Q - Axogen,
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
AXGN$50.02+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000805928-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0000805928-25-000107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 74 current paragraphs.
37 unchanged; 19 reworded; 14 added; 6 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are currently evaluating the impact of the OBBBA.
Current report
•Expanded coverage and reimbursement for nerve repair for peripheral nerve injuries using synthetic conduits or allografts by an estimated approximately 10 million new covered lives during 2025; bringing the total new lives covered in 2025 to an estimated approximately 17 million which brings coverage amongst private payers to more than 55%.
Current report
Following is a summary of the change in costs and expenses for the three months ended June 30, 2025:
Current report
Other expense, net for the three months ended June 30, 2025 decreased $400, or 26.8%, to $1,093, as compared to $1,493 for the three months ended June 30, 2024. The decrease in other expense, net was primarily due to increases of (i) $178 in other income and (ii) $16 in the change in fair value of the debt derivative liabilities and a decrease of $208 in interest expense.
Current report
Comparison of the Six Months Ended June 30, 2025 and 2024
Current report
Revenues
Current report
Revenues for the six months ended June 30, 2025 increased $15,933, or 17.8%, to $105,222, as compared to $89,289 for the six months ended June 30, 2024. The increase in revenues was primarily driven by an increase in unit volume of approximately 11.8%, as well as the net impact of changes in price and product mix of approximately 3.0% and 2.5%, respectively.
Current report
Gross Profit
Current report
Gross profit for the six months ended June 30, 2025 increased $8,987, or 13.2%, to $76,951, as compared to $67,964 for the six months ended June 30, 2024. Gross margin as a percentage of revenues was 73.1% and 76.1% for the six months ended June 30, 2025 and 2024, respectively. Lower margins on products sold, driven by higher product costs, lowered gross margin by 2.8% and an increase in inventory write-offs lowered gross margin by 0.5%. These decreases were partially offset by an increase of 0.4% from lower shipping costs on products sold.
Current report
Costs and Expenses
Current report
Following is a summary of the change in costs and expenses for the six months ended June 30, 2025:
Current report
Other Expense, Net
Current report
Income Taxes
Current report
(3)See Note 8 -Long-Term Debt, Net of Debt Discount and Financing Fees in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Removed paragraphs (6)
Previous report
Total costs and expenses for the three months ended March 31, 2025 decreased $586, or 1.6%, to $36,594, as compared to $37,180 for the three months ended March 31, 2024. The decrease in total costs and expenses was due to decreases of (i) $956 in research and development project costs; (ii) $317 in occupancy related costs; and (iii) $242 in compensation costs, partially offset by increases of (i) $365 in travel costs; (ii) $255 in marketing program costs; (iii) $201 in professional services fees and expenses; and (iv) $108 in other costs and expenses.
Previous report
Sales and marketing costs and expenses for the three months ended March 31, 2025 increased $1,230, or 6.2%, to $21,045, as compared to $19,815 for the three months ended March 31, 2024. The increase in sales and marketing costs and expenses was due to increases of (i) $689 in compensation costs; (ii) $310 in travel costs; (iii) $255 in marketing program costs; (iv) $84 in other costs and expenses; and (v) $19 in professional services fees and expenses, partially offset by a decrease of $127 in occupancy related costs.
Previous report
General and administrative costs and expenses for the three months ended March 31, 2025 decreased $498, or 5.0%, to $9,458, as compared to $9,956 for the three months ended March 31, 2024. The decrease in general and administrative costs and expenses was due to decreases of (i) $512 in compensation costs and (ii) $101 in occupancy related costs, partially offset by increases of (i) $79 in professional services fees and expenses and (ii) $36 in net other costs.
Previous report
Net Cash Provided by (Usedin) Investing Activities
Previous report
(3)See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Feesin the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Previous report
(6)Includes our former CEO’s senior advisory fees through May 2025 and fifteen months of COBRA payments. See Note 13 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Reworded paragraphs (19)
Previous wording
Our portfolio of products is currently available in the United States (“U.S.”), Canada, Germany, the United Kingdom, Spain, South Korea and several other countries.
