Q2 2024 AxoGen Inc Earnings Call

August 8, 2024

Greetings and welcome to the oxygen Inc. Reports 2024 second quarter financial results call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Operator: Greetings and welcome to the AxoGen Inc. 2024 second quarter financial results call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Harold Tamayo, Vice President of Finance and Investor Relations. Thank you, Harold. You may begin.

Unknown Executive: Greetings and welcome to the AxoGen Inc. reports, 2024, second quarter financial results call. At this time, all participants are in a listen-only mode.

Operator: Greetings, and welcome to the AxoGen Inc. 2024 Second Quarter Financial Results Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Harold Tamayo, Vice President of Finance and Investor Relations. Thank you, Harold. You may begin.

Unknown Executive: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host Harold.

Harold Tamayo: It is now my pleasure to introduce your host, Harold Tamayo, Vice President of Finance and Investor Relations. Thank you, Harold. You may begin.

Vice President of Finance and Investor Relations. Thank you Harold you may begin.

Harold Tamayo: Thank you, Maria. Good morning, everyone.

Unknown Executive: Thank you, Maria.

Speaker Change: Thank you Maria Good morning, everyone. Joining me on today's call is cars that are accidents, Chairman Chief Executive Officer and President.

Harold Tamayo: Good morning, everyone. Joining me on today's call is Karen Zaderej, AxoGen Inc. Chairman, Chief Executive Officer, and President. And Nir Naor, Chief Financial Officer, Karen will discuss the second quarter of 2024 financial results and near we provide an analysis of our financial performance and guidance and discuss our outlook for the year, followed by a question and answer session.

Harold Tamayo: Joining me on today's call is Karen Zaderej, AxoGen's Chairman, Chief Executive Officer, and President, and Nir Naor, Chief Financial Officer. Karen will discuss the second quarter of 2024 financial results. And Nir will provide an analysis of our financial performance and guidance and discuss our outlook for the year, followed by a question and answer session. Today's call is being broadcast live via webcast, which is available on the investor section of the AxoGen website.

Speaker Change: And do you know or Chief Financial Officer, Karen will discuss the second quarter of 2024 financial we sold EMEA would provide an analysis of our financial performance and guidance and discuss our outlook pretty year bottle by a question and answer session.

Harold Tamayo: Today's call is being broadcast live via webcast, which is available on the investor section of the AxoGen website. Following the end of the live call, a replay will be available in the investor section of the company's website at www.axoGenInc.com.

Harold Tamayo: Following the end of the live call, a replay will be available in the investor section of the company's website at www.axogeninc.com. Before we get started, I'd like to remind you that during this conference call, the company will make projections and forward-looking statements, including our financial guidance, our expectations regarding our ability to expand our markets and expand revenue from core accounts, anticipated growth for revenue categories, marketing opportunities with nerve repair applications associated with breast OMF protection and the surgical treatment of pain, and new products.

Speaker Change: Today's call is being broadcast live.

Speaker Change: <unk> via webcast, which is available on the investors section of the <unk> website.

Speaker Change: Following the end of the live call a replay will be available in the investors section of the company's website at Www <unk>, Inc.

Speaker Change: Inc. Dot com.

Harold Tamayo: Before we get started, I like to remind you that during this conference call, the company will make projections and forward-looking statements, including our financial guidance, our expectations regarding our ability to expand our markets and expand revenue from core accounts, anticipated growth for revenue categories, marketing opportunities with nerve repair applications associated with breast, OMF protection, and the surgical treatment of pain and new products. Our expectations regarding the commercial performance of a via-floss of tissue matrix are statements regarding the timing of the complete biological license application submission for advanced nerve graft, as well as statements regarding the timing for approval of the BLA, our expectations that, assuming approval of the BLA, advanced nerve graft will be designated as a reference product and the respective market exclusivity of such designation, and our expectations around cash flow, including that will continue trending toward cash flow break-even in profitability.

Harold Tamayo: Our expectations regarding the commercial performance of a viable soft tissue matrix, our statements regarding the timing of the Complete Biologics License Application submission for Advanced NerveCraft, as well as statements regarding the timing for approval of the BLA, our expectations that, assuming approval of the BLA, Advanced NerveCraft will be designated as a reference product in the expected market exclusivity of such designation, and our expectations around cash, including that it will continue trending toward cash flow Forelooking statements are based on current beliefs and assumptions and are not guarantees of future performance and are subject to risk and uncertainty, including, not without limitation, the risk and uncertainties reflected in the company's annual and periodic reports, such as hospital staffing issues, regulatory processes and approvals, surgeon and product adoption, and market awareness of our product.

Speaker Change: Before we get started I'd like to remind you that during this conference call. The company will make projections and forward looking statements, including our financial guidance, our expectations regarding our ability to expand our markets and expand revenue from core icons.

Speaker Change: Anticipated growth for revenue categories marketing opportunities with nerve repair applications associated with breast or mask protection in the surgical treatment of pain and new products.

Harold Tamayo: Our expectations regarding the commercial performance of a viable soft tissue matrix, our statements regarding the timing of the complete biologics license application submission for the advanced nerve graft, as well as statements regarding the timing of the approval of the BLA. Our expectations that, assuming approval of the BLA advanced nerve graft, it will be designated as a reference product in the expected market exclusivity of such designation, and our expectations around cash, including that it will continue trending toward cash flow breakeven and profit.

Speaker Change: Patients regarding the commercial performance of a byproduct of tissue matrix are statements regarding the timing of the complete biologics license application submission for advanced nerve graft.

Speaker Change: Well our statements regarding the timing for approval of the BLA.

Speaker Change: Our expectation is that assuming approval of the BLA advanced nerve graft will be designated as I've referenced product and the expected market exclusivity with such designation.

Speaker Change: Our expectations around cash flow.

Speaker Change: <unk> that will continue trending towards cash flow breakeven and profitability.

Harold Tamayo: For-looking statements are based on current beliefs and assumptions and our guarantees of future performance and are subject to risk and uncertainty, including that with all imitation, the risk and uncertainties reflected in the company's annual and periodic reports such as Haskell staffing issues, regulatory processes and approvals, surgeon and product adoption, and market awareness of our products. The forward-looking statements are represented only as of the day they are made, and except as required by applicable law, we assume no responsibility to publicly update or revise any forward-looking statements.

Harold Tamayo: Forelooking statements are based on current beliefs and assumptions and are not guarantees of future performance and are subject to risk and uncertainty, including, not without limitation, the risk and uncertainties reflected in the company's annual and periodic reports, such as hospital staffing issues, regulatory processes, and approvals, surgeon and product adoption, and market awareness of our product. The forward-looking statements are representative only as of the date they are made, and, except as required by applicable law, we assume no responsibility to publicly update or revise any forward-looking statement. In addition, for reconciliation of no-gap measures, please reference today's press release and our corporate presentation in the investor section of the company. Now, I'd like to turn the call over to Karen. Karen?

Speaker Change: Forward looking statements are based on current beliefs and assumptions and are guarantees of future performance and are subject to risks and uncertainties, including.

Speaker Change: Without limitation, the risks and uncertainties reflected in the company's annual and periodic reports suggest hospital staffing issues regulatory processes and approvals surgeon and product adoption and market awareness of our products. The forward looking statements are representative only as of the day, they are made and except as required by applicable law.

Harold Tamayo: The forward-looking statements are representative only as of the date they are made, and, except as required by applicable law, we assume no responsibility to publicly update or revise any forward-looking statement. In addition, for reconciliation of no-gap measures, please reference today's press release and our corporate presentation in the investor section of the company. Now, I'd like to turn the call over to Karen. Okay, Karen?

Speaker Change: We assume no responsibility to publicly update or revise any forward looking statements.

Harold Tamayo: In addition, for reconciliation of no gap measures, please reference today's press release and our corporate presentation on the investor section of the company's website.

Speaker Change: In addition for a reconciliation of non-GAAP measures. Please reference to date press release, and our corporate presentation on the investors section of the company's website.

Harold Tamayo: Now, I'd like to turn the call over to Karen. Karen?

Karen: Now I'd like to turn the call over to Karen Karen.

Karen Zaderej: Thank you, Harold. And thank you all for joining us today to discuss our 2024 second quarter financial results. Before discussing the quarter, and as we announced earlier today, I'd like to welcome Michael Dale to AxoGen. Effective August 9th, Michael will be stepping in as AxoGen's Chief Executive Officer.

Karen Zaderej: Thank you, Harold, and thank you all for joining us today to discuss our 2024 second-quarter financial results.

Karen: Thank you Sarah and thank you all for joining us today to discuss our 2024 second quarter financial results.

Karen Zaderej: Before discussing the quarter, and as we announced earlier today, I'd like to welcome Michael Dail to ask effective August 9th, Michael will be stepping in an Accentions Chief Executive Officer. Mike recently served as the president of Abbott's Structural Heart and has a long history of successfully leading, building, and scaling commercial-stage life science companies. With his extensive experience, Mike is well equipped to lead Accentions through its next phase of growth and innovation as our retired.

Speaker Change: Before discussing the quarter and as we announced earlier today I'd like to welcome Michael Dell the accident.

Michael Dell: Effective August 9th Michael will be stepping in as <unk> Chief Executive Officer.

Karen Zaderej: Mike recently served as president of Abbott Structural Heart and has a long history of successfully leading, building, and scaling commercial stage life science companies. With his extensive experience, Mike is well-equipped to lead AxoGen through its next phase of growth and innovation as I retire.

Speaker Change: Mike recently served as the president of Abbott's structural heart and has a long history of successfully leading building and scaling commercial stage life science companies.

Speaker Change: With his extensive experience Mike is well equipped to lead oxygen through its next phase of growth and innovation as I retire.

Karen Zaderej: Turning now to the quarter, we had a solid second quarter, achieving a number of major milestones. We're pleased with our positive trends in revenue growth, bottom line performance, and the launch of a buy plus soft tissue matrix, and the progress of our BLA submission for advanced nerve graft. Our achievements highlight the strides we are making towards reaching our growth targets, driving towards profitability, and generating positive cash flow. During today's call, I will review our accomplishments and the advancements we've made across our business. We're pleased with the quarter's top line revenue and EBITDA growth. Revenue was $47.9 million, an increase of 25.6% compared to last year.

Michael Dell: Turning now to the quarter.

Karen Zaderej: We had a solid second quarter achieving a number of major milestones. We're pleased with our positive trends in revenue growth, bottom line performance, and the launch of a VIVE Plus Soft Tissue Matrix and the progress of our BLA submission for Advanced Nerve Graphics. Our achievements highlight the strides we're making towards reaching our growth targets, driving towards profitability, and generating positive cash flow. During today's call, I will review our accomplishments and the advancements we've made across our business. We're pleased with the quarter's top-line revenue and EBITDA growth. Revenue was $47.9 million, an increase of 25.6% compared to last year. However, adjusted EBITDA was $5.6 million versus a loss of $0.2 million last year.

Karen Zaderej: We had a solid second quarter, achieving a number of major milestones. We're pleased with our positive trends in revenue growth, bottom line performance, and the launch of the VIVE Plus Soft Tissue Matrix and the progress of our BLA submission for Advanced Neurography. Our achievements highlight the strides we're making towards reaching our growth targets, driving towards profitability, and generating positive cash flow. During today's call, I will review our accomplishments and the advancements we've made across our business. We're pleased with the quarter's top line revenue and EBITDA growth. Revenue was $47.9 million, an increase of 25.6% compared to last year. However, adjusted EBITDA was $5.6 million versus a loss of $0.2 million last year.

Michael Dell: We had a solid second quarter, achieving a number of major milestones. We're pleased with our positive trends in revenue growth bottom line performance and the launch of <unk> soft tissue matrix and the progress of our BLA submission for advanced nerve graft.

Speaker Change: Our achievements highlight the strides we are making towards reaching our growth targets driving towards profitability and generating positive cash flow.

Speaker Change: During today's call I'll review, our accomplishments and the advancements we've made across our business.

Speaker Change: We're pleased with the quarter's topline revenue and EBITDA growth revenue was $47 $9 million, an increase of 25, 6% compared to last year.

Karen Zaderej: While adjusted EBITDA was $5.6 million versus a loss of $0.2 million last year. Notably, revenue growth was broad-based across our products and applications. During this quarter, our results were driven by improved sales productivity and solid commercial execution of our growth strategy. Our strategy remains focused on deepening our presence and high potential accounts. Specifically, level 1 trauma centers and academic affiliated hospitals with a high number of trained microsurgeons. Our goal is to continue to penetrate the nerve repair business within these accounts across all of our targeted nerve repair applications. In addition to the strong execution in the quarter, and as we mentioned in our Q1 earnings call, we saw a shift in some procedures from March to early Q2.

Speaker Change: While adjusted EBITDA was $5 $6 million versus a loss of $2 million last year.

Speaker Change: Notably revenue growth was broad based across our products and applications.

Karen Zaderej: Notably, revenue growth was broad-based across our products and applications. During this quarter, our results were driven by improved sales productivity and solid commercial execution of our growth strategy. 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. Our goal is to continue to penetrate the nerve repair business within these accounts across all of our targeted nerve repair applications. In addition to the strong execution in the quarter, and as we mentioned in our Q1 earnings call, we saw a shift in some procedures from March to early Q2.

Speaker Change: During this quarter our results were driven by improved sales productivity and solid commercial execution of our growth strategy.

Speaker Change: Our strategy remains focused on deepening our presence in high potential accounts, specifically level, one trauma centers and academic affiliated hospitals with a high number of trained microsurgeon.

Speaker Change: Our goal is to continue to penetrate the nerve repair business within these accounts across all of our targeted nerve repair applications.

Speaker Change: In addition to the strong execution in the quarter and as we mentioned in our Q1 earnings call. We saw a shift in some procedures from March to early Q2.

Karen Zaderej: We believe this shift positively impacted our results for this quarter, approximately $1.5 million.

Karen Zaderej: We believe this shift positively impacted our results for this quarter by approximately one and a half million dollars. As a result of our strong performance and momentum in the first half of the year, we are raising our revenue guidance for the full year, and Nir will provide more detail in a few moments. In this quarter, our core accounts increased to 412 versus 347 at the end of the second quarter of the prior year and 400 at the end of the first quarter of this year. As a reminder, core accounts are defined as those generating more than $100,000 in revenue over the trailing 12 months and currently represent approximately 65% of our total revenue.

Speaker Change: We believe this shift positively impacted our results for this quarter approximately one $5 million.

Karen Zaderej: As a result of our strong performance and momentum in the first half of the year, we are raising our revenue guidance for the full year, and Neural will provide more detail in a few moments. In this quarter, our core accounts increased to 412 versus 347 at the end of the second quarter of the prior year and 400 at the end of the first quarter of this year. As a reminder, core accounts are defined as those generating more than $100,000 in revenue over the trailing 12 months and currently represent approximately 65% of our total revenue. Our largest core accounts are over $1 million in annualized sales.

Speaker Change: As a result of our strong performance and momentum in the first half of the year, we are raising our revenue guidance for the full year and narrow will provide more detail in a few moments.

Speaker Change: And this quarter, our core accounts increased to 412 versus 347 at the end of the second quarter of the prior year and 400 at the end of the first quarter of this year.

Speaker Change: As a reminder, core accounts are defined as those generating more than $100000 in revenue over the trailing 12 months and currently represent approximately 65% of our total revenue.

