As of March 5, 2015 CORPORATE PRESENTATIONcontent.stockpr.com/axogeninc/media/aeae980fb1b9b2f115d06b2f89e... · •7+cm defect in ulnar nerve •Parents did not want risk of comorbidities

It’s time to rethink nerve repair! 1

CORPORATE PRESENTATION

As of March 5, 2015

NASDAQ: AXGN


This Presentation contains “forward-looking” statements

as defined in the Private Securities Litigation Reform Act of

1995. These statements are based on management’s

current expectations or predictions of future conditions,

events or results based on various assumptions and

management’s estimates of trends and economic factors

in the markets in which we are active, as well as our

business plans. Words such as “expects”, “anticipates”,

“intends”, “plans”, “believes”, “seeks”, “estimates”,

“projects”, “forecasts”, “may”, “should”, variations of such

words and similar expressions are intended to identify

such forward-looking statements. The forward-looking

statements may include, without limitation, statements

regarding product development, product potential,

regulatory environment, sales and marketing strategies,

capital resources or operating performance.

The forward-looking statements are subject to risks and

uncertainties, which may cause results to differ materially

from those set forth herein. Forward-looking statements in

this presentation should be evaluated together with the

many uncertainties that affect the Company’s business

and its market, particularly those discussed in the risk

factors and cautionary statements in the Company’s

filings with the Securities and Exchange Commission.

Forward-looking statements are not guarantees of future

performance, and actual results may differ materially from

those projected. The forward-looking statements are

representative only as of the date they are made, and the

Company assumes no responsibility to update any

forward-looking statements, whether as a result of new

information, future events or otherwise.

Safe Harbor Statement


AxoGen Overview

• Exclusively focused on peripheral nerve repair solutions

• Addressing a $1.6B+ current market opportunity

• Comprehensive product portfolio addresses all surgical peripheral nerve reconstruction needs

• Barriers to competitive entry & growing body of clinical data

• Strong revenue, 2014 Revenue $16.8 million, 54% growth vs 2013

• High gross margins: 80% 2014

• Long term expansion potential beyond current market

Focus on Executing Sales & Marketing Strategy To Drive Shareholder Value


Providing options for surgeon & patients

● More than 1.4 million Americans will experience a nerve injury in 2014 1,2

● More than 900,000 will require a surgical intervention 1,2

● AxoGen products are used to repair patients of all ages and all walks of life

Nerve injuries can happen to anyone

AxoGen Patient Story: Jajuan • 10 year old aspiring football player & video game lover

• Laceration in hand caused loss of sensation and numbness

• Nerve and tendon injury repaired by Dr. Joshua Abzug, Baltimore, MD

• Nerve gap bridged with Avance® Nerve Graft

• Sensory recovery underway

1 National Hospital Ambulatory Medical Care Survey 2008 2 Noble, et al., “Analysis of Upper and Lower Extremity Peripheral Nerve Injuries in a Population of Patients with Multiple Injuries”, Journal of Trauma, Vol 45, 2008


Need for Options in Nerve Repair

Causes of Nerve Injuries

● Lacerations, power tool / saw accidents, motor vehicle accidents, battle field injuries, gunshot wounds, natural/other disasters

● Surgical injuries

● Nerve compression: Carpal & cubital tunnel revision, blunt trauma, previous surgery

Nerves are Injured in Many Ways

AxoGen Patient Story: Anna • College student and athlete having routine wisdom tooth removal

• Lingual nerve severed during procedure resulting in numbness of tongue

• Repaired by Dr. Shahrokh Bagheri, Atlanta, GA and protected with AxoGuard® Nerve Protector

• Sensory recovery underway


Need for Options in Nerve Repair

Impact of Peripheral Nerve Injuries ● Pain – chronic, stabbing, radiating, debilitating

● Numbness and Loss of Sensation

● Partial or Full Loss of Movement

Peripheral Nerve Injuries Impact Quality of Life

AxoGen Patient Story: Frankie • 12 year old male, injured in an ATV rollover

• 7+cm defect in ulnar nerve

• Parents did not want risk of comorbidities associated with autograft repair

• Repaired with Avance® Nerve Graft & 2 AxoGuard® Nerve Connectors

• Return of fine motor skills in fingers underway, planning to join the military


Cross section of a peripheral nerve illustrating the nerve bundles

containing individual axons

Example of axonal regeneration after injury

Peripheral Nerves & Goals of Repair

Peripheral Nerves are Capable of Regeneration with Appropriate Guidance & Protection

Peripheral Nerves provide the pathways for both motor and sensory signals between the central nervous system and target organs, regulating movement and sensation.

