will solidify our position as a leader in the field of peripheral nerve repair products. The following provides the key elements of our sales and marketing strategy. 12 Table of Contents Axogen, Inc.
Given the pooled standard deviation assumptions and a non-inferiority margin of 2mm, approximately 88 patients per treatment group are required to assess non-inferiority with at least 83% power. In addition to non-inferiority, a minimum treatment effect is required to be demonstrated.
Given the pooled standard deviation assumptions and a 22 Table of Contents Axogen, Inc. non-inferiority margin of 2mm, approximately 88 patients per treatment group are required to assess non-inferiority with at least 83% power. In addition to non-inferiority, a minimum treatment effect is required to be demonstrated.
Our customer call points are focused on plastic reconstructive surgeons, orthopedic and plastic hand surgeons who perform surgeries on patients suffering traumatic nerve damage or transection, on oral maxillofacial and head and neck surgeons who repair damaged oral and facial nerves, and on plastic reconstructive surgeons who perform breast reconstruction and neurotization.
Our customer call points are focused on plastic reconstructive surgeons, orthopedic and plastic hand surgeons who perform surgeries on patients suffering traumatic nerve damage or transection, on oral maxillofacial and head and neck surgeons who repair damaged oral and facial nerves, on plastic reconstructive surgeons who perform breast reconstruction and neurotization and on urologists who perform robotically assisted radical prostatectomies.
We currently have European Union (“E.U.”) wide registration only for Axoguard Nerve Connector and Axoguard Nerve Protector as approval/registration for Avance Nerve Graft as human tissue is required in each individual country. Avance Nerve Graft was granted marketing authorization in Germany and direct commercial operations began in 2022. Currently, Axoguard Nerve Cap is available in the U.S. and New Zealand.
We currently have European Union (“E.U.”) wide registration only for Axoguard Nerve Connector and Axoguard Nerve Protector as approval/registration for Avance Nerve Graft as human tissue is required in each individual country. Avance Nerve Graft was granted marketing authorization in Germany and direct commercial operations began in 2022.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, further escalation of trade tensions between the U.S. and China, escalation of tensions between China and Taiwan, further escalation in the conflict between the State of Israel, and the Islamic Republic of Iran and its proxy terror organizations including Hamas, Hezbollah and the Houthis, as well as further escalation of tensions between the State of Israel and various countries or terror organizations in the Middle East and North Africa, further escalation of tensions between the Houthis and the U.S. led multinational force stationed in the Middle East as well as broader involvement of the U.S. in the conflict in the Middle East, could result in a global economic slowdown and long-term changes to global trade.
Biggest changeAdditionally, further escalation of trade tensions between the U.S. and China, heightened geopolitical competition in the Indo-pacific region, periodic flare-ups of instability in the Middle East, as well as other localized or emerging geopolitical disruptions, could result in a global economic slowdown and long-term changes to global trade.
We distribute Axoguard Nerve Connector and Axoguard Nerve Protector for Evergen, and Evergen is the contract manufacturer for our HA+ and Axoguard Nerve Cap products.
We distribute Axoguard Nerve Connector and Axoguard Nerve Protector for Evergen, and Evergen is the contract manufacturer for our Axoguard HA+ Nerve Protector and Axoguard Nerve Cap products.
We may not be able to continue to identify and develop new product candidates in addition to our current pipeline. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may require extensive resources to development, may not be suitable for clinical development or may not achieve market acceptance.
We may not be able to continue to identify and develop new product candidates in addition to our current pipeline. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may require extensive resources to develop, may not be suitable for clinical development or may not achieve market acceptance.
Additionally, our customers could experience financial and operational pressures as a result of labor shortages, the supply chain disruptions, and increased inflation, which could impact their ability to access capital markets and other funding sources, increase cost of funding, or impede their ability to comply with debt covenants, which in turn could impede their ability to provide patient care, conduct further research and development, marketing and commercialization efforts, or impact their profitability.
Additionally, our customers could experience financial and operational pressures as a result of labor shortages, supply chain disruptions, and increased inflation, which could impact their ability to access capital markets and other funding sources, increase cost of funding, or impede their ability to comply with debt covenants, which in turn could impede their ability to provide patient care, conduct further research and development, marketing and commercialization efforts, or impact their profitability.
Additionally, in the event that Evergen were to enforce minimum purchase quantities and we fail to reach an agreement as to such minimums, Evergen could terminate the agreement if we fail to generate commercially reasonable sales of Axoguard Nerve Connector and Axogen Nerve Protector as measured by sales similar to a competitive product at the same stage in its commercial launch as verified by a mutually acceptable third party.
Additionally, in the event that Evergen were to enforce minimum purchase quantities and we fail to reach an agreement as to such minimums, Evergen could terminate the agreement if we fail to generate commercially reasonable sales of Axoguard Nerve Connector and Axogen HA+ Nerve Protector as measured by sales similar to a competitive product at the same stage in its commercial launch as verified by a mutually acceptable third party.
Any disruption in our ability to generate revenue from the processing, distribution, and sale of products, especially Avance Nerve Graft, will have a material adverse impact on our business, results of operations, financial condition, and prospects. Axoguard Nerve Connector and Axoguard Nerve Protector are only available through a distribution agreement with Evergen. The Distribution Agreement terminates on December 31, 2030.
Any disruption in our ability to generate revenue from the processing, distribution, and sale of products, especially Avance Products, will have a material adverse impact on our business, results of operations, financial condition, and prospects. Axoguard Nerve Connector and Axoguard Nerve Protector are only available through a distribution agreement with Evergen. The Distribution Agreement terminates on December 31, 2030.
The recent implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process, including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase our cost of doing business.
The implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process, including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase our cost of doing business.
Our success will be dependent on continued acceptance of our products by the medical community. Our success is dependent on continued acceptance of our products by the medical community, which will depend on our ability to demonstrate that our products are an attractive alternative to existing or new nerve reconstruction treatment options, including both surgical techniques and products.
Our success is dependent on continued acceptance of our products by the medical community, which will depend on our ability to demonstrate that our products are an attractive alternative to existing or new nerve reconstruction treatment options, including both surgical techniques and products.
Future acquisitions, joint ventures or minority equity investments by us could result in the following, any of which could seriously harm our results of operations or the price of our stock: • issuance of equity securities that would dilute our current shareholders’ percentages of ownership; • large one-time write-offs or equity investment impairment write-offs; • incurrence of debt and contingent liabilities; • difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies; • inability to realize cost efficiencies or synergies, thereby incurring higher operating expenditures as a result of the acquisition; • diversion of management’s attention from other business concerns; • contractual disputes; • risks of entering geographic and business markets in which we have no or only limited prior experience; and P41 Table of Conten t • potential loss of key employees of acquired organizations.
Future acquisitions, joint ventures or minority equity investments by us could result in the following, any of which could seriously harm our results of operations or the price of our stock: • issuance of equity securities that would dilute our current shareholders’ percentages of ownership; • large one-time write-offs or equity investment impairment write-offs; • incurrence of debt and contingent liabilities; • difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies; • inability to realize cost efficiencies or synergies, thereby incurring higher operating expenditures as a result of the acquisition; • diversion of management’s attention from other business concerns; • contractual disputes; • risks of entering geographic and business markets in which we have no or only limited prior experience; and • potential loss of key employees of acquired organizations.
Significant and increasing investments of time and resources by management and Board have been, and will continue to be, required to anticipate and address cybersecurity risks and incidents.
Significant and increasing investments of time and resources by management and the Board have been, and will continue to be, required to anticipate and address cybersecurity risks and incidents.
Delays, interruptions, or the cessation of production by our third-party suppliers, including products supplied by single suppliers, of important materials may prevent or delay our ability to manufacture or process the final products. Most of the raw materials used in the process for Avance Nerve Graft are available from more than one supplier.
Delays, interruptions, or the cessation of production by our third-party suppliers, including products supplied by single suppliers, of important materials may prevent or delay our ability to manufacture or process the final products. Most of the raw materials used in the process for Avance Products are available from more than one supplier.
As a result of the allograft device intensive status and direct repair Ambulatory Payment Category realignment, CMS reimbursement rates for nerve repair in the outpatient setting have changed significantly during the last two years.
As a result of the allograft device intensive status and direct repair Ambulatory Payment Category realignment, CMS reimbursement rates for nerve repair in the outpatient setting have changed significantly during the last three years.
Due to our resource allocation, size, and relatively early stage, we may face competitive challenges from new products or existing products and barriers that are difficult to overcome and could neg atively impact our growth. We may not be successful in our efforts to build a pipeline of additional product candidates.
Due to our resource allocation, size, and relatively early stage, we may face competitive challenges from new products or existing products and barriers that are difficult to overcome and could negatively impact our growth. We may not be successful in our efforts to build a pipeline of additional product candidates.
Media reports or other negative publicity concerning both improper methods of tissue recovery from donors and disease transmission from donated tissue, including bones and tendons, may limit widespread acceptance of our Avance Nerve Graft.
Media reports or other negative publicity concerning both improper methods of tissue recovery from donors and disease transmission from donated tissue, including bones and tendons, may limit widespread acceptance of our Avance Products.
Although we believe we could develop or obtain products that would replace the Axoguard P35 Table of Conten t products obtained through the Evergen agreements, the loss of the ability to sell the Axoguard products could have a material adverse effect on our business, results of operations, financial condition, and prospects.
Although we believe we could develop or obtain products that would replace the Axoguard products obtained through the Evergen agreements, the loss of the ability to sell the Axoguard products could have a material adverse effect on our business, results of operations, financial condition, and prospects.
In operating our new processing facility, we have been forced to devote greater resources and management time than anticipated, particularly in areas relating to operations, quality, raw material supply, regulatory, facilities and information technology. We also have experienced unanticipated employee turnover at our APC Facility.
In operating our APC facility, we have been forced to devote greater resources and management time than anticipated, particularly in areas relating to operations, quality control, raw material supply, regulatory compliance, facilities and information technology. We also have experienced unanticipated employee turnover at our APC Facility.
Any delay, interruption, or cessation of production by our third-party suppliers of important materials, or any delay in qualifying new materials, if necessary, would prevent or delay our ability to manufacture products. We are working on identifying and contracting with additional suppliers to reduce our dependence on single source suppliers and service providers.
Any delay, interruption, or cessation of production by our third-party suppliers of important materials, or any delay in qualifying new materials, if necessary, would prevent or delay our ability to manufacture products. We are working on identifying and contracting with additional suppliers to reduce our dependence on single source suppliers and service providers. 35 Table of Contents Axogen, Inc.
Over the past several years, legislative and executive action from U.S. and foreign leaders has led to both threats of and the imposition of tariffs on certain materials and products. The U.S. and China imposed tariffs or announced proposed tariffs to be applied in the future to certain of each other’s exports.
Over the past several years, legislative and executive action from U.S. and foreign leaders has led to both threats of and the imposition of tariffs on certain 38 Table of Contents Axogen, Inc. materials and products. The U.S. and China imposed tariffs or announced proposed tariffs to be applied in the future to certain of each other’s exports.
P43 Table of Conten t We are dependent on internal information and telecommunications systems, and any failure of these systems, including system security breaches, data protection breaches or other cybersecurity attacks, may negatively impact our business and results of operations.
We are dependent on internal information and telecommunications systems, and any failure of these systems, including system security breaches, data protection breaches or other cybersecurity attacks, may negatively impact our business and results of operations.
We have historically incurred net losses and operated with negative cash flow from our operations and may continue to incur losses and operate with negative cash flow from operations for the foreseeable future. We have incurred net losses of $10.0 million, $21.7 million, and $28.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We have historically incurred net losses and operated with negative cash flow from our operations and may continue to incur losses and operate with negative cash flow from operations for the foreseeable future. We have incurred net losses of $15.7 million, $10.0 million, and $21.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
For example, although our Avance Nerve Graft follows stringent safety standards, including sterilization by gamma irradiation, we believe that a small portion of the medical community has lingering concerns over the risk of disease transmission through the use of allografts in general.