Karen Zaderej: As a reminder, core counts are defined as those generating more than $100,000 in revenue over the trailing 12 months and currently represent approximately 65% of our total revenue. Our largest core accounts are over a million dollars in annualized sales. We ended the second quarter with 117 direct sales representatives.

Karen Zaderej: Our largest core accounts are over a million dollars in annualized sales. We ended the second quarter with 117 direct sales representatives. An increase of two reps sequentially and compared to a year ago. We believe our revenue growth will continue to be driven primarily by increased productivity of our sales force. And we will evaluate and add additional sales reps as needed. Additionally, our direct sales force is supplemented by independent sales agencies that represent approximately 10% of our total revenue.

Speaker Change: Our largest core counts are over a million dollars in annualized sales.

Speaker Change: We ended the second quarter with 117 direct sales representatives, an increase of two reps sequentially and compared to a year ago.

Karen Zaderej: We ended the second quarter with 117 direct sales representatives, an increase of 2 reps sequentially and compared to a year ago. We believe our revenue growth will continue to be driven primarily by increased productivity of our sales force, and we will evaluate and add additional sales reps as needed. Our direct sales force is supplemented by independent sales agencies that represent approximately 10% of our total revenue.

Karen Zaderej: An increase of two reps sequentially and compared to a year ago. We believe our revenue growth will continue to be driven primarily by increased productivity of our sales force, and we will evaluate and add additional sales reps as needed. Our direct sales force is supplemented by independent sales agencies that represent approximately 10% of our total revenue.

Speaker Change: We believe our revenue growth will continue to be driven primarily by increased productivity of our sales force.

Speaker Change: And we will evaluate and add additional sales reps as needed.

Speaker Change: Our direct sales force is supplemented by independent sales agencies that represent approximately 10% of our total revenue.

Karen Zaderej: As the leader in the nerve repair market, driving innovation through new products and expanded applications to provide advanced solutions for surgeons and their patients is a key pillar of our growth strategy. We previously announced three new innovations to our portfolio, which included recent stations for implant-based breast neurodization and two new products in the nerve protection space. In the quarter, we continue to see strong surgeon and patient interest in implant-based breast neurodization. We completed an additional surgical education program, training new teams of both breast and reconstructive surgeons in the recent station procedure, a nerve repair technique providing the opportunity for the return of sensation to the breast.

Speaker Change: As the leader in the nerve repair market driving innovation through new products and expanded applications to provide advanced solutions for surgeons and their patients is a key pillar of our growth strategy.

Karen Zaderej: As the leader in the nerve repair market, driving innovation through new products and expanded applications to provide advanced solutions for surgeons and their patients is a key pillar of our growth strategy. We previously announced three new innovations to our portfolio, which included re-sensation for implant-based breast neurotization and two new products in the nerve protection space. In the quarter, we continue to see strong surgeon and patient interest in implant-based breast augmentation. We completed an additional surgical education program training new teams of both breast and reconstructive surgeons in the recensation procedure, a nerve repair technique, providing the opportunity for the return of sensation to the breast.

Karen Zaderej: As the leader in the nerve repair market, driving innovation through new products and expanded applications to provide advanced solutions for surgeons and their patients is a key pillar of our growth strategy. We previously announced three new innovations to our portfolio, which included re-sensation for implant-based breast neurotization and two new products in the nerve protection space. In the quarter, we continued to see strong surgeon and patient interest in implant-based breast surgery. We completed an additional surgical education program, training new teams of both breast and reconstructive surgeons in the recensation procedure, a nerve repair technique providing the opportunity for the return of sensation to the breast.

Speaker Change: We previously announced three new innovations to our portfolio, which included recent station for implant based breast <unk> and two new products in the nerve protection space.

Speaker Change: In the quarter, we continued to see strong surgeon and patient interest in implant based breast and organization.

Speaker Change: We completed an additional surgical education program training, new teams of both breast and reconstructive surgeons and the recent station procedure a nerve repair technique, providing the opportunity for the return of sensation to the breath.

Karen Zaderej: These immersive training programs are surgeon-led and prepare the surgical team to incorporate the recent station procedure into their breast reconstructions. We're pleased with the response from the two programs we've completed this year and are on track to complete an additional education program in the third quarter. In addition to our surgeon education programs, we continue to invest in driving awareness and education on the quality of life's impact of numbness after mastectomy. We work with patient advocacy groups to build awareness and support the right of mastectomy patients to receive breast neurodization as a part of their reconstructive procedure.

Karen Zaderej: These immersive training programs are surgeon-led and prepare the surgical team to incorporate the recensation procedure into their breast reconstruction. We're pleased with the response from the two programs we've completed this year and are on track to complete an additional education program in the third quarter.

Speaker Change: These immersive training programs, our surgeon led and prepare the surgical team to incorporate the recent station procedure into their breast reconstructions.

Speaker Change: We're pleased with the response from the two programs. We've completed this year and are on track to complete an additional education program in the third quarter.

Speaker Change: In addition to our surgeon education programs, we continue to invest in driving awareness and education on the quality of life impact of numbness after mastectomy, where.

Karen Zaderej: In addition to our surgeon education programs, we continue to invest in driving awareness and education on the quality of life impact of numbness after mastectomy. We work with patient advocacy groups to build awareness and support the right of mastectomy patients to receive breast neurotization as a part of their reconstructive procedure. We're pleased with the increasing number of patients who are connecting with surgeons who perform breast neurotization through our ReSensation website. We've also expanded our innovation and focus on protecting injured nerves.

Karen Zaderej: In addition to our surgeon education programs, we continue to invest in driving awareness and education on the quality of life impact of numbness after mastectomy. We work with patient advocacy groups to build awareness and support the right of mastectomy patients to receive breast neurotization as a part of their reconstructive procedure. We're pleased with the increasing number of patients who are connecting with surgeons who perform breast neurotization through our Recommendation website. We've also expanded our innovation and focus on protecting injured nerves.

Speaker Change: It worked with patient advocacy groups to build awareness and support the right of mastectomy patients to receive breast and organization as a part of their reconstructive procedure.

Karen Zaderej: We're pleased with the increasing number of patients who are connecting with surgeons who perform breast neurodization through our recent station website.

Speaker Change: We're pleased with the increasing number of patients who are connecting with surgeons, who perform breast organization through our recent station website.

Speaker Change: We've also expanded our innovation and focus on protecting injured nerves.

Karen Zaderej: We've also expanded our innovation and focus on protecting injured nerves. The category of nerve protection covers a wide range of diverse nerve injuries and defects, including compression, nerve crushed injuries, and complex traumatic injuries. In these injuries, the nerve is still intact, but could have damaged to its internal structure or surrounding tissue bed, which drives the need for protecting the nerve during the critical phase of healing. The nerve protection market, which we estimate to have a potential market opportunity of above $800 million dollars, represents a significant growth opportunity for oxygen, and we see a need for multiple solutions to address these diverse types of non-transacted nerve injuries.

Karen Zaderej: The category of nerve protection covers a wide range of diverse nerve injuries and defects, including compression, nerve crush injuries, and complex traumatic injuries. In these injuries, the nerve is still intact, but could have damage to its internal structure or surrounding tissue bed, which drives the need to protect the nerve during the critical phase of healing.

Speaker Change: The category of nerve protection covers a wide range of diverse nerve injuries and defects, including compression nerve crushed injuries and complex traumatic injuries.

Speaker Change: And these injuries the nerve is still intact, but could have damage to its internal structure or surrounding tissue bed, which drives the need for protecting the nerve during the critical phase of healing.

Speaker Change: The nerve protection market, which we estimate to have a potential market opportunity of above $800 million.

Karen Zaderej: The nerve protection market, which we estimate to have a potential market opportunity of above $800 million, represents a significant growth opportunity for AxoGen, and we see a need for multiple solutions to address these diverse types of non-transfected nervins. Our first portfolio addition in the nerve protection category was AxoGuard HA Plus Nerve Protector, which continues to be well-received by surgeons and an important growth driver. We're continuing to expand our offerings for nerve protection.

Speaker Change: It represents a significant growth opportunity for oxygen and we see a need for multiple solutions to address these diverse types of non transected nerve injuries.

Karen Zaderej: Our first portfolio addition in the nerve protection category was Axigard HA Plus nerve protector, which continues to be well received by surgeons and an important growth driver. We're continuing to expand our offerings for nerve protection, and in June of 2024, we announced the full launch of our newest product, Avive Plus soft tissue matrix. Avive Plus is intended for use as a soft tissue barrier, and is a resorbable, multi-layer, amniotic membrane allograft that provides temporary protection and tissue separation during the critical phase of peripheral nerve healing. We are pleased with the initial positive surgeon feedback, and we believe that Avive Plus will have use cases in multiple nerve repair applications.

Speaker Change: Our first portfolio addition, and the nerve protection category was <unk> HLA, plus nerve protector, which continues to be well received by surgeons and an important growth driver.

Speaker Change: We're continuing to expand our offerings for Nerf protection and in June of 2024, we announced the full launch of our newest product <unk>.

Karen Zaderej: And in June of 2024, we announced the full launch of our newest product, Avive Plus Soft Tissue Matrix. AVIVE Plus is intended for use as a soft tissue barrier and is a resorbable, multilayer amniotic membrane allograft that provides temporary protection and tissue separation during the critical phase of peripheral nerve healing.

Speaker Change: <unk> soft tissue matrix.

Speaker Change: <unk> plus is intended for use as a soft tissue barrier and is a resorbable multi layer amniotic membrane allografts that provides temporary protection and tissue separation during the critical phase of peripheral nerve healing.

Karen Zaderej: We're pleased with the initial positive surgeon feedback, and we believe that Avive Plus will have use cases in multiple nerve repair applications. With these additions, we believe we offer the most comprehensive protection portfolio for nerve repair, which addresses the diverse needs in the protection market. Moving on to updates in our growing body of clinical evidence. Over the years, we've made significant investments to develop quality clinical evidence to demonstrate the safety, performance, healthcare economics, and utility of our nerve repair solution. Our active clinical programs are progressing as expected. As of the end of the quarter, we had 275 peer-reviewed publications, including applications in trauma, breast, OMS, and pain.

Karen Zaderej: We're pleased with the initial positive surgeon feedback, and we believe that Avive Plus will have use cases in multiple nerve repair applications. With these additions, we believe we offer the most comprehensive protection portfolio for nerve repair, which addresses the diverse needs in the protection market. Over the years, we've made significant investments to develop quality clinical evidence to demonstrate the safety, performance, healthcare economics, and utility of our nerve repair solution. Our active clinical programs are progressing as expected. As of the end of the quarter, we had 275 peer-reviewed publications, including applications in trauma, breast, OMS, and pain.

Speaker Change: We are pleased with the initial positive surgeon feedback and we believe that a <unk> plus will have use cases and multiple nerve repair applications.

Karen Zaderej: With these additions, we believe we offer the most comprehensive protection portfolio for nerve repair, which addresses the diverse needs in the protection market.

Speaker Change: With these additions we believe we offer the most comprehensive protection portfolio for nerve repair, which addresses the diverse needs in the protection market.

Karen Zaderej: Moving on to updates in our growing body of clinical evidence. Over the years, we've made significant investments to develop quality clinical evidence to demonstrate the safety, performance, health care economics, and utility of our nerve repair solutions. Our active clinical programs are progressing as expected. As of the end of the quarter, we had 275 peer-reviewed publications, including applications in trauma, breast, OMS, and pain. In July of 2024, a new study evaluating nerve co-optation approaches was published in the Journal of Plastic and Reconstructive Surgery Global Open. The study titled, "Comparative Effectiveness, Systematic Review, and Meta Analysis, a Peripheral Nerve Repair Using Direct Repair and Connector Assisted Repair."

Speaker Change: Moving on to updates and a growing body of clinical evidence over.

Speaker Change: Over the years, we've made significant investments to develop quality clinical evidence to demonstrate the safety performance health care economics, and utility of our nerve repair solutions.

Unknown Executive: greetings and welcome to the AxoGen Inc, reports, 2024, second quarter financial results call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Speaker Change: Our active clinical programs are progressing as expected.

Speaker Change: As of the ended the quarter, we had 275 peer reviewed publications, including applications in trauma breast, Oh, MF and pain.

Unknown Executive: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Karen Zaderej: In July of 2024, a new study evaluating nerve coaptation approaches was published in the Journal of Plastic and Reconstructive Surgery Global Open. The study, titled Comparative Effectiveness, Systematic Review, and Meta-Analysis of Peripheral Nerve Repair Using Direct Repair and Connector-Assisted Repair, Assessed differences in outcomes between nerves repaired with suture-only direct repair and Connector Assisted Repair Techniques, and significantly fewer patients experienced cold intolerance than those in the direct repair group. This evidence supports the benefits of protecting the nerve coaptation site with implants like our AxoGuard connectors and protectors as compared to direct repair alone.

Karen Zaderej: In July of 2024, a new study evaluating nerve coaptation approaches was published in the Journal of Plastic and Reconstructive Surgery Global Open. The study, titled Comparative Effectiveness, Systematic Review, and Meta-Analysis of Peripheral Nerve Repair Using Direct Repair and Connector-Assisted Repair, Assessed differences in outcomes between nerves repaired with suture-only direct repair and Connector Assisted Repair Techniques. This Level 1 evidence found that the Connector Assisted Repair Group had significantly more patients achieve meaningful recovery, and significantly fewer patients experienced cold intolerance than those in the direct repair group.

Speaker Change: In July of 2020 for a new study evaluating nerve coaptation approaches was published in the journal plastic and reconstructive surgery Global open.

Harold Tamayo: It is now my pleasure to introduce your host, Harold Tamayo, vice president of finance and investor relations. Thank you, Harold. You may begin. Thank you, Maria. Good morning, everyone.

Speaker Change: The study titled Comparative effectiveness systematic review and meta analysis of peripheral nerve repair using direct repair and connector assisted repair.

Harold Tamayo: Joining me on today's call is Karen Zaderej, AxoGen Inc. Chairman, Chief Executive Officer and President. And Nir Naor Chief Financial Officer, Karen will discuss the second quarter of 2024 financial results and near we provide an analysis of our financial performance and guidance and discuss our outlook for the year followed by a question and answer session.

Karen Zaderej: Assess differences in outcomes between nerves repaired with suture-only direct repair and connector-assisted repair techniques. This level one evidence found that the connector-assisted repair group had significantly more patients achieved meaningful recovery and significantly fewer patients experienced cold intolerance than those in the direct repair group. A suture direct repair is considered a historical standard of care and is one of the most common nerve repair methods. This evidence supports the benefit of protecting the nerve co-optation site with implants like our Axigard connectors and protectors, as compared to direct repair alone. Similar to Meta Analysis' Prevulacy Polish for Nerve Gap Repair, we believe these findings will plan an important role in searching clinical decision-making and in the adoption of connector assisted repair techniques for transfected nerves.

Speaker Change: Assess differences in outcomes between nerves repaired with suture only direct repair.

Speaker Change: And can put and connector assisted repair techniques.

Speaker Change: This level one evidence found that the connector assisted repair group had significantly more patients achieved meaningful recovery.

Harold Tamayo: Today's call is being broadcast live via webcast which is available on the investor section of the AxoGen website. Following the end of the live call, a replay will be available in the investor section of the company's website at www.axoGen Inc.com. Before we get started, I like to remind you that during this conference call, the company will make projections and forward-looking statements including our financial guidance, our expectations regarding our ability to expand our markets and expand revenue from core accounts, anticipated growth for revenue categories, marketing opportunities with nerve repair applications associated with breast, OMF protection, and the surgical treatment of pain and new products.