Current wording
Our portfolio of products is currently available in the U.S., Canada, Germany, the United Kingdom, Spain, South Korea and several other countries.
Previous wording
•Revenues were $48,560 for the quarter ended March 31, 2025, an increase of $7,182 or 17.4%compared to the quarter ended March 31, 2024.
Current wording
•Revenues were $56,662 for the quarter ended June 30, 2025, an increase of $8,750 or 18.3% compared to the quarter ended June 30, 2024.
Previous wording
•Gross profit was $34,933 for the quarter ended March 31, 2025, an increase of $2,313 or 7.1% compared to the quarter ended March 31, 2024.
Current wording
•Gross profit was $42,018 for the quarter ended June 30, 2025, an increase of $6,673 or 18.9% compared to the quarter ended June 30, 2024.
Previous wording
•The U.S. Food and Drug Administration (“FDA”) accepted the filing of the Company’s Biologics License Application (“BLA”) for Avance® Nerve Graft on November 1, 2024, and assigned a Prescription Drug User Fee Act (“PDUFA”) goal date of September 5, 2025. During the first quarter 2025, we successfully completed the following regulatory milestones to support our anticipated approval in September 2025: a mid-cycle meeting with the FDA, clinical trial site inspections, and sponsor inspection under the FDA’s Bioresearch Monitoring program.
Current wording
•The FDA accepted the filing of the Company’s Biologics License Application (“BLA”) for Avance® Nerve Graft on November 1, 2024, and assigned a Prescription Drug User Fee Act goal date of September 5, 2025. During the second quarter of 2025, we completed the following regulatory milestones to support our anticipated approval in September 2025: the late-cycle meeting with the FDA, pre-licensing inspection, and sponsor inspection under the FDA’s Bioresearch Monitoring program.
Previous wording
Revenues for the three months ended March 31, 2025 increased $7,182, or 17.4%, to $48,560, as compared to $41,378 for the three months ended March 31, 2024. The increase in revenues was driven by anincrease in unit volume of approximately 12.0%, as well as the net impact of changes in price and product mix of approximately 3.2% and 2.1%, respectively.
Current wording
Revenues for the three months ended June 30, 2025 increased $8,750, or 18.3%, to $56,662, as compared to $47,912 for the three months ended June 30, 2024. The increase in revenues was driven by an increase in unit volume of approximately 12.2%, as well as the net impact of changes in price and product mix of approximately 3.1% and 3.0%, respectively.
Previous wording
Gross profit for the three months ended March 31, 2025 increased $2,313, or 7.1%, to $34,933, as compared to $32,620 for the three months ended March 31, 2024. Gross margin as a percentage of revenues was 71.9% and 78.8% for the three months ended March 31, 2025 and 2024, respectively. Lower margins on products sold, driven by higher product costs, lowered the gross margin by 4.5% and an increase in inventory write-offs lowered the gross margin by 2.8%.
Current wording
Gross profit for the three months ended June 30, 2025 increased $6,673, or 18.9%, to $42,018, as compared to $35,345 for the three months ended June 30, 2024. Gross margin as a percentage of revenues was 74.2% and 73.8% for the three months ended June 30, 2025 and 2024, respectively. Higher margins, driven by lower inventory write-offs and shipping costs on products sold, increased gross margin by 0.9%, partially offset by higher product costs that lowered gross margin by 0.5%.
Previous wording
We had no income tax expense or benefit during the three months ended March 31, 2025 and 2024 due to the incurrence of net operating losses in both periods, 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. The Internal Revenue Service is currently examining our 2021 federal income tax return. We do not believe that there are any material additional tax expenses or benefits.
Current wording
We had no income tax expense or benefit during the three months ended June 30, 2025 and 2024 due to the incurrence of fiscal year net operating losses in both periods, 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. The Internal Revenue Service is currently examining our 2021 federal income tax return. We do not believe that there are any material additional tax expenses or benefits.
