AXGN - Earnings call transcript Q2 2019

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Operator

Greetings. And welcome to the AxoGen’s Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question–and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

to conference like host to now Krum. Kaila would turn over the our I you. Thank

begin. may You

Kaila Krum

Thank Officer. good We Executive Chairman, Diego, of on XXXX Pete us. you, the and and Kaila Officer Investor financial second to I'm Chief are Development. Mariani, results and quarter Relations AxoGen call and President; conference With Vice today Chief call. Krum, appreciate Corporate joining afternoon, you Financial President everyone. me Welcome Zaderej, Karen

as be follows. format for will The call today's

First, XXXX guidance. review will key discuss Karen full then our strategic and our and will highlights quarter second to year objectives. She financial operational turn

will then Pete results the financial outlined in Next, details press release. provide today's on

then your call for open questions. will the We

the the www.axogeninc.com. Within end Investors AxoGen following the Today's in call, made company's live hour website website. at webcast, call is being on live an of broadcast replay of the the via available will a section be available which is

factors filings to or we this may like Before forward-looking events. that the including the regarding you with statements and We started, call, company's will the future encourage during future specific to limitation Form conference cause get and described the make and statements. forward-looking review XX-Q, materially the identify actual without XX-K results from differ events which these to projections company's I'd remind those past SEC, you company that in

product potential, or environment, These factors regulatory operating development, may include, regarding the and/or without limitation, and acquisitions capital performance. marketing statements sales strategies, resources product

turn over the to call Karen with Karen? And I'd like Zaderej. to that,

Karen Zaderej

everyone. and good afternoon, Kaila, Thanks,

in and continued We're million. execution. pleased the Second our quarter revenue $XX.X commercial to progress made we've our grew growth strengthening XX% with

primarily quarter range at growth. our annual the of due end the in low delayed in productivity guidance came to Sales

$XXX the year. current As a of guidance revenues XX% in for representing XX% will reflect our be updating the rate. full the this for range to growth result, of million $XXX to now to We run expect million, year we're

direct. have grow this now territory, to XXX XXX continue to allows end We and The clinical now versus and add number of reps business of independent to larger representatives increased We've our year. reps represents direct by territories specialists XX% least direct expect XX% and XX% at the agency to one year new direct our revenue convert of approximately sales sales ago. by to the split

continue structure sustainable prior Our dense will smaller, the and territories, that is growth drive improved long-term we are initiatives to important will over year, the believe the drive direct more developing in coverage matures. much strategic which to productivity improvement with market. These us allow as

leading the restoring quality We're company nerve damage. solely patients dedicated of peripheral from to for life suffering

skilled to works solutions purpose-driven of Our better deliver mission to population. clinicians professionals team life-changing serve further our with patient its evidence-based to

each we of repair. this of in strategic growing body as pillars our expanded refer five building which these comment advancing the surgeons introducing our of our market of executing initiatives, progress applications growth, I'll evidence, mission pursuit products and and our developing new sales awareness, advocates, the areas. on now plan clinical educating in We're nerve on through to and

we First, patients by in of market surgeons. continue and products AxoGen build awareness our to engaging with

We within algorithm repair community. products are of growing surgeon and awareness clinical the our nerve

societies hand surgeons we've meeting to around the conference the hand quarter, of International of world. of in the In participated the clinical XXXX Federation surgery a from for the

presentations related AxoGen's scientific XX were to There products.

clinical increased awareness two hosted repair by use of repair these presentations outcomes we educational nerve were focused the portfolio highly attended AxoGen's supporting optimizing and to on of symposiums products. nerve provided peripheral These addition evidence our symposiums In algorithm. utilizing of

breast led with education conducted reconstruction. number quarter, development in participating We're and of educational including of repair Fellows surgeon in on events and advocates. surgeon growing of pillar national the seven program. one practices including also second nerve education second Our focused on techniques. programs the advances focus programs We growth the confidence is specific The nerve to gaining best repair applications surgeon surgeons OMF our in specialty and

utilization year the the see expect program. more six quarters to all total On six next than surgeon Axogen they of from hand remain and conduct we We three attend to in of of national after double education product months attendees In train fellows to the programs. plan generation XX Fellows and training programs, average, neurosurgeons this including microsurgery we a XXXX, committed

an the Axogen to publication portfolio, Our nerve repair. the Recently, body grow evidence. our involving evidence announced clinical we milestone our advancing clinical third XXXth studies of of clinical reinforces paper for that results from pillar is the commitment and important peer-reviewed product to featuring ongoing peripheral

both and acceptance sponsored seeing technology. of results outcome, evaluating products. of across and more years than investigator evidence been the portfolio demonstrating replicated clinical With of initiated our positive are comprehensive growing interest studies independent Favorable have surgeon Axogen we XX

we will research can difference. a clinical We make to meaningful believe continue where we sponsor

on study Avance an to for late graft. pivotal our update to Phase BLA conduits. synthetic compares RECON, provided double-blinded study In controlled Graft nerve our randomized we III support prospective Avance Nerve This April,