For example, although our Avance Products follow stringent safety standards, including sterilization by gamma irradiation, we believe that a small portion of the medical community has lingering concerns over the risk of disease transmission through the use of allografts in general.
High profile security breaches leading to unauthorized release of sensitive information have occurred with increasing frequency at a number of major U.S. companies, despite widespread recognition of the cyberattack threat and improved data protection methods.
High profile 39 Table of Contents Axogen, Inc. security breaches leading to unauthorized release of sensitive information have occurred with increasing frequency at a number of major U.S. companies, despite widespread recognition of the cyberattack threat and improved data protection methods.
The occurrence of any of these events could harm our business, financial condition or results of operations. Future acquisitions, investments or joint ventures may require substantial capital resources, which may require us to seek additional debt or equity financing.
The occurrence of any of these events could harm our business, financial condition or results of operations. Future acquisitions, investments or joint ventures may require substantial capital resources, which may require us to seek additional debt or equity financing. 37 Table of Contents Axogen, Inc.
In partnership with P39 Table of Conten t healthcare providers, we are working actively to reverse these non-coverage decisions and have been successful with several regional plans. However, we cannot provide assurance that we will continue to be successful in these efforts.
In partnership with healthcare providers, we are working actively to reverse these non-coverage decisions and have been successful with several regional plans. However, we cannot provide assurance that we will continue to be successful in these efforts.
In addition, we may plan to expand the APC facility or open additional office, lab or distributions space in the future, and our ability to license, renovate, rebuild, or find acceptable service facilities takes a considerable amount of time and expense. There may be significant fluctuations in our operating results.
In addition, we may plan to expand the APC Facility or open additional office, lab or distributions space in the future, and our ability to license, renovate, rebuild, or find acceptable service facilities takes a considerable amount of time and expense.
Further, changes in domestic and global economic conditions, supply chain disruptions, labor shortages, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to increased costs and may cause changes in fiscal and monetary policy.
Further, changes in domestic and global economic conditions, supply chain disruptions, tight labor markets, as well as other stimulus and spending programs, have led to persistently high inflation, which is likely to lead to increased costs and may cause changes in fiscal and monetary policy.
If the medical community and patients do not ultimately accept our products as safe and effective or P37 Table of Conten t we are unable to raise awareness of our products and processes, our ability to sell the products may be materially and adversely affected, and our business, results of operations, financial condition, and prospects may be adversely affected.
If the medical community and patients do not ultimately accept our products as safe and effective or 34 Table of Contents Axogen, Inc. we are unable to raise awareness of our products and processes, our ability to sell the products may be materially and adversely affected, and our business, results of operations, financial condition, and prospects may be adversely affected.
Such challenges have negatively impacted our gross margins. Such challenges, if prolonged, could also cause a significant disruption in service to our customers if we were to lose, even temporarily, the availability of our production or distribution facilities.
Such challenges, if prolonged, could also cause a significant disruption in service to our customers if we were to lose, even temporarily, the availability of our production or distribution facilities.
With the new 2024 CMS reimbursement rates for nerve repair in the outpatient setting that became effective January 1st, reimbursement for procedures using Avance Nerve Graft have increased 40 % in hospital outpatient centers and 138% in ambulatory surgery centers since 2019.
With the new 2026 CMS reimbursement rates for nerve repair in the outpatient setting that became effective January 1st, reimbursement for procedures using Avance Nerve Graft have increased 96% in hospital outpatient centers and 221% in ambulatory surgery centers since 2019.
If demand only grows in one use application, it could negatively impact gross margin. We are focusing on creating balanced revenue growth and yield improvements in product processing, but we may be unable to do so. Our revenue depends on a limited number of products.
If demand only grows in one use application, it could negatively impact gross margin. We are focusing on creating balanced revenue growth and yield improvements in product processing, but we may be unable to do so.
Changes in political conditions in China and changes in the state of China-U.S. relations, including the P42 Table of Conten t current trade tensions, are difficult to predict and could adversely affect our operations or financial condition.
Changes in political conditions in China and changes in the state of China-U.S. relations, including ongoing trade tensions, are difficult to predict and could adversely affect our operations or financial condition.
During this same timeframe, reimbursement rates for procedures involving conduits and connectors also increased 40% in hospital outpatient centers and 70% in ambulatory surgery centers. While Medicare patients represent a relatively small percentage of trauma cases, CMS’ direction often influences commercial payor policies and payments.
During this same timeframe, reimbursement rates for procedures involving conduits and connectors also 33 Table of Contents Axogen, Inc. increased 96% in hospital outpatient centers and 126% in ambulatory surgery centers. While Medicare patients represent a relatively small percentage of trauma cases, CMS’ direction often influences commercial payor policies and payments.
Finally, we can provide no assurance that we can keep inventory costs within our target levels, particularly in light of overall cost increases due to global inflation. Failure to do so may materially and adversely impact our business, results of operations, financial condition, and prospects. We may be unsuccessful in commercializing our products outside the U.S.
Finally, we can provide no assurance that we can keep inventory costs within our target levels, particularly in light of overall cost increases due to global inflation. Failure to do so may materially and adversely impact our business, results of operations, financial condition, and prospects. There may be significant fluctuations in our operating results.
Any failure in the physical infrastructure of our facilities, including the APC Facility and the facility we lease from Solvita, could lead to significant costs and disruptions that could reduce our revenue and harm both our business reputation and financial results.
Any failure in the physical infrastructure of our facilities, including the APC Facility, the Dayton Facility, and our distribution facility in Burleson, Texas could lead to significant costs and disruptions that could reduce our revenue and harm both our business reputation and financial results.
We are dependent on our relationships with independent agencies to generate a material portion of our revenue. We derive material revenue through our relationships with independent agencies. In 2024, approximately 10% of gl obal product revenue was generated through independent agencies.
We are dependent on our relationships with independent agencies to generate a material portion of our revenue. We derive material revenue through our relationships with independent agencies. In 2025, approximately 8% of global product revenue was generated through independent agencies.
Furthermore, if we do not successfully develop and commercialize product candidates based upon our approach, we will not be able to obtain product revenue in future periods, which likely would result in significant harm to our financial position and adversely affect our stock price. P38 Table of Conten t We must maintain high quality processing of our products.
Furthermore, if we do not successfully develop and commercialize product candidates based upon our approach, we will not be able to obtain product revenue in future periods, which likely would result in significant harm to our financial position and adversely affect our stock price.
If we are not able to comply with the applicable regulatory requirements or produce product that meets our requirements and specifications, it could delay or disrupt our BLA approval and we will be subject to the same risks that we would be subject to should third parties be unable to comply with the applicable regulatory requirements or produce product meeting our requirements or specifications, as described above.
If we are not able to comply with the applicable regulatory requirements or produce products that meet our requirements and specifications, we will be subject to the same risks that would arise should third parties be unable to comply with the applicable regulatory requirements or produce products meeting our requirements or specifications, as described above.
We rely upon third parties for certain recovery/acquisition, sterilization, distribution, and transportation services for our products. For example, the Avance Nerve Graft processing consists of several steps, and we use a number of recovery and/or acquisition agencies to supply the human tissue needed for these products.
For example, the Avance Nerve Graft processing consists of several steps, and we use a number of recovery and/or acquisition agencies to supply the human tissue needed for these products.
Substantially all o f our revenue is currently derived from six products, Avance Nerve Graft, Axoguard Nerve Protector, Axoguard Nerve Connector, Axoguard HA + Nerve Protector, Axoguard Nerve Cap, and Avive+ Soft Tissue Matrix for the treatment of peripheral nerve damage. Of these six products, Avance Nerve Graft represents approximatel y 60% of our total revenue.
Our revenue depends on a limited number of products. Substantially all of our revenue is currently derived from six products, Avance Products, Axoguard Nerve Protector, Axoguard Nerve Connector, Axoguard HA+ Nerve Protector, Axoguard Nerve Cap, and Avive+ Soft Tissue Matrix for the treatment of peripheral nerve damage. Of these six products, Avance Products represent approximately 60% of our total revenue.
We have completed renovation of our APC Facility and transferred the Avance Nerve Graft tissue processing and packaging to the APC Facility but expect to continue to rely on the Solvita facility for the processing of Avive+ Soft Tissue Matrix. We have experienced unanticipated operating challenges as we commenced processing operations at the APC Facility.
We transitioned the Avance Nerve Graft tissue processing and packaging to the APC Facility in November of 2023 but expect to continue to rely on the Dayton Facility for the processing of Avive+ Soft Tissue Matrix. We have experienced unanticipated operating challenges as we commenced processing operations at the APC Facility. Such challenges have negatively impacted our gross margins.
Many factors affect the efficient use and planning of product inventory, such as our ability to predict demand for donor tissue, prepare manufacturing to meet that demand and product mix and handle product expiration.
If we do not manage product inventory in an effective and efficient manner, it could adversely affect profitability. Many factors affect the efficient use and planning of product inventory, such as our ability to predict demand for donor tissue, prepare manufacturing to meet that demand and product mix and handle product expiration.
Although we do not have material operations in Russia, Ukraine, China, Taiwan, Israel, or other countries in the Middle East and North Africa, further escalation of geopolitical tensions could have a broader impact that expands into other markets where we have material operations, which may adversely affect our business, financial condition and results of operations.
Although we do not have material operations in regions experiencing such conflicts or instability, further escalation of geopolitical tensions could have a broader impact that expands into other markets where we have material operations, which may adversely affect our business, financial condition and results of operations.
This in turn allowed CMS visibility to nerve allograft nerve procedure costs, and thereby confirm that nerve allograft qualified as a device intensive procedure.
This in turn allowed the Centers for Medicare & Medicaid Services (“CMS”) to have visibility to nerve allograft nerve procedure costs, and thereby confirm that nerve allograft qualified as a device intensive procedure.
Further, there can be no assurance that we would be able to obtain additional financing on acceptable terms, if at all.
Further, there can be no assurance that we would be able to obtain additional financing on acceptable terms, if at all. Our success will be dependent on continued acceptance of our products by the medical community.
Cyberattacks, intrusions, or other breaches could adversely impact our business, results of operations, financial condition, and prospects and potentially subject us to fines and penalties. In the U.S., federal and state privacy and security laws require certain of our operations to protect the confidentiality of personal information, including patient medical records and other health information.
In the U.S., federal and state privacy and security laws require certain of our operations to protect the confidentiality of personal information, including patient medical records and other health information.
Our business is unproven on a large scale, and actual revenue and operating margins, or revenue and margin growth, may be less than expected. If we are unable to scale our production capabilities efficiently or maintain pricing without significant discounting, we may fail to achieve expected operating margins, which would have a material and adverse effect on our operating results.
If we are unable to scale our production capabilities efficiently or maintain pricing without significant discounting, we may fail to achieve expected operating margins, which would have a material and adverse effect on our operating results. Growth may also stress our ability to adequately manage our operations, quality of products, safety, and regulatory compliance.
As of December 31, 2024, we had an accumulated deficit of approximately $291.3 million. If revenue does not increase as anticipated, then we will continue to incur net losses and experience negative cash flows and adverse operating conditions.
As of December 31, 2025, we had an accumulated deficit of approximately $307.0 million. If revenue does not increase as anticipated, we will continue to incur net losses and experience negative cash flows and adverse operating conditions. If we raise funds by selling additional equity, such sale would result in dilution to our shareholders.
Risks Related to Our Business and Strategy Approximatel y 60% o f our total revenues are from sales of Avance Nerve Graft and any adverse decision from the FDA would negatively impact our operations and financial condition.