Speaker Change: And significantly fewer patients experienced cold intolerant then.

Speaker Change: And the direct repair group.

Karen Zaderej: A suture direct repair is considered a historical standard of care and is one of the most common nerve repair methods. However, this evidence supports the benefits of protecting the nerve coaptation site with implants like our AxoGuard connectors and protectors as compared to direct repair alone. Similar to the meta-analysis previously published for nerve gap repair, we believe that these findings will play an important role in surgeon clinical decision making and in the adoption of connector-assisted repair techniques for transected nerves.

Speaker Change: The suit your direct repair is considered a historical standard of care and it's one of the most common nerve repair methods. This evidence supports the benefit of protecting the nerve coaptation site with implants like our Axa guard connectors and protectors as compared to direct repair alone.

Harold Tamayo: Our expectations regarding the commercial performance of a via-floss of tissue matrix are statements regarding the timing of the complete biological license application submission for advanced nerve graft, as well as statements regarding the timing for approval of the BLA, our expectations that assuming approval of the BLA advanced nerve graft will be designated as a reference product and the respective market exclusivity of such designation, and our expectations around cash flow, including that will continue trending toward cash flow break even in profitability. For-looking statements are based on current beliefs and assumptions and our guarantees of future performance and are subject to risk and uncertainty, including that with all imitation, the risk and uncertainties reflected in the company's annual and periodic reports such as Haskell staffing issues, regulatory processes, and approvals, surgeon and product adoption, and market awareness of our products. The forward-looking statements are represented only as of the day they are made and except as required by applicable law, we assume no responsibility to publicly update or revise any forward-looking statements.

Speaker Change: So much of the meta analysis previously Polish for nerve gap repair. We believe these findings will play an important role in searching clinical decision, making and in the adoption of connector assisted repair techniques for transected nerves.

Karen Zaderej: Coming to the BLA for Advanced Nerve Grap, we're excited that we completed an important milestone with the submission of the first wave of data to FDA in May. We plan to provide the remaining modules in the third quarter. We believe this submission timeline will allow for a potential approval in mid 2025. As a reminder, a BLA approval will complete the regulatory process to transition advanced nerve graft to a 351 biological product. Importantly, we believe Advance will be designated as the reference product for potential biosimilars, providing at least 12 years of market exclusivity from the approval date.

Speaker Change: Turning to the BLA for advanced nerve graft.

Karen Zaderej: Turning to the BLA for advanced neurography, we're excited that we completed an important milestone with the submission of the first wave of data to FDA in May. We plan to provide the remaining modules in the third quarter. We believe this submission timeline will allow for a potential approval in mid-2025. As a reminder, a BLA approval will complete the regulatory process to transition advanced nerve grafts to a 351 biological product. Importantly, we believe advanced will be designated as the reference product for potential biosimilars, providing at least 12 years of market exclusivity from the approval date.

Speaker Change: Excited that we completed an important milestone with the submission of the first wave of data to FDA in may.

Speaker Change: We plan to provide the remaining modules in the third quarter. We believe the submission timeline will allow for a potential approval in mid 2025.

Karen Zaderej: As a reminder, a BLA approval will complete the regulatory process to transition advanced nerve grafts to a 351 biological product. As often seen in the ramp-up of new facilities, we have incurred some start-up costs that were of greater magnitude than we initially expected and have impacted our growth margin in the near term. In conclusion, we're pleased with our strong second quarter results. Looking ahead, we remain focused on delivering on our revenue growth and profitability as we advance our mission to revolutionize the science of nerve repair.

Speaker Change: As a reminder, our BLA approval, we will complete the regulatory process to transition advanced nerve graft to a $3 51 biological product importantly, we believe events will be designated as the reference product for potential biosimilars, providing at least 12 years of market exclusivity from the approval date.

Karen Zaderej: Another key component of our transition to a biologic was the construction and validation of our new accident processing center near Dayton, Ohio. By the end of 2023, we had fully transitioned all advanced processing to this new facility. And in June of 2024, we celebrated the official ribbon-cutting event supported by many esteemed community leaders. This new center not only enhances our processing capabilities and capacity, but it also underscores our commitment to quality and innovation. It demonstrates our investment in the local community, fostering strong relationships with local leaders and showcasing our dedication to creating high quality jobs and contributing to this regional economy.

Speaker Change: Another key component of our transition to a biologics was the construction and validation of our new oxygen processing Center near Dayton, Ohio.

Karen Zaderej: Another key component of our transition to a biologic was the construction and validation of our new AxoGen Processing Center near Dayton, Ohio. By the end of 2023, we had fully transitioned all advanced processing to this new facility, and in June of 2024, we celebrated the official ribbon-cutting event supported by many esteemed community leaders. This new center not only enhances our processing capabilities and capacity, but it also underscores our commitment to quality and innovation. It demonstrates our investment in the local community, fostering strong relationships with local leaders, and showcasing our dedication to creating high-quality jobs and contributing to this regional economy.

Speaker Change: By the end of 2023, we had fully transitioned all advanced processing to this new facility and in June of 2024, we celebrated the official ribbon cutting event supported by many is deemed community leaders.

Speaker Change: This new center, not only enhances our processing capabilities and capacity.

Speaker Change: But it also underscores our commitment to quality and innovation.

Speaker Change: It demonstrates our investment in the local community fostering strong relationships with local leaders and showcasing our dedication to creating high quality jobs and contributing to this regional economy.

Harold Tamayo: In addition, for reconciliation of no gap measures, please reference today press release and our corporate presentation on the investor section of the company's website.

Harold Tamayo: Now, I'd like to turn the call over to Karen.

Karen Zaderej: As often seen in the ramp up of new facilities, we have incurred some startup costs that were of greater magnitudes than we initially expected and have impacted our growth margin in the near term. We have resolved these early challenges, and we're confident in our ability to execute moving forward. During the startup process, we've also gained some insight into the incremental operating cost of running the state-of-the-art biologic facility. We expect to see higher capacity utilization and other improvements that will help offset these costs over time.

Speaker Change: As often seen in our ramp up of new facilities, we have incurred some startup costs there were a greater magnitude than we initially expected and have impacted our gross margin in the near term.

Karen Zaderej: As often seen in the ramp-up of new facilities, we have incurred some start-up costs that were of greater magnitude than we initially expected and have impacted our growth margin in the near term. However, we have resolved these early challenges, and we're confident in our ability to execute moving forward. During the startup process, we've also gained some insight into the incremental operating costs of running this state-of-the-art biologics facility. We expect to see higher capacity utilization and other improvements that will help offset these costs over time.

Karen Zaderej: Karen? Thank you, Harold, and thank you all for joining us today to discuss our 2024 second-quarter financial results.

Karen Zaderej: Before discussing the quarter, and as we announced earlier today, I'd like to welcome Michael Dail to ask Effective August 9th, Michael will be stepping in an Accentions Chief Executive Officer. Mike recently served as the president of Abbott's Structural Heart and has a long history of successfully leading building and scaling commercial stage life science companies. With his extensive experience, Mike is well equipped to lead Accentions through its next phase of growth and innovation as our retired.

Speaker Change: We have resolved these early challenges and we're confident in our ability to execute moving forward.

Speaker Change: During the startup process. We've also gained some insight into incremental operating cost of running the state of the art biologics facility.

Speaker Change: We expect to see higher capacity utilization and other improvements that will help offset these costs over time.

Karen Zaderej: In conclusion, we're pleased with our strong second quarter results, which reflect the successful execution of our gross strategy and commitment to innovation. Looking ahead, we remain focused on delivering on our revenue growth and profitability as we advance our mission to revolutionize the science of nerve repair.

Speaker Change: In conclusion, we're pleased with our strong second quarter results.

Karen Zaderej: In conclusion, we're pleased with our strong second quarter results, which reflect the successful execution of our growth strategy and commitment to innovation. Looking ahead, we remain focused on delivering on our revenue growth and profitability as we advance our mission to revolutionize the science of nerve repair. I'll now hand the call over to Nir, who will provide further details on our financials and provide the updated financial guidance for the full year 2024.

Speaker Change: Which reflects the successful execution of our growth strategy and commitment to innovation.

Karen Zaderej: Turning now to the quarter, we had a solid second quarter achieving a number of major milestones where pleased with our positive trends in revenue growth, bottom line performance, and the launch of a buy plus soft tissue matrix, and the progress of our BLA submission for advanced nerve graft. Our achievements highlight the strides we are making towards reaching our growth targets, driving towards profitability and generating positive cash flow. During today's call, I will review our accomplishments and the advancements we've made across our business.

Speaker Change: Looking ahead, we remain focused on delivering on our revenue growth and profitability as we advance our mission to revolutionize the science of nerve repair.

Nir Naor: I'll now hand the call over to you here, who will provide further details on our financials and provide the updated financial guidance for the full year 2024. Thank you, Karen. We're excited about our results for the quarter. We have seen a lot of progress in our strategy, and our commercial execution continues to yield solid results. Turning to our financial results for this quarter, our revenue was $47.9 million, representing 25.6% growth from the second quarter of 2023. This growth is attributed to a 22.4% increase in unit volume and mixed, and a 3.2% increase in price. Higher unit volumes were driven by broad strengths across the existing product portfolio, momentum from new product introductions, as well as some benefits from shifting procedures from March to the early parts of the second quarter, which we believe added approximately $1.5 million in revenues to this quarter.

ye: I'll now hand, the call over to ye who will provide further details on our financials and provide the updated financial guidance for the full year 2024.

Speaker Change: Hum.

Unknown Executive: Thank you, Karen. We're excited about our results for this quarter. We have seen a lot of progress in our strategy, and our commercial execution continues to yield solid results. As we mentioned on past calls, we expect gross margin to contract as we sell more products from our new facility, which are at a higher relative price. This represents a gross margin of 73.8%, down from the 77.7% in the same period last year, mainly due to product mix, including the previously mentioned trends of higher cost of products sold, driven by the higher relative cost over new. Research and development expenses decreased by 5.6% to $6.7 million from $7.1 million in the second quarter of 2020. As of June 30th, our balance of cash, cash equivalents, and investments was $27.1 million, compared to $23.6 million at the end of the first quarter of 2020.

Nir Naor: Thank you, Karen. We're excited about our results for this quarter. We have seen a lot of progress with our strategy, and our commercial execution continues to yield solid results. Turning to our financial results, for this quarter, our revenue was $47.9 million, representing 25.6% growth from the second quarter of 2020. This growth is attributed to a 22.4% increase in unit volume and mix, and a 3.2% increase in production.

ye: Thank you Karen we're excited about our results for this quarter, we have seen a lot of progress in our strategy and our commercial execution continues to yield solid results.

Karen Zaderej: We're pleased with the quarter's top line revenue and EBITDA growth. Revenue was $47.9 million, an increase of 25.6% compared to last year. While adjusted EBITDA was $5.6 million versus a loss of $0.2 million last year. Notably, revenue growth was broad based across our products and applications. During this quarter, our results were driven by improved sales productivity and solid commercial execution of our growth strategy. Our strategy remains focused on deepening our presence and high potential accounts.

Nir Naor: Higher unit volumes were driven by broad strengths across the existing product portfolio, momentum from new product introductions, as well as some benefits from a shift in procedures from March to the early part of the second quarter, which we believe added approximately $1.5 million in revenues to this quarter. As we mentioned on past calls, we expect gross margin to contract as we sell more products from our new facility, which are at a higher relative price. We expect this headwind to be offset by higher capacity utilization and other improvements as we scale up the process.

ye: Turning to our financial results.

Nir Naor: Nonetheless, as Karen mentioned, we have incurred some startup issues and seen some incremental ongoing costs associated with this type of facility. On a positive note, we have resolved these early challenges and, as such, expect to see gross margin improvements over time. Our gross profit for the quarter was $35.3 million, an increase from the $29.7 million recorded in the second quarter of 2020. This represents a gross margin of 73.8%, down from the 77.7% in the same period last year, mainly due to product mix, including the previously mentioned trend of higher cost of product sold, driven by the higher relative cost over new. Our total operating expenses for the quarter decreased by 2.2% to $35.8 million, down from $36.6 million in Q2 of 2020.

ye: This quarter, our revenue was $47 9 million, representing 25, 6% growth from the second quarter of 2023.

Speaker Change: This growth is attributed to a 22, 4% increase in unit volume and mix and a three 2% increase in price.

Speaker Change: Higher unit volumes were driven by broad strength across the existing product portfolio momentum from new product introductions as well as some benefit from a shift in procedures for March through the early part of the second quarter, which we believe added approximately $1 $5 million in revenue to this quarter.

Nir Naor: As we mentioned on past calls, we expect gross margin to contract as we sell more products from our new facility, which are at a higher relative cost. We expect this headwind to be offset by higher capacity utilization and other improvements as we scale up processing. Nonetheless, as Karen mentioned, we have incurred some start-up issues and saw some incremental ongoing costs associated with this type of facility. On a positive note, we have resolved these early challenges and is such expected to see gross margin improvements over time. Our gross profit for the quarter was $35.3 million and increased from the $29.7 million recorded in the second quarter of 2023.

Speaker Change: As we mentioned on past calls, we expect gross margin to contract as we sell more products from our new facility, which are at a higher relative cost.

Karen Zaderej: Specifically, level 1 trauma centers and academic affiliated hospitals with a high number of trained micro surgeons. Our goal is to continue to penetrate the nerve repair business within these accounts across all of our targeted nerve repair applications. In addition to the strong execution in the quarter, and as we mentioned in our Q1 earnings call, we saw a shift in some procedures from March to early Q2. We believe this shift positively impacted our results for this quarter, approximately $1.5 million.

Speaker Change: We expect this headwind to be offset by higher capacity utilization and other improvements as we scale up process.

Speaker Change: Nonetheless, as Darren mentioned, we have incurred some startup issues.

Darren: Awesome incremental ongoing costs associated with this type of facility.

Darren: On a positive note we have resolved these early challenges and as such expect to see gross margin improvements over time.

Speaker Change: Our gross profit for the quarter was $35 $3 million, an increase from the $29 $7 million recorded in the second quarter of 2023.

Karen Zaderej: As a result of our strong performance and momentum in the first half of the year, we are raising our revenue guidance for the full year and Neural provide more detail in a few moments. In this quarter, our core accounts increased to 412 versus 347 at the end of the second quarter of the prior year and 400 at the end of the first quarter of this year. As a reminder, core accounts are defined as those generating more than $100,000 in revenue over the trailing 12 months and currently represent approximately 65% of our total revenue.

Nir Naor: This represents gross margin of 73.8%, down from the 77.7% in the same period last year, mainly due to product mix, including the previously mentioned trends of higher cost of product sold driven by the higher relative cost over new facility. Our toll operating expenses for the quarter decreased by 2.2% to $35.8 million, down from $36.6 million in Q2 of 2023. Then a decrease in toll expenses was primarily the result of the reduction in R&D expenses, royalty fees, and travel costs. Our sales and marketing expenses for the second quarter grew by 4.2% to $19.7 million, driven by compensation and occupancy-related expenses.

Speaker Change: This represents a gross margin of 73, 8% down from the 77, 7% in the same period last year, mainly due to product mix, including the previously mentioned trends of higher cost of products sold driven by the higher relative costs over in your facility.