Specifically, expand enrollment and we XX plan power announced to our the completion by the to subjects of original the blinded interim study. of support analysis the

process XXX and started the recruiting centers. we're to of up Over and are selecting of the additional our sites goal in continue We reach anticipate end subjects onboarding subjects now half of study of study by actively XXXX. enrollment have of our we and will and new to reinitiated the summer five been subjects

from lengths. nerve to demonstrate now injuries of management has Graft gap and repairs injuries. X,XXX treating in nerve registry RANGER Nerve Data Our and Avance significant recovery a provide variety continues meaningful more than registry to the continues evidence the enrolled of new

and comorbidities and clinical Surgeons understand their positive the to nerve sensory motor repair data while the shows this restore better autograft. expand demonstrates ability outcomes data and function to The with donor-site treatment are using to outcomes eliminating associated algorithms.

participating RANGER centers. study control provides that controls synthetic autograft the the to for continue within conduits is enroll contemporary which also a nerve We MATCH study, reference registry from cohort and

study year. from this later presented this data expect be will We

Additionally, believe that this We with along the Sensation-NOW, we life subjects quality for in the enroll improved will reconstruction of from meaningful Resensation neurotization for clinical demonstrate Neurotization continue evidence Women, Outcomes recovery provides technique clinical choose following who the flat their women data and and registry. build to Sensation sensation of or registry vasectomy.

procedure. In compared initiated Nerve as study is management XXXX, we our a of of study. in use painful standard clinical a randomized-controlled AxoGuard prospective, the REPOSE REPOSE the neuroma evaluating neurectomy to Cap

REPOSE is a XX subject and pilot XX of phase. subject consisting an study, two-phased pivotal

enrollment pivotal of the completed the the study. initiated of of enrollment have phase We and pilot, we've

ASSIST use enroll of Avive also study Tissue that traumatic includes the enrollment is a Recently, our injuries. we Membrane years in next evaluates cohort begun in clinical have a the compared several a This control to will follow over Soft and acute as one-year up. nerve study non-transacted ASSIST study. non-treatment

Our fourth pillar is sales execution.

core ended XX continue refine the seven capabilities XX applications. across We a three the over quarter months. our nerve grow increase We direct repair commercial our of quarter total an with of XXX the in last and and to sales representatives,

the ended XX We with quarter independent agencies.

as independent We certain have territories, converted to agencies. as adding new well territories direct

will reduce also penetration adding new them footprint, With agencies in and continue we've believe create our our expect deeper allowing this active size current efficiencies able to accounts. team, an sales expanded geographies. sales territory add for direct to accounts drive to while in been we to select We active

number up products to XXX her We as our an active least nerve at the second his times quarter or least the who in the of XX% in converted that from active a has an approval of months. at repair has one define typically gone second surgeon the of to quarter, accounts account portion as the process through the and account XX XXX, AxoGen In AxoGen last portfolio ordered XXXX. algorithm increased has committee X

because is three one the of products. all treatment four repair our accounts continuum the an repair. products ordering to surgeons This generate continue revenue just these times nerve than across to is objective our expanding ordering Our least at account more nerve six of of of algorithms of implant products full surgical include important

repair. of applications Our growth fifth the and expanded products new pillar of in introduction nerve is

to our nerves. in the unmet making product and our in the to surgical are opportunities many repair application peripheral expand investments We address portfolio of the innovate nerve products repair of to needs

In treatment November planned broader could A for initiatives our total expand introduction several addressable pain. surgical we we year, support XXXX of a into help the market. foundational to announced of nerve believe, last repair application,

nerve As is procedures injury one pain of resulting of chronic our a using symptomatic sources surgically remove orthopedic we've can discussed, injuries products. the and following the repair or Surgeons the neuroma neuroma. traumatic

explore this in see patient population. we market As significant under-served treating interest this surgeon opportunity, we

confident I'm an with a drive building strategic to of call I I Before that long-term execute expanding large progress to I'm want set Pete, repair growth our our to pleased across reiterate in turn capabilities strong initiatives applications. developing as nerve sustainable we and market. continue the against to over we're

call for Pete Now, a over financial of I'll to the review Pete? highlights. turn our

Peter Mariani

Thanks, Karen.

