AXGN - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. Welcome to the AxoGen’s Fourth Quarter and Full-Year 2019 Financial Results 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] Please note this conference is being recorded.

the Officer. to turn Mariani, host, now Financial Chief will conference our over Pete I you. Thank

may You begin.

Peter Mariani

Thank Diego, you, and good afternoon, everyone.

today's and our and later begin I will on Chief fourth highlights for overview quarter me call a and Zaderej, operational the Karen in Joining then quarter AxoGen's of Executive our Officer performance call detailed President. full-year our will provide financial the Karen call. with an is Chairman, analysis of

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

will We to specific future regarding I'd operating limitation, cause in get these Before without make you encourage the that and/or I XX-K capital sales and Company like Company's remind future the described These XX-Q, may factors and review with regulatory forward-looking limitation, identify and may you statements statements. the regarding past or during those marketing the or the Company's Forms this to events. that including, started, SEC, projections filings conference the without product call, potential, include, actual events differ resources development, acquisition from forward-looking performance. factors environment, which statements to materially product strategies, and results

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

Karen Zaderej

quarter the million, in grew good strength and the quarter driven trauma fourth both Pete, afternoon, Total Thanks, and core business. the in revenue solid everyone. our by delivered $XX.X the growth full-year. We to XX.X% fourth in revenue

quality life nerve restore AxoGen, grew million. to nerve patients revenue $XXX.X function injuries. full-year, At the peripheral our mission For to with is to of and XX.X%

pursuit and repair. introducing applications advocates, sales this of advancing and our execution, evidence, are surgeons the building new We mission pillars the expanded in products market growing developing nerve body are clinical educating awareness, of five through growth, which of and

sales to execution. Turning first

we sustainable path call, commercial rebalanced trauma, have market efficient quarter's towards extremity growth. discussed largest we earnings our to efforts our long-term and most As last on refocused and opportunity

increased flagship, we This deeper outcomes by achievement our going use on their injury patients. and expanded of repair penetration is our have surgeon deeper improved focus to Specifically, full increased anchored algorithm. current supported Graft, of Avance in sales our support optimal nerve clinical deeper of for customers result sales development Nerve our representatives the believe focus all use by active We within will nerve accounts. rep this and

at new and requires Developing nerve our consistently executing refocused nerve requires development raise with persistence data the pleased and of market recognizing are us that use algorithms and of clinical peer-to-peer endorse progress provide both optimal supports repair surgeon our education awareness this account the teach portfolio products that that and use to programs We while level. repair the techniques. our approach, also should surgeons interactions and to

with We to technology. nerve closely build each and their surgeon our support their work continued of as patient outcomes repair own use positive experience they

products and Our surgeon's supporting repair user a AxoGen's nerve become long-term each representatives to sales consistent involved, of algorithm. highly journey are

confident have driving place and right are adoption We surgeon in strategy the several that the team we years. next to over continue

resources to an and markets do to as develop. are invest oral and focus the continue we continue extremity reconstruction balance breast maxillofacial improved As of with so in on doing nascent grow we trauma, these but neurotization, markets, and commercial

sales ended to with we our continue To and XX market direct and independent sales build agencies. XXX increase sales quarter representatives footprint penetration, our the

reps which time geographies. thoughtfully by are allows territories XXXX, throughout spend tighter and territories agency strategically discussed our more accounts surgeons account splitting within we sales to sales and improved gaining to we direct developing converting coverage, As reps,

It remote year-ago. these geographically locations. direct essential to accounts the our strategy result, be efficiently channel XX% as XX% approximately know of to is are part more our important that fourth sales an to quarter target revenues effectively through a came in cover agencies channel able our of will a As agency versus continue and

fourth our of XXX, the active quarter, number of at the from XX% XXX to accounts XXXX. we In increased end up