Speaker Change: Our total operating expenses for the quarter decreased by two 2% to 35 $8 million down from $36 $6 million in Q2 of 2023.

Karen Zaderej: Our largest core accounts are over $1 million in annualized sales. We ended the second quarter with 117 direct sales representatives, an increase of 2 reps sequentially and compared to a year ago. We believe our revenue growth will continue to be driven primarily by increased productivity of our sales force, and we will evaluate and add additional sales reps as needed. Our direct sales force is supplemented by independent sales agencies that represent approximately 10% of our total revenue.

Nir Naor: The decrease in total expenses was primarily the result of a reduction in R&D expenses, royalty fees, and travel. However, our sales and marketing expenses for the second quarter grew by 4.2% to $19.7 million, driven by compensation and occupancy-related expenses.

Speaker Change: And a decrease in total expenses was primarily the result of a reduction in R&D expenses royalty fees and travel costs.

Darren: Our sales and marketing expenses for the second quarter grew by four 2% to $19 $7 million driven by compensation and occupancy related expenses.

Nir Naor: Sales and marketing is a percentage of toll revenue decreased to 41.1% from 49.4% in the second quarter of 2023, as we saw improved sales force productivity and top line growing faster than sales market. Research in development expenses decreased by 5.6% to 6.7 million dollars from 7.1 million dollars in the second quarter of 2023. As a percentage of total revenues, total R&D expenses decreased to 13.9%, down from 18.7% in the same quarter of the previous year. General and administrative expenses decreased to 9.4 million dollars in the second quarter of 2024 compared to 10.6 million dollars in the same quarter of 2023, mainly driven by lower compensation cost.

Speaker Change: Sales and marketing as a percentage of total revenue decreased to 41, 1% from 49, 4% in the second quarter of 2023, as we saw improved sales force productivity and top line growing faster than sales and marketing expenses.

Nir Naor: Sales and marketing as a percentage of total revenue decreased to 41.1% from 49.4% in the second quarter of 2023, as we saw improved salesforce productivity and a top line growing faster than sales and marketing. Research and development expenses decreased by 5.6% to $6.7 million from $7.1 million in the second quarter of 2020. As a percentage of total revenues, total R&D expenses decreased to 13.9%, down from 18.7% in the same quarter of the previous year. General and administrative expenses decreased to $9.4 million in the second quarter of 2024 compared to $10.6 million in the same quarter of 2023, mainly driven by lower compensation.

Speaker Change: Research and development expenses decreased by five 6% to $6 7 million from seven $1 million in the second quarter of 2023.

Speaker Change: As a percentage of total revenue total R&D expenses decreased to 13, 9% down from 18, 7% in the same quarter of the previous year.

Speaker Change: General and administrative expenses decreased to $9 $4 million in the second quarter of 2024 compared to $10 $6 million in the same quarter of twin 33, mainly driven by lower compensation costs.

Karen Zaderej: We completed an additional surgical education program, training new teams of both breast and reconstructive surgeons in the recent station procedure, a nerve repair technique providing the opportunity for the return of sensation to the breast. These immersive training programs are surgeon led and prepare the surgical team to incorporate the recent station procedure into their breast reconstructions. We're pleased with the response from the two programs we've completed this year and are on track to complete an additional education program in the third quarter.

Nir Naor: The quarter ended with a net loss of 1.9 million dollars, or 4 cents per share, compared to a net loss of 6.7 million dollars, or 16 cents per share, in the second quarter of 2023. However, we recorded an adjusted net income of 2 million dollars for the quarter, or 5 cents per share, compared to an adjusted net loss of 1.3 million dollars, or 3 cents per share, in the same period last year. Adjusted, the second quarter EBITO was 5.6 million dollars compared to an adjusted EBITO loss of 0.2 million dollars in the prior year. The change stands as a testament to our focus, execution, and improvement in operational efficiency and underscores our commitment to optimizing our toll cost structure.

Nir Naor: The quarter ended with a net loss of $1.9 million, or $0.04 per share, compared to a net loss of $6.7 million, or $0.16 per share, in the second quarter of 2020. However, we recorded an adjusted net income of $2 million for the quarter, or $0.05 per share, compared to an adjusted net loss of $1.3 million, or $0.03 per share, in the same period last year. Adjusted second quarter EBITDA was $5.6 million compared to an adjusted EBITDA loss of $0.2 million in the price.

Speaker Change: The quarter ended with a net loss of $1 9 million or <unk> <unk> per share compared to a net loss of $6 7 million or <unk> 16 per share in the second quarter of 2023.

Speaker Change: However, we recorded an adjusted net income of $2 million for the quarter or <unk> <unk> per share compared to an adjusted net loss of $1 3 million or three cents per share in the same period last year.

Karen Zaderej: In addition to our surgeon education programs, we continue to invest in driving awareness and education on the quality of life's impact of numbness after mastectomy. We work with patient advocacy groups to build awareness and support the right of mastectomy patients to receive breast neurodization as a part of their reconstructive procedure. We're pleased with the increasing number of patients who are connecting with surgeons who perform breast neurodization through our recent station website.

Speaker Change: Adjusted second quarter, EBITDA was $5 6 million compared to an adjusted EBITDA loss of 0.2, Maryland in the prior year.

Nir Naor: This change stands as a testament to our focused execution and improvement in operational efficiency and underscores our commitment to optimizing our total cost. Despite the previously mentioned gross margin headwind, we generated positive cash flow in the second quarter. As of June 30th, our balance of cash, cash equivalents, and investments was $27.1 million compared to $23.6 million at the end of the first quarter of 2020.

Speaker Change: This change is a testament to our focus execution and improvement in operational efficiency and underscores our commitment to optimizing our total cost structure.

Nir Naor: Despite the previously mentioned growth margin headwinds, we generated positive cash flow in the second quarter. As of June 30th, our balance of cash, cash equivalents, and investments was 27.1 million dollars compared to a 23.6 million dollars at the end of the first quarter of 2024.

Speaker Change: Despite the previously mentioned gross margin headwinds.

Speaker Change: We generated positive cash flow in the second quarter.

Speaker Change: As of June 30, our balance of cash cash equivalents and investments was $27 1 million compared to $23 $6 million at the end of the first quarter of 2024.

Nir Naor: Turning now to our guidance. As outlined in today's press release, we're raising our revenue guidance for the full year 2024. Given the momentum we saw and the first half, we now expect revenue for the full year to be in the range of 182 million dollars to 186 million dollars. In addition, we're adjusting our growth margin for the year to be in the range of 74% to 76%, driven by the costs we described earlier. Additionally, we're reaffirming that we expect to be net cash flow positive to relatively for the period from April 1st to year end.

Nir Naor: Turning now to our guidance. As outlined in today's press release, we're raising our revenue guidance for the full year 2024. Given the momentum we saw in the first half, we now expect revenue for the full year to be in the range of $182 million to $186 million. In addition, we're adjusting our gross margin for the year to be in the range of 74% to 76%, driven by the costs we described earlier.

Speaker Change: Turning now to our guidance as outlined in today's press release, we are raising our revenue guidance for the full year 2024.

Speaker Change: Given the momentum we saw in the first half we now expect revenue for the full year to be in the range of $182 million to $186 million.

Speaker Change: In addition, we are adjusting our gross margin for the year to be in the range of 74% to 76% driven by the cost we described earlier.

Karen Zaderej: Our first portfolio addition in the nerve protection category was Axigard HA plus nerve protector, which continues to be well received by surgeons and an important growth driver. We're continuing to expand our offerings for nerve protection, and in June of 2024, we announced the full launch of our newest product, Avive plus soft tissue matrix. Avive plus is intended for use as a soft tissue barrier, and is a resorbable, multi-layer, amniotic membrane alligraphe that provides temporary protection and tissue separation during the critical phase of peripheral nerve healing. We are pleased with the initial positive surgeon feedback, and we believe that Avive plus will have use cases in multiple nerve repair applications.

Nir Naor: Additionally, we're reaffirming that we expect to be net cash flow positive cumulatively for the period from April 1st to year-end. In summary, we're pleased with our performance in the second quarter. We will continue to execute our strategies, invest in innovation, drive revenue growth, and optimize business allocation and profitability. And this time, we'd like to open the line for questions. Maria?

Speaker Change: Additionally, we are reaffirming that we expect to be net cash flow positive cumulatively for the period from April one through year end.

Nir Naor: In summary, we're pleased with our performance in the second quarter. We will continue to execute our strategies, investing innovation, drive revenue growth, and optimize versus allocation of profitability.

Speaker Change: In summary, we are pleased with our performance in the second quarter, we will continue to execute our strategies investing in innovation and drive revenue growth and optimize versus allocation and profitability.

Unknown Executive: And this time, we'd like to open the line for questions.

Speaker Change: At this time, we'd like to open the line for questions.

Unknown Executive: Maria? Thank you.

Speaker Change: Maria.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue you.

Unknown Executive: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. We ask that analysts limit yourselves to one question and a follow-up, so that others may have an opportunity to ask questions. You may re-cue if you have additional questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. We ask that you limit yourselves to one question and a follow-up so that others may have an opportunity to ask questions. You may retreat if you have additional questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Speaker Change: You May press Star two if you would like to remove your question from the queue. We ask that analysts limit yourselves to one question and a follow up so that others may have an opportunity to ask questions. You may re queue. If you have additional questions.

Karen Zaderej: With these additions, we believe we offer the most comprehensive protection portfolio for nerve repair, which addresses the diverse needs in the protection market.

Unknown Executive: You may return if you have additional questions.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Unknown Executive: One moment, please. I'll we pull for questions.

Operator: One moment, please, while we poll for questions. Our first question comes from Chris Pasquale with Nefron Research. Please proceed with your question.

Speaker Change: One moment, please while we poll for questions.

Chris Pizcal: Our first question comes from Chris Pizcal with Neffron Research. Please proceed with your question. Thanks, and congrats on the quarter, guys. Karen, I was hoping you could talk a little bit more about what drove the growth and selection here in 2P. I understand the million and a half of procedures shifting, but even if we adjust for that, growth was still over 20%. And it looks like it was driven by the core advanced product line more so than some of the newer products you've just launched. So what led to that? Why do we see a pickup in utilization?

Speaker Change: Our first question comes from Chris Watsco with Nephron Research. Please proceed with your question.

Karen Zaderej: Thanks and congratulations on the quarter, guys. Karen, I was hoping you could talk a little bit more about what drove the growth and selection here in 2Q. I understand the million and a half procedures shifting, but even if we adjust for that, growth was still over 20%. And it looks like it was driven by the core advanced product line more so than some of the newer products you've just launched. So what led to that? Why did we see a pickup in utilization?

Chris Watsco: Thanks, and congrats on the quarter guys.

Chris Watsco: Ken I was hoping you could talk a little bit more about what drove the growth inflection here in <unk> I understand the million and a half of procedures shifting but even if we adjust for that growth was still over 20% and it looks like it was driven by the core advanced product line more so than some of the newer products you've just launched so.

Speaker Change: What led to that why do we see it pick up.

Karen Zaderej: The study titled, Comparative Effectiveness, Systematic Review, and Meta Analysis, a peripheral nerve repair using direct repair and connector assisted repair. Assess differences in outcomes between nerves repaired with suture-only direct repair and connector assisted repair techniques. This level one evidence found that the connector assisted repair group had significantly more patients achieved meaningful recovery and significantly fewer patients experienced cold intolerance than those in the direct repair group. A suture direct repair is considered a historical standard of care and is one of the most common nerve repair methods.

Speaker Change: Utilization.

Karen Zaderej: Actually, our growth was across all of our products. So, Advance, of course, is our flagship product, but it still remains about 65% of our revenue. So, it didn't outpace all of the other areas.

Karen Zaderej: Actually, our growth was across all of our products, so advanced, of course, is our flagship product, but still remains about 65% of our revenue, so it didn't outpace all of the other areas that it remains our leading product, but we saw growth across the way. So, we see some of the innovations that I mentioned helped to drive it with certainly of Accigard HA Plus, of I Plus is recently launched so it's smaller, but we think it has a good trajectory ahead of it. And then, of course, we continue to see strong acceptance and growth in our newer applications like breast and OMS. Having said that, we also saw substantial growth in our trauma business and continue to be really pleased as our sales reps are executing and really focusing in on those high value targets that continue to drive deeper penetration in those targets across all of those areas.

Ken: Actually our growth was across all of our products. So advanced of course is our flagship product, but still remains at about 65% of our revenue. So it didn't outpace all of the other areas. It remains our leading product, but we saw growth across the way.

Karen Zaderej: It remains our leading product, but we saw growth across the way. So, some of the innovations that I mentioned helped to drive it with, certainly, AxiGuard HA+. Avive Plus is recently launched, so it's smaller, but we think it has a good trajectory ahead of it. And, of course, we continue to see strong acceptance and growth in our newer applications, like Breast and OMF. Having said that, we also saw substantial growth in our trauma business and continue to be really pleased as our sales reps are executing and really focusing in on those high-value targets. They're continuing to drive deeper penetration into those targets across all of those areas.

Speaker Change: So we see.

Speaker Change: Some of the innovations that I mentioned help to drive it with.

Speaker Change: Certainly of Axa Guard.

Speaker Change: Hey, plus.

Speaker Change: <unk> recently launched its smaller but we think it has a good trajectory ahead of it and then of course, we continue to see strong acceptance and growth in our newer applications like breast and our math.

Karen Zaderej: This evidence supports the benefit of protecting the nerve co-optation site with implants like our Axigard connectors and protectors as compared to direct repair alone. Similar to Meta Analysis' Prevulacy Polish for Nerve Gap Repair, we believe these findings will plan an important role in searching clinical decision-making and in the adoption of connector assisted repair techniques for transfected nerves.

Speaker Change: We said that we also saw substantial growth in the in our trauma business and continue to be really pleased as our sales reps are executing and really focusing in on those high value targets. They are continuing to drive deeper penetration in those targets across all of those areas.

Chris Pizcal: Thanks. And then the follow up would just be the guidance implies 10% to 15% growth in the back half of the year. So given the factors that you talked about for 2Q, which were mostly not one time in nature, but the results of execution and things that should be sustainable. You know, why the deceleration in the back half of the year? You just want to be conservative, or are there things that you're assuming will be incremental headwinds in 3Q and 4Q. Right. So just to add, again, we're very happy about our results for a second quarter, but it is relatively high also driven by this $1.5 million, Chris, that you mentioned.

Speaker Change: Thanks, and then the follow up would just be the guidance implies 10% to 15% growth in the back half of the year. So given the factors that you talked about for <unk>, which were mostly not onetime in nature, but the result is of execution and things that should be sustainable.

Nir Naor: And then the follow-up would just be, you know, the guidance implies 10 to 15% growth in the back half of the year. So given the factors that you talked about for 2Q, which were mostly not one-time in nature but results of execution and things that should be sustainable, you know, why the deceleration in the back half of the year? Do you just want to be conservative? Or are there things that you're assuming will be incremental headwinds in 3Q and 4Q? Right?

Karen Zaderej: Coming to the BLA for Advanced Nerve Grap, we're excited that we completed an important milestone with the submission of the first wave of data to FDA and May. We plan to provide the remaining modules in the third quarter. We believe this submission timeline will allow for a potential approval in mid 2025. As a reminder, a BLA approval will complete the regulatory process to transition advanced nerve graft to a 351 biological product. Importantly, we believe advance will be designated as the reference product for potential biosimilers, providing at least 12 years of market exclusivity from the approval date.