Risks Related to Our Business and Strategy Approximately 60% of our total revenues are from sales of Avance Products and any adverse decision from the FDA would negatively impact our operations and financial condition. Approximately 60% of our total revenues are from sales of Avance Products. The FDA approved Avance as a licensed biological product on December 3, 2025.
We are highly dependent on our ability to recover human peripheral nerve tissue from tissue donors for our Avance Nerve Graft product. The availability of acceptable donors is relatively limited, and this availability is impacted by regulatory changes, general public opinion of the donation process, and our reputation for handling the donation process.
The availability of acceptable donors is relatively limited, and this availability is impacted by regulatory changes, general public opinion of the donation process, and our reputation for handling the donation process.
If we are unable to establish new agency relationships or renew certain current distribution agreements on commercially P40 Table of Conten t acceptable terms, our business, results of operations, financial condition, and prospects could be materially and adversely impacted. If we do not manage product inventory in an effective and efficient manner, it could adversely affect profitability.
If we are unable to establish new agency relationships or renew certain current distribution agreements on commercially acceptable terms, our business, results of operations, financial condition, and prospects could be materially and adversely impacted. We may be unsuccessful in commercializing our products outside the U.S.
Any disruption in the supply caused by these publicity issues could have a material impact for our business, results of operations, financial condition, and prospects. The failure of third parties to perform many necessary services for the commercialization of our products, including services related to recovery/acquisition, sterilization, distribution, and transportation, would impair our ability to meet commercial demand.
The failure of third parties to perform many necessary services for the commercialization of our products, including services related to recovery/acquisition, sterilization, distribution, and transportation, would impair our ability to meet commercial demand. We rely upon third parties for certain recovery/acquisition, sterilization, distribution, and transportation services for our products.
If the FDA places limits on use of our Avance Nerve Graft product it would have a significant impact on our revenues and thus would have a material adverse effect on us.” Our revenue growth depends on our ability to increase distribution and sales to existing customers and develop new customers, domestically and abroad, and there can be no assurance that these efforts will result in significant increases in sales.
Our revenue growth depends on our ability to increase distribution and sales to existing customers and develop new customers, domestically and internationally, and there can be no assurance that these efforts will result in significant increases in sales.
If the FDA does not approve our BLA, approves a narrower indication than Avance Nerve Graft’s current use or otherwise limits use of our Avance Nerve Graft product it would have a significant impact on our revenues and thus would have a material adverse effect on us.
However, if the FDA were to withdraw or suspend that approval, narrow the approved indication, or otherwise limit the use of our Avance Products, it would have a significant impact on our revenues and thus would have a material adverse effect on us.
Loss of key members of management, who we need to succeed, could adversely affect our business. Our future success depends on the continued efforts of the members of our executive management team. Competition for experienced management personnel in the healthcare industry is intense.
There is no assurance that if we are required to secure funding, we would be able to do so on terms acceptable to us, or at all. Loss of key members of management, who we need to succeed, could adversely affect our business. Our future success depends on the continued efforts of the members of our executive management team.
Additionally, healthcare law and policy changes may have a material adverse effect on our revenues. See: “Risk Factors – Healthcare law and policy changes may have a material adverse effect on us.” Negative publicity concerning methods of donating human tissue and screening of donated tissue may reduce demand for our products and negatively impact the supply of available donor tissue.
Negative publicity concerning methods of donating human tissue and screening of donated tissue may reduce demand for our products and negatively impact the supply of available donor tissue. We are highly dependent on our ability to recover human peripheral nerve tissue from tissue donors for our Avance Products.
The negative impacts arising from the war and sanctions and export restrictions imposed by various countries, including those imposed by Russia, may include reduced consumer demand, supply chain disruptions, increased cybersecurity risks, and increased costs for transportation, energy, and raw materials.
The global economy has been, and may continue to be, negatively impacted by regional conflicts and associated sanctions and trade restrictions, including as a result of reduced consumer demand, supply chain disruptions, increased cybersecurity risks, and increased costs for transportation, energy, and raw materials.
Avance Nerve Graft is distributed in Canada, the UK, and certain other countries. We received approval to distribute Avance Nerve Graft in Germany in December 2019. Avance Nerve Graft use in Spain currently requires approval for each case to be approved by tissue authorities under an alternative therapy designation.
Avance Nerve Graft is distributed in Canada, the U.K., and certain other countries. We originally received approval to distribute Avance Nerve Graft in Germany in December 2019. The original approval was for product manufactured at our Dayton Facility.
P36 Table of Conten t Our operating results could be adversely impacted if we are unable to effectively manage and sustain our future growth or scale our operations. There can be no assurance that we will be able to manage our future growth efficiently or profitably.
There can be no assurance that we will be able to manage our future growth efficiently or profitably. Our business is unproven on a large scale, and actual revenue and operating margins, or revenue and margin growth, may be less than expected.
The adoption of some or all of these proposals could have a material adverse effect on our business, results of operations, financial condition, and prospects.
Any disruption in the supply caused by these publicity issues could have a material impact for our business, results of operations, financial condition, and prospects. 36 Table of Contents Axogen, Inc.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability and tensions, Russia's ongoing invasion of Ukraine and illegal annexation of Ukrainian territories, and the war in the Middle East between the state of Israel and the Islamic Republic of Iran and its proxy terror organizations could materially and adversely affect our business, financial condition and results of operations.
We are currently operating in a period of economic uncertainty and capital markets volatility driven in part by growing geopolitical tensions and evolving global security risks, any of which could materially and adversely affect our business, financial condition and results of operations. We are exposed to the risk of changes in social, geopolitical, legal, and economic conditions.
We and our collaborators and licensors may be unable to obtain and enforce IP rights to adequately protect our products and related IP, which could materially and adversely impact our business, results of operations, financial condition, or prospects.
Lot failures or product recalls or withdrawals could adversely affect supplies of Avance, which could be costly to us and otherwise harm our business, financial condition, results of operations and prospects.
Additionally, approximate ly 60% of our total revenues are from sales of Avance Nerve Graft, any change in position by the FDA regarding its use of enforcement disc retion to permit the sale of Avance Nerve Graft or a negative action on the BLA could have a material negative impact on our revenues and our operations.
Any action by the FDA following approval that withdraws or suspends the BLA, narrows the approved indication, imposes additional restrictions or limitations on use, or otherwise adversely affects the commercialization of Avance Products could have a material negative impact on our revenues and our operations.
Removed
Approximately 60% of our total revenues are from sales of Avance Nerve Graft, which the FDA considers to be a biological product subject to BLA approval requirements. The product is currently distributed pursuant to a transition plan with the FDA as we await FDA’s decision on the BLA we submitted in September 2024.
Added
Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods.
Removed
Any change in position by the FDA regarding its use of enforcement discretion regarding the sale of Avance Nerve Graft in the interim prior to FDA’s decision on the BLA, or if the BLA is not approved, or in the process of BLA approval, our i ndications for Avance Nerve Graft are narrowed or its use is curtailed in any other way, any such developments would have a material negative impact on our revenues and our operations.
Added
For additional information see: Risk Factors – If the FDA were to withdraw or suspend our BLA approval, narrow the approved indication, or otherwise limit the use of our Avance Products, our revenues would be significantly impacted and thus would have a material adverse effect on us. The FDA approved the BLA for Avance on December 3, 2025.
Removed
For additional information see: “Risk Factors – Our Avance Nerve Graft product is currently distributed pursuant to a transition plan with the FDA; w e completed t he rolling BLA submission for the Avance Nerve Graft in the third quarter of 2024 and are waiting for FDA approval of our BLA.
Added
Portions of the FDA-approved indication for Avance were granted under the FDA’s accelerated approval program, and continued approval for these indications is contingent upon our timely completion of required post-marketing confirmatory studies.
Removed
Macroeconomic trends, such as the inflationary pressure, and political instability could continue to have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments.
Added
Failure to verify clinical benefit or comply with accelerated approval requirements could result in withdrawal, restriction, or other adverse FDA action that would materially adversely affect our business, financial condition, and results of operations.
Removed
We continue to actively monitor the impact of various macroeconomic trends, including high rates of inflation, interest rates, increasing labor costs, supply chain disruptions, labor shortages and, geopolitical instability on our business. We have experienced increased costs consistent with rising interest rates, and inflationary pressures.
Added
On December 3, 2025, the FDA approved the BLA for Avance, including for sensory nerve discontinuities greater than 25mm and for mixed and motor nerve discontinuities under the FDA’s accelerated approval pathway. As reflected in the prescribing information, continued approval of these indications is contingent upon verification and description of clinical benefit in confirmatory clinical trials.
Removed
At this time, we cannot predict the specific extent, duration or full impact of inflationary conditions, supply chain disruptions, geopolitical instability will have on our ongoing and planned clinical trials, our ability to operate, results of operations, financial condition, liquidity, and capital investments.
Added
The FDA has required a post-marketing requirement study for sensory nerve discontinuities greater than 25 mm and for mixed and motor nerve discontinuities with a final protocol due February 5, 2026, study completion by December 5, 2030, and a final report due June 5, 2031, as well as progress reports every 180 days, beginning May 31, 2026.
Removed
Economic conditions, such as rising inflation, higher interest rates, increasing labor costs, supply chain pressures, changes in regulatory laws and monetary exchange rates, and government fiscal policies, can also have a significant effect on the cost of operations, including the cost of materials and labor, as well as the interest on our debt.
Added
Products approved under the accelerated approval program remain subject to heightened FDA oversight.
Removed
Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all. In addition, the geopolitical instability and related sanctions could continue to have significant ramifications including volatility in the U.S. and global financial markets.
Added
If we fail to initiate, enroll, or complete the required confirmatory trial with due diligence, fail to meet specified milestones, fail to timely submit required progress reports, or fail to demonstrate clinical benefit in the confirmatory study, the FDA may withdraw approval of the affected indications on an expedited basis.
Removed
Growth may also stress our ability to adequately manage our operations, quality of products, safety, and regulatory compliance.
Added
In addition, the FDA retains authority to limit or modify these indications, impose additional post-marketing requirements, alter labeling, or require changes to our promotional materials. Even if we comply with all requirements, the confirmatory study may fail to verify the anticipated clinical benefit for sensory nerve gaps greater than 25mm or mixed or motor nerve discontinuities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeP59 Table of Conten t The Company’s Vice President of Information Technology, Security and Business Intelligence is the member of the Company’s management that is principally responsible for overseeing the Company’s cybersecurity risk management program, in partnership with other business leaders across the Company.
Biggest changeOur Vice President of Information Technology is the member of our management team that is principally responsible for overseeing our cybersecurity risk management program, in partnership with other business leaders across the Company. The Vice President of Information Technology works in coordination with senior leadership, which includes our Chief Executive Officer, Chief Financial Officer, and General Counsel.
The Board and the Audit Committee each receive regular presentations and reports on cybersecurity risks, which address a wide range of topics including, for example, recent developments, evolving standards, vulnerability assessments, third-party reviews, the threat environment, technological trends and information security considerations arising with respect to the Company’s peers.
The Board and the Audit Committee each receive regular presentations and reports on cybersecurity risks, which address a wide range of topics including, for example, recent developments, evolving standards, vulnerability assessments, third-party reviews, the threat environment, technological trends and information security considerations arising with respect to our peers.
To facilitate the success of this program, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and to respond to cybersecurity incidents in accordance with the Company’s policy as it relates to the incident, management response and recovery plan .
To facilitate the success of this program, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and to respond to cybersecurity incidents in accordance with our policy as it relates to the incident, management response and recovery plan.
Governance The Board, in coordination with the Audit Committee, oversees the effectiveness of management of risks from cybersecurity threats, including the policies, standards, processes and practices that the Company’s management implements to address risks from cybersecurity threats.
Governance The Board, in coordination with the Audit Committee, oversees the effectiveness of management of risks from cybersecurity threats, including the policies, standards, processes and practices that our management implements to address risks from cybersecurity threats.