Goals of repair

● Restore muscle function and sensation

● Prevent neuroma / chronic pain

Successful nerve regeneration requires

● Scaffold to direct, support growth

● No tension on the repair site

● Protection from soft tissue attachments


The AxoGen Family of Products

Comprehensive portfolio of nerve repair products.

● Thousands of implants to date

● Currently distributed in the US and 7 other countries


…with future expansion opportunities in Lower Limb Surgery Facial Reconstruction Breast Reconstruction Prostatectomy Pain Management Regeneration Enhancement

Head and Neck

The Market for Nerve Repair

AxoGen is currently focused on Extremity Trauma Carpal Tunnel Revision Oral Maxillofacial…

The Nerve Repair Market is Large with Opportunity for Expansion

Torso Upper Extremity

Lower Extremity


Currently Targeted Nerve Markets (US)

AxoGen Current Target Markets $1.6 billion1

In millions

Extremity Market $1.3 billion1

In millions

Approximately 900K Procedures Annually in US: Extremity 719,0002

Carpal Tunnel 100,0003

Oral 68,0004

Oral Carpal Tunnel Revision

Extremity

$129 $160

$1,312

Nerve Protection

Nerve Repair – Transected with Gap

Nerve Repair – Transected No Gap

$483 $668

$161

1. Market sizes are an estimate of AxoGen based upon the number of nerve repair procedures it believes are performed and applying its average sales price to the particular procedure for which an AxoGen product could be used. 2. Noble, J et al, “Analysis of Upper and Lower Extremity Peripheral Nerve Injuries in a Population of Patient with Multiple Injuries”; The Journal of Trauma: Injury, Infection, and Critical Care Vol. 45. No. 1 (2008) - National Hospital Ambulatory Medical Care Survey: 2008 Emergency

Department Summary Tables – “Analysis of the Peripheral Nerve Repair Market in the United States”; Kurt Brattain, MD, Magellan Medical Technology Consultants, Inc., Minneapolis, Minnesota. 3. University of Maryland Medical Center, Carpal Tunnel Syndrome – Surgery. 4. The Prophylactic Extraction of Third Molars: A Public Health Hazard: Jay W. Friedman, DDS, Health Policy and Ethics; Peer Reviewed; Friedman American Journal of Public Health; September 2007, Vol 97, No. 9, pp 1554 – 1559 – Journal of Oral Implantology, Vol. XXXVI/No. Five/2010; “Inferior Alveolar Nerve Injury in Implant Dentistry: Diagnosis, Causes, Prevention, and Management”; Ahmed Ali Alhassani, BDS - “Nerve Injuries after Dental Injection: A Review of the Literature”; Clinical practice, July/August 2006, Vol. 72, No. 6, Miller H. Smith, BMedSc, DDS; Kevin E. Lung, BSc, DDS, MSc, FRCD(C).


Strong Competitive Barriers

● Avance® Nerve Graft 6 issued U.S. patents; 4 pending U.S. patent applications; 3 issued international patents

and 9 pending international patent applications

Regulatory path US: Biologic Transition Process • November 2010: Enforcement Discretion letter from FDA allowing continued sales under

controls applicable to HCT/P with agreed transition plan to Biologic (BLA)

• BLA requires a phase III clinical trial; SPA approved by FDA

Regulatory path ex-US: Country by country • Registration completed in Austria, Canada, Israel, Italy, Singapore, Switzerland and the United

Kingdom.

● AxoGuard® Nerve Connector & AxoGuard® Nerve Protector FDA 510(k) Clearance, CE Mark and Health Canada Approval

Patents held by Cook Biotech, AxoGen exclusive WW license for nerve

IP and Unique Regulatory Framework


Traditional Peripheral Nerve Repair Options Transected Nerves

1. Rappaport ,et al., Am J Surg 1993

2. Weber, et al., Plas and Recon Surg 2000, Wangensteen et al., Hand 2009

Suture Direct suture repair of

no-gap injuries

Autograft Traditional “Gold Standard”

despite several disadvantages

Hollow-Tube Conduit Convenient off the shelf option;

limited efficacy and use

• Common repair method

• May result in tension to the repair leading to ischemia

• Concentrates sutures at the coaptation site

• Secondary surgery

• Loss of function & sensation at harvest site

• 27% complication rate including infection, wound healing and chronic pain1

• Limited availability of graft length & diameter

• Provides only gross direction for re-growth

• Limited to small gaps

• 34%-57% failure rate >5mm gaps2

• Semi-rigid and opaque material limits use & procedure visualization

• Repair depends on fibrin clot formation


25 µm

AxoGen Solutions for Transected Nerves

Processed human nerve allograft for bridging nerve gaps

• Clinically studied off-the-shelf alternative • 87% meaningful recovery in sensory, mixed and motor nerve gaps in multi-center study 1