We revenue active targeted trend as observe these to this surgeon focus to and accounts continued expect year-over-year continue and in other increases we in increasing on accounts. for adoption

continued surgeons of extremity that in to our expect beyond. development and pipeline also and leading We active our of over further the accounts, year the accounts will course focus to lead accounts increases trauma in developing of on

revenue, a existing For our accounts, current represent approximately moved the other the our runway growth base. to penetration represents is as suggesting account the our growth quarter, top XX% there our top our for In significant our accounts a active rate towards more words, utilization significant accounts XX%. opportunity XX% continue of that increasing of of within of

which XX% continues come number Additionally, within account, accounts. accounts a revenue from to strongest of provides in our opportunities of growth surgeons additional top our even each primarily early adopter from small

and results by We are firmly sales encouraged continues of as focused early force commercial improvements organization commercial develop our we to and our matures execution our on XXXX. remained the throughout

with execution, team to confident sales year. analyze and throughout these our commercial the and to will allocate continue strategy am to payoff the continue that progress see made long-term the I we and we areas resources growth. leadership I on Our efforts am greatest provides have those review will pleased

our pillar building to Turning awareness. market of

well the Our for Association of at Surgery, Microsurgery. American platform Society Hand the combined American meetings Society the for and for nerve Nerve for repair Reconstructive XXXX Peripheral American recent represented was

the well horizon. and procedures last hosted an improved role are AxoGen's peripheral educational nerve supporting in that on AxoGen that the as techniques made explore symposium as advancements repair decade in

full our throughout several presentations portfolio, the AxoGen-Sponsored that to AxoGen's symposium, and RANGER were highlighted product scientific meetings data the there addition from including clinical In Registry.

XXXX moment X. take went for to effect CMS like into highlight new repair reimbursement setting also I outpatient the on rates nerve the a in to that January

an the the injured the lowering repairs for implant gap increasing new significantly With unbundled direct direct requiring these bridge rules, gap. reimbursement repair, and has effectively to repairs nerve for CMS from repair reimbursement

direct increased outpatient for Avance in XX% reimbursement outpatient in centers, by and centers. repairs hospital XX% reduced Specifically, of approximately using surgery while hospital ambulatory procedures at ambulatory both was XX% and surgery reimbursement centers

for procedures outpatient XX% and and in connectors centers surgery rates in XX% involving also centers. hospital Reimbursement ambulatory conduits increased

percentage trauma the patients relatively represent by are nerve direction cases, we reflects repair Medicare the a of of small evolution it encouraged While new adoption. CMS as

procedure CMS, repair nerve Commercial payers of short nerve lead centers. often repairs of to follow reimbursement gap in volume the for ambulatory well for could bodes we future which increased and lead surgery believe

we repair fourth in of Advances events to educate confidence repair participating efforts with six develop programs. and Our conducted quarter XX These including in surgeon-led surgeons on total advocates Best continued Practices Fellows in in education the programs techniques. and focused a surgeons additional nerve XXXX, and nerve gaining national

surgeons. We educating remain three-quarters and of microsurgery the and in next-generation as committed of three-quarters of trained XXXX XXXX to expect hand in to fellows incoming we all train fellows

The structure regional and of program continue advanced programs. to programs shift compliment our to education We education format more national XXXX. will towards core our evolve targeted in to and educational resources plan

data. than we achieved our Increasing continues body repairs. surgeon portfolio of a adoption clinical that Registry X,XXX January, a and of significant enrolling by our has to announced large more supported milestone, product Nerve expanding In Avance RANGER Graft be

supported across nerve evaluation at publications motor repairs and allows short study and repair long has peer-reviewed meetings. outcomes presentations for and sensory, several gap mixed and techniques injury and in surgeon of the scientific registry clinical ongoing nerves The and

a For graft-related meaningful of of with example, American the Surgery Hand, consistent no XX average data repairs at demonstrating upper XX% presented events. Society the was adverse recovery Avance nerve the September months, extremity follow-up of Graft for XXX meeting an from of for rate with Nerve