Speaker Change: Why the deceleration in the back half of the year or you just wanted to be conservative or are there things that you're assuming will be incremental headwinds in <unk> and <unk>.

Nir Naor: Right, so just to add, again, we're very happy about our results for the second quarter, but it is relatively high also, driven by this $1.5 million, Chris, that you mentioned. And in addition to that, Q2 of last year was probably a very favorable comparison in terms of year-over-year growth. Nonetheless, yeah, as Karen mentioned, we're very happy with the execution of our commercial strategy and the broad-based growth. And if that continues, we expect to be around the high end of the guidance.

Unknown Executive: Right. So just to

Speaker Change: Right. So just to add again, we're very happy about our results for the second quarter, but it is.

Speaker Change: Related we high also driven by this one half million dollars. Chris that you mentioned in addition to that Q2 of last year is probably a very favorable.

Nir Naor: In addition to that, Q2 of last year is probably a very favorable compare in terms of year of year growth. Nonetheless, yeah, as Karen mentioned, we're very happy with the execution of our commercial strategy and the broad base growth. And if that continues, we expect to be around the high end of the guidance. But again, the various puts and takes here, if we do see some deceleration of our key growth products and applications, that will be more towards the lower end. And yet, we wanted to give guidance that we feel absolutely confident with some level of caution here.

Karen Zaderej: Another key component of our transition to a biologic was the construction and validation of our new accident processing center near Dayton, Ohio. By the end of 2023, we had fully transitioned all advanced processing to this new facility. And in June of 2024, we celebrated the official ribbon cutting event supported by many esteemed community leaders. This new center not only enhances our processing capabilities and capacity, but it also underscores our commitment to quality and innovation.

Speaker Change: Compare in terms of year over year growth Nonetheless.

Karen Karen: Nonetheless, as Karen mentioned, we're very happy with the execution of our commercial strategy and the broad based growth and if that continues.

Karen Karen: We expect to.

Speaker Change: Be around the high end of the guidance, but again there are various puts and takes here.

Nir Naor: But again, there are various puts and takes here. If we do see some deceleration of our key growth products and applications, then we'll be more towards the lower end. And yeah, we wanted to give guidance that we feel absolutely confident with, so there's some level of caution here. You could argue that this is great.

Speaker Change: We do see some deceleration of our key.

Speaker Change: Growth products and applications that will be more towards the lower end and yes, we wanted to give guidance that we feel absolutely confident with.

Karen Zaderej: It demonstrates our investment in the local community fostering strong relationships with local leaders and showcasing our dedication to creating high quality jobs and contributing to this regional economy. As often seen in the ramp up of new facilities, we have incurred some startup costs that were of greater magnitudes than we initially expected and have impacted our growth margin in the near term. We have resolved these early challenges and we're confident in our ability to execute moving forward. During the startup process, we've also gained some insight into incremental operating cost of running the state-of-the-art biologic facility. We expect to see higher capacity utilization and other improvements that will help offset these costs over time.

Speaker Change: So there is some some level of caution here.

Chris Pizcal: You could argue. Great. Thank you.

Speaker Change: You could argue great. Thank you.

Michael Serconi: Our next question comes from Michael Serconi with Jeffries. Please proceed with your question. Good morning, and thanks for taking my questions. Good morning, Mike. Good morning.

Speaker Change: Our next.

Operator: Our next question comes from Michael Sarcone with Jeffries. Please proceed with your question.

Speaker Change: Question comes from Michael Sarcone with Jefferies. Please proceed with your question.

Operator: Good morning, and thanks for taking my questions. Good morning. So yeah, just to start, you know, some of the

Michael Sarcone: Morning, and thanks for taking my questions.

Mike: Good morning, Mike.

Mike: Good morning, just to start some of the the.

Michael Serconi: So just to start, some of the expenses you talked about in the new facility that were greater magnitudes and expected, you mentioned some challenges that were resolved. Could you just maybe elaborate on what those challenges were and how you resolved them and that you feel confident in the go forward? Yeah, I think like any new startup, there were some mistakes that were made as we started up in processing by new operators or equipment for processes that weren't quite set up for daily operation as we had hoped they would be. And so the losses were ended up that we ended up quarantining lots that had deviations to them and ultimately deciding that they should not be released for commercial use.

Speaker Change: <unk> expenses, you talked about in the new facility that we're greater magnitude than expected you mentioned some challenges that were resolved could you just maybe elaborate on what those challenges were in.

Speaker Change: How you resolve them and that you feel confident in.

Speaker Change: The go forward.

Speaker Change: Yeah, I think like any new startup there were some mistakes that were made as we started up in processing by new operators or <unk>.

Karen Zaderej: Yeah, I think like any new startup, there were some mistakes that were made as we started up in processing by new operators or equipment processes that weren't quite set up for daily operation as we had hoped they would be. And so the losses were so great that we ended up quarantining lots that had deviations to them and ultimately deciding that they should not be released for commercial use. They'll be used for the demo.

Unknown Executive: Yeah, I think like any new startup, there were some mistakes that were made as we started up in processing by new operators or equipment processes that weren't quite set up for daily operation as we had hoped they would be. And so the losses were so great that we ended up quarantining lots that had deviations to them and ultimately deciding that they should not be released for commercial use. They'll be used for the demo.

Karen Zaderej: In conclusion, we're pleased with our strong second quarter results which reflect the successful execution of our gross strategy and commitment to innovation. Looking ahead, we remain focused on delivering on our revenue growth and profitability as we advance our mission to revolutionize the science of nerve repair.

Speaker Change: Equipment processes that werent quite setup.

Speaker Change: For daily Operation as we had hoped they would be and so the losses were ended up that we ended up quarantining lots that had deviations to them and ultimately deciding that they should not be.

Nir Naor: I'll now hand the call over to you here, who will provide further details on our financials and provide the updated financial guidance for the full year 2024 year. Thank you, Karen. We're excited about our results for the quarter. We have seen a lot of progress in our strategy and our commercial execution continues to yield solid results. Turning to our financial results for this quarter, our revenue was $47.9 million representing 25.6% growth from the second quarter of 2023.

Speaker Change: Released for commercial use there'll be used for demo and so we had a greater.

Nir Naor: They'll be used for demo, and so we had a greater the cost was directly. We had a greater number of lots failing, mostly not because they failed in terms of product quality, but because they had these procedural issues that came up with them that were ended up being written off. We've resolved that we've put in place, you know, a lot of investigation, a lot of good engineering work, and today we're running at or greater yields and acceptance rates than what we have historically. So we're certainly where we expect to be now, but in the earlier part of this year we saw some bumps.

Karen Zaderej: And so we had a greater, the cost was directly, we had a greater number of lots failing, mostly not because they failed in terms of product quality, but because they had these procedural issues that came up with them that ended up being written off. We've resolved that, we've put in place a lot of investigation, a lot of good engineering work, and today we're running at or greater yields and acceptance rates than what we have historically. So we're certainly where we expect to be now, but in the earlier part of this year, we saw some bumps.

Unknown Executive: And so we had a greater, the cost directly reflected, we had a greater number of lots failing, mostly not because they failed in terms of product quality, but because they had these procedural issues that came up with them that ended up being written off. We've resolved that; we've put in place a lot of investigation, a lot of good engineering work. And today we're running at or greater yields and acceptance rates than what we have historically. So we're certainly where we expect to be now, but in the earlier part of this year, we saw some bumps.

Speaker Change: Cost to us directly we had a greater number of lots are failing mostly not because they failed in terms of product quality, but because they had these procedural issues that came up with them that were ended up being written off.

Unknown Executive: Got it. Thank you.

Speaker Change: Resolve that we've put in place.

Speaker Change: You know a lot of investigation and a lot of good engineering work and today, we're running at.

Speaker Change: <unk> or greater yields and acceptance rates than what we have historically so we're we're certainly where we expect to be now but.

Nir Naor: This growth is attributed to a 22.4% increase in unit volume and mixed and a 3.2% increase in price. Higher unit volumes were driven by broad strengths across the existing product portfolio, momentum from new product introductions, as well as some benefits from shifting procedures from March to the early parts of the second quarter, which we believe added approximately $1.5 million in revenues to this quarter. As we mentioned on past calls, we expect gross margin to contract as we sell more products from our new facility, which are at a higher relative cost.

Speaker Change: In the earlier part of.

Speaker Change: This year, we saw some some pumps.

Michael Serconi: Got it.

Unknown Executive: Then you talked about better Salesforce productivity. Can you also give us some more color there on, you know, what you're doing commercially that's helping to drive that better rep productivity? Yeah, I think it's directly related to our strategy.

Speaker Change: Got it. Thank you and then you talked about better sales force productivity can you also give us some more color there.

Michael Serconi: Thank you.

Karen Zaderej: Then you talked about better sales force productivity. Can you also give us some more color there on, you know, what you're doing commercially that's helping to drive that better productivity? Yeah, I think it's directly related again to our strategy of really focusing in on these high value targets. The reps are sending their time where they can continue to get where they can continue to build a solid repeat business, and that's particularly important in the trauma space. Again, with those unscheduled cases, you really need to be top of mind. And, and build it out so there's more than one surgeon who's using your products for traumatic injuries.

Speaker Change: What youre doing commercially that's helping to drive that better rep productivity.

Speaker Change: I think it's directly related again to our strategy of really focusing in on these high value targets. The reps are spending their time, where they can continue to get where they can continue to build a solid repeat business and that's particularly important in the trauma space again with those unscheduled cases, you really need to be.

Nir Naor: We expect this headwind to be offset by higher capacity utilization and other improvements as we scale up processing. Nonetheless, as Karen mentioned, we have incurred some start-up issues and saw some incremental ongoing costs associated with this type of facility. On a positive note, we have resolved these early challenges and is such expected to see gross margin improvements over time. Our gross profit for the quarter was $35.3 million and increased from the $29.7 million recorded in the second quarter of 2023.

Speaker Change: Top of mind and and build it out so there's more than one surgeon who is using your products for <unk> for.

Speaker Change: For traumatic injuries and so we've been pleased with that strategy, we see that reps engaging in it theyre happy because theyre, making their numbers and we're happy because we're seeing the growth we expect.

Karen Zaderej: And so we've been pleased with that strategy. We see the reps engaging in it. They're happy because they're making their numbers, and we're happy because we're seeing the growth we expect. Great.

Kevin: Great. Thank you Kevin.

Karen Zaderej: Thank you, Karen.

Nir Naor: This represents gross margin of 73.8% down from the 77.7% in the same period last year, mainly due to product mix including the previously mentioned trends of higher cost of product sold driven by the higher relative cost over new facility. Our toll operating expenses for the quarter decreased by 2.2% to $35.8 million down from $36.6 million in Q2 of 2023. Then a decrease in toll expenses was primarily the result of the reduction in R&D expenses, royalty fees and travel costs.

Caitlin Cronin: Our next question comes from Caitlin Cronin with Can a cord genuity. Please proceed with your question. Hey, great. Congrats on an awesome quarter, and thanks for taking the questions. So just to jump off of the APC question. You know, what do you expect the margin to be as you recover from those challenges, giving you already expected to kind of a lower gross margin through the second half of the year just from the transition to the facility? Right. So our guidance for the year took into account the Q2 results. Those startup issues that we've had and our assessment of overall cost.

Speaker Change: Our next question comes from Caitlin Kannan with Canaccord Genuity. Please proceed with your question.

Karen Zaderej: Got it. Thank you.

Karen Zaderej: Then you talked about better Salesforce productivity. Can you also give us some more color there on, you know, what you're doing commercially that's helping to drive that better rep productivity? Yeah, I think it's directly related to our strategy.

Caitlin Kannan: Oh, great congrats on the quarter and thanks for taking my questions.

Caitlin Kannan: So Justin you jump off of the Hec question.

Unknown Executive: So just to jump off of the APC question, you know, what do you expect the margin to be as you recover from those challenges, given you already expected kind of a lower gross margin through the second half of the year, just from the transition to the facility?

Caitlin Kannan: You know what do you expect the margin to cover.

Speaker Change: Some of those challenges given you already expected.

Speaker Change: Lower.

Speaker Change: Gross margins in the second half of the year just from the transition to the facility.

Speaker Change: Right so our guidance for.

Speaker Change: For the year, taking into account the Q2 results.

Nir Naor: Our sales and marketing expenses for the second quarter grew by 4.2% to $19.7 million, driven by compensation and occupancy related expenses. Sales and marketing is a percentage of toll revenue decreased to 41.1% from 49.4% in the second quarter of 2023 as we saw improved sales force productivity and top line growing faster than sales market. Research in development expenses decreased by 5.6% to 6.7 million dollars from 7.1 million dollars in the second quarter of 2023.

Speaker Change: Those startup issues that we've had and our assessment of overall cost.

Nir Naor: I would say that the end result would be then a function of two trends that we mentioned before. So one gradually selling more products from the new facility at a higher cost that will take the margin down gradually. On the other hand, offsetting this is benefiting the margin, higher capacity utilization, and other improvements that we are putting in place.

Speaker Change: I would say that the end result would be then a function of two trends that we mentioned before so one gradually filling more product from the new facility at a higher cost I will take the margin down gradually on the other hand offsetting that is.

Speaker Change: Benefiting the margin.

Speaker Change: Higher capacity utilization and other improvements.

Speaker Change: We are putting in place so in the end the margin for the year will be the result of the relative weight and balanced over those two trends again for the year.

Nir Naor: So, in the end, the margin for the year will be the result of the relative weight and balance of those two trends against for the year between 74 and 70. 36% okay, great.

Nir Naor: As a percentage of total revenues, total R&D expenses decreased to 13.9% down from 18.7% in the same quarter of the previous year. General and administrative expenses decreased to 9.4 million dollars in the second quarter of 2024 compared to 10.6 million dollars in the same quarter of 2023 mainly driven by lower compensation cost. The quarter ended with a net loss of 1.9 million dollars or 4 cents per share compared to a net loss of 6.7 million dollars or 16 cents per share in the second quarter of 2023.

Speaker Change: Between 74 and 76%.

Speaker Change: Okay, great and.

Karen Zaderej: And two graphs on the new CDO, Karen, really sad if you go, but, you know, what do you think Michael brings to the table that can help AxoGen along in the next phase with Web Cycle? Yeah, absolutely. Very excited to have Mike. He brings over 30 years of leadership experience in Medtech companies across various therapeutic areas, predominantly very good commercial experience, and his focus will be driving our commercial growth and boosting our move towards profitability and cash flow positivity. And he brings experience from both small companies, larger companies, private, and public.

Speaker Change: Congrats on the new CEO, Karen really sad to see you go but you know what.

Speaker Change: What do you think Michael brings to the table that can help oxygen along in its next phase of its lifecycle.

Unknown Executive: Yeah absolutely, very excited to have Mike. He brings over 30 years of leadership experience in medtech companies across various therapeutic areas. Mostly, very good commercial experience, and his focus will be driving our commercial growth and boosting our move towards profitability and cash flow positive.

Speaker Change: Yes, absolutely very excited to have Mike.

Speaker Change: He brings over 30 years of leadership experience in med tech companies across various.

Speaker Change: Therapeutic areas.

Speaker Change: Predominantly very good commercial experience and his focus will be driving our commercial growth and.

