Oct 28, 2026 earnings call — BioCircuit acquisition and robust market growth
Axogen reported third quarter revenue of $75.8 million and completed the BioCircuit acquisition adding NerveTape.
Revenue $0.1B (est $0.1B) · EPS $0.21 (est $0.13)
Key quotes
"Breast grew more than 50% year-over-year and extremities, OMF, head and neck combined grew 10.7%."
"On October 1, we completed our acquisition of BioCircuit, adding NerveTape as a sixth product in our nerve repair algorithm."
"With the updates from Elevance and Aetna, the commercial payer coverage for Avance is approximately 96% of covered lives in the United States."
Analyst Q&A 10
breast penetration and prostate targeting
Q (Rei Tan · BofA): What share of eligible reconstructions now include Resensation and how much growth is from new accounts versus deeper use in existing accounts? Also, of the 110,000 robotic prostatectomies a year, which procedures or centers will you target at launch and how do you decide?
A: Penetration in breast is about 11% and growth comes from both existing accounts using Resensation more and adding new surgeons and new accounts. For prostate, they will not target all centers at launch and will focus on academic and high-volume centers and centers doing new lateral, bilateral reconstructions and nerve sparing procedures.
"So, our estimated TAM procedure volume is around 110,000 procedures." — Jens Schroeder Kemp
NerveTape cannibalization and Aetna coverage
Q (Ross Osborn · Wells Fargo): How much of the $34 million in NerveTape sales next year is incremental versus cannibalistic? And for Aetna, what share of your procedures fall under the policy shorter than 30 millimeters, and are Aetna breast cases paid under WHCRA or denied?
A: The company said the $34 million cited at closing for next year is incremental and net of cannibalization. On Aetna, management said Aetna and CVS intend to comply with WHCRA and pay breast claims; they do not break out procedures by gap length but said a fair number fall in that category and they are working to resolve details with Aetna.
"For next year, the $34 million that I put out in the press release at closing is incremental." — Lindsey Hartley (CFO)
Q4 growth drivers and product mix
Q (Michael Sarcone · Jefferies): Where is the expected 4Q growth acceleration coming from in core markets, and how is the sales force handling the transition from Connector to NerveTape? Also, how is cannibalization treated in the organic growth guide?
A: Growth in 4Q is driven by expanding footprint, opening accounts, and deepening use in those accounts through surgeon education. Early sales feedback on NerveTape is enthusiastic; NerveTape is broader than Connector and will shift product mix toward NerveTape for many use cases while Connector stays for specific procedures. Cannibalization was modeled and baked into the organic growth guidance; they will report pro forma results quarter-to-quarter.
"While there will be product mix naturally in favor of NerveTape versus Connector, Connector will still continue to be used for specific procedures." — Michael Dale (CEO)
biggest growth lever for NerveTape
Q (Barclays): Which lever will drive NerveTape growth most: direct repairs, more use in advanced cases, or expanding the surgeon base? And how quickly for each?
A: Management said it is all of the above — easier, faster procedures will make nerve repair more adoptable and remove barriers to use. Adoption will help OMF mandible and breast cases now and support direct repair over time; it will not happen overnight but all avenues should contribute.
"To be very honest, I know this might be unsatisfying, but it's all of the above." — Michael Dale (CEO)
breast growth and commercial wins impact
Q (Michael Kratky · Leerink Partners): What was breast growth in the third quarter after 47% in the first half? And how much incremental growth is from recent commercial wins and which markets benefit most?
A: Breast growth in the third quarter was over 60%. Management said it is difficult to precisely quantify impact from commercial wins, but fewer coverage and reimbursement issues have clearly helped create customers across markets.
"It's over -- yes, in the third quarter, the breast growth is over 60%." — Lindsey Hartley (CFO)
surgeon base and reimbursement for NerveTape
Q (Caitlin Cronin · Canaccord Genuity): Of the over 4,000 potential NerveTape users, how many expand Axogen's market, what surgeon types are added, and what is the long-term medical education plan? Also, what are the economics and reimbursement for NerveTape?
A: It's too early to report adoption differences. Training needs are very low and will focus on best-use scenarios like direct repair and OMF procedures where NerveTape makes difficult nerve work simpler. They said combined penetration of Axoguard Connector and NerveTape across their procedural TAM is around 5% today, and the proper code for NerveTape is 64910 with CMS payments shown in the corporate materials.
"If you combine the Axoguard Connector and NerveTape penetration of the overall procedure TAM that we see, it's around 5% today." — Jens Schroeder Kemp
rep hiring and hospital approval process
Q (Ravi Misra · Truist): How should we think about the pace of rep adds for the rest of the year and into 2027? And how will you accelerate hospital VAC approvals and logistics for BioCircuit/NerveTape now that you own it?
A: They will continue to add headcount and will provide guidance in Q1 for 2027, while being mindful not to hurt profitability; footprint expansion remains a key lever. BioCircuit had around 400 active accounts and Axogen has a footprint close to 3,000 accounts, so they expect to accelerate VAC approvals and expand NerveTape presence in their accounts in the coming months.
"BioCircuit had around 400 accounts -- active accounts." — Jens Schroeder Kemp
2027 margin drivers and prostate effect
Q (Zachary Gold · Raymond James): What helps and hurts 2027 margins and does this view include any impact from selling prostate? Will prostate cause similar COGS pressure as breast?
A: They are implementing pricing and yield initiatives but expect those to take time to flow through COGS, so they do not forecast a big margin uplift in 2027 until pricing is baked. Prostate should be helpful because grafts are shorter and productivity per donor is better, so they do not expect the same margin pressure as with breast.
"So we're going through right now some pricing initiatives as well as yield initiatives." — Lindsey Hartley (CFO)
extremities penetration and prostate scope
Q (Anthony Petrone · Mizuho): Where is penetration in core extremities and what growth should be modeled? Also, beyond da Vinci prostatectomy, will you target active surveillance or intermediate patients or stick to DVPs initially?
A: Extremities remain underpenetrated; adjusted growth was about 15% year-over-year in the quarter and they expect very high single digit to low double-digit growth quarter-to-quarter, year in, year out. For prostate, initial clear value is for unilateral or bilateral non-nerve-spared patients; broader patient groups may be addressed over time as awareness and screening build.
"As we look at the business on a going-forward basis, we still believe that extremities will be a business, which will range from very high single digit to low double-digit growth quarter-to-quarter, year in, year out." — Michael Dale (CEO)
clinical guideline updates
Q (Frank Takkinen · Lake Street Capital): Any clinical guideline updates expected in the next 12 months?
A: They were asked and clarified the question referred to clinical guidelines. Management said they do not expect any changes to clinical guidelines in the coming 12 months.
"We don't see any changes to clinical guidelines in the coming 12 months." — Michael Dale (CEO)