the the hand. the Avance improvements in sensory and compared degree of rate two-point had three discrimination, of recovery, measure of from overall a Nerve of cohort to MATCH areas: recovery, major study conduits as average key the synthetic Findings essential in show the the statistically recovery Graft static significant

than to demonstrated were The between study conduits of for to demonstrated XX nerve consistent or for Avance less in with founded XX% synthetic literature and and recovery a conduits to compared millimeter, found XX% XX millimeter, These gaps rate XX XX%. XX% rate Avance. are published equal conduits Avance recovery gap of meaningful be meaningful and while as previously outcomes a digital

serves autograft control nerve this repair data algorithm. centers. from outcomes arm data understand participating better the and to Surgeons using MATCH cohort as clinical and RANGER contemporary a conduits of to treatment providing are The expand

for enroll, continues we XXX RECON subjects the report updated in Study anticipate to target RECON enrollment of and data to We expectation the total out recently a occur QX XXXX. will Our second end quarter. reach to our of of of the

the Our the to ReSensation of Sensation-NOW reconstruction continues enroll. and neurotization technique. surgical of sensory registry Sensation-NOW using after outcomes clinical studies breast life quality

neuroma evaluating study, enrolling currently phase. in standard of Nerve of prospective, the Study comparative compared completed We the a Axoguard randomized-controlled a are pilot phase REPOSE to as REPOSE use management the painful in Cap is the of neurectomy procedure. and

the significant surgeons confidence both portfolio. we and that new breadth advancements studies invest in will provide of in to We nerve the in AxoGen depth Avance clinical techniques are with making and with repair continue studies

onset patients RETHINK of prior to pain. of pain following is then is that the therapy pain, through technology. evaluating treatment initiated designed journey, example This newly using the the chronic and nerve onto at One surgical performs our Study, surgeon including referral Registry AxoGen PAIN study repair networks, the beginning capture the patient's attempted the

and This we of study on recently will once believe nerve complete, in study provide management the data it surgery, center patients chronic initiated patient at meaningful the Following with to data first clinical the ultimately aid pain. will its outcomes. collect

XX first of this The XXX approximately across target will study up to subjects module centers.

or new had the symptomatic portfolio We source introduce of injuries the products surgeries. pain application surgical traumatic chronic treatment orthopedic foundational initiatives are expand believe our We pain. a of common following discussed to and neuromas previously several of into

surgically symptomatic referral limited plastic patients repair treatment. and population. see the patient resulting interest evaluation XXXX, the underserved our Surgeons current and with We significant we surgeons neuroma neuroma identification in nerve development efforts treating number their surgeon injury and our can using customers of products. for initiated remove increase In market hand of a this the to among and

launch Nerve is protect Nerve from separate to efforts, Axoguard surrounding stimulation from expansion nerve important This month, including we reduce to environment an an solutions formation. our and it neuromas. and of portfolio the neuroma mechanical Cap, Cap of Axoguard the to initiated painful addition to these address the designed

how this reiterate developing we've Pete, progress and Before to to pleased strategic market. initiatives to as want I I I hand call made the with our executing am against we the large continue over in

and significant taken year organization XXXX was we sustainable long-term our change steps we've for AxoGen. a believe the growth commercial support in of will

invest sales to order growth, sales capability field to continue continue but allow our in and – to will commercial drive pace current organization so measured do at develop. will to to a future We in revenue our mature

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

Peter Mariani

quarter million, impact in Karen. as $XX.X grew quarter well grew million. Revenue year to the as volume primarily net was product XX.X% Thanks, unit revenue of mix. XX.X% for full-year Fourth of $XXX.X the to growth increases the revenue changes price and in the while increases and result

accounts of new revenue addition revenue Our largely well active by accounts. growth increased the and as was driven as active

We XX% have an XXX active year. accounts, which prior over the of represents increase

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

required Gross points profit of year impacted not well compared from the increase was basis quarter quarter. processing the to QX in costs quarters. margins in the QX quarter by in quarter, margin a XXXX. compared was in $XX.X fourth as for prior increased were which XX.X% reserves to XX.X% are repeat the XX.X% expected XXX future Gross to fourth as for $XXX,XXX approximately additional million, inventory negatively or Gross