Nir Naor: However, we recorded an adjusted net income of 2 million dollars for the quarter or 5 cents per share compared to an adjusted net loss of 1.3 million dollars or 3 cents per share in the same period last year. Adjust the second quarter EBITO was 5.6 million dollars compared to an adjusted EBITO loss of 0.2 million dollars in the prior year. The change stands as a testament to our focus execution and improvement in operational efficiency and underscores are commitment to optimizing our toll cost structure.

Speaker Change: Boosting our move towards profitability and cash flow positivity.

Speaker Change: And he brings experience from both small companies larger companies private and public.

Michael Kratky: Thanks, Caitlin. Our next question comes from Mike Kratky with Learning Partners. Please proceed with your question.

Speaker Change: Thank you.

Caitlin Kannan: Thanks Caitlin.

Speaker Change: Yes.

Speaker Change: Our next question comes from Mike Kratky with Leerink Partners. Please proceed with your question.

Brett Gasaway: Hey guys, this is Brett on from Mike. Thanks for taking the questions, and I'd congratulate some of the great quarter. Thank you. So obviously, yes, of course, you saw substantial step up in revenue per non-core account this quarter, you know, even excluding the benefits in that procedure shift. So can you talk to some of the drivers and some of the commercial efforts that may be driving that step up in non-core revenue per account? Well, again, it is, we've identified target accounts that we want our reps that have high potential that we want our reps to really focus on.

Speaker Change: Hey, guys. This is Brett on for Mike Thanks for taking the questions and congrats on another great quarter. Thank.

Nir Naor: Despite the previously mentioned growth margin headwinds, we generated positive cash flow in the second quarter. As of June 30th, our balance of cash cash equivalents and investments was 27.1 million dollars compared to a 23.6 million dollars at the end of the first quarter of 2024.

Speaker Change: Thank you all obviously, yes of course, you are you saw substantial step up in revenue per noncore count this quarter.

Speaker Change: Even excluding the benefit from that procedure shifts. So can you talk through some of the drivers and some of the commercial efforts that may be driving that step up in noncore revenue per account.

Karen Zaderej: Yeah, I think it's directly related again to our strategy of really focusing in on these high-value targets. So the reps are spending their time where they can continue to get where they can continue to build a solid repeat business. And that's particularly important in the trauma space. Again, with those unscheduled cases, you really need to be top of mind and build it out so that it's more than one surgeon who's using your products for traumatic injuries.

Speaker Change: Well again it is we've identified.

Speaker Change: Targeted accounts that we want our reps that have a high potential that we want our reps to really focus on and some of those are core accounts today. Many of them frankly are core accounts today, but some are not someone just to high potential account that are that we think meets our criteria for focus.

Brett Gasaway: And some of those are core accounts today; many of them, frankly, are core accounts today, but some are not. Some are just a high potential account that we think meets our criteria for focus. And so that's where our reps have been really spending their time. I think they really hit their stride here in second quarter, understanding the strategy, understanding where we're going, and they're just continuing to execute and put numbers on the page. That makes total sense. And then just as a follow-up, you know, obviously you're not breaking out scheduled versus trauma going forward, but you did hit benefit from trauma this quarter.

Nir Naor: Additionally, we're reaffirming that we expect to be net cash flow positive to relatively for the period from April 1st to year end. In summary, we're pleased with our performance in the second quarter. We will continue to execute our strategies, investing innovation, drive revenue growth, and optimize versus allocation of profitability.

Speaker Change: And so.

Speaker Change: That's where our reps have been really spending their time I think they really hit their stride here in second quarter.

Speaker Change: Understanding the strategy understanding where we're going and they're just continuing to execute and put numbers on the page.

Speaker Change: Got it that makes total sense and then just as.

Unknown Executive: And this time, we'd like to open the line for questions. Maria? Thank you.

Speaker Change: As a follow up.

Speaker Change: Obviously, youre not breaking out scheduled versus trauma going forward, but you did see a benefit from trauma this quarter.

Unknown Executive: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. We ask that analysts limit yourselves to one question and a follow-up so that others may have an opportunity to ask questions. You may re-cue if you have additional questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please. I'll we pull for questions.

Karen Zaderej: So how should you be thinking about the contribution from that? I guess in the second half, 2025, is there anything that we should be thinking about that is more durable, maybe kind of lying under the surface at this point? At the core of this strategy that we have is the philosophy that by building concentration and account, you build a stronger annuity business, and you continue to build on that. And so we think that the important thing here is that that business is sticky and that it continues to grow with some momentum. And that's really been our philosophy in thinking about the strategy and the results that we've seen today.

Speaker Change: So how should we be thinking about the contribution from that I guess in the second half of 2025 is there anything we should be thinking about that as more durable that maybe you're kind of lining under the surface at this point.

Unknown Executive: What is at the core of this strategy?

Speaker Change: Alright at the core of this strategy that we have is the philosophy that by building.

Speaker Change: By building concentration and accounts.

Speaker Change: Build a stronger annuity business and you get you continue to build on that and so we we think that the important thing here is that that business is sticky.

Speaker Change: And that it continues to grow with some momentum and that's really been our philosophy in thinking about the strategy and the results that we've seen today.

Brett Gasaway: Understood.

Speaker Change: Understood. Thanks, guys.

Brett Gasaway: Thanks, guys.

Jason Bedford: Thank you. Our next question comes from Jason Bedford with Raymond James. Please proceed with your question.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Jason Bedford with Raymond James. Please proceed with your question.

Operator: Our next question comes from Caitlin Cronin with Canaccord Genuity. Please proceed with your question.

Operator: Our next question comes from Jason Bedford with Raymond James. Please proceed with your question.

Jason Bedford: Good morning. Thanks for taking the questions.

Jason Bedford: Good morning, Thanks for taking the questions Karen I'm not sure if you'll be on these calls going forward, but certainly congratulations on what you've helped build here.

Operator: Hey, great, congrats on an awesome quarter and thanks for taking the questions. So just to jump off of the APC question, you know, what do you expect the margin to be as you recover from those challenges, given you already expected kind of a lower gross margin through the second half of the year just from the transition to the facility?

Jason Bedford: Karen, I'm not sure if you'll be on these calls going forward, but certainly congratulations on what you've helped build here. I guess you're welcome. The couple of questions, a vibe plus, can we assume they're launched at more broadly late in the quarter? Can we assume there wasn't much contribution in two queue?

Chris Pizcal: So what led to that? Why do we see a pickup in utilization? Actually, our growth was across all of our products, so advanced, of course, is our flagship product, but still remains about 65% of our revenue, so it didn't outpace all of the other areas that it remains our leading product, but we saw growth across the way. So, we see some of the innovations that I mentioned helped to drive it with certainly of Accigard HA plus, of I plus is recently launched so it's smaller, but we think it has a good trajectory ahead of it.

Karen Karen: Thank you.

Karen Karen: You are welcome.

Jason Bedford: Couple of questions.

Nir Naor: Right, so our guidance for the year took into account the Q2 results, those startup issues that we've had, and our assessment of overall costs. I would say that the end result would then be a function of two trends that we mentioned before. So one, gradually selling more products from the new facility at a higher cost that will take the margin down gradually. On the other hand, offsetting this is benefiting the margin, higher capacity utilization, and other improvements that we are putting in place. So, in the end, the margin for the year will be the result of the relative weight and balance of those two trends, again, for the year between 74 and 75.

Speaker Change: Device plus can we assume that or you launched it more broadly late in the quarter can we assume there wasn't much contribution.

Jason Bedford: <unk>.

Karen Zaderej: And then in the, I know you're in the early introduction phase here, but the value analysis process within hospitals has been burdensome or has this process been pretty smooth? Yeah, great question. And you're right. As you launch a new product, you've got a number of administrative hurdles that you've got to get through in account. And so the total contribution in this quarter is modest. We think it's got a lot of potential, but it's going to be modest in the initial stages. And yeah, one of the administrative hurdles is that when you bring in a new product, you've got to go through the value analysis committee.

Jason Bedford: Then.

Speaker Change: I know you are in the early.

Speaker Change: Introduction phase here, but.

Speaker Change: Is that the value analysis process within hospitals been burdensome or is this process been pretty smooth.

Speaker Change: Yes.

Speaker Change: Great question, and you're right as you launch a new product you've got a number of administrative hurdles that you've got to get through in an account and so the total contribution in this quarter is.

Chris Pizcal: And then, of course, we continue to see strong acceptance and growth in our newer applications like breast and OMS. Having said that, we also saw substantial growth in our trauma business and continue to be really pleased as our sales reps are executing and really focusing in on those high value targets that continue to drive deeper penetration in those targets across all of those areas.

Speaker Change: Modest we think it's got a lot of potential, but it's going to be modest in the initial stages and yes. One of the administrative hurdles is that when you bring in a new product you've got to go through value analysis Committee.

Karen Zaderej: Our assumption going in was that we would need a value analysis committee in essentially all accounts. We have been pleasantly surprised in some in that they still had the vibe, the original vibe that we withdrew because of the regulatory changes in 2021. They still have the vibe on their systems, and they've allowed a vibe plus to come in without going through a full value analysis committee. So we actually have done, had a little higher step up than we expected, but I don't want to overplay that to make it sound, you know, that was a major driver of growth.

Speaker Change: Our assumption going in was that we would need value analysis committee in essentially all accounts.

Speaker Change: We have been pleasantly surprised in some in that they still had a vibe. The original revive that we withdrew because of the regulatory changes in 2021, they still have the avaya on their in their systems and they've allowed a five plus to come in without going through a full value analysis committee. So we <unk>.

Karen Zaderej: Thanks. And then the follow up would just be the guidance implies 10% to 15% growth in the back half of the year. So given the factors that you talked about for 2Q, which were mostly not one time in nature, but the results of execution and things that should be sustainable. You know, why the deceleration in the back half of the year, you just want to be conservative or are there things that you're assuming will be incremental headwinds in 3Q and 4Q.

Speaker Change: Actually have done had a little higher step up than we expected, but I don't want to overplay that to make it sound that way.

Speaker Change: A major driver of growth is just a really good foundation for us to start to build that growth from.

Karen Zaderej: It's just a really good foundation for us to start to build that growth from.

Karen Zaderej: Right. So just to add, again, we're very happy about our results for a second quarter, but it is relatively high also driven by this $1.5 million Chris that you mentioned. In addition to that Q2 of last year is probably a very favorable compare in terms of year of year growth. Nonetheless, yeah, as Karen mentioned, we're very happy with the execution of our commercial strategy and the broad base growth. And if that continues, we expect to be around the high end of the guidance.

Jason Bedford: Okay, that's helpful.

Speaker Change: Okay. That's helpful. Maybe just last one on the Opex.

Nir Naor: Maybe just last one on the op-ex, you were able to leverage revenue really well. Just curious, was there a timing dynamic that will see cost jump in the second half? Or is this level reflective of a business kind of settling into a more normalized level of spending? Yeah, I would say that there's some season healthy in our op-ex pen, but not material ones. So I would consider the level of op-ex pen in the past two quarters, even a bit more, as indicative. So we don't expect any major swings or increases in op-ex.

Unknown Executive: You were able to leverage revenue really well. Just curious, was there a timing dynamic that will see cost jump in the second half, or is this level reflective of a business kind of settling into a more normalized level of spending?

Speaker Change: You were able to leverage revenue really well just curious was there a timing dynamic that we'll see cost jump in the second half or is this level reflective of a business kind of settling into a more normalized level of spending.

Speaker Change: Yeah, I would say that.

Unknown Executive: Yeah, I would say that there's some seasonality in our operating expenses, but not material ones. So I would consider the level of operating expenses in the past two quarters, even a bit more as indicative, so we don't expect any major swings or increases in operating expenses.

Speaker Change: There is some seasonality in our opex spend but not non material ones. So I would consider the level of opex spend in the past.

Karen Zaderej: But again, the various puts and takes here, if we do see some deceleration of our key growth products and applications that will be more towards the lower end. And yet, we wanted to give guidance that we feel absolutely confident with some level of caution here.

Speaker Change: Two quarters, even a bit more as indicative. So we don't expect any major.

Speaker Change: Swings or increases.

Nir Naor: And just a reminder, though, the beginning of next year, Q1 op-ex is typically higher. No, the Q1. Yeah, that's a good point. So the Q1 will have a high, as every year, a high amount of cash outflow, but still, you know, due to accruals and so on, the op-ex itself, again, should not be much fairly higher than the average.

Unknown Executive: And just a reminder, though, at the beginning of next year, our Q1 OPEX is typically higher. No, the Q1, yeah, that's a good point.

Speaker Change: And just a reminder, though at the beginning of next year. Our Q1 Opex is typically higher.

Unknown Executive: Now, the Q1, yeah, that's a good point. So the Q1 will have a high, as every year, a high amount of cash outflow. But still, you know, due to accruals and so on, the opex itself, again, should not be materially higher than the average.

Unknown Executive: You could argue.

Speaker Change: Yes. It is.

Unknown Executive: Great.

Unknown Executive: Thank you.

Speaker Change: Q1, yes, thats a good point so the Q1 will have a high as every year a high amount of cash outflow.

Michael Sarcone: Our next question comes from Michael Serconi with Jeffries. Please proceed with your question. Good morning, and thanks for taking my questions. Good morning, Mike. Good morning. So just to start, some of the expenses you talked about in the new facility that were greater magnitudes and expected, you mentioned some challenges that were resolved.

Speaker Change: But it's still due to accruals and so on.

Speaker Change: The opex itself again should not be materially higher than the average.

Nir Naor: Okay, thank you.

Speaker Change: Okay. Thank you.

Speaker Change: Okay.

Nir Naor: Could you just maybe elaborate on what those challenges were and how you resolved them and that you feel confident in the Go Forward? Yeah, I think like any new startup, there were some mistakes that were made as we started up in processing by new operators or equipment for processes that weren't quite set up for daily operation as we had hoped they would be. And so the losses were ended up that we ended up quarantining lots that had deviations to them and ultimately deciding that they should not be released for commercial use.

Ross Osborn: Our next question comes from Ross Osburn with Cantor Fitzgerald. Please proceed with your question. Oh, did we lose Ross? Ross, are you muted?

Operator: Our next question comes from Ross Osborn with Cantor Fitzgerald. Please proceed with your question.

Speaker Change: Our next.

Speaker Change: Comes from Ross Osborne with Cantor Fitzgerald. Please proceed with your question.

Speaker Change: Did we lose Ross.

Rafa: Rafa you muted.

Unknown Executive: Okay, we can go to the next question, and Ross, if you're able to, you can rejoin.

Speaker Change: Okay. We can go to the next question and Ross if Youre able to you can rejoin our next question comes from Dave, Turkey, Turkey with citizens J M. P. Please proceed with your question.

Dave Turkaly: Our next question comes from Dave Turkaly, with Citizens JMP. Please proceed with your question. Great.

Karen Zaderej: Okay, great. And congrats on being the new CEO. Karen, really sad to see you go. But, you know, what do you think Michael brings to the table that can help AxoGen along in its next phase of the flood cycle? Yeah, absolutely. Very excited to have Mike.

Ross Osborn: Great, I try not to say this, but yeah, congrats on the print and congrats on hiring Mike. He is a great guy and a great leader. Yeah, we, we

Rafa: Great.

Karen Zaderej: I'm trying not to say this, but yeah, congrats on the print and congrats on hiring Mike. He is a great guy and a great leader. Karen, you know, you mentioned Level One trauma centers and the academic centers that you're focused on. I'm just curious, do you have a number like an outright number of how many there are? And then, as I look at your core accounts at 412, I'm just trying to get an understanding of like, are you in most of these are eddies, or is there is a green space? Like, what percent of core are those level one centers?