Second quarter unit was and increases grew the in increases as mix. Revenue as to revenue million. in primarily of XX% volume price $XX.X net of result changes the impact growth well product

was revenue active in the accounts. addition new our As revenue growth largely of driven prior our increased in active quarters, and by accounts

net the of increase prior sequential year. over increase a and XX% second now XX active in accounts of an have We XXX, had the quarter

into products We to their accounts with incorporate surgeons algorithms. to become see pipeline more and new our of as our in growth also them familiar treatment continue begin

million, $XX.X XX% increase year margin Gross to in the profit to was prior second the for quarter. was of XX.X% compared Gross a for 'XX. compared quarter quarter the QX XX.X% second

prior commercial Total as and capabilities operating second in clinical, our in million, in investments with $XX.X increase associated as XX% The expenses was quarter general expense and R&D investments over includes the well growth. our corporate expanding up higher the year.

in marketing up compared quarter over QX compensation Sales was expense in $XX.X of quarter the XX% 'XX. the million in expenses prior $X.X also million, Operating of non-cash year. include and expenses million second to the $X stock second

in percentage prior sales and compared in revenue, of quarter a marketing XX% year. to increased expense the XX% to As

the Research and in million was million $X.X year. development $X.X spending to in prior second quarter compared the

includes our BLA advanced as investment clinical additional in supporting and development nerve expenditures increased Our product as R&D programs, graft. our well for

As R&D was QX of revenue, prior year. the to for XX% XX% compared a expense percentage in

second administrative costs. up including expense the in higher stock quarter includes and The higher and litigation and prior compensation expenses, increase General related year. $X.X million, over XX% was compensation non-cash the

was quarter prior expense the As second XX%, G&A second which the in a of year with consistent percentage quarter. is revenue,

million $X.XX million Net loss year. per share the in to $X.XX in per prior $X share was compared quarter or the $X.X or

compensation charges, per as share impact and stock $X.X in compared to the and share was QX loss million net $X.XX $X.X share million per litigation in non-cash per and year. related and prior Excluding $X.XX well of as net the loss adjusted

EBITDA adjusted which in loss of the and impact was stock excludes also in million quarter, to loss charges, the of litigation related year. EBITDA an million $X.X prior $X.X Adjusted the compared compensation,

ended quarter. of cash, On million quarter balance and $XXX.X $XXX.X to sheet, the our the investments the we million first with compared in end cash at equivalents,

And turning $XXX updating as mentioned, between we XXXX are our million. guidance, revenue to and guidance million Karen to $XXX now be

additionally least XXX at We prior exceed continue will expect direct sales with year-end, gross to XX%, consistent comments. have we our expect margins by to and reps

the a we to foundation make sustainable for long-term quarter, build investments In second continue to significant growth.

team in in broader commercial that the with but we moderation saw growth quarter. We we our will continue the to pleased are of invest spending capabilities, and

I'd And Karen. to to back with call over the like that, hand

Karen Zaderej

outcomes in Thanks, Pete. quality We based challenges. these company for are we from science believe unmet will to that and patients leading life solely clinical to suffering a damage. peripheral improving building nerve important clinical dedicated allow foundation us address AxoGen remains that the of

are initiatives underlying strategic our strong, are business the will the deliver believe and We our execution continued that long-term driving that growth. fundamentals sustainable of confident we

part big the Ohio works and lives family of know, you of many Dayton area. in AxoGen the As

and are employees Dayton and While our time. prayers El our are deepest Paso communities this safe, during their the with challenging families and sympathies

ongoing thank AxoGen to their their and values the love the I nerve repair. science team of for our for commitment support our to to revolutionize and vision investors

improved quality patient using Before nerve algorithm. taking life questions, AxoGen by was repair I'd whose like featuring a by prepared of to the a remarks end our

hand them. Florida. enthusiast badly arm. he dogs. his Central slipped and in Unfortunately, One the is a fell and he his an is patient engineering to ran afternoon, a Don backyard he glass loves here injuring and door patio in distress student through who fitness on He from check his and in dog heard

theory. or The or damage able call but feel fingers, he unable move to him and to his using left significantly was hand XXX bleeding

laceration The AMS ever his for Gupta about could again. transacted. and was Axoguard nerve waited he the be median he'd was nerve in nerve severe using think As have both function hand. ulnar repaired were nerve and graft that an all repaired Jon to and and Jon to and whether nerves sensation able weights lift discovered active median suffered nerves median arrive, ulnar his advanced and and ulnar Dr. control This motor was had lifestyle connector. Nirav wrist using