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

million stock quarter non-cash Operating $X.X $X.X the prior fourth include expenses compared to the of in million also compensation in year. expense

quarters to Our with past over is spending revenue and growth has continued now the our growth. moderate line three in

expansion million, education in of increased our surgeon XX.X% an programs. increase and the sales quarter The $XX.X prior footprint includes marketing investment in the of the year. continued spending fourth over expense was and Sales

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

fourth year. quarter an the development XX.X% of and prior to in spending $X.X million the million, increase compared $X.X in was Research

clinical BLA development Nerve R&D our supporting Our increased programs well and in additional as Graft. as product expenditure for Avance included investment

compared fourth As increased to a year's revenue, fourth of quarter. in the in percentage quarter, revenue XX.X% R&D to of the prior XX.X%

non-cash includes an The stock General compensation including and increase in growth. million fourth quarter expenses higher compared $X prior year. administrative to supporting X.X% the in was our the increase expenses million, related compensation higher organizational $X.X of to

XX.X% prior in As to to percentage fourth of revenue, in G&A XX.X% decreased quarter. year the compared expense QX

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

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

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

to balance the balance and million $XXX.X year was quarter. equivalents the cash investments the The sheet. of third million end cash, end Turning of of to our compared at the $XXX.X at

Now turning to guidance.

are our guidance. reiterating We XXXX

direct million expect representatives million million $XXX to and $XXX of We that increase $XXX will that between to expect number between will million. sales revenue $XXX the be and

Additionally, and moderate we improvement margins. above year-over-year will see we will expect in the XX% remain operating gross margins

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

Karen Zaderej

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

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

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

a to he suffered end from wife prepared interrupted wound David his upper recover his nerve remarks algorithm, a story using helped Before David, about and injury. how when a gunshot home surgeon our with AxoGen I'd like invasion. the taking his patient, questions, terrible right unknowingly a to leg a

ER, recuperate. he David's in was immediate sent and treated home wound was the to

stand He one in him severed with debilitating Unfortunately, referred leg. David's He his He for to gunshot sit, which struggled pain. to evaluation. surgeon with the constant bolt to and activities to walk his nerve was the unable ability left pain consulted unable He or everyday has as was specialists. work. nerve, described However, walk impacted sciatic return and to him comfortably. several lightning a

pain. wrapped surgically significant was Nerve around nerve resulting The remove tissue that repaired injured a nerve The out to developed, surgeon Nerve the Graft was painful able the resolved becomes large gap with and then scar neuroma Protector. that it had Axoguard cut which Avance and

a to David Following He to rehabilitate to was back immediately work recently returned regain he to He is pain-free began motor his leg. his sensation continues working surgery, and and function roughhousing driving grandchildren. and leg. his forklift injured to with

AxoGen on the grateful play that provided a possibility of techniques nerve were able terrible partnering to trauma. we role for the surgeon following recovery with repair the Avance with is such David

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

Operator

Our we question. you. Thank first gentlemen, [Operator your with Instructions] will Jefferies. session. Ladies Please at question time, and our this from conduct Raj Denhoy comes state question-and-answer

Rajbir Denhoy

of a reps question size? start is force, of is see the or or additional could doubled almost I Maybe In time so period hires. by just there it the around XXXX. right couple mean, the of where afternoon. years, Or here really And ultimately the slows with sales the at I addition rep you've is again guess which be little expectation good Hi, and force do heading? maybe XX I you the grow sales the about at where a reps the sales reps in think you will last the of to cadence the bit?