Through the ongoing communications from these teams, the Vice President of Information Technology, Security and Business Intelligence and senior leadership monitor the prevention, detection, mitigation and remediation of cybersecurity incidents in real time, and report such incidents to the Audit Committee when appropriate.
Through the ongoing communications from these teams, the Vice President of Information Technology and senior leadership monitor the prevention, detection, mitigation and remediation of cybersecurity incidents in real time, and report such incidents to the Audit Committee when appropriate.
The Company's cybersecurity standards and practices follow industry trends, which align with frameworks established by the Center for Internet Security.
Our cybersecurity standards and practices follow industry trends, which align with frameworks established by the Center for Internet Security.
Third-Party Risk Management: The Company endeavors to identify and oversee cybersecurity risks presented by third parties, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. e.
Third-Party Risk Management: We endeavor to identify and oversee cybersecurity risks presented by third parties, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. e.
Communication, Coordination and Disclosure: The Company utilizes a cross-functional approach to address the risk from cybersecurity threats, involving management personnel from the Company’s technology, operations, legal, risk management and other key business functions, as well as the members of the Board and the Audit Committee of the Board in an ongoing dialogue regarding cybersecurity threats and incidents, while also implementing controls and procedures for the escalation of cybersecurity incidents pursuant to established thresholds so that decisions regarding the disclosure and reporting of such incidents can be made by management in a timely manner. h.
Communication, Coordination and Disclosure: We utilize a cross-functional strategy to address the risk from cybersecurity threats, involving management personnel from our technology, operations, legal, risk management and other key business functions, as well as the members of the Board and the Audit Committee of the Board in an ongoing dialogue regarding cybersecurity threats and incidents, while also implementing controls and procedures for the escalation of cybersecurity incidents pursuant to established thresholds so that decisions regarding the disclosure and reporting of such incidents can be made by management in a timely manner. h.
Risk Management and Strategy The Company’s cybersecurity program focuses on the following areas: a. Vigilance: The Company maintains cybersecurity threat operations with the goal of identifying, preventing and mitigating cybersecurity threats and responding to cybersecurity incidents in accordance with our established incident response and recovery plans. b.
Risk Management and Strategy Our cybersecurity program focuses on the following areas: a. Vigilance: We maintain cybersecurity threat operations with the goal of identifying, preventing and mitigating cybersecurity threats and responding to cybersecurity incidents in accordance with our established incident response and recovery plans. b.
Governance: The Board’s oversight over the effectiveness of the Company's cybersecurity risk management is supported by the Audit Committee, which regularly interacts with the Company’s Vice President of Information Technology, Security and Business Intelligence and other members of the cyber team and management.
Governance: The Board’s oversight over the effectiveness of our cybersecurity risk management is supported by the Audit Committee, which regularly interacts with our Vice President of Information Technology and other members of the cyber team and management.
Collaboration: The Company utilizes collaboration mechanisms established with public and private entities, including intelligence and enforcement agencies, industry groups and third-party service providers, to identify, assess and respond to cybersecurity risks. d.
Collaboration: We utilize collaboration mechanisms established with public and private entities, including intelligence and enforcement agencies, industry groups and third-party service providers, to identify, assess and respond to cybersecurity risks. d.
Systems Safeguards: The Company deploys system safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through ongoing vulnerability assessments and cybersecurity threat intelligence. c.
Systems Safeguards: We deploy system safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through ongoing vulnerability assessments and cybersecurity threat intelligence. c.
The results of such assessments and reviews are reported to the Audit Committee and the Board, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by the assessments, audits and reviews.
The results of such assessments and reviews are reported to the Audit Committee and the Board, and we adjust our cybersecurity policies, standards, processes and practices as necessary based on the information provided by the assessments, audits and reviews.
The Company manages risks from cybersecurity threats through the assessment and testing of the Company’s processes and practices focused on evaluating the effectiveness of our cybersecurity measures. The Company engages third parties as appropriate to perform assessments of our cybersecurity measures.
We manage risks from cybersecurity threats through the assessment and testing of our processes and practices focused on evaluating the effectiveness of our cybersecurity measures. We engage third parties as appropriate to perform assessments of our cybersecurity measures.
ITEM 1C. CYBERSECURITY Cybersecurity represents an important component of the Company’s overall approach to risk management. The Company’s cybersecurity policies, standards and practices are integrated into the Company’s enterprise risk management approach, and cybersecurity risks are one of the enterprise risks that are subject to oversight by the Company’s Board of Directors (the “Board”).
ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 1C. CYBERSECURITY Cybersecurity represents an important component of our overall approach to risk management. Our cybersecurity policies, standards and practices are integrated into our enterprise risk management approach, and cybersecurity risks are one of the enterprise risks that are subject to oversight by our Board.
The Company approaches cybersecurity threats through a cross-functional approach which endeavors to: (i) identify, prevent and mitigate cybersecurity threats to the Company; (ii) preserve the P58 Table of Conten t confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protecting the Company’s IP; (iv) maintaining the confidence of our customers, clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.
We approach cybersecurity threats through a cross-functional strategy which endeavors to: (i) identify, prevent and mitigate cybersecurity threats to us; (ii) preserve the confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protect our IP; (iv) maintain the confidence of our customers, clients and business partners; and (v) provide appropriate public disclosure of cybersecurity risks and incidents when required.
Training: The Company provides periodic training for personnel regarding cybersecurity threats, which reinforces the Company’s information security policies, standards and practices. f.
Training: We provide periodic training for personnel regarding cybersecurity threats, which reinforces our information security policies, standards and practices. f.
Cybersecurity threats, resulting from any previous cybersecurity incidents, have not materially affected or are not reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition. P60 Table of Conten t
Cybersecurity threats, resulting from any previous cybersecurity incidents, have not materially affected or are not reasonably likely to affect us, including our business strategy, results of operations, or financial condition. 55 Table of Contents Axogen, Inc.
The Company’s Vice President of Information Technology, Security and Business Intelligence, in coordination with senior leadership, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
The Vice President of Information Technology holds a bachelor’s degree in management, information systems and accounting from Case Western Reserve University. Our Vice President of Information Technology in coordination with senior leadership, works collaboratively across the Company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
The Board and the Audit Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding such incident until it has been addressed.
The Board and the Audit Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding such incident until it has been addressed. On a regular basis, the Board and the Audit Committee discuss our approach to cybersecurity risk management with our cyber team and senior leadership team.
Incident Response and Recovery Planning: The Company has established and maintains incident response and recovery plans that address the Company’s response to a cybersecurity incident and the recovery from a cybersecurity incident, and such plans are tested and evaluated periodically. g.
Incident Response and Recovery Planning: We have established and maintain incident response and recovery plans that address our response to a cybersecurity incident and the recovery from a cybersecurity incident, and such plans are tested and evaluated periodically. 54 Table of Contents Axogen, Inc. g.
Removed
On a regular basis, the Board and the Audit Committee discuss the Company’s approach to cybersecurity risk management with the Company’s cyber team and senior leadership team.
Added
Item 1C. Cybersecurity for additional information related to cybersecurity risks. We are dependent on internal information and telecommunications systems, and we are vulnerable to failure of these systems, including through system security breaches, data protection breaches or other cybersecurity attacks.
Removed
The Vice President of Information Technology, Security and Business Intelligence works in coordination with senior leadership, which includes our Chief Executive Officer, Chief Financial Officer, and General Counsel.
Added
If these events occur, the unauthorized disclosure, loss or unavailability of data and disruption to our business may have a material adverse effect on our reputation and harm our relationships with vendors and customers.
Removed
The Company’s Vice President of Information Technology, Security and Business Intelligence has served in various roles in information technology and information security for over 18 years, including Biogen, AstraZeneca, Iron Mountain, and consulting roles at Charles River Labs, Sunovion Pharmaceuticals, Agero and DentaQuest.
Added
Additionally, these events may lead to financial losses from remedial actions, or potential liability from fines, including in relation to noncompliance with the GDPR, as well as possible litigation and punitive damages. Failures of our internal information or telecommunications systems may prevent us from taking customer orders, shipping products and billing customers.
Removed
The Vice President of Information Technology, Security and Business Intelligence holds a master's degree in business administration from Boston University, a master’s degree in electrical and computer engineering from Utah State University, and a bachelor’s degree in electronics engineering from Mumbai University.
Added
Sales may also be impacted if our customers are unable to access our pricing and product availability information. The occurrence of any of these events could have a material adverse impact on our business and results of operations. Our business and financial performance could be adversely affected, directly or indirectly, by natural or man-made disasters or other similar events.
Removed
The Company’s Information Technology team has specific professional certifications and has over 10 years of experience with managing risks arising from cybersecurity threats.
Added
Neither the occurrence nor the potential impact of risks such as earthquakes, hurricanes, floods and other natural disasters, fire, power shortages, geopolitical unrest, war, terrorist attacks and other hostile acts, epidemics or pandemics, international hostilities or other criminal activities and other events beyond our control and the control of the third parties on which we depend can be predicted.
Added
However, these occurrences could impact us directly as a result of damage to our facilities or by preventing us from conducting our business in the ordinary course, or indirectly as a result of their impact on our customers, suppliers, or other counterparties.
Added
We could also suffer adverse consequences to the extent that these disasters affect the financial markets or the economy in general or in any particular region. Additionally, climate change could present immediate and long-term risks to our industry and our customers.
Added
The potential for increased severe weather events could have a material adverse effect on our operations and infrastructure or the operations and infrastructure of our suppliers. In addition, the effects of climate change could include long-term changes in temperature levels and water availability, increased energy costs, and increased supply costs impacted by those increasing energy costs.
Added
Our ability to mitigate the adverse consequences of such occurrences is in part dependent on the quality of our resiliency planning, and our ability, if any, to anticipate the nature of any such event that occurs.
Added
The adverse impact of natural or man-made disasters also could be increased to the extent that there is a lack of preparedness on the part of national or regional emergency responders or on the part of other organizations and businesses that we deal with, particularly those that we depend upon but have no control over.
Added
Changes in the tax code could have a material adverse effect on our results of operations, financial condition, liquidity, and capital investments. In recent years, political discourse has centered on potential changes in tax laws or tax rulings. Certain of these changes could negatively affect our financial condition.
Added
For example, on July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”), which makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research and development cost expensing, and the business interest expense limitation.
Added
The OBBBA includes multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. While the new legislation did not have a material impact on our effective tax rate in 2025, future interpretations, regulations, or amendments to the OBBBA could impact our tax position in subsequent periods.
Added
In addition, our ability to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments may be limited by provisions of the Internal Revenue Code, and it is possible that certain transactions or a combination of certain transactions may result in material additional limitations on our ability to use our net operating loss and tax credit carryforwards. 40 Table of Contents Axogen, Inc.
Added
We may have exposure to additional tax liabilities as a result of our foreign operations. We are subject to income taxes in the U.S. and various foreign jurisdictions. We have operations in Canada, Germany, the U.K., Spain and several other countries. Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities.
Added
In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by tax authorities. Our intercompany transfer pricing may be reviewed by the U.S. Internal Revenue Service and by foreign tax jurisdictions.
Added
Although we believe that our tax estimates are reasonable, due to the complexity of our corporate structure, the multiple intercompany transactions and the various tax regimes, we cannot assure you that a tax audit or tax dispute to which we may be subject will result in a favorable outcome for us.
Added
If taxing authorities do not accept our tax positions and impose higher tax rates on our foreign operations, our overall tax expenses could increase.
Added
Risks Related to the Regulatory Environment in which We Operate We obtained regulatory approval for certain uses of Avance through the FDA’s accelerated approval pathway and traditional approval will be contingent on successful completion of a confirmatory post-approval trial. Failure to successfully complete our confirmatory post-approval trial or obtain traditional approval would have a material adverse effect on our business.