Previous wording
Research and development costs and expenses for thethree months ended March 31, 2025 decreased $1,318, or 17.8%, to $6,091, as compared to $7,409 for the three months ended March 31, 2024. The decrease in research and developments costs and expenses was primarily due to product development and clinical expenses. 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 57% and 59% of total research and development costs and expenses for the three months ended March 31, 2025 and 2024, respectively. Clinical trial costs and expenses represented approximately 43% and 41% of total research and development costs and expenses for the three months ended March 31, 2025 and 2024, respectively. The decrease in research and development costs and expenses was due to decreases of (i) $956 in research and development project costs; (ii) $419 in compensation costs; (iii) $89 in occupancy related costs; and (iv) $13 in other costs and expenses, partially offset by increases of (i) $103 in professional services fees and expenses and (ii) $56 in travel costs.
Current wording
(1)The decrease in research and development costs and expenses was primarily due to product development and clinical expenses. 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 56% and 57% of total research and development costs and expenses for the six months ended June 30, 2025 and 2024, respectively. Clinical trial costs and expenses represented approximately 44% and 43% of total research and development costs and expenses for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
Other expense, net for the three months ended March 31, 2025 increased $98, or 4.7%, to $2,173, as compared to $2,075 for the three months ended March 31, 2024. The increase in other expense, net was primarily due to increases of (i) $223 in the change in fair value of the debt derivative liabilities and (ii)$21 in investment income, partially offset by decreases of(i)$76 in interest expense and (ii) $70 in other expense.
Current wording
Other expense, net for the six months ended June 30, 2025 decreased $302, or 8.5%, to $3,266, as compared to $3,568 for the six months ended June 30, 2024. The decrease in other expense, net was primarily due to decreases of (i) $285 in interest expense and (ii) $247 in other expense. These decreases were partially offset by decreases of (i) $207 in the change in fair value of the debt derivative liabilities and (ii) $23 in investment income.
Previous wording
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. We believe our accounting policies for Inventories, Derivative Instruments and Stock-based Compensation, as well as the others set forth in Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in our 2024 Annual Report on Form 10-K, are critical to understanding our results of operations and financial condition. See Critical Accounting Estimates in our 2024 Annual Report on Form 10-K. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition. During the quarter covered by this report, there have been no material changes to the accounting estimates and assumptions previously disclosed.
Current wording
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. We believe our accounting policies for Inventories, Derivative Instruments and Stock-based Compensation, as well as the others set forth in Note 2 -Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in our 2024 Annual Report on Form 10-K, are critical to understanding our results of operations and financial condition. See Critical Accounting Estimates in our 2024 Annual Report on Form 10-K. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial cond ition. During the quarter covered by this report, there have been no material changes to the accounting estimates and assumptions previously disclosed.
Previous wording
As of March 31, 2025, our principal sources of liquidity were our cash and cash equivalents and investments totaling $22,069. Our cash equivalent is comprised of a money market mutual fund and our investments consist of U.S. Treasuries. Our cash and cash equivalents and investments decreased$11,413 to $22,069 from $33,482 at December 31, 2024, primarily as a result of paying annual bonuses and the expenses incurred in connection with conducting our national sales meeting in the first quarter of 2025.
Current wording
As of June 30, 2025, our principal sources of liquidity were our cash and cash equivalents and investments totaling $29,922. Our cash equivalent is comprised of a money market mutual fund and our investments consist of U.S. Treasuries. Our cash and cash equivalents and investments decreased $3,560 to $29,922 from $33,482 at December 31, 2024, primarily as a result of paying annual bonuses and the expenses incurred in connection with conducting our national sales meeting in the first quarter of 2025, partially offset by collections of receivables and proceeds from the exercise of stock options.
Previous wording
On March 31, 2025 and December 31, 2024, our current assets exceeded our current liabilities by $71,325 and $68,607, respectively, and we had a current ratio of 4.3x and 3.2x, respectively. 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.
Current wording
On June 30, 2025 and December 31, 2024, our current assets exceeded our current liabilities by $78,439 and $68,607, respectively, and we had a current ratio of 4.1x and 3.2x, respectively. 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.