Karen Zaderej

year. business. we of we and scale of reps depend continue rate the can that think the of improve size productivity a And to team and of with of that think ultimate the reps as size will I their are territory this I on growth sales the slowing addition the Well, the maintain starting they build

So territory. threshold growth maintain this to of point, $X as million split about we've about a the talked we we a to at before, where see territory a need

may the me service you for to early a of a doable. We are more to that allow exploring it's tell some models components too to to territory of allow But I that's other think threshold. number that higher that selling that us offload reach

things would this the to more to at well need some that we've we because be point, as of we some as rate entering caused strategic at It a we agencies. reps foundational I territories, geographic XXXX split will that say, do of continue like as the independent needed we that the see of some to rep territories accelerate in key over So hires us and add to converting done reduced some time. will splitting

So those are pieces complete.

Rajbir Denhoy

I point change you're productivity of in. calculate a by by parse sales number think Again, you pace any you from XXXX, sales the maybe has depending number the one into appreciated finer difficult the to be been that of rep reps, is I becomes because that you see that start as shine things imagine the being it's Okay. that out to reps productivity it is start through such bit Well, adding expect investors? can when on those coming a sheer to new reps it, But on the put I in relatively numbers see that are of the can the productivity of we'll do that look average now you sales reps flat. to masked how

Karen Zaderej

ahead flat we've what So in guidance XXXX that. productivity in and our assumed is jumping not of relatively

it again, to improve it, piloting that But some would not think, potential see we're we're we the in. baking things that. I until have

some as do rep. possible the relatively yes, very as sales that of So well measures. with both at that's I this think of flat maturing per these productivity productivity Longer-term, point, the is team assumption our

Rajbir Denhoy

anything products, is Avance just the the in are of seeing Or most give products? of of revenue. the at one other Where relatively the balanced? mix terms Axoguard us versus just you it Maybe well point? growth can last family there one, on Is Okay. you this of

Karen Zaderej

It's of little been our remains revenue. That's the relatively well years. over half over consistent a balanced, Avance very

we with the see again, contributor across Board. of So over is growth half Avance significant growth. the a revenue and But

Rajbir Denhoy

you. Thank great. Okay,

Peter Mariani

Raj. Thanks,

Operator

Thank you.

comes from Richard Newitter Leerink. question next state SVB Our Please with question. your

Richard Newitter

for force questions. a more follow-ups. attempt Hi. guidance selling you're trauma just to core your taking the of bit the the that and one here on I – reflects in have some guidance sales then that Maybe sales works and or that refocusing heavily do optimize Thanks little appreciate organization. an the realignment on the some and two been

talk curious that if is contemplated just a I'm though, little you're new looking newer what from can you areas that contribution, or and what understand contribution about maybe is OMF is go areas? deemphasized. breast? if those from in I any And of bit any, some into penetrating nerve the considered to But

Karen Zaderej

Yes. segments. each the don't breakout We of

for both continued continued and think – good a of but I And OMF from small have segments, when those their we've growth. breast base, relatively overall both opportunity performance. small look we year-over-year a a have seen growth at

So I'd more growth. those will that in have we continue little be of to cautious both pain. anticipate a

early at I to of very just parts build. all of and process the just like stages long-term think pain, time the we're takes conversion repair, nerve

outer would start impact that I seeing that this more an eye towards year put with negligible years so And of hold. take to a of as

Richard Newitter

an fresh changes. a and things opportunity you versus you like maybe just to it. look in fresh that reevaluate, a be to some take facilitated the at which And the reshuffled gave or happening kind things need and internally, that some had of these look as Karen, feel that look your new maybe are market of sales and Got things at you leadership, you

And at the nothing that say end just doing as you're you what confidence confidence your you it's you're the your and opportunity. you're changing all and things that about markets that or under of to market. this us that control can that or a confident is Thanks. way give what that reevaluate accessing you necessarily what that structurally I'm kind market just ultimately But curious, point gives in

Karen Zaderej

our opportunity potential into at and account Yes. for the piece see one reps the disclosure. of that and added We the look obviously the at very we've all territory and closely we level at

that that quarters in active So started reporting we've we've last of our couple put our of here revenue. the XX% of XX% accounts is delivered

accounts, XX duplicate XX good not unique. more it they're And there's accounts. not – those roughly accounts unique the It’s are those can't that centers. nothing but about we It's

see accounts active like that XX% to there's expand be And developed sizes that so significant what we where that our to we've penetration. existing potential do of like already is

we still and the at accounts. early-adopter in in those usually top growth, it’s best small surgeons, number when see you surgeons addition, XX%, even In them, – look a that continued of top