Added
Although the FDA granted traditional approval to Avance as an acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory nerve discontinuity (≤25mm), the FDA granted accelerated approval to Avance for the treatment of sensory nerve discontinuity (>25mm) and mixed and motor nerve discontinuity.
Added
For products granted accelerated approval, sponsors are required to verify and describe the product’s anticipated clinical benefit generally in the form of confirmatory trials.
Added
These confirmatory trials must be completed with due diligence and, pursuant to the Food and Drug Omnibus Reform Act (“FDORA”), the FDA is authorized to require a post-approval trial to be underway prior to approval or within a specified time period following approval.
Added
FDORA also requires the FDA to specify conditions of any required post-approval trial and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA.
Added
FDORA enables the FDA to initiate enforcement action for the failure to conduct with due diligence a required post-approval trial, including a failure to meet any required conditions, which may include enrollment targets, the study protocol and study milestones, specified by the FDA, or to submit timely reports.
Added
Failure to conduct our required post-approval confirmatory trial with due diligence, to meet the timelines and conditions agreed to by FDA for the completion of the confirmatory trial, or to verify and describe the anticipated clinical benefit of Avance during our post-approval confirmatory trial would allow the FDA to withdraw approval on an expedited basis as to the portions of the indication providing for use of Avance to treat sensory nerve discontinuity (>25mm), mixed and motor nerve discontinuity, or both, which would have a material adverse effect on our business.
Added
In addition, all promotional materials for products approved under the accelerated approval pathway are subject to prior review by the FDA. If the FDA were to object to our promotional pieces, we may be required to revise our materials, or be subject to untitled or warning letters.
Added
If the FDA were to withdraw or suspend our BLA approval, narrow the approved indication, or otherwise limit the use of our Avance Products, our revenues would be significantly impacted and thus would have a material adverse effect on us.
Added
The FDA approved the BLA for Avance to treat sensory nerve discontinuity ( Because approximately 60% of our total revenues are from sales of Avance Products, any narrowing of the approved indication, additional FDA-imposed restrictions, or other adverse action relating to the BLA could have a material negative impact on our revenues and our operations.
Added
For additional information see: Risk Factors - Approximately 60% of our total revenues are from sales of Avance Products and any adverse decision from the FDA would negatively impact our operations and financial condition. 41 Table of Contents Axogen, Inc.
Added
Manufacturers and manufacturers’ facilities are required to continuously comply with FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations and corresponding foreign regulatory manufacturing requirements.
Added
As such, we and our third-party suppliers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in our BLA.
Added
Any failure by us or our third-party suppliers to adhere to or document compliance with such regulatory requirements could lead to a delay or interruption in the availability of materials for the manufacture of Avance, among other consequences.
Added
For example, Avance is supplied by a single Axogen owned and operated manufacturing facility and our ability to continue manufacturing Avance at this facility under the terms of our BLA is dependent on the successful implementation of certain updates to our previous environmental monitoring program.
Added
The FDA requires sponsors to conduct environmental monitoring for biologics manufacturing to control microbial and particulate contamination and ensure product safety and efficacy. We have an ongoing Environmental Monitoring Performance Qualification (“EMPQ”) study intended to demonstrate the adequacy of the updates to our environmental monitoring program to the FDA and that they have been successfully implemented.
Added
We will need to demonstrate that our environmental monitoring program continues to be adequate post-licensure, and the FDA will verify the results of our EMPQ study during follow-up inspections of our facility.
Added
If we fail to properly qualify our environmental monitoring program or the FDA finds that the results of the EMPQ study require changes to our environmental monitoring program, we may be forced to implement additional monitoring procedures, obtain and qualify new equipment, or hire and train additional staff, and we may be forced to run a new EMPQ study, any of which could impact our ability to manufacture product, which would have a material effect on our business.
Added
If we or our third-party contractors fail to comply with the requirements of the FDA or other regulatory authorities or fail to comply with other post-approval commitments, it could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, clinical holds or termination of clinical trials.
Added
Form 483s, warning or untitled letters, regulatory communications warning the public about safety issues with a product, import or export refusals, license revocation, seizures, detentions, or recalls of product candidates or product, operating restrictions, criminal prosecutions or debarment, suits under the civil False Claims Act, corporate integrity agreements, or consent decrees any of which could significantly and adversely affect supplies of Avance and our business, financial conditions and results of operations could be materially adversely affected.
Added
Our business is subject to continuing regulatory compliance by the FDA and other authorities, which is costly and could result in negative effects on our business.
Added
We are subject to extensive regulation by foreign and domestic government entities, including compliance with regulations governing appropriate relationships with healthcare professionals, such as physicians, hospitals, distributors, third-party payors, patients, charitable organizations, and those to whom and through whom we may market our products.
Added
We are subject to various federal, state, and territorial laws in the U.S. and other jurisdictions in which we conduct business. These include, for example, anti-kickback laws, false claims laws, healthcare fraud, waste, and abuse laws, and anti-bribery laws such as the U.S. Foreign Corrupt Practices Act.
Added
Violations of these laws can be punishable by criminal and/or civil sanctions, including, in some instances, fines, imprisonment and, within the U.S., exclusion from participation in government healthcare programs, including Medicare, Medicaid, and Veterans Administration health programs.
Added
These laws are administered and enforced by, among others, the DOJ, which issued new compliance guidance in 2020, the Office of Inspector General of the Department of Health and Human Services, state attorneys general, and their respective counterparts in the applicable foreign jurisdictions in which we conduct business.
Added
Many of these agencies have increased their enforcement activities with respect to drug and medical device manufacturers in recent years. There can also be changes to the regulations by foreign and domestic government entities that require us to update or upgrade business processes or to perform additional validation activities for product or processes.
Added
Compliance with such changes can be costly to implement or result in non-compliance, thus restricting the ability to distribute tissue or sell products, which could have a material adverse effect on our business, results of operations, financial condition, and prospects. Our products are also subject to regulation by the FDA in the U.S.
Added
The FDA regulates the development, pre-clinical and clinical testing, requirements for commercial marketing and distribution, manufacturing and quality, safety, labeling, and promotion of medical products including human cells, tissues and cellular and tissue-based products (“HCT/Ps”), medical devices, and biological products. See Business — Government Regulations — U.S. Government Regulation Overview .
Added
The FDA also regulates medical devices, for example the Axoguard products, and generally requires them to be cleared through the 510(k) pre-market notification process prior to marketing or through other pre-market approval processes. The FDA’s pre-market review process for new and modified existing devices that precedes product marketing can be time consuming and expensive.
Added
Some of the future products and enhancements to such products that we expect to develop, and market may require marketing clearance or approval from the FDA. 42 Table of Contents Axogen, Inc.
Added
There can be no assurance, however, that clearance or approval will be granted with respect to any of our medical device products or enhancements of marketed products or that we will continue to meet the FDA’s requirements applicable to the approved BLA for Avance Nerve Graft.
Added
FDA review of our devices or biological products may encounter significant delays during pre-market review or supplemental review processes, which could adversely affect our ability to market our products or enhancements. Any products regulated solely under Section 361 of the PHS Act are subject to close scrutiny by the FDA and potentially subject to regulatory change.
Added
Failure to comply with applicable regulatory requirements could expose us to potential compliance actions by FDA or other regulators and could risk the commercial availability of the product.
Added
It is possible that if regulatory clearances or approvals to market a product are obtained from the FDA, the clearances or approvals may contain limitations on the indicated uses of such product and other uses may be prohibited, as well as require continuing regulatory review.
Added
Product approvals by the FDA can also be withdrawn due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval. The FDA may require post marketing clinical studies or other activities that may add cost or limit marketing of the product.
Added
Furthermore, the FDA could limit or prevent the distribution of our products, and the FDA has the authority to require the recall of such products.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed0 unchanged
Biggest changeWe believe that our facilities will be sufficient to operate our business for the next 12 months and that current lease obligations will not change materially. ITEM 3.
Biggest changeSee Note 15 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for details regarding the License and Services Agreement. We believe that our facilities will be sufficient to operate our business for the next 12 months and that current lease obligations will not change materially.
PROPERTIES Our material physical properties consisted of the following as of December 31, 2024: Location General Character Total Square Feet Square Feet Utilized Expiration Alachua, Florida (1) Headquarters - General office, warehousing and distribution 19,000 19,000 October 31, 2026 Tampa, Florida (1) Headquarters - General office, medical laboratory, and meeting space 75,000 50,000 October 31, 2034 Burleson, Texas (1) Facility - Raw material and finished goods warehousing and distribution 15,000 15,000 April 30, 2027 10,000 5,000 September 30, 2027 Vandalia, Ohio (2) Facility - Clean-room, manufacturing, warehousing, and office space 107,000 84,000 N/A Dayton, Ohio (3)(4) Facility - Clean-room, manufacturing, warehousing, and office space Varies Varies December 31, 2026 (1) Property is encumbered by a lease agreement and is collateral to our Credit Facility.
PROPERTIES Our material physical properties consisted of the following as of December 31, 2025: Location General Character Total Square Feet Square Feet Utilized Expiration Alachua, Florida (1) Headquarters - General office, warehousing and distribution 19,000 19,000 October 31, 2026 Tampa, Florida (1)(2) Headquarters - General office, medical laboratory and meeting space 75,000 50,000 October 31, 2034 Burleson, Texas (1) Facility - Raw material and finished goods warehousing and distribution 15,000 15,000 April 30, 2027 10,000 5,000 September 30, 2027 Vandalia, Ohio Facility - Clean-room, manufacturing, warehousing and office space 107,000 84,000 N/A Dayton, Ohio (3) Facility - Clean-room, manufacturing, warehousing and office space Varies Varies December 31, 2026 ___________ (1) Property is encumbered by a lease agreement.
(2) Property is collateral to our Credit Facility. (3) Property is encumbered by our Solvita Agreement as an embedded lease. (4) Total square feet and utilization varies each month for the use of Solvita's clean room, manufacturing, warehousing, and office space in accordance with the Solvita Agreement.
(2) Portions of this property are subleased under two sublease agreements with different sublessees. (3) Property is encumbered by our License and Services Agreement as an embedded lease. Total square feet and utilization varies each month for the use of clean room, manufacturing, warehousing, and office space in accordance with the License and Services Agreement .
Removed
LEGAL PROCEEDINGS Information required by this item is set forth in Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K and is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES None. P61 Table of Conten t PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−1 removed2 unchanged
Biggest changeShareholders As of February 19, 2025, we had 44,343,785 shares of common stock outstanding, and approximately 218 common shareholders of record, based upon information received from our stock transfer agent. However, this number does not include beneficial owners whose shares were held of record by nominees or broker dealers. We estimate that there are approximately 11,964 individual owners.
Biggest changeShareholders As of February 20, 2026, we had 51,897,682 shares of common stock outstanding, and approximately 178 common shareholders of record, based upon information received from our stock transfer agent. However, this number does not include beneficial owners whose shares were held of record by nominees or broker dealers.
Additional information called for by this item is incorporated herein by reference to the following sections of this Report: Note 11 - Stock-Based Compensation of the Notes to Consolidated Financial Statements included in Item 8; and Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Equity Compensation Plan Information”.
Additional information called for by this item is incorporated herein by reference to the following sections of this Report: Note 11 - Stock-Based Compensation of the Notes to Consolidated Financial Statements included in Item 8; and Part III, Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Equity Compensation Plan Information .
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Dividends We have never declared or paid and do not anticipate paying or declaring a cash dividend on our common stock.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . Dividends We have never declared or paid and do not anticipate paying or declaring a cash dividend on our common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our securities in the fourth quarter of 2024. Recent Sales of Unregistered Securities We had no sales of unregistered securities in 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our securities in the fourth quarter of 2025. Recent Sales of Unregistered Securities We had no sales of unregistered securities in 2025.
Performance Graph The following graph compares the cumulative total shareholder return on our common stock for the period from December 31, 2019 to December 31, 2024 with (i) the Nasdaq Stock Market Biotechnology Index and (ii) the Nasdaq Stock Market Composite Index.