I'm fast his to functions motor Jon sensation I completing to active see has lifting proud encourage returned you hand story. and return arm. the forward experienced Jon's As He's to life and his engineering to today, of and degree that more visit both of We weights has report our website style. and to

this point, for I'd like line to At up Diego? the open questions.

Operator

question-and-answer state this first time, Newitter your question. question Partners. session. Richard At you. with Our a [Operator comes Thank Instruction] be Please we'll conducting Leerink from

Richard Newitter

in quarter maybe What at end could questions. for is just was being keys Thanks with, start it by you delayed the we low could Hi. came you're but end, I business. you The of Pete, I taking a this for year little productivity kind the just exactly hoping contemplation and off you out gains and forecast range, future visibility the us. have low guidance maybe bit Karen feels that. towards force right appreciate half challenging into, that made have It is guess back productivity to issues range. sales what for gives kind the that the of the related your I like guidance productivity in and

gives in understand for quarter. half the us you quarter and even what's your to the Thanks. exactly new contemplated in What led that visibility back confidence and and half, target? have the help the back full-year into delays between the So third the guidance maybe fourth you what

Karen Zaderej

Sure. Thanks, Rich.

in territories So, we've these [ph] take territories. And that's dent them more growth demonstrated as those generate more geographically we can we're that make smaller better both and you and metropolitan to areas. and what replicate so productivity looking across high

diffuse independent the cities to we're agencies. taking moving those the same of geographically time, At some and

footing both So continued geography presence for a there our that growth. long-term in to revenue and and make see is as some changes strong We moving these pieces of happen. platform

if we would has at -- -- the the transition, would with direct We was we remained come we do hope to reps previously, we timing up that we reps, looked see you see you we've not see how a in it's but the see good that full concentration The when focus. to uptick as thing. original territories we've year, originally back and give look expect we seen our think that that guidance, flat. remain at relatively to Because flat this the done they our that productivity allowing

in are touch to so we they can the more a surgeons home period we are those from for practical close happen where can on that surgeons it time having during focusing you or penetration And continue out time case just that be matter, drive accounts. value they're from territory instead see don't trauma five high how their they six cover their better might to a rep, that driving wait and would driving or hours accounts with on can to their lose the reduces in their that the and not spend house, points

Richard Newitter

just the about think us to are start Okay. and we between give back be you in exactly bottom -- us start modeling and And XQ? improve? to can a Help what and seeing XQ rep embedded you maybe cadence sense think assumptions as XQ for when clear, maybe the that you. purposes then what to half? Thank to in should XQ And the year expect between then, productivity

Peter Mariani

Rich. Yeah,

and end the range. what reason through set some of below some a to at run whatever we half looked at rate that of be as some additional at of productivity the So, low-end first said, where about the current at the sales or could that is, conservativeness the around we And top around. this with range original we range in we think the move we productivity of pullback outcomes had came continue things for is guidance. the it our We look way in as we rep if

I a that current confidence that the year. investors’ and the rate So, the it we've makes the define us, now, for the I got end hope us should we've through go that of gives at sense and said, we think range, half right top that run back range of that's where and

right where as second the if split, looked When that's QX rest about ended think the we to I And it be quarter comes and QX, think you think way go historical again, we've we seasonal would patterns, look way of at apply it. the year. the at that the to I

Richard Newitter

if And I...