Previous wording
The following table presents a summary of cash flows from operating, investing and financing activities:
Current wording
The following table presents a summary of cash flows from operating, investing and financing activities for the periods indicated:
Previous wording
Net cash used in operating activities was $13,179 and $12,266 during the three months ended March 31, 2025 and 2024, respectively. The increase in net cash used in operating activities of $913, or 7.4%, was due to the net unfavorable change of $2,777 in working capital accounts and noncash charges of $906, partially offset by the decrease in net loss of $2,801.
Current wording
Net cash used in operating activities was $5,449 and $8,101 during the six months ended June 30, 2025 and 2024, respectively. The decrease in net cash used in operating activities of $2,652, or 32.7%, was due a decrease in net loss of $5,301, partially offset by the net unfavorable change of $2,588 in working capital accounts and noncash charges of $29.
Previous wording
Net cash provided by investing activities for the three months ended March 31, 2025 was $1,339 compared to net cash used in investing activities of $3,251 for the three months ended March 31, 2024. The favorable change in net cash provided by investing activities of $4,590 was principally due to the sale of $2,000 of investments during the three months ended March 31, 2025 compared to purchases of $1,910 of investments during the three months ended March 31, 2024 and the decrease in purchases of property and equipment of $668.
Current wording
Net cash used in investing activities for the six months ended June 30, 2025 was $5,608 compared to $4,484 for the six months ended June 30, 2024. The unfavorable change in net cash used in investing activities of $1,124 was primarily due to the purchase of $7,837 of investments, offset by the sale of $4,000 of investments during the six months ended June 30, 2025, compared to purchases of $1,911 of investments during the six months ended June 30, 2024, and the decrease in purchases of property and equipment of $856.
Previous wording
Net cash provided by financing activities was $2,382 and $204 for the three months ended March 31, 2025 and 2024, respectively, an increase of $2,178 due primarily to the increase in proceeds from the exercise of stock options.
Current wording
Net cash provided by financing activities was $3,539 and $748 for the six months ended June 30, 2025 and 2024, respectively, an increase of $2,791 due primarily to the increase in proceeds from the exercise of stock options.
Previous wording
As of March 31, 2025, we had $50,000 outstanding in indebtedness under a credit facility with $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. 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% (11.91% as of March 31, 2025). Revenue participation payments are calculated as a percentage of our net revenues, up to $70,000 in any given year, adding approximately 1.5% per year of additional interest payments on the outstanding indebtedness. 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. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 13 - Commitments and Contingenciesin the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Current wording
As of June 30, 2025, we had $50,000 outstanding in indebtedness under the Credit Facility with $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. 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% (11.90% as of June 30, 2025). Revenue participation payments are calculated as a percentage of our net revenues, up to $70,000 in any given year, adding approximately 1.5% per year of additional interest payments on the outstanding indebtedness. 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. See Note 8 -Long-Term Debt, Net of Debt Discount and Financing Fees and Note 13 -Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Previous wording
(1)See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 13 - Commitments and Contingenciesin the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Current wording
(1)See Note 8 -Long-Term Debt, Net of Debt Discount and Financing Fees and Note 13 -Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Previous wording
(2)Calculated using the forecasted interest rates used in the valuation of the debt derivative liabilities. See Note 6 - Fair Value Measurement inthe Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Current wording
(2)Calculated using the forecasted interest rates used in the valuation of the debt derivative liabilities. See Note 6 -Fair Value Measurements inthe Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(1)Product development costs and expenses represented approximately 53% and 52% of total research and development costs and expenses for the three months ended June 30, 2025 and 2024, respectively. Clinical trial costs and expenses represented approximately 47% and 48% of total research and development costs and expenses for the three months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and percentage of total revenue:
Current report — wording carried from elsewhere
We had no income tax expense or benefit during the six months ended June 30, 2025 and 2024 due to the incurrence of net operating losses in both periods, 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. The Internal Revenue Service is currently examining our 2021 federal income tax return. We do not believe that there are any material additional tax expenses or benefits.
Current report — wording carried from elsewhere
Net Cash Used in Investing Activities