Dave Turkey: Try not to say this but congrats on the on the print and congrats on hiring Mike. He is a great guy and a great leader.

Nir Naor: They'll be used for demo and so we had a greater the cost was directly we had a greater number of lots failing mostly not because they failed in terms of product quality but because they had these procedural issues that came up with them that were ended up being written off. We've resolved that we've put in place, you know, a lot of investigation, a lot of good engineering work and today we're running at at or greater yields and acceptance rates than what we have historically so we're certainly where we expect to be now but in the earlier part of this year we saw some some bumps. Got it. Thank you. Then you talked about better sales force productivity.

Karen Zaderej: Yeah absolutely, very excited to have Mike. He brings over 30 years of leadership experience in medtech companies across various therapeutic areas. Primarily, very good commercial experience, and his focus will be driving our commercial growth and boosting our move toward profitability and cash flow positive. And he brings experience from both small companies and larger companies, private and public.

Karen Karen: Karen you mentioned a level one trauma centers in the academic centers that youre focused on.

Operator: Our next question comes from Mike Kratky with Lee Ring Partners. Please proceed with your question. Hey guys, this is Brett Gasaway.

Dave: I'm just curious do you have a number like the outright number of how many there are and then as I look at your core accounted for 12 Im just trying to get an understanding of like are you in most of these already or is there is a green space like what percent of core are those level one centers yes.

Operator: Hey guys, this is Brett on for Mike. Thanks for checking the questions and congrats on another great quarter. Thank you. So obviously, yes, of course, you saw a substantial step up in revenue per non-core account this quarter, even excluding the benefits from that procedure shift. So can you talk to some of the drivers and some of the commercial efforts that may be driving that step up in non-core revenue per account?

Karen Zaderej: Well, again, it is. We've identified target accounts that we want our reps, that have high potential, that we want our reps to really focus on, and some of those are core accounts today. Many of them, frankly, are core accounts today, but some are not. Some are just high-potential accounts that we think meet our criteria for focus. And so that's where our reps have been really spending their time. I think they really hit their stride here in the second quarter, understanding the strategy, understanding where we're going, and they're just continuing to execute and put numbers on the page.

Unknown Executive: Yeah, we are; thanks for the question. Yeah, we still see a lot of room to go.

Karen Zaderej: Yeah, we are. Thanks for the question. Now we still see a lot of room to go. That was one of the things that we came to the conclusion was we really wanted to focus the reps because we felt that they were trying to spread themselves to send and trying to go after too many things at once. And that was really the focus on this targeted approach. If you look at the number of level one, level two trauma centers, academic centers, we talk about that there's a little over 5,000 accounts out there. A half to a third of that, we would consider to be what I call a good target.

Speaker Change: Thanks for the question that we still see a lot of room to go that that was one of the things that we came to the conclusion was we really wanted to focus the reps because we felt that they were trying to spread themselves too thin.

Unknown Executive: That was one of the things that we came to the conclusion that we really wanted to focus the reps because we felt that they were trying to spread themselves too thin and trying to go after too many things at once, and that was really the focus of this targeted approach. If you look at the number of Level 1, Level 2 trauma centers, academic centers, we talk about that there are a little over 5,000 accounts out there.

Dave Turkey: And trying to go after too many things at once and that was really the focus on this.

Nir Naor: Can you also give us some more color there on, you know, what you're doing commercially that's helping to drive that better productivity? Yeah, I think it's directly related again to our strategy of really focusing in on these high value targets. The reps are sending their time where they can continue to get where they can continue to build a solid repeat business and that's particularly important in the trauma space again with those unscheduled cases you really need to be top of mind.

Rafa: Targeted approach.

Speaker Change: If you look at the number of level one level two trauma centers academic centers.

Rafa: We talked about that there is little over 5000 accounts out there.

Unknown Executive: A half to a third of that we would consider to be what I'd call a good target. And so our focus today is still, you know, a subset of that, and there's still quite a bit of room to grow.

Rafa: A half to a third of that we would consider to be what I would call a good target and so our focus today is still with.

Karen Zaderej: And so our focus today is still a subset of that, and there's still quite a bit of room to grow. Great.

Rafa: A subset of that and there's still quite a bit of room to grow.

Nir Naor: And and build it out so there's more than one surgeon who's using your products for for traumatic injuries. And so we've been pleased with that strategy. We see the reps engaging in it. They're happy because they're making their numbers and we're happy because we're seeing the growth we expect. Great.

Speaker Change: Great and then as a follow up on the comments you made on the sales force productivity.

Unknown Executive: Great. And then as a follow-up on the comments you made on Salesforce productivity, I was wondering if you could even comment broadly, like what that is or what level that's at. And then if you think, you know, there's still room to go for those guys, you know, to continue, you know, to

Karen Zaderej: And then, as a follow-up on the comments you made on Salesforce productivity, I was worried if you could even comment on broadly what that is or what level that's at. And then, if you think there's still room to go for those guys to continue to sell even more. Yeah, we still have the same views on productivity that we've talked about in the past, which is that a standalone rep in a territory pulling providing full service to an account has the potential to do about two million dollars on average in their territory. We've seen reps do higher than that, but the trick is how do we get the whole average up?

Speaker Change: I was wondering if you could comment on broadly like what that is or what level. That's out and then if you think there's still room to go.

Unknown Executive: Thank you, Karen.

Speaker Change: For those guys to continue.

Speaker Change: Yeah.

Speaker Change: So even more.

Unknown Executive: Yeah, we still have the same views on productivity that we've talked about in the past, which is that a standalone rep in a territory providing full service to an account has the potential to do about $2 million on average in their territory. We've seen reps do more than that, but the trick is, how do we get the whole average up? So obviously, our average is still below that, but it is continuing to increase and showing really good trends.

Caitlin Cronin: Our next question comes from Caitlin Cronin with can a cord genuity. Please proceed with your question. Hey, great.

Speaker Change: We still have the same views on productivity that we've talked about in the past which is that Ah.

Rafa: Our standalone rep in a territory.

Caitlin Cronin: Congrats on an awesome quarter and thanks for taking the questions. So just to jump off of the APC question. You know, what do you expect the margin to be as you recover from those challenges, giving you already expected to kind of a lower gross margin through the second half of the year just from the transition to the facility? Right. So our guidance for the year took into account the Q2 results. Those startup issues that we've had and our assessment of overall cost.

Speaker Change: Poland, providing full service to an account has the potential to do about $2 million on average and in their territory.

Caitlin Cronin: I would say that the end result would be then a function of two trends that we mentioned before. So one gradually selling more products from the new facility at a higher cost that will take the margin down gradually. On the other hand, offsetting this is benefiting the margin higher capacity utilization and other improvements that we are putting in place. So in the end, the margin for the year will be the result of the relative weight and balance of those two trends against for the year between 74 and 70.

Speaker Change: We've seen reps do higher than that.

Speaker Change: The trick is how do we get the whole averaged up so obviously, our average is still below that but continuing to increase and showing really good trends there.

Karen Zaderej: So obviously, our average is still below that but continuing to increase and showing really good trends. The other thing that I think is a potential to help improve that number and bring the two million up is to add support people in the territories that are lower cost. And so we continue to look at these ways that we can continue to push productivity and ultimately improve the number even above two million, but right now our target is that two million number. Thank you.

Unknown Executive: The other thing that I think is a potential to help improve that number and bring the $2 million up is to add support people in the territories at a lower cost. And so we continue to look at these ways that we can continue to push productivity and ultimately improve the number even above $2 million, but right now, our target is that $2 million number.

Speaker Change: The other thing that I think is the potential to help improve that number and bring the $2 million up is to add support people in the territories at a lower cost and so we continue to look at these waves that we can continue to push productivity and ultimately improve.

Speaker Change: <unk> improved the number even above 2 million, but right now our target is that 2 million number.

Speaker Change: Thank you.

Unknown Executive: There are no further questions at this time.

Speaker Change: There are no further questions at this time I would now like to turn the floor back over to Karen Saturday for closing comments.

Karen Zaderej: Got it. That makes total sense.

Karen Zaderej: I would now like to turn the floor back over to Karen Zatteray for closing comments. Thank you, Maria. And before we conclude today's call, I actually want to just take a moment to reflect on our incredible oxygen journey. Over the past 18 years at Accigen, we've achieved remarkable milestones together. We've demonstrated the opportunity to have a significant impact on patient outcomes in a broad range of applications. from our single-minded focus on building awareness of the significant impact of nerve injuries to the success of our flagship product, Advanced Nerve Graphs, and the recent launches of our latest innovations, Axigord HA-plus-Nerve Protector, and Avive-plus-Fox Tissue Matrix.

Karen Zaderej: Thank you, Maria. And before we conclude today's call, I actually want to just take a moment to reflect on our incredible AxoGen journey. Over the past 18 years at AxoGen, we've achieved remarkable milestones together. We have demonstrated the opportunity to have a significant impact on patient outcomes in a broad range of applications. From our single-minded focus on building awareness of the significant impact of nerve injuries to the success of our flagship product, Advanced NerveGraft, and the recent launches of our latest innovations, AxoGuard HA Plus Nerve Protector and Avive Plus Block Tissue Matrix, AxoGen has truly transformed the landscape of nerve repair.

Karen Zaderej: And then just as a follow-up, you know, obviously, you're not breaking out scheduled versus trauma going forward, but you did see a benefit from trauma this quarter. So how should we be thinking about the contribution from that? I guess in the second half, 2025, is there anything that we should be thinking about that is more durable that may be kind of lying under the surface at this point? What is at the core of this strategy?

Karen Saturday: Thank you Maria and before we conclude today's call I actually wanted to just take a moment to reflect on our incredible oxygen journey over the past 18 years at accident. We've achieved remarkable milestones together, we've demonstrated the opportunity to have a significant impact on patient outcomes in a broad range of applications.

Karen Zaderej: At the core of this strategy that we have is the philosophy that by building concentration in accounts, you build a stronger annuity business, and you continue to build on that. And so we think that the important thing here is that that business is sticky and that it continues to grow with some momentum. And that's really been our way of thinking about the strategy and the results that we've seen today.

Operator: Our next question comes from Jayson Bedford with Raymond James. Please proceed with your question.

Karen Zaderej: 36% Okay, great. And two graphs on the new CDO, Karen, really sad if you go, but, you know, what do you think Michael brings to the table that can help AxoGen along in the next phase with Web Cycle? Yeah, absolutely. Very excited to have Mike. He brings over 30 years of leadership experience in Medtech companies across various therapeutic areas, predominantly very good commercial experience and his focus will be driving our commercial growth and boosting our move towards profitability and cash flow positivity. And he brings experience from both small companies, larger companies, private and public.

Operator: Good morning. Thanks for taking the questions. Karen, I'm not sure if you'll be on these calls going forward, but certainly congratulations on what you've helped build here. You're welcome. The couple of questions, A Vive Plus, can we assume that you launched it more broadly late in the quarter; can we assume there wasn't much contribution in 2Q? And then, I know you're in the early introduction phase here, but has the value analysis process within hospitals been burdensome, or has this process been pretty smooth?

Karen Zaderej: Yeah, great question. And you're right.

Caitlin Cronin: Thanks, Caitlin.

Karen Saturday: From our single minded focus on building awareness of the significant impact of nerve injuries to the success of our flagship product advanced nerve graft and the recent launch launches of our latest innovations accident H E plus nerve protector and <unk> plus soft tissue matrix.

Karen Zaderej: As you launch a new product, you've got a number of administrative hurdles that you've got to get through. And so the total contribution in this quarter is modest. We think it's got a lot of potential, but it's going to be modest in the initial stages. And yeah, one of the administrative hurdles is that when you bring in a new product, you've got to go through a value analysis committee. Our assumption going in was that we would need a value analysis committee in essentially all accounts.

Karen Zaderej: We have been pleasantly surprised by some, in that they still have the original eVive that we withdrew because of the regulatory changes in 2021. They still have the eVive on their, in their systems, and they've allowed eVive plus to come in without going through a full value analysis committee. So we actually have done, had a little higher step up than we expected, but I don't want to overplay that to make it sound like that was a major driver of growth. It's just a really good foundation for us to start to build that growth.

Nir Naor: Okay, that's helpful. Maybe just the last one on the OpEx. You were able to leverage revenue really well. Just curious, was there a timing dynamic that will see cost jump in the second half, or is this level reflective of a business kind of settling into a more normalized level of spending?

Karen Zaderej: Axogen has truly transformed the landscape of nerve repair. I want to express my heartfelt appreciation to the patients who've inspired us with their courage and resilience. You're at the heart of everything we do. Your stories of recovery and restored function have been our greatest motivation and the driving force behind our relentless pursuit of innovation and excellence. I also want to thank the surgeons and medical professionals who have embraced our products and who have trusted us to improve the lives of their patients. Your feedback and collaboration have been invaluable in refining our solutions, building robust clinical data, educating the next generation of surgeons, and pushing the boundaries of what is possible in nerve repair.

Karen Saturday: <unk> has truly transformed the landscape of nerve repair.

Karen Zaderej: I want to express my heartfelt appreciation to the patients who have inspired us with their courage and resilience. You're at the heart of everything we do. Your stories of recovery and restored function have been our greatest motivation and the driving force behind our relentless pursuit of innovation and excellence. I also want to thank the surgeons and medical professionals who have embraced our products and who have trusted us to improve the lives of their patients.

Nir Naor: Yeah, I would say that there's some seasonality in our off expenses, but not non-material ones. So I would consider the level of off expense in the past two quarters, even a bit more as indicative. So we don't expect any major swings or increases in office.

Speaker Change: I want to express my heartfelt appreciation to the patients who have inspired us with their courage and resilience.

Nir Naor: And just a reminder, though, at the beginning of next year, our Q1 OPEX is typically higher. No, the Q1, yeah, that's a good point.

Nir Naor: Now, the Q1, yeah, that's a good point. So the Q1 will have a high, as every year, a high amount of cash outflow. But still, you know, due to accruals and so on, the opex itself, again, should not be materially higher than the average.

Operator: Our next question comes from Ross Osborn with Cantor Fitzgerald. Please proceed with your question.

Speaker Change: At the heart of everything we do.

Operator: Oh, did we lose Ross?

Speaker Change: Your stories of recovery and restored function have been our greatest motivation and the driving force behind our relentless pursuit of innovation and excellence.

Operator: Okay, we can go to the next question. And Ross, if you're able to, you can rejoin. Our next question comes from Dave Turkaly with Citizens JMP. Please proceed with your question.

Speaker Change: I also want to thank the surgeons and medical professionals, who have embarked who have embraced our products and who have trusted us to improve the lives of their patients.

Karen Zaderej: Your feedback and collaboration have been invaluable in refining our solutions, building robust clinical data, educating the next generation of surgeons, and pushing the boundaries of what is possible in nerve repair. Our partnerships with leading institutions have been instrumental in advancing our research and development efforts. Together, we've expanded the knowledge and application of nerve repair techniques.

Speaker Change: Your feedback and collaboration have been invaluable and refining our solutions building robust clinical data educating the next generation of surgeons and pushing the boundaries of what is possible in nerve repair.

Unknown Executive: Our next question comes from Mike Kratky with Learing Partners. Please proceed with your question. Hey guys, this is Brett on from Mike. Thanks for taking the questions and I'd congratulate some of the great quarter. Thank you. So obviously, yes, of course, you saw substantial step up in revenue per non-core account this quarter, you know, even excluding the benefits in that procedure shift. So can you talk to some of the drivers and some of the commercial efforts that may be driving that step up in non-core revenue per account?