Karen Zaderej

that end at end up that Yeah. see rates pick back if us position. towards we better we're And run what top the puts current so I that the is range, saying a range, in guess, the of the

Peter Mariani

could, Right. And maybe one more. just, if I

As company step it, assuming all I When XX% profile we curve side back. do to think rate in call the plan, take projected you the, of of a growth the XXXX. the view the company? out to presumably goes normalized you're growth now how the of it on productivity other you is, what the just about for longer-term XX% come range

Richard Newitter

plus Are the growth Has the you. you changed of XX now percent markets? company? in size at or end anything markets Thank the

Peter Mariani

has for as fundamentals by earlier, reps our No, look in it. XX% of changed the last at way a the we nothing market. we've of us, the in market mentioned premium This sales continue has over see company. we ourselves the year. the growth grown the size Like over changed Nothing to Karen

premium footprint specialists splitting doing to think growth forward. company clinical metropolitan we're larger us things are I that especially We're creating areas. a better continue adding the allow going we're sales to much a And territories. the We're be to going across

of we're things how develop on where are we see in I year and where range through we'll half based back this now, appropriate right updated think the the coming half first But the from sitting is

Richard Newitter

Thanks.

Operator

Our comes state Raj next Please Denhoy from with question question Jefferies. your

Raj Denhoy

reps in or Pete. maybe competitive standpoint curious there new for think you these hires? Karen; of to ramp I of up the productivity Hi, just progress original that relative I'm guess, following the is a different line your why anything Hi, with I expectations? our new what's market, questions, sales taking Is longer from these last think, to kind on perhaps really slowing

Karen Zaderej

Yeah.

no see a really change that to new first, as there is that growth of we AxoGen the levels place - any nerve that no competitive market nothing is entrants, market is the the coming from difference repair there doing nerve from in in growing, there is So attention. market competitive standpoint, And are market. we that is care build the things

no the ones algorithm bringing are So and results for optimum patients. we that that than a are and awareness market other think repair to create, will to we nerve repair helping we surgeons yield dynamics which teach we

higher our of about of unexpected kind just rang. things we're productivity, could see terms -- we've end lower coming at productivity in In seeing is I l pop come longer there coming think reps a come at so, end talked the in the not It's the nine in range run are range. the at a We how months we're is seeing of not is end to the XX lower We're up. we're it we always end. the an range, on between and of the

And that. we prudent it felt to was so just reflect

Raj Denhoy

time. I'm and dynamic I guess for of happening so this, now lot a period reps more tenured you're kind been at what's the adding junior part but you curious end, a reps for have this And fair. I a -- That's prepared of of other suppose of that right, few

for some go I is still are seeing those broadly? any trying a mean productivity are tenured where the productivity folks folks could out figure what seeing maybe improving you to time? in with get and over it even more of What of terms or is just are you gauge of or there

Peter Mariani

Yeah.

the So, we're more same the the with still reps. seeing dynamics marketplace in tenured

we talked will like $X get we as split have, territories those before territories. We to million, about

they're for split two level. well who are reps sometimes one, them many split that on at, I'll four, where or we them Sometimes three have crossing and underpinning

it. fact, got something above we've In

on their to specific them it territory. okay it's little keep a about for while And based

So, reps growth. the business continue there about and nothing fundamentally these is ability here of to drive to the

could as mature And think, better broader about this beginning I where develop. we optimistic its to Karen setting. in mentioned, organization this this about be continue to current is really

Karen Zaderej

that's at the And just these I of to more added to are add, this looking potential solid country. think We some concentrated run scenarios and across of replicate we the what territory. see when we're and we what we think, where macro the territories very looked we've really results

So more looking that we've something now is expand that geographies. approach to demonstrated demonstrated this in we're and

Raj Denhoy

that That's -- you then, Can price quickly, you just was, around give And quarter. more you took in great. little that what what price mentioned Pete, a us the contributed?

Peter Mariani

Yeah, what net we continuing we're digit we a see. continue that's to increase, expected -- mid-single price and

Raj Denhoy

great. Okay, Thank you.

Peter Mariani

Yeah.

Operator

question comes Please with Our from question. BTIG. Ryan your next state Zimmerman

Ryan Zimmerman

right. questions. for taking Thanks the All

Just deeper Karen, front in territories. as to the going a And are in Thank and continue the follow-up. for talking you. then So, realignment that transition? about you're that we have on to follow-up end territory of this timeframe I what's process? are that transition well. you Where

Karen Zaderej

this not revolution see and the we a evolution, market. So changing an as

over law So, we've reps. least at Those and time. not said one will bunch spread at XXX the all QX to trying be we'll we're QX direct have

reflected like earlier some of and just part the reps that the So reps - in some be QX. in did we've in done where will and QX we year

see you'll we change sales a team So continued increase continue our to as

Ryan Zimmerman

ago come months characterize groups? changing if question. marginal and now they maybe what and came you of right, online, okay. Or difference are account them. talk are characterize just users maybe just in in then six they as of line those or Are accounts accounts? And the seeing to is All there levels kind you similar accounts as online productivity seeing of where maybe any them you're But a new previously new more can follow-up about similar you XX with between