Performance Graph The following graph compares the cumulative total shareholder return on our common stock for the period from December 31, 2020 to December 31, 2025 with (i) the Nasdaq Stock Market Biotechnology Index and (ii) the Nasdaq Stock Market Composite Index.
The graph assumes an investment of $100 in our common stock and the respective indices for the period of December 31, 2019 to December 31, 2024.
The graph assumes an investment of $100 in our common stock and the respective indices for the period of December 31, 2020 to December 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Capital Market under the symbol “AXGN.” On February 19, 2025, the last reported closing sale price of our common stock on the Nasdaq Capital Market was $18.68 per share.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Capital Market under the symbol “AXGN.” On February 20, 2026, the last reported closing sale price of our common stock on the Nasdaq Capital Market was $35.30 per share.
We intend to retain any earnings to finance the growth and development of our business. Our Board of Directors may declare dividends at its discretion.
We intend to retain any earnings to finance the growth and development of our business. Our Board may declare dividends at its discretion. 57 Table of Contents Axogen, Inc.
Removed
P62 Table of Conten t ITEM 6. [RESERVED] Not applicable. P63 Table of Conten t
Added
December 31, 2020 2021 2022 2023 2024 2025 Axogen, Inc. $ 100.00 $ 52.35 $ 55.20 $ 38.60 $ 92.07 $ 182.85 Nasdaq Stock Market Biotechnology Index $ 100.00 $ 100.02 $ 89.07 $ 95.89 $ 93.49 $ 124.75 Nasdaq Stock Market Composite Index $ 100.00 $ 122.18 $ 81.81 $ 117.28 $ 154.48 $ 187.14

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

42 edited+24 added−45 removed14 unchanged
Biggest changeProduct Portfolio Our platform for peripheral nerve repair features a comprehensive portfolio of products, including: • Avance ® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site. • Axoguard Nerve Connector ® , a porcine (pig) submucosa extracellular matrix ("ECM") coaptation aid for tensionless repair of severed peripheral nerves. • Axoguard Nerve Protector ® , a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while preventing soft tissue attachments. • Axoguard HA+ Nerve Protector™, is comprised of a processed porcine submucosa ECM base layer with a hyaluronate-alginate gel coating designed to provide short- and long-term protection for peripheral nerve injuries.
Biggest changeProduct Portfolio Our platform for peripheral nerve repair features a comprehensive portfolio of products, including: • Avance ® (acellular nerve allograft-arwx) an FDA-approved acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory, mixed, and motor peripheral nerve discontinuities (“Avance”). • Avance® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site (“Avance Nerve Graft” and together with Avance, the “Avance Products”). • Axoguard Nerve Connector ® , a porcine (pig) submucosa extracellular matrix (“ECM”) coaptation aid for tensionless repair of severed peripheral nerves. • Axoguard Nerve Protector ® , a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while minimizing soft tissue attachments. • Axoguard HA+ Nerve Protector™, a porcine submucosa ECM base layer coated with a proprietary hyaluronate-alginate gel, a next-generation technology designed to enhance nerve gliding and provide short- and long-term protection for peripheral nerve injuries. • Axoguard Nerve Cap ® , a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma. • Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue healing.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with our consolidated financial statements and the notes thereto contained in Item 8 of Part II in this Form 10-K, “Forward-Looking Statements” contained in Part 1 of this Form 10-K, “Risk Factors” contained in Item 1A of this Form 10-K, and the other information appearing elsewhere in, or incorporated by reference into, this Form 10-K.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with our consolidated financial statements and the notes thereto contained in Item 8 of Part II in this Form 10-K, “Forward-Looking Statements” contained in Part I of this Form 10-K, “Risk Factors” contained in Item 1A of this Form 10-K, and the other information appearing elsewhere in, or incorporated by reference into, this Form 10-K.
The number of TSR PSUs that will be earned is based upon the achievement of stock price targets ("Price Targets") over the measurement period. Compensation expense is recognized regardless if the Price Targets are satisfied. Compensation expense will be reversed if an employee's employment is terminated prior to satisfying the requisite service period.
The number of TSR PSUs that will be earned is based upon the achievement of stock price targets (“Price Targets”) over the measurement period. Compensation expense is recognized regardless if the Price Targets are satisfied. Compensation expense will be reversed if an employee’s employment is terminated prior to satisfying the requisite service period.
Sources of Capital Our expected future capital requirements may depend on many factors including expanding our customer base and sales force and timing and extent of spending in obtaining regulatory approval and introduction of new products.
Sources of Capital Our expected future capital requirements may depend on many factors including expanding our customer base and sales force, the timing and extent of spending in obtaining regulatory approval, strategic opportunities and introduction of new products.
The increase in net cash provided by financing activities was primarily due to an increase of $336 in proceeds from the exercise of stock options and Employee Stock Purchase Plan (“ESPP”) purchases year-over-year.
The increase in net cash provided by financing activities was primarily due to an increase of $8,231 in proceeds from the exercise of stock options and Employee Stock Purchase Plan (“ESPP”) purchases year-over-year.
Sensitivity of Estimate to Change As of December 31, 2024, we have reserved $1,630 for potential losses relating to inventory. If our actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write downs may be required, which could unfavorably affect future operating results.
Sensitivity of Estimate to Change As of December 31, 2025, we have reserved $2,202 for potential losses relating to inventory. If our actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write downs may be required, which could unfavorably affect future operating results.
Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements.
Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements. 62 Table of Contents Axogen, Inc.
Embedded derivatives that are not clearly and closely related to the debt host are bifurcated and recognized at fair value on the Consolidated Balance Sheets with changes in fair value recognized as either a gain or loss on the Consolidated Statements of Operations for each reporting period.
Embedded derivatives that are not clearly and closely related to the debt host are bifurcated and recognized at fair value on the Consolidated Balance Sheets with changes in fair value recognized as either a gain or loss on the Consolidated Statements of Operations for each reporting period. 64 Table of Contents Axogen, Inc.
If the performance-based milestones related to the Revenue PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants is reversed. The estimated grant date fair value of the Total Shareholder Return PSUs ("TSR PSUs") is calculated by using a Monte Carlo simulation.
If the performance-based milestones related to the Revenue PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants is reversed. The grant date fair value of the Total Shareholder Return (“TSR”) PSUs (“TSR PSUs”) is calculated using a Monte Carlo simulation.
See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 15 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K.
See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 15 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K. 63 Table of Contents Axogen, Inc.
Product development costs include spending for a number of specific programs, including the non-clinical expenses related to the BLA for Avance Nerve Graft. Product development costs and expenses represented approximately 53% and 60% of total research and development costs and expenses for the years ended December 31, 2024 and 2023, respectively.
Product development costs include spending for a number of specific programs, including the non-clinical expenses related to the BLA for Avance. Product development costs and expenses represented approximately 50% and 53% of total research and development costs and expenses for the years ended December 31, 2025 and 2024, respectively.
P70 Table of Conten t Derivative Instruments Description We review debt instruments to determine whether there are embedded derivative instruments, which are required to be bifurcated and accounted for separately as a derivative financial instrument.
Derivative Instruments Description We review debt instruments to determine whether there are embedded derivative instruments, which are required to be bifurcated and accounted for separately as a derivative financial instrument.
The fair value of the Revenue PSUs also includes our estimates of achieving the applicable revenue goals. The value of the P71 Table of Conten t portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Operations.
The fair value of the Revenue PSUs and CAGR TSR PSUs also includes our estimates of achieving the applicable revenue and revenue CAGR goals. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Operations.
Upon each maturity date or upon such date earlier repayment occurs, we will repay the principal balance and provide a make-whole payment calculated to generate an internal rate of return to the lender equal to 11.5%, less the total of all quarterly interest and revenue participation payments previously paid.
Upon such date early repayment occurs, we are required repay the principal balance and provide a make-whole payment calculated to generate an internal rate of return to the lender equal to 11.5%, less the total of all quarterly interest and revenue participation payments previously paid (the “Make-Whole Payment”).
The determination of fair value using option-pricing models, as indicated above, is affected by our stock price, as well as assumptions regarding several subjective variables. These variables include, but are not limited to, our expected stock price volatility over the expected term of the awards.
The grant date fair value is expensed on a straight-line basis over the offering period. The determination of fair value using option-pricing models, as indicated above, is affected by our stock price, as well as assumptions regarding several subjective variables. These variables include, but are not limited to, our expected stock price volatility over the expected term of the awards.
Stock-based compensation expense is based on the fair value of the stock options, RSUs and PSUs. Judgments and Uncertainties We estimate the grant date fair value of each stock option award on the date of grant using a multiple-point Black-Scholes option-pricing model.
Judgments and Uncertainties We estimate the grant date fair value of each stock option award on the date of grant using a multiple-point Black-Scholes option-pricing model.
Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation (“AC”), Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH.
Dollar amounts referenced in this Item 7 are in thousands, except per share amounts. Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation (“AC”), Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH.
The fair value of the PSU grants tied to revenue goals (the "Revenue PSUs") is determined based on the fair value of our common stock on the date of grant and our estimate of achieving the applicable revenue goals. Compensation expense for the Revenue PSUs is recorded as the milestones are achieved.
The fair value of the PSU grants tied to revenue goals (the “Revenue PSUs”) is determined based on the fair value of our common stock on the date of grant and our estimate of achieving the applicable revenue goals. Compensation expense for the Revenue PSUs is recorded ratably over the performance period.
The increasing need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount.
Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount.
See Note 8 - Leases, Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees, and Note 15 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K, for further information.
See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees , Note 15 - Commitments and Contingencies and Note 16 - Subsequent Events in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K . (2) Calculated at 11.59% ; the interest rate as of December 31, 2025.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $2,290 as compared to $1,954 for the years ended December 31, 2024 and 2023, respectively, an increase of $335, or 17%.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $10,499 as compared to $2,290 for the year ended December 31, 2024, an increase of $8,209, or 358%.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and as percentages of total revenue: Year Ended December 31, 2024 2023 Amount % of Revenue Amount % of Revenue (dollars in thousands) Revenues $ 187,338 100.0 % $ 159,012 100.0 % Cost of goods sold 45,361 24.2 37,143 23.4 Gross profit 141,977 75.8 121,869 76.6 Costs and expenses: Sales and marketing 78,461 41.9 77,580 48.8 Research and development 27,767 14.8 27,339 17.2 General and administrative 39,036 20.8 38,412 24.2 Total costs and expenses 145,264 77.5 143,331 90.1 Loss from operations (3,287) (1.8) (21,462) (13.5) Other (expense) income: Investment income 1,141 0.6 1,487 0.9 Interest expense (8,206) (4.4) (2,835) (1.8) Change in fair value of derivatives 587 0.3 1,531 1.0 Other expense (199) (0.1) (437) (0.3) Total other (expense) income, net (6,677) (3.7) (254) (0.2) Net loss $ (9,964) (5.3) % $ (21,716) (13.7) % Revenue s Revenues for the year ended December 31, 2024 increased $28,326, or 17.8%, to $187,338, as compared to $159,012 for the year ended December 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table sets forth our results of operations expressed as dollar amounts and as percentages of total revenue for the periods presented: Years Ended December 31, 2025 2024 (dollars in thousands) Amount % of Revenue Amount % of Revenue Revenues $ 225,208 100.0 % $ 187,338 100.0 % Cost of goods sold 57,855 25.7 45,361 24.2 Gross profit 167,353 74.3 141,977 75.8 Cost and expenses Sales and marketing 97,740 43.4 78,461 41.9 Research and development 32,885 14.6 27,767 14.8 General and administrative 44,577 19.8 39,036 20.8 Total costs and expenses 175,202 77.8 145,264 77.5 Loss from operations (7,849) (3.5) (3,287) (1.8) Other income (expense): Investment income 1,168 0.5 1,141 0.6 Interest expense (7,702) (3.4) (8,206) (4.4) Change in fair value of derivatives (1,487) (0.7) 587 0.3 Other expense 167 0.1 (199) (0.1) Total other expense, net (7,854) (3.5) (6,677) (3.7) Net loss $ (15,703) (7.0) % $ (9,964) (5.3) % Revenues Revenues for the year ended December 31, 2025 increased $37,870, or 20.2%, to $225,208, as compared to $187,338 for the year ended December 31, 2024.