• Eliminates need for an additional surgical site & risks of donor nerve harvest 1

• Can reduce OR time

• Structural support for regenerating axons • Cleansed and decellularized extracellular matrix (ECM) • Offers the benefits of human peripheral nerve micro-architecture & handling

• Revascularizes and remodels into patient’s own tissue similar to autologous nerve 2

• Available in a variety lengths (up to 70mm) and diameters (up to 5mm)

Only minimally processed porcine ECM for connector-assisted coaptation

• Alternative to direct suture repair • Can reduce surgery time by as much as 40% 3

• Reduces the risk of forced fascicular mismatch 7

• Alleviates tension at critical zone of regeneration • Disperses tension across repair site 8

• Moves suture inflammation away from coaptation face 3

• Revascularizes and remodels into patient’s own tissue 4,5,6,9

1.Brooks Miscrosurg.2012;32:1-85 2.Whitlock Muscle & Nerve, 2009;6:787-799 3. Boechstyns, Jhand Surg. 2013;38:2405-2411 4. Badylak, et al., 1998, J Biomater Sci Polym Ed 9(8):863-878. 5.Hodde, et al., 2007, J Mater Sci Mater Med 18(4):545-550. 6.Nihsen, et al., 2008, Adv Skin Wound Care 21(10):479-486. 7. Brushart Exp Neurol. 1987;97:289-300 8. Schmidhammer J Trauma. 2004;56(3):571-583 9. Data on file at AxoGen, Inc.


Traditional Peripheral Nerve Protection Options

Compressed and Transected Nerves

Vein Wrapping Autologous vein

Hypothenar Fat Pad Flap Autologous vascularized flap

Collagen Wraps Off –the-shelf

• Barrier to attachment to surrounding tissue

• Requires extra time and skill to perform spiral wrapping technique

• Second surgical site

• Barrier to attachment to surrounding tissue

• Only wraps part of the nerve circumference

• Increases procedure time

• Semi-rigid material limits use

• Degrades over time and does not provide a lasting barrier to soft tissue attachments

Lippincott and Williams Sotereanos DG, et al., Microsurgery 1995


AxoGen Solutions for Nerve Protection

Only minimally processed porcine extracellular matrix for wrapping and protecting injured peripheral nerve • Protects repair site from surrounding tissue

• Minimizes soft tissue attachments 1

• Allows for diffusion of nutrients through the material 2

• Allows nerve gliding • Minimizes risk of entrapment 1

• Creates a barrier between repair and surrounding tissue bed 1

• ECM revascularizes and remodels into patient’s own tissue, does not degrade 2, 3, 4,5

• Easy to use • Semi-translucent to allows visualization of underlying nerve • Conforms to nerve

1.Kokkalis, J Recon MicroSurg.2011;27(1):19-28 2. Nihsen, et al., 2008, Adv Skin Wound Care 21(10):479-486 3.Badylak, et al., 1998, J Biomater Sci Polym Ed 9(8):863-878. 4. Hodde, et al., 2007, J Mater Sci Mater Med 18(4):545-550. 5.Data on file at AxoGen, Inc.


Pioneering Sales & Marketing Strategy

Strong Forward Momentum and Growth

Build Market Awareness

Educate Surgeons, Develop Advocates

Grow Body of Clinical Evidence

Execute Sales Plan

4 PILLAR

APPROACH

FOR DRIVING

BUSINESS

RESULTS


Build Market Awareness

● Participated in major clinical conferences Technical exhibits

Podium presentations

Sponsored surgeon panels

● Garnered Positive Media Attention Local and National television

Wall Street Journal, SF Chronicle

Continuing focus on building awareness among Surgeons, Patients & Investors


Educate Surgeons & Develop Advocates

● Launched AxoGen Professional Education Program Educate on “best practices”, science of nerve repair

● Continued Surgeon Advocacy and Speakers’ Bureau National and International Key Opinion Leaders

Data presentations, panel events and publications

Increased emphasis on education & hands-on training

“Excellent course! Should be offered to all oral maxillofacial surgeons who would consider micro-

surgery in their practice.“

Alexander E. Pazoki, DDS, MD, FACS, University of Maryland Maxillofacial Surgery, Oral & Maxillofacial Oncology, Microvascular Reconstructive Surgery

