Axogen, Inc. Reports Preliminary Revenue for the First Quarter 2020, Provides Business Update in Response to COVID-19 Pandemic, and Announces Dismissal of Class Action Lawsuit

ALACHUA, Fla., April 23, 2020 (GLOBE NEWSWIRE) -- Axogen, Inc. (NASDAQ: AXGN), a global leader in developing and marketing innovative surgical solutions for peripheral nerve injuries, today announced preliminary first quarter 2020 revenue, provided a business update on its actions in response to the COVID-19 pandemic, and announced the dismissal of its class-action lawsuit.

First quarter 2020 net revenue is estimated to be approximately $24.3 million, an increase of approximately 4% over the first quarter 2019. Although revenue exiting February was trending toward the Company’s annual guidance, hospital reallocation of resources toward the COVID-19 pandemic, along with deferrals and restrictions placed on elective procedures, had a material negative impact on revenue in March. Additionally, management believes that demand for the Company’s products has been temporarily reduced as nationwide shelter-in-place orders have lowered the incidence of traumatic injuries. 

In response to the current restrictions in hospital and community activity, as well as the anticipated reduction of revenue caused by these factors, the Company has implemented a cost mitigation initiative designed to defer and reduce certain expenses and capital expenditures during this time. More specifically, the Company has:

• Implemented a plan reducing executive cash compensation and board fees by 20%, and reducing cash compensation for all other employees by 10% to 15%;
• Completed an employee layoff of approximately 10% of its workforce and implemented a hiring freeze;
• Temporarily suspended recovery and processing of tissue in order to utilize existing inventory;
• Deferred completion of its new biologics processing center in Dayton, Ohio by up to one year, which defers approximately $25 million of expected 2020 capital expenditures to 2021, and extended its current production facility License and Services agreement with Community Tissue Services (CTS) by one year; and
• Reduced certain discretionary spending, including travel, conference participation, surgeon education (as a result of surgeon travel restrictions), and selected projects across the organization.

Additionally, the Company announced today approval for a Small Business Administration loan under the Paycheck Protection Program in the amount of $7.8 million. The loan will preserve key positions in the Company by providing necessary economic relief during this period of reduced surgical volumes.