Critical Accounting Estimates In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application.
(3) See Note 8 - Leases in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K . Critical Accounting Estimates In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application.
Cash Flow Information The following table presents a summary of our cash flows from operating, investing and financing activities: Year Ended December 31, (in thousands) 2024 2023 Net cash provided by (used in): Operating activities $ 4,535 $ (5,716) Investing activities (10,297) 19,253 Financing activities 2,290 1,954 Net (decrease) increase in cash and cash equivalents $ (3,472) $ 15,491 P68 Table of Conten t Net Cash Provided By (Used In) Operating Activities Net cash provided by operating activities was $4,535 compared to net cash used in operating activities of $5,716 for the years ended December 31, 2024 and 2023, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Cash Flow Information The following table presents a summary of our cash flows from operating, investing and financing activities for the periods presented: Years Ended December 31, (in thousands) 2025 2024 Net cash provided (used in) by: Operating activities $ 812 $ 4,535 Investing activities (5,317) (10,297) Financing activities 10,499 2,290 Net increase (decrease) in cash and cash equivalents $ 5,994 $ (3,472) Net Cash Provided By Operating Activities Net cash provided by operating activities was $812 compared to $4,535 for the years ended December 31, 2025 and 2024, respectively.
Interest is calculated as 7.5% plus the greater of the forward-looking term rate based on the secured overnight financing rate as set by the Federal Reserve Bank of New York plus 0.10% ("Adjusted SOFR") or 2.0% (12.19% as of December 31, 2024).
Quarterly interest only and revenue participation payments are due through each of the maturity dates. Interest is calculated as 7.5% plus the greater of the forward-looking term rate based on the secured overnight financing rate as set by the Federal Reserve Bank of New York plus 0.10% (“Adjusted SOFR”) or 2.0% (11.59% as of December 31, 2025).
The decrease in investment income was primarily related to the Federal Reserve decreasing interest rates 100 basis points throughout 2024. Income Taxes We had no federal income tax expense or benefit for the years ended December 31, 2024 and 2023 due to the incurrence of net operating losses in both years, the benefits of which have a full valuation allowance.
Income Taxes We had no federal income tax expense or benefit for the years ended December 31, 2025 and 2024 due to the incurrence of net operating losses in both years, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities.
Net Cash (Used In) Provided By Investing Activities Net cash used in investing activities was $10,297 compared to net cash provided by investing activities of $19,253 for the years ended December 31, 2024 and 2023, respectively.
Net Cash Used In Investing Activities Net cash used in investing activities was $5,317 compared to $10,297 for the year ended December 31, 2024.
Our portfolio of products is currently available in the United States ("U.S."), and 19 other countries including Canada, Germany, United Kingdom, Spain and several other European, Asian and Latin American countries. We derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S.
Our portfolio of products is currently available in the United States (“U.S.”), Canada, Germany, the United Kingdom, Spain and several other countries. We derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S. On December 3, 2025, the FDA approved the Biologics License Application (“BLA”) for Avance (acellular nerve allograft-arwx).
Gross margin as a percentage of revenue decreased to 75.8% for the year ended December 31, 2024, as compared to 76.6% for the year ended December 31, 2023. The decrease in gross margin was due to the change in our product mix.
Gross margin as a percentage of revenue decreased to 74.3% for the year ended December 31, 2025, as compared to 75.8% for the year ended December 31, 2024.
We will drive growth in these accounts through targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties. Summary of Operational and Business Highlights • We completed the Biologics License Application ("BLA") submission for Avance Nerve Graft on September 6, 2024.
We will drive growth in these accounts through targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties.
The favorable change in net cash provided by operating activities of $10,251 was due to the decrease in net loss of $11,751 and the favorable change in noncash accounts of $6,093, partially offset by an unfavorable change in working capital of $7,594.
The unfavorable change in net cash provided by operating activities of $3,723 was due to an unfavorable change in working capital of $13,855 and the increase in net loss of $5,739, partially offset by the favorable change in noncash accounts of $16,589.
We recognize compensation expense related to the ESPP based on the estimated fair value of the options on the date of grant. We estimate the grant date fair value using a Black-Scholes option pricing model for each purchase period. The grant date fair value is expensed on a straight-line basis over the offering period.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) We recognize compensation expense related to the ESPP based on the estimated fair value of the options on the date of grant. We estimate the grant date fair value using a Black-Scholes option pricing model for each purchase period.
The unfavorable change in net cash used in investing activities of $29,550 was due to the decrease in proceeds from the sale of investments, net of investment purchases, totaling $39,944, partially offset by a net decrease in capital expenditures of $10,771, primarily related to the renovation of the APC Facility completed in 2023.
The favorable change in net cash used in investing activities of $4,980 was primarily due to the increase in proceeds from the sale of investments, net of investment purchases, totaling $6,050, partially offset by a net increase in capital expenditures of $644.
We do not believe that there are any additional tax expenses or benefits currently available. Liquidity and Capital Resources As of December 31, 2024, our principal sources of liquidity were our cash and cash equivalents and investments totaling $33,482. Our cash equivalent is comprised of a money market mutual fund and our investments are comprised of U.S. Treasuries.
The Internal Revenue Service is currently examining the Company’s 2021 federal income tax return. Liquidity and Capital Resources As of December 31, 2025, our principal sources of liquidity were our cash and cash equivalents and investments totaling $41,528. Our cash equivalent is comprised of a money market mutual fund and our investments are comprised of U.S. Treasuries.
Clinical trial costs and expenses represented approximately 47% and 40% of total research and development costs and expenses for the years ended December 31, 2024 and 2023, respectively.
Clinical trial costs and expenses represented approximately 50% and 47% of total research and development costs and expenses for the years ended December 31, 2025 and 2024, respectively. Other Expense Total other expense, net increased $1,177, or 17.6%, to $7,854 for the year ended December 31, 2025, as compared to $6,677 for the year ended December 31, 2024.
If factors change and different assumptions are used, stock-based compensation expense could be materially different in the future. Sensitivity of Estimate of Change As of December 31, 2024, if we determine that the unvested PSUs outstanding were in a pay-out range of 150%, our stock-based compensation expense would increase by $616.
Sensitivity of Estimate to Change If we determine that the pay-out range of unvested PSUs outstanding were to change by 50 basis points from expected payout as of December 31, 2025, our stock-based compensation expense would change by $541 for the fiscal year ended December 31, 2025.
Judgements and Uncertainties The fair value of embedded derivatives is measured based on equity markets and interest rates, as well as an estimate of our nonperformance risk adjustment. This estimate includes an option adjusted spread and an estimate of our discount rate. Sensitivity of Estimate to Change As of December 31, 2024, we recorded a derivative liability of $2,400.
This estimate includes an option adjusted spread and an estimate of our discount rate. Sensitivity of Estimate to Change As of December 31, 2025, we recorded a derivative liability of $3,886. However, if the discount rate were to change by 1%, it would have an approximately $600 effect on our derivative liability fair value.
Revenue growth was driven by an increase in unit volume of approximately 9.0%, as well as the net impact of changes in product mix and price of approximately 5.5% and 3.3%, respectively.
Revenue growth was driven by an increase in unit volume, as well as the impact of changes in price and product mix. Gross Profit Gross profit for the year ended December 31, 2025 increased $25,376, or 17.9%, to $167,353, as compared to $141,977 for the year ended December 31, 2024.
However, if the discount rate were to change by 1%, it would have a less than $50 effect on our derivative liability fair value. Stock-Based Compensation Description Stock-based compensation is in the form of stock options, restricted stock units ("RSU") and performance stock units ("PSU") granted to employees and directors.
Stock-Based Compensation Description Stock-based compensation is in the form of stock options, restricted stock units (“RSU”) and performance stock units (“PSU”) granted to employees and directors. Stock-based compensation expense is based on the fair value of the stock options, RSUs and PSUs.
Failure to comply with applicable regulatory requirements could expose us to potential compliance actions by the FDA or state regulators and could risk the commercial availability of the product. Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons.
Credit Facilities As of December 31, 2024, we had $50,000 outstanding in indebtedness under a credit facility; $35,000 maturing on June 30, 2027 and $15,000 maturing on June 30, 2028. Quarterly interest only and revenue participation payments are due through each of the maturity dates.
Credit Facilities As of December 31, 2025, we had $50,000 outstanding in indebtedness under the Term Loan Agreement, dated June 30, 2020, with Oberland Capital and its affiliates, TPC Investments II LP and Argo LLC (as amended, the “Credit Facility”); $35,000 maturing on June 30, 2027 and $15,000 maturing on June 30, 2028.
Our cash and cash equivalents and investments increased $2,458 to $33,482 from $31,024 at December 31, 2023, due to a reduction in capital expenditures and general operating activities. On December 31, 2024 and 2023, our current assets exceeded our current assets liabilities by $68,607 and $57,574, respectively.
Our cash and cash equivalents and investments increased $8,046 to $41,528 from $33,482 at December 31, 2024, primarily due to proceeds from the exercise of stock options and an increase in proceeds from the sale of investments, net of investment purchases, partially offset by a reduction in cash generated from general operating activities.
Removed
Dollar amounts referenced in this Item 7 are in thousands, except per share amounts.
Added
Continued approval depends on verification and description of clinical benefits in confirmatory studies. 59 Table of Contents Axogen, Inc.
Removed
Financial information for prior periods has been reclassified to reflect the retrospective application of voluntary changes in the Company’s accounting policy for shipping and handling costs and changes to certain allocated corporate costs, as discussed under “Note 2 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in this Form 10-K.
Added
Summary of Operational and Business Highlights • Revenue was $225,208 for the year ended December 31, 2025, an increase of $37,870, or 20.2%, compared to the year ended December 31, 2024. • Gross profit was $167,353 for the year ended December 31, 2025, an increase of $25,376, or 17.9%, compared to the year ended December 31, 2024. • Gross margin reflects one-time costs of approximately $1.9 million, or 1% for full-year 2025, respectively, related to the FDA BLA approval of Avance ® . 67% of the one-time costs are non-cash and relate to the vesting of certain stock compensation awards containing FDA BLA approval of Avance ® milestones. • Net loss for the full-year 2025 was $15.7 million, or $0.34 per share, compared to $10.0 million, or $0.23 per share for 2024. • As of December 31, 2025, cash and cash equivalents, restricted cash, and investments was $45.5 million, as compared to $39.5 million as of December 31, 2024, an increase of $6.0 million. • Expanded coverage and reimbursement for nerve repair for peripheral nerve injuries using synthetic conduits or allografts, increasing the total number of new lives covered in 2025 to approximately 19.8 million and bringing coverage amongst commercial payers to more than 65%. • Effective January 1, 2026, CMS created a new Level 3 Nerve Procedure Code, increasing Avance facility reimbursement 40% year-over-year to $9 for hospital outpatient and 35% to $6 for ASC-based procedures. • On January 23, 2026, we closed an upsized public offering with the sale of 4,600,000 shares of common stock and receipt of $133,338 of net proceeds. $69,707 of the net proceeds were used to fully repay and terminate our term loan facility on January 28, 2026 with the remaining funds available for working capital, capital expenditures, and other general corporate purposes. 60 Table of Contents Axogen, Inc.
Removed
The gel layer facilitates enhanced nerve gliding to aid in minimizing soft tissue attachments, while the base layer is remodeled into a long-term protective tissue layer. • Axoguard Nerve Cap ® , a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma. • Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue healing.