Attended AxoGen Best Practices Nerve Course for Trigeminal Nerve

“The course was an outstanding experience! Definitely one of the best hands-on practical courses

I have taken. It will have a direct impact on the way that I treat certain clinical problems.“ Ignatius Roger, MD, New York Hospital Queens (NY Presbyterian)

Plastic & Reconstructive Surgery, Hand Surgery Attended AxoGen Best Practices Nerve Course for Upper Extremity Nerves


0%

25%

50%

75%

100%

Sen

so

ry

Mix

ed

Mo

tor

Injuries Achieving Meaningful Recovery by Nerve Type 1

88% 83%

67%

Injuries Achieving Meaningful Recovery by Gap length 1

98% 85% 100%

0%

25%

50%

75%

100%

5 -

14 m

m

15 -

29 m

m

30 -

65 m

m

90% 80% 87%

Clinical Data - RANGER® Study

● Open enrollment observational study

● First data milestone

12 centers, 25 surgeons, 132 nerve injuries

No graft-related complications

● Peer reviewed publications

Brooks, et al. Microsurgery, January 2012

Cho, et al. Journal of Hand Surgery, November 2012

● Expanded data milestone presented at 5th Vienna Symposium on Surgery of Peripheral Nerves, March 2014

18 centers, 36 surgeons, 431 repairs enrolled

85% meaningful recovery 1

87% Meaningful

Recovery 1, 2, 3

Largest Multi-center Study in Peripheral Nerve Reconstruction

1 Includes repairs with qualitative outcomes data 2 Meaningful recovery defined at S3-S4 and M3-M5 from the works of (Kim and Kline), (Frykman and

Gramyk) and (Kallio). 3 Brooks, et al. Microsurgery, January 2012


RANGER® Study Results Compare Favorably to Other Repairs

Comparison to Historical Reference Literature

Study Nerve Injury Types Test Article Positive

Outcomes*

RANGER® Study

(Brooks, et al, 2012;

Cho, et al, 2012)

Sensory, Mixed and

Motor Nerve Injuries Avance® Nerve Graft 87%

Autograft Studies

Weber, et al., 2000 Sensory Nerves Direct Repair and Autograft 86%

Kim and Kline 2001-

2006

Sensory and Mixed

Nerves Direct Suture and Autograft 67-86%

Frykman and Gramyk,

1991 Sensory Nerves

Autograft for Digital Nerve

Injury under 5 cm 80%

Frykman and Gramyk,

1991 Mixed Nerves Direct Suture and Autograft 75-78%

Kallio, et al., 1993 Sensory Nerves Autograft and Direct Repair 70%

Conduit Studies

Haug, et al., 2013 Sensory Nerves NeuraGen® Type 1 Bovine

Collagen Tube 40%

Weber, et al., 2000 Sensory Nerves Neurotube® PGA tube 74%

Wangensteen and

Kalliainen, 2009

Sensory, Mixed and

Motor Nerve Injuries

NeuraGen® Type 1 Bovine

Collagen Tube 43% * As reported, based on individual study parameters for acceptable recovery: M3-M5, S3-S4 by MRCC

0

20

40

60

80

100

% S

ucc

ess

ful R

eco

very

43%

Wangensteen, Kalliainen

n=85

89%

RANGER® Registry

n=59

RA

NG

ER®

Conduit vs. Avance® Nerve Graft Overall Recovery Outcomes

Autograft vs. Avance® Nerve Graft Motor Recovery Outcomes in

Mixed and Motor Nerves

0

20

40

60

80

100

% S

ucc

essf

ul R

eco

very

78%

Frykman & Gramyk

n=111

67%

Kallio

n=85

75%

Kim & Kline4

n=118

78%

Ranger® Registry

n=21

RA

NG

ER®


Clinical Data - CHANGE Clinical Study

100%

Avance® Nerve Graft

Return of s2PD No Response

75%

Hollow-tube Conduit

13

11 10 11

9

14

13

8 7

5

0

2

4

6

8

10

12

14

16

Baseline Month 3 Month 6 Month 9 Month 12

2 P

oin

t D

iscr

imin

atio

n

Mean Recovery of Static 2PD (PPP)

Conduit

Avance®NerveGraft

Study Design

● Prospective single-blind, randomized, comparison trial of recovery outcomes between hollow-tubes and Avance® Nerve Graft

● Adults; Digital nerve injuries 5 to 20 mm

● Primary outcome static 2PD- a standardized measure of sensory density (lower is better sensory discrimination)

● 23 subjects with 31 repairs, randomized & enrolled in the study

Outcomes

● Follow-up on 18 subjects

● Treatment groups showed statistically significant difference at month 12 in static 2PD with greater recovery in the Avance® Nerve Graft group

● Avance® Nerve Graft group reported functional sensory outcomes at more consistent levels as compared to hollow -tube conduits.

