United States securities and exchange commission logo
April 27, 2020
Peter Mariani
Chief Financial Officer
Axogen, Inc.
13631 Progress Boulevard, Suite 400
Alachua, FL 32615
Re: Axogen, Inc.
Form 10-K For the
Fiscal Year Ended December 31, 2019
Filed February 24,
2020
File No. 001-36046
Dear Mr. Mariani:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K For the Fiscal Year Ended December 31, 2019
Item 7. Management's Discussion and Analysis
Comparison of the Years Ended December 31, 2019 and 2018, page 71
1. Please expand your
results of operations discussion in future filings to quantify the impact
of each factor
identified, including offsetting, as causing changes in results between
periods. For example,
we note that your changes in revenue are attributable to a number of
factors, including
increases in unit volume, net impacts of price increases and changes in
product mix. Please
quantify the impact of each factor attributing to the increase, here, and
throughout your
discussion, in accordance with Item 303(a)(3)(iii) of Regulation S-K and
Section III.D of SEC
Release No. 33-6835.
2. We note the increase in
your research and development expenses and that you have
multiple products in
varying stages of development and clinical testing. Please revise
future filings to
provide more detail for your research and development expenses for each
Peter Mariani
FirstName LastNamePeter Mariani
Axogen, Inc.
Comapany NameAxogen, Inc.
April 27, 2020
Page 27,
April 2 2020 Page 2
FirstName LastName
period presented, including but not limited to by product candidate as
well as by the
nature of the expenses. To the extent that you do not track expenses
by product candidate,
please disclose as such.
Note 3. Summary of Significant Accounting Policies
Revenue Recognition, page 91
3. We note your disclosure that you do not provide disaggregated revenue
because of the
similarity of products and arrangements. Please explain to us in
greater detail your
consideration of ASC 606-10-50-5 and 55-89 through 55-91 in
determining that
disaggregation of revenue is not required. In particular, describe
what types of sales
information is reviewed by management to assess operating performance
and the
similarity of your individual product gross margins impacting cash
flows. As an example,
we note that you cite changes in product mix as a factor in increasing
revenue for the year.
We also note in your recent earnings call that you identified Avance
contributes over half
your revenue and growth and you also describe differences between the
direct and indirect
sales channels. Lastly, tell us how you considered the disclosure
requirements of ASC
280-10-50-40.
Item 9A. Controls and Procedures, page 114
4. We note that within Management's Annual Report on Internal Control
Over Financial
Reporting, you state that management evaluated the effectiveness of
the design and
operation of disclosure controls and procedures and concluded that
your disclosure
controls and procedures were effective. Please note that Item 308 of
Regulation S-K
requires a separate evaluation of your internal control over financial
reporting. Please
amend your filing to provide both the required management's report on
internal control
over financial reporting under Item 308 of Regulation S-K and
management's conclusions
on the effectiveness of your disclosure controls and procedures as
part of your Evaluation
of Disclosure Controls and Procedures section under Item 307 of
Regulation S-K.
5. Please tell us your consideration of whether management's failure to
complete and
disclose its report on internal control over financial reporting for
two successive annual
periods impacts its conclusions regarding the effectiveness of your
disclosure controls and
procedures as of the end of the fiscal year covered by the report and
revise your disclosure
as appropriate. In particular, please explain to us how you considered
the definition of
disclosure controls and procedures provided in Rule 13a-15(e), which
indicates that
effective controls and procedures would ensure that information
required to be disclosed
by the issuer is recorded, processed, summarized and reported within
the time periods
specified in the Commission's rules and forms.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Peter Mariani
Axogen, Inc.
April 27, 2020
Page 3
You may contact Lynn Dicker at (202) 551-3616 or Kevin Kuhar,
Accounting Branch
Chief, at (202) 551-3662 with any questions.
FirstName LastNamePeter Mariani Sincerely,
Comapany NameAxogen, Inc.
Division of Corporation
Finance
April 27, 2020 Page 3 Office of Life Sciences
FirstName LastName