Added
Gross margin reflects one-time costs of approximately $1,900, or 1%, related to the FDA BLA approval of Avance, with approximately 67% of such costs related to the vesting of stock compensation awards containing FDA BLA approval of Avance milestones.
Removed
On June 24, 2024, we announced the launch of Avive+ Soft Tissue Matrix. Avive+ Soft Tissue Matrix is processed and distributed in accordance with U.S. Food and Drug Administration ("FDA") requirements for Human Cellular and Tissue-based Products under the Code of Federal Regulations ("CFR") Title 21 Part 1271 regulations and U.S.
Added
The decrease in gross margin was due to higher product costs and BLA-related stock-based compensation costs, partially offset by lower inventory write-offs. 61 Table of Contents Axogen, Inc.
Removed
Public Health Service Act regulations as a Section 361 human tissue product. Products regulated solely under Section 361 of the Public Health Service Act are a product category under close scrutiny by the FDA for compliance with the regulatory requirements and potentially P64 Table of Conten t subject to regulatory change in the future.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Costs and Expenses Following is a summary of the change in costs and expenses for the year ended December 31, 2025: (dollars in thousands) Total costs and expenses Sales and marketing Research and development General and administrative For the year ended December 31, 2024 $ 145,264 $ 78,461 $ 27,767 $ 39,036 Change from: Compensation costs (1) 22,230 13,312 5,481 3,437 Marketing program costs 3,676 3,676 — — Travel costs 2,446 2,063 213 170 Occupancy related costs (1,145) (269) (316) (560) Research and development project costs (2) (69) — (69) — Professional services fees and expenses (12) 209 (207) (14) Other 2,812 288 16 2,508 Total change 29,938 19,279 5,118 5,541 For the year ended December 31, 2025 $ 175,202 $ 97,740 $ 32,885 $ 44,577 Percentage change 20.6 % 24.6 % 18.4 % 14.2 % __________ (1) The increase in compensation costs is primarily due to higher: (i) stock-based compensation, primarily due to $7,236 from PSU awards vesting in connection with Avance BLA approval by the FDA, and (ii) salaries and sales commissions, due to higher headcount and sales volume.
Removed
On November 1, 2024, the FDA informed us that they had accepted the BLA for filing and assigned a Prescription Drug User Fee Act goal date of September 5, 2025.
Added
BLA approval-related stock compensation expenses included $749 in sales and marketing, $4,600 in research and development, and $1,887 in general and administrative. (2) The decrease in research and development costs and expenses was primarily due to product development and clinical expenses.
Removed
The FDA further indicated that it does not currently plan to hold an advisory committee meeting for the application. • Revenue was $187,338 for the year ended December 31, 2024, an increase of $28,326, or 17.8%, compared to the year ended December 31, 2023. • Gross profit was $141,977 for the year ended December 31, 2024, an increase of $20,108, or 16.5%, compared to the year ended December 31, 2023.
Added
The increase was primarily due to the change in the fair value of debt derivative liabilities. See Note 6 - Fair Value Measurement in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for details regarding the valuation of the debt derivative liabilities.
Removed
P65 Table of Conten t Gross Profit Gross profit for the year ended December 31, 2024 increased $20,108, or 16.5%, to $141,977, as compared to $121,869 for the year ended December 31, 2023.
Added
On December 31, 2025 and 2024, our current assets exceeded our current liabilities by $96,866 and $68,607, respectively.
Removed
Costs and Expenses Total costs and expenses increased $1,933, or 1.3%, to $145,264 for the year ended December 31, 2024, as compared to $143,331 for the year ended December 31, 2023.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Contractual Obligations and Commitments The following table presents current and long-term material cash requirements as of December 31, 2025: (in thousands) 2026 2027-2028 2029-2030 Thereafter Total Credit Facility principal (1) $ — $ 50,000 $ — $ — $ 50,000 Credit Facility interest (1)(2) 5,793 4,634 — — 10,427 Credit Facility revenue participation payments (1) 756 987 — — 1,743 Operating and finance lease obligations (3) 4,294 6,252 6,287 12,285 29,118 $ 10,843 $ 61,873 $ 6,287 $ 12,285 $ 91,288 __________ (1) On January 28, 2026, all obligations under the Credit Facility, including the Make-Whole Payment, were paid in full with net proceeds from the Offering.
Removed
The increase in total operating costs was primarily attributable to the following: (i) $9,745 in compensation costs; (ii) $ 1,288 in professional services fees; and (iii) $308 in net other costs, partially offset by decreases of (i) $3,593 in research and development project costs; (ii) $3,114 in royalty expenses; (iii) $1,621 in marketing program costs; and (iv) $218 in travel costs.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Judgments and Uncertainties The fair value of embedded derivatives is measured based on equity markets and interest rates, as well as an estimate of our nonperformance risk adjustment.
Removed
Sales and marketing costs and expenses increased $881, or 1.1%, to $78,461 for the year ended December 31, 2024, as compared to $77,580 for the year ended December 31, 2023.
Added
On January 28, 2026, all obligations under the Credit Facility were paid in full. See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K for details regarding the termination of the Credit Facility.
Removed
The increase in sales and marketing costs and expenses was due to the following: (i) $6,028 in compensation costs and (ii) $311 in occupancy related costs, partially offset by decreases of (i) $3,114 in royalty expenses; (ii) $1,621 in marketing program costs; (iii) $173 in travel costs; (iv) $153 in professional services fees; and (v) $396 in net other costs.
Added
The fair value of the PSU grants tied to revenue compounded annual growth rate (“CAGR”) goals, subject to modification based on our TSR relative to the TSR of companies within our industry (“Relative TSR”) over the performance period (the “CAGR TSR PSUs”) is determined based on the fair value of our common stock on the date of grant and our estimate of achieving the applicable revenue CAGR goals.
Removed
Research and development costs and expenses increased $428, or 1.6%, to $27,767 for the year ended December 31, 2024, as compared to $27,339 for the year ended December 31, 2023. The increase was primarily due to product development and clinical expenses.
Added
The estimated grant date fair value of the CAGR TSR PSUs is calculated using a Monte Carlo simulation. Compensation expense for the CAGR TSR PSUs is recorded ratably over the performance period.
Removed
The increase in research and development costs and expenses was due to the following: (i) $3,027 in compensation costs and (ii) $1,814 in professional services fees, partially offset by decreases of (i) $3,593 in research and development project costs; (ii) $414 in occupancy related costs; (iii) $173 in travel costs; and (iv) $97 in other costs to support these clinical and non-clinical expenses.
Added
The number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on the actual performance metrics as set forth in the applicable CAGR TSR PSU award agreement. The amount actually awarded will be based upon achievement of the performance measures.
Removed
General and administrative costs and expenses increased $624, or 1.6%, to $39,036 for the year ended December 31, 2024, as compared to $38,412 for the year ended December 31, 2023.
Added
Expectations related to the achievement of the revenue CAGR goals associated with the CAGR TSR PSU grants is assessed at each reporting period and is used to determine whether any of the CAGR TSR PSU grants are expected to vest.
Removed
The increase was primarily due to (i) $921 in bad debt expense and (ii) $254 in occupancy related costs; partially offset by decreases of (i) $373 in professional services fees and (ii) $187 in compensation costs.
Added
If the performance-based milestones related to the CAGR TSR PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants is reversed. 65 Table of Contents Axogen, Inc.
Removed
Other Expense Total other expense increased $6,423, or 2528.7%, to $6,677 for the year ended December 31, 2024, as compared to $254 for the year ended December 31, 2023.
Added
If factors change and different assumptions are used, stock-based compensation expense could be materially different in the future.
Removed
The increase was primarily due to the increase in interest expense of $5,372 which was a result of no longer capitalizing interest due to the completion of the Axogen Processing Center facility (the "APC Facility") in 2023.
Added
Subsequent Events On January 20, 2026, we entered into a payoff letter (the “Payoff Letter”) with Oberland Capital and its affiliates, TPC Investments II LP and Argo LLC (collectively, the “Lender”). Pursuant to the Payoff Letter, the final payoff amount was approximately $69,707 (the “Payoff Amount”), so long as the payoff date was on or before February 15, 2026.
Removed
In connection with our credit facility with Oberland Capital ("Credit Facility"), we recognized total interest charges of $8,101 and $8,083 for the years ended December 31, 2024 and 2023, respectively, and of the total interest charges, we capitalized to the construction of the APC Facility interest charges of $— and $5,285 for the years ended December 31, 2024 and 2023, respectively.
Added
Upon payment of the Payoff Amount on January 28, 2026 and satisfaction of the other conditions specified in the Payoff Letter, all obligations under the Credit Facility, including the Make-Whole Payment, were paid in full, all liens and security interests securing such obligations were released, and the Credit Facility and related loan documents were terminated, subject to certain customary surviving provisions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur portfolio of products is currently available in the U.S. and 19 other countries, including Canada, Germany, United Kingdom, Spain and several other European, Asian and Latin American countries. P72 Table of Conten t
Biggest changeOur portfolio of products is currently available in the U.S., Canada, Germany, the U.K., Spain and several other countries. 67 Table of Contents Axogen, Inc.
Credit Risk Financial instruments that potentially subject us to credit risk consist of cash and cash equivalent balances, investments in U.S. Treasuries and accounts receivable. Certain of our cash and cash equivalents balances exceed Federal Deposit Insurance Corporation ("FDIC") insured limits or are invested in money market accounts with investment banks that are not FDIC-insured.
Credit Risk Financial instruments that potentially subject us to credit risk consist of cash and cash equivalent balances, investments in U.S. Treasuries and accounts receivable. Certain of our cash and cash equivalents balances exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits or are invested in money market accounts with investment banks that are not FDIC-insured.
We have not entered into derivative transactions related to cash and cash equivalents. We do not expect changes in interest rates to have a material adverse effect on our income or our cash flows in 2025. However, we give no assurance that interest rates will not significantly change in the future.
We have not entered into derivative transactions related to cash and cash equivalents. We do not expect changes in interest rates to have a material adverse effect on our income or our cash flows in 2026. However, we give no assurance that interest rates will not significantly change in the future.
We also have interest rate exposure as a result of the Credit Facility. As of December 31, 2024, the outstanding principal amount of our loans under the Credit Facility was $50,000.
We also have interest rate exposure as a result of the Credit Facility. As of December 31, 2025, the outstanding principal amount of our loans under the Credit Facility was $50,000.
Interest on our loans under the Credit Facility is payable quarterly during the term of the loans and is calculated as 7.5% plus the greater of Adjusted SOFR or 2.0% (12.19% as of December 31, 2024); provided that the interest rate shall never be less than 9.5%.
Interest on our loans under the Credit Facility is payable quarterly during the term of the loans and is calculated as 7.5% plus the greater of Adjusted SOFR or 2.0% (11.59% as of December 31, 2025); provided that the interest rate shall never be less than 9.5%.
As of December 31, 2024, $27,054 of the cash and cash equivalents balance was in excess of FDIC limits. We invest our cash primarily in money market accounts and in U.S. Treasuries. We believe our cash is invested in a conservative manner, with cash preservation being the primary investment objective.
As of December 31, 2025, $35,048 of the cash and cash equivalents balance was in excess of FDIC limits or not FDIC-insured. We invest our cash primarily in money market accounts and in U.S. Treasuries. We believe our cash is invested in a conservative manner, with cash preservation being the primary investment objective.
Removed
Changes in the Adjusted SOFR rate may therefore affect our interest expense associated with the loans. An increase of 100 basis points in interest rates would increase expense by approximately $500 annually based on the amounts currently outstanding and would not materially affect our results of operations.
Added
On January 28, 2026, all obligations under the Credit Facility were paid in full. See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K for details regarding the termination of the Credit Facility.

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