Pilot Comparative Study of Avance® Nerve Graft and Hollow Tubes 1

25%

1 Data presented - AAHS meeting 1/2014


Execute Sales Plan

• Expanded Reach: • US Sales Team • 29 direct sales professionals

• 23 independent distributors

Available in 8 countries

• Focused Sales Execution: • Breadth: grow account foot print

• Depth: utilization of all 3 product lines, increase penetration

• Quality: High and medium potential accounts

• Reorder rate

Expanded Reach, Focus on Sales Execution


Delivering Strong Growth

Year over Year 52% Annual Revenue Growth

$2.98

$4.79

Quarter over Quarter 61% Revenue Growth

$ in millions

Q4 2013 Q4 2014


Balance Sheet & Capital Structure

Balance Sheet Highlights December 31, 2014

Cash and cash equivalents 1,2 $8,215,791

Term Loan $25,085,777

Capital Structure 2 December 31, 2014

Common Stock 19,488,814 shares

Common Stock Options 2,733,812 shares

Common Stock Warrants 89,686 shares

Fully Diluted 22,312,312 shares

1. 12/31/2014 unaudited ending cash reflects the impact of $911,000 of financing expenses paid for a refinancing completed in November 2014. 9/30/2014 cash totaled $11.8 million.

2. In February, the Company issued 5,437,200 common stock shares in an equity raise for net proceeds of approximately $13.6 million.


Oberland Capital/Three Peaks Financing

Term Loan • $25 million in debt, 6 year term • Interest only quarterly payments at 9% plus the greater of LIBOR or 1% • Principal due at end of 6 year term • Company has option to draw an additional $7 million, April 1 to June 29, 2016, upon meeting

certain conditions • Secured by Company’s assets

Revenue Interest Agreement

• 10 year term at 3.75% of company revenues up to a maximum of $30 million in revenues for any 12 month period

Company has pre-payment option, in whole or in part, at any time

Common Stock Purchase

• $3.55 million in common stock purchased


Leadership Team

AxoGen was founded by regenerative medicine pioneer, Jamie Grooms (RTI, Cryolife and Osteotech), and is headed by a seasoned executive team

Karen Zaderej, MBA President & Chief Executive Officer J&J (Ethicon)

Lee “Bob” Johnston, MBA Chief Financial Officer Tutogen Medical, Ascension Orthopedics

Greg Freitag, JD, CPA General Counsel & SVP Business Development Pfizer, Guidant

Jill Schiaparelli, MBA Chief Marketing Officer J&J (Ethicon, Ethicon Endo), ApaTech (Baxter)

John Engels, MBA VP & Founder University of FL, CACM

Shawn McCarrey SVP, Sales Bayer/Medrad/Possis

Mark Friedman, PhD VP, Regulatory & Quality Assurance AtriCure, Enable Medical

Erick DeVinney VP, Clinical & Translational Sciences Angiotech, PRA International


Investment Considerations

• Exclusively focused on peripheral nerve repair solutions

• Addressing a $1.6B+ current market opportunity

• Comprehensive product portfolio addresses all surgical peripheral nerve reconstruction needs

• Barriers to competitive entry & growing body of clinical data

• Strong revenue, 2014 Revenue $16.8 million, 54% growth vs 2013

• High gross margins: 80% 2014

• Long term expansion potential beyond current market

Focus on Executing Sales & Marketing Strategy To Drive Shareholder Value

NASDAQ: AXGN

AxoGen is exclusively dedicated to the $1.6 billion US nerve repair market

Recognitions Deloitte & Touche “Fast 500”

Frost & Sullivan 2014 Technology Innovation Award Russell MicroCap Index 2014

It’s time to rethink nerve repair!

Visit us at www.AxoGenInc.com Follow us on Twitter @AxoGen

http://www.axogeninc.com/

Documents

As of March 5, 2015 CORPORATE PRESENTATIONcontent.stockpr.com/axogeninc/media/aeae980fb1b9b2f115d06b2f89e... · •7+cm defect in ulnar nerve •Parents did not want risk of comorbidities