Karen Zaderej

more treatment or very small. we about, really they algorithm. our talked six portion adopt one it's when three is So the versus our we implants It's see than using is in one when revenue range an start his of one account the our her of And using an of product algorithms, broader start account in times, right. usually as momentum to surgeon one,

it's adoption broader growth I or three algorithm. one it's relationship, it accounts a look faster higher And those products not it of more and was So a The one the rate revenue really have today. if than generation the to historically. at is that is and

So that stages it positive. trialing. go We mean all of through at product, That we see as that doesn't the happens first still adopting these surgeon once. in fact the

The product of in outcomes, third my surgical a first a it's still, time a areas nerve example. the fracture, much applications waiting repair adopting many expand care other for and of that outcomes adoption -- longer as is and slower because slower see and product for product, period than nerve to it nerve to is and in second pass they get repair. starting approach first would to that adoption experience, be than And that from first then the the that expand product they

we changing. we have marginalization that But don't into. the also that degradation that don't so moving potential a the don't We it, into adoption. And of of once of part we're see see accounts we get

Ryan Zimmerman

hop Okay. That's helpful. in queue. back Thank very I'll you.

Operator

Bijou Craig state from comes with question Cantor your next Please Fitzgerald. Our question.

Craig Bijou

clarifications. couple have follow-ups pieces taking moving thanks of and afternoon the talked I or about maybe the some questions. for I of you a Good and Karen, territory the Karen, splits. guess

weren't year. this have adding given earlier sense those you've reps the about guidance those were -- a get are was so knew the for given I know coming. maybe I guidance in -- that the So, or I want we contemplated you guess, changes to

leadership contemplated, start But of maybe QX there the in things I any some happened splits maybe guess Were that at additional weren't year? the with that the or force changes. of say, sales

Karen Zaderej

Our sales attrition the the addition of changed rate has with not leadership.

place. In behind continue in fact, the we well team new sales that the And now execute to VP. I plan our sales we've on think rallied has had

not So no, that. seen we've

we're year As would see I've said in XX% focused and approach that we range. to a attrition XX% to management and the expect tracking performance in before, do we

Craig Bijou

was Okay. sure reps on clear guess And see believe one the were I I'm of I'm know want this was the trying and delayed that make productivity because I rep maybe growth. another year I I come slowdown And to that the productivity productivity, just growth from most then mature. that more that just to to the have clarification more was been know the focused that it, like you've understand that impact that that just bit or a going in newer you group of exactly there delay, some but from? questions delay the from a gotten impact couple maybe of over reps. what a year any didn't where reps it, on of little on a I more came

Karen Zaderej

we've the before. we from from with reps. we - at of the we were reps hired would talked That original end I about So, that as say, assumptions the be that had the see, and growth would XX year modest contributions the new

reps year, terms the very a assumed growth all in the for first I reasons the talked modest surgeons. we've come of of conversion process in on as they New a about

say that two approach. grown expect grown modest because have done that the reps then, look have reps and a actually a a that contribute I little at of we recent have worse the they very a reps so, very little we do sort are year basis to one-year would been better, actually I over small more still And tenured hires than if better the our a but have little time, reps on percentage expected a I numbers,

substantial is not something would I I It's a say bag. a think mixed that So trend. it's

Craig Bijou

ahead. Go it. Got Thanks.

Peter Mariani

to them Yeah, and get chance this. get they're up giving much that it a so to is that some get of specific putting get introduced I folks It's think as not in just we're going speed. and and rolling the to geographies

got team. great a we've think I

our I think added tremendous we've folks. training for

sales well. moving continue to view this half. develop we'll the think This think lower how through of I and way I the think putting positioned point reps really see updating training is is in our it's things team we're And at basis; just I the the in range at on the gone and very along a well training well. end regular second extremely the that

Karen Zaderej

And the XXXX when in XX hired were just and we ended talked reps, XXXX in fourth them, reminder I certainly those some quarter. about of with in reps XX a and

of nine fact, them In were fourth in the quarter.

folks those the still curve. productivity So are up coming

the at as that productivity to the had new balance we're again as, is that's well we're this well year place year trying hiring now. we the the people look the people As hires last continuing of doing in to maximize we're and as that that

Craig Bijou

the taking questions. for Thanks Great.