Karen Zaderej: Our partnerships with leading institutions have been instrumental in advancing our research and development efforts. Together, we've expanded the knowledge and application of nerve repair techniques, and I'm confident that this collaboration will continue to yield transformative results in the years to come. Our accomplishments are testament to the dedication and passion of our extraordinary team. We are all here because we believe we can change the world. Our shared purpose is to make life-changing improvements in the quality of life for patients with peripheral nerve injuries. Accident was originally created out of my belief, my vision, and my tenacity that this was a purpose worth fighting for.

Speaker Change: Our partnerships with leading institutions have been instrumental in advancing our research and development efforts.

Karen Saturday: Together, we've expanded the knowledge and application of nerve repair techniques and I am confident that this collaboration will continue to yield transformative results in the years to come.

Karen Zaderej: And I'm confident that this collaboration will continue to yield transformative results in the years to come. Our accomplishments are testament to the dedication and passion of our extraordinary team. We are all here because we believe we can change the world. Our shared purpose is to make life-changing improvements in the quality of life for patients with peripheral nerve injuries. My vision and my tenacity convinced me that this was a purpose worth fighting for.

Karen Saturday: Our accomplishments are testament to the dedication and passion of our extraordinary team.

Unknown Executive: Well, again, it is, we've identified target accounts that we want our reps that have high potential that we want our reps to really focus on. And some of those are core accounts today, many of them, frankly, are core accounts today, but some are not. Some are just a high potential account that we think meets our criteria for focus. And so that's where our reps have been really spending their time. I think they really hit their stride here in second quarter, understanding the strategy, understanding where we're going, and they're just continuing to execute and put numbers on the page.

Karen Saturday: We are all here because we believe we can change the world. Our shared purpose is to make life changing improvements in the quality of life for patients with peripheral nerve injuries.

Operator: Great. Try not to say this, but yeah, congrats on the print and congrats on hiring Mike. He is a great guy and a great leader.

Speaker Change: Acrogen was originally created out of my belief.

Karen Zaderej: Karen, you know, you mentioned level one trauma centers and the academic centers that you're focused on. I'm just curious, do you have a number, like an outright number, of how many there are? And then as I look at your core accounts at 412, I'm just trying to get an understanding of, like, are you in most of these already? Or is there green space? Like, what percent of core are those level one centers? Yeah, we are.

Karen Zaderej: Yeah, we are; thanks for the question. Yeah, we still see a lot of room to go.

Speaker Change: My vision and my tenacity that this was a purpose worth fighting for.

Karen Zaderej: That was one of the things that we came to the conclusion that we really wanted to focus the reps because we felt that they were trying to spread themselves too thin and trying to go after too many things at once. And that was really the focus of this targeted approach. If you look at the number of level one, level two trauma centers, academic centers, we talk about that there are a little over 5000 accounts out there.

Karen Zaderej: Along the way, each of you have joined me in this purpose. Each one of you has played a crucial role in making Accident what it is today. Thank you for believing in my vision and sharing this journey with me. Your hard work, resilience, creativity, and commitment to excellence have been the driving forces behind our success, and I'm incredibly proud of what we built together.

Karen Zaderej: Along the way, each of you has joined me in this purpose, and each one of you has played a crucial role in making AxoGen what it is today. Thank you for believing in my vision and sharing this journey with me. Your hard work, resilience, creativity, and commitment to excellence have been the driving forces behind our success. And I'm incredibly proud of what we've built together. As I depart, I'm filled with optimism about AxoGen's future. I have no doubt that the company will continue to thrive and grow. AxoGen has and will continue to make a profound impact on the field of nerve repair.

Speaker Change: Along the way each of you have joined me in this purpose. Each one of you has played a crucial role in making <unk> what it is today.

Karen Zaderej: A half to a third of that would be what I'd call a good target. And so our focus today is still a subset of that, and there's still quite a bit of room to grow.

Karen Zaderej: Great. And then as a follow-up on the comments you made on Salesforce productivity, I was wondering if you could even comment broadly, like what that is or what level that's at. And then if you think, you know, there's still room to go for those guys, you know, to continue, you know, to

Karen Zaderej: Yeah, we still have the same views on productivity that we've talked about in the past, which is that a standalone rep in a territory providing full service to an account has the potential to do about $2 million on average in their territory. We've seen reps do more than that, but the trick is, how do we get the whole average up? Our average is still below that, but it is continuing to increase and showing really good trends.

Karen Zaderej: The other thing that I think is a potential to help improve that number and bring the $2 million up is to add support people in the territories at a lower cost. We continue to look at these ways that we can continue to push productivity and ultimately improve the number even above $2 million, but right now, our target is that $2 million number.

Karen Zaderej: There are no further questions at this time. I would now like to turn the floor back over to Karen Zaderej for closing comments. Thank you.

Speaker Change: Thank you for believing in my vision and sharing this journey with me.

Speaker Change: Your hard work resilience creativity and commitment to excellence have been the driving forces behind our success and I'm incredibly proud of what we've built together.

Karen Zaderej: And I'm confident that this collaboration will continue to yield transformative results in the years to come. Our accomplishments are testament to the dedication and passion of our extraordinary team. We are all here because we believe we can change the world. Our shared purpose is to make life-changing improvements in the quality of life for patients with peripheral nerve injuries. AxoGen was originally created out of my belief, my vision, and my tenacity that this was a purpose worth fighting for.

Brett Gasaway: That makes total sense. And then just as a follow-up, you know, obviously you're not breaking out scheduled versus trauma going forward, but you did hit benefit from trauma this quarter. So how should you be thinking about the contribution from that? I guess in the second half, 2025, is there anything that we should be thinking about that is more durable maybe kind of lying under the surface at this point? At the core of this strategy that we have is the philosophy that by building concentration and account, you build a stronger annuity business, and you continue to build on that.

Karen Zaderej: As I depart, I'm filled with optimism for Accident's future. I have no doubt that the company will continue to thrive and grow. Accident has and will continue to make a profound impact on the field of nerve repair. In closing, thank you for the incredible journey we've shared. It has been an honor and a privilege to build and lead Accident. And I'm excited to see all the great things that lie ahead. I wish the entire Accident team continued success as you embark on this next chapter. And with that, I thank you and farewell.

Karen Zaderej: Along the way, each of you has joined me in this purpose, and each one of you has played a crucial role in making AxoGen what it is today. Thank you for believing in my vision and sharing this journey with me. Your hard work, resilience, creativity, and commitment to excellence have been the driving forces behind our, and I'm incredibly proud of what we've built together. As I depart, I'm filled with optimism for AxoGen's future. I have no doubt that the company will continue to thrive and grow. AxoGen has and will continue to make a profound impact on the field of nerve repair.

Karen Saturday: As I depart I'm filled with optimism for <unk> future.

Karen Saturday: I have no doubt that the company will continue to thrive and grow.

Speaker Change: Oxygen has and will continue to make a profound impact on the field of nerve repair.

Karen Zaderej: In closing, thank you for the incredible journey we've shared. It has been an honor and a privilege to build and lead AxoGen, and I'm excited to see all the great things that lie ahead. I wish the entire AxoGen team continued success as you embark on this next chapter. And with that, I say thank you and farewell.

Speaker Change: In closing thank you for the incredible journey, we've shared it has been an honor and a privilege to build and lead oxygen and I'm excited to see all the great things lie ahead.

Brett Gasaway: And so we think that the important thing here is that that business is sticky and that it continues to grow with some momentum. And that's really been our philosophy in thinking about the strategy and the results that we've seen today. Understood.

Speaker Change: I wish the entire oxygen team continued success as you embark on this next chapter.

Speaker Change: And with that I'll say, thank you and farewell.

Unknown Executive: This concludes today's telecom blints. You may disconnect your lines at this time. Thank you for your participation. Peter Mariani, Christopher Pasquale, Jayson Bedford, David Turkaly, Peter Mariani, Christopher Pasquale, Jayson Bedford, David Turkaly, Michael Sarcone, Christopher Pasquale, Jayson Bedford, David Turkaly, Michael Sarcone, Christopher Pasquale, Jayson Bedford, David Turkaly, Michael Sarcone, Christopher Pasquale.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Brett Gasaway: Thanks, guys.

unknown: Singing in the Rain

Operator: [music]

Speaker Change: Hum.

Speaker Change: Mhm.

Speaker Change: [music].

Speaker Change: Hum.

Jason Bedford: Thank you. Our next question comes from Jason Bedford with Raymond James. Please proceed with your question.

Speaker Change: Okay.

Speaker Change: [music].

Jason Bedford: Good morning. Thanks for taking the questions. Karen, I'm not sure if you'll be on these calls going forward, but certainly congratulations on what you've helped build here. I guess you're welcome. The couple of questions, a vibe plus, can we assume they're launched at more broadly late in the quarter? Can we assume there wasn't much contribution in two queue? And then in the, I know you're in the early introduction phase here, but the value analysis process within hospitals been burdensome or is this process been pretty smooth?

Speaker Change: Hum.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [music].

Jason Bedford: Yeah, great question. And you're right. As you launch a new product, you've got a number of administrative hurdles that you've got to get through in account. And so the total contribution in this quarter is modest. We think it's got a lot of potential, but it's going to be modest in the initial stages. And yeah, one of the administrative hurdles is that when you bring in a new product, you've got to go through value analysis committee.

Jason Bedford: Our assumption going in was that we would need value analysis committee in essentially all accounts. We have been pleasantly surprised in some in that they still had the vibe, the original vibe that we withdrew because of the regulatory changes in 2021. They still have the vibe on their systems, and they've allowed a vibe plus to come in without going through a full value analysis committee. So we actually have done, had a little higher step up than we expected, but I don't want to overplay that to make it sound, you know, that was a major driver of growth.

Jason Bedford: It's just a really good foundation for us to start to build that growth from. Okay, that's helpful. Maybe just last one on the op-ex, you were able to leverage revenue really well. Just curious, was there a timing dynamic that will see cost jump in the second half? Or is this level reflective of a business kind of settling into a more normalized level of spending? Yeah, I would say that there's some season healthy in our op-ex pen, but not material ones.

Speaker Change:

Speaker Change: Hum.

Speaker Change: Okay.

Speaker Change: Hmm.

Speaker Change: Hum.

Speaker Change: [music].

Jason Bedford: So I would consider the level of op-ex pen in the past two quarters, even a bit more as indicative. So we don't expect any major swings or increases in op-ex. And just a reminder though, the beginning of next year are Q1 op-ex is typically higher. No, the Q1, yeah, that's a good point. So the Q1 will have a high, as every year, a high amount of cash outflow, but still, you know, due to accruals and so on, the op-ex itself, again, should not be much fairly higher than the average.

Unknown Executive: Okay, thank you.

Speaker Change: Mhm.

Speaker Change: Yeah.

Speaker Change:

Speaker Change: Hello.

Speaker Change: Ooh.

Speaker Change: Mhm.

Speaker Change: [music].

Ross Osborn: Our next question comes from Ross Osburn with Cantor Fitzgerald. Please proceed with your question.

Speaker Change: Hum.

Speaker Change: [noise].

Unknown Executive: Oh, did we lose Ross? Ross, are you muted? Okay, we can go to the next question and Ross, if you're able to, you can rejoin.

Dave Turkaly: Our next question comes from Dave Turkaly, with Citizens JMP. Please proceed with your question. Great.

Karen Zaderej: I'm trying not to say this, but yeah, congrats on the print and congrats on hiring Mike. He is a great guy and a great leader. Karen, you know, you mentioned level one trauma centers and the academic centers that you're focused on. I'm just curious, do you have a number like an outright number of how many there are? And then as I look at your core accounts at 412, I'm just trying to get an understanding of like, are you in most of these are eddies or is there is a green space like what percent of core are those level one centers?

Karen Zaderej: Yeah, we are, thanks for the question. Now we still see a lot of room to go. That was one of the things that we came to the conclusion was we really wanted to focus the reps because we felt that they were trying to spread themselves to send and trying to go after too many things at once. And that was really the focus on this targeted approach. If you look at the number of level one level two trauma centers, academic centers, we talk about that there's a little over 5,000 accounts out there.

Karen Zaderej: A half to a third of that, we would consider to be what I call a good target. And so our focus today is still a subset of that and there's still quite a bit of room to grow.

Karen Zaderej: Great. And then as a follow up on the comments you made on Salesforce productivity, I was worried if you could even comment on broadly what that is or what level that's at. And then if you think there's still room to go for those guys to continue to sell even more. Yeah, we still have the same views on productivity that we've talked about in the past which is that a standalone rep in a territory pulling providing full service to an account has the potential to do about two million dollars on average in in their territory.

Karen Zaderej: We've seen reps do higher than that, but the trick is how do we get the whole average up? So obviously our average is still below that but continuing to increase and showing really good trends. The other thing that I think is a potential to help improve that number and bring the two million up is to add support people in the territories that are lower cost. And so we continue to look at these ways that we can continue to push productivity and ultimately improve the number even above two million, but right now our target is that two million number.

Unknown Executive: Thank you.

Karen Zaderej: There are no further questions at this time.

Karen Zaderej: I would now like to turn the floor back over to Karen Zatteray for closing comments. Thank you, Maria.

Karen Zaderej: And before we conclude today's call, I actually want to just take a moment to reflect on our incredible oxygen journey. Over the past 18 years at Accigen, we've achieved remarkable milestones together. We've demonstrated the opportunity to have a significant impact on patient outcomes in a broad range of applications, from our single-minded focus on building awareness of the significant impact of nerve injuries to the success of our flagship product, Advanced Nerve Graphs, and the recent launches of our latest innovations, Axigord HA-plus-Nerve Protector, and Avive-plus-Fox tissue matrix.

Karen Zaderej: Our accomplishments are testament to the dedication and passion of our extraordinary team. We are all here because we believe we can change the world. Our shared purpose is to make life-changing improvements in the quality of life for patients with peripheral nerve injuries. Accident was originally created out of my belief, my vision, and my tenacity that this was a purpose worth fighting for. Along the way, each of you have joined me in this purpose.

Karen Zaderej: Each one of you has played a crucial role in making accident what it is today. Thank you for believing in my vision and sharing this journey with me. Your hard work, resilience, creativity, and commitment to excellence have been the driving forces behind our success, and I'm incredibly proud of what we built together.

Karen Zaderej: As I depart, I'm filled with optimism for Accident's future. I have known doubt that the company will continue to thrive and grow. Accident has and will continue to make a profound impact on the field of nerve repair.

Karen Zaderej: In closing, thank you for the incredible journey we've shared. It has been an honor and a privilege to build and lead Accident. And I'm excited to see all the great things that lie ahead. I wish the entire Accident team continued success as you embark on this next chapter. And with that, I thank you and farewell. This concludes today's telecom blints. You may disconnect your lines at this time. Thank you for your participation. Peter Mariani, Christopher Pasquale, Jayson Bedford, David Turkaly Peter Mariani, Christopher Pasquale, Jayson Bedford, David Turkaly, Michael Sarcone, Christopher Pasquale, Jayson Bedford, David Turkaly, Michael Sarcone Christopher Pasquale, Jayson Bedford, David Turkaly, Michael Sarcone, Christopher Pasquale,

Q2 2024 AxoGen Inc Earnings Call

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