Operator

Thank you.

Nemers with next comes William Please Our Josh from question Blair. question. your state

Andrew Brackmann

Brackmann off is for actually Weinstein. of questioning previous good line just Maybe the Andrew Brian of on This Hi, afternoon. there. piggybacking

organization, As sort it brought they've more the you the the the the field? reps into to the new being Thanks. sales talk little and specific about is bit by changes that to in maybe a how team can commercial leaders of received relates brought

Karen Zaderej

Yeah.

done really done to up I of fundamental and I have also think, strategy good place. supported by in we on. speed But that have that Chris very plan coming on not think helped the job The that we're reinforce has changed. the execution Eric to first strategy they've a good some fundamental of the has

associates hiring really what has I For criteria the out laying the job example, expand we done for standardizing and sales think as team. is one continue of the team new to a sales is our things that great

this we we've seen benchmarking hired are set we and have that we did best and try was hiring nice in to a growth the in people criteria we're these of really the best with they what the that job where right. growth that a of Obviously year, what development up place, important get

but strong bringing for have best now again hiring for best the excuse success. will people of growth, who -- next or me, the We're year, on we're we potential XXXX, very XXXX impacting possible think class a really

So a they've job of nice standardizing done there.

think that is opportunity both it them our the we're our that program we've I so bringing ramp management The and ever we're way to and associates educate trying to that delivering for goal we're best the messaging training to the people board, again quickly. sales the up on it both to had, put for the delivering in maximize

the on long two things strength. I with good us so they've think a emphasis up put And term those that set for

Andrew Brackmann

of point that sort place? said this that one go enter year, being Thanks. territory I you force put is just strategy Okay, the around in throughout of contemplated back splits you XXXX as new sort clarification, a think to was of thanks. want And I the sales to that's or then, something

Karen Zaderej

for - years. a we've number done actually That's of this Yeah.

it. in As growth get up been of compensation our out such we've gets larger. have a a are and to We million, recognizes It we we dollars territory. splitting often territory when that and rewards set as of is $X that harder territories grown, we will the gross the split the plan range

good it a good base rep up growth smaller more money. rate. because back make So, to go the wins And the With being win-win. ends that and will also a a company we

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Andrew Brackmann

you. Thank

Operator

Our Rose next from with Canaccord. your comes Kyle question. state question Please

Kyle Rose

much very I just specialty talked about also reps. investments question. taking Great. you got the expanding when you you sales one. talked I Thank in mean, about force, for the

towards guess, and you talk many wondering I breast about, if how reps particular? specialized actually markets, of you've at could smaller least markets OMF some smaller more growing Just the in or

your then, kind markets are and how how expectations should relative them And of a growth? we about tracking overall to those the Thank just to as think you. contribution

Karen Zaderej

our and grounding, injuries. our dollar the a again, Well, traumatic in largest just biggest as area opportunity Sure. is

but we And ago number segment. that years we the recognize of as oral so foundation the was a and that's of there have what opportunity the business, maxillofacial in

nerves. or breast in dental are then that these procedures also, reconstruction the either damage injuries And reconstruction mandible angiogenic and neurotization. So

me, eight And XX selected those people XX centers, about specialists on with six breast in people is two in conjunction team the in centers put then place breast six focusing this. the so work in in to teams we've They centers. focus manager, so, across for the across the we the And the -- OMF specialty manager, country. on we team, again specialty really excuse specialize that neurotization, support area country and have territory

to In are and area addition, manager in count our again those rep included the

Operator

are much. back Great, it this you. turn for Thank I remarks. questions very closing at will thank Zaderej There you Thank no Karen time, to you. further

Karen Zaderej

look Conference the want many I and Well, Stanley seeing everyone at we of Diego. this the you, forward to at today's and Cantor Canaccord coming on joining Thank week Morgan in thank the to call and us you conferences months. for

be we'll on Investor City about XXth. in conducting on coming and in we'd you. to our event York Additionally, announce Thank November the detail the available be website made Analyst Day More will like months. New this AxoGen

Operator

today’s my Have This conference. day. you. great concludes All Thank party disconnect. a

AxoGen (AXGN) 6 Aug 192019 Q2 Earnings call transcript