So and performer room level further to those we is. top have raising what keep bar even of expand the that

early that at that we put of breast believe We market other the really So conversion of the into doing. the in us these what effort there's and accounts. able it convert that surgeons they're continue approach we're these to to really to exciting continue at some areas focused to And that's stages realize be a to move these the work getting with like why stay value the best out we to look things neurotization don't hard and need to still is we say, that's OMF, here. through to distracted focused trauma and the not in but execute limitation. concern It see and trauma, get give stay process,

Richard Newitter

in One for there increase Got and XXXX Thanks. your assumed more, price it. outlook how much? is a

Karen Zaderej

or Yes, we a historically first price taken have a take price increase quarter. in the

that that increase will price again that digits. however, low-single doing We've assumed, this be are year. We

assumed Just more with accounts so we we've low that for price larger pricing. there as single-digit that be pressure discounting anticipating a some and into larger get will and

Richard Newitter

you. Thank

Operator

Thank you.

Securities. your Our with next question state from David comes Turkaly JMP question. Please

Daniel Stauder

the for Thanks is This questions. on taking actually Dave. Dan Hi. for

Peter Mariani

Hi, Dan.

Daniel Stauder

first this give expect color make this us in on could line? net So improvement if some you were the see can should where how and income XXXX, P&L off, see the on we margin impact so to Thanks. wondering mentioned benefit an any to of just operating you just you much

Peter Mariani

I'll make but continue quantify indicate we're growth. the moderating we've but that it, to spending I'll across going organization, think certainly investments to been don't I Well, that

in leverage certainly see You'll year. sales across in and G&A, marketing the

us continue continue R&D revenue got we've R&D we will line. is additional than It's this do some an continue in grow You've higher was we that development. year-ago. be higher to percentage because and additional work a it The to the are seen clinical going at of work to rate to product initiating as a

So see in And quantifying across and leverage the we're you'll the not but that, marketing certainly margin improvements sales and year. you'll see operating G&A. across

Daniel Stauder

just on how Okay, to great. an takes but well questions. idea of for as us should And a splitting That's split amount long of helpful. up the productivity through to follow-up, touching to time Thanks just it then productivity drive ramp back back in takes give a you of territories, as long-term these improvements, this it areas? the could see region transition

Karen Zaderej

see we about ramping. see months we a get to that effective in to new talk nine start that When really and we still Yes. start bringing XX assume rep, before they to

there be and has while who for us short-term on new split XX-month a portion second portion coming work the they things disruption in picking will will the is split a been patterns. their disruption and territory. be and and work But territory, keeping in impact is person real about rep the a of the a of up half it that the with So as the

Daniel Stauder

you. Thank Great.

Operator

you. Thank

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

Samuel Brodovsky

is Hi, on thanks. Sam for This Ryan.

of usage based any quarter reimbursement seeing updated in repair, nerve first with Just CMS with, kind you're patterns it's change of early, for you off start to this? out characterize know but can I

Karen Zaderej

early more to who's in trauma Yes. see anything. a it It's traumatic happens of Medicare small is young the very Medicare often than anybody still Remember, is ranks. a – to injuries, person too be injury, amount

tremendous It's structure bigger impact impact. point. the payers around follow So adjust start don't we'll more the this and see think to a see commercial we a we at that

Samuel Brodovsky

there? And then should see that to expect year-over-year margin can that we And gross we margin this should expansion? about to pressure contribute going lines, there. some decline operating think into FYXXXX? on the Or Okay. How

Peter Mariani

we prepared have our Yes. do No, processing we remarks, increased said some in costs.

having As to on additional had we event got primarily donor quarter we tissue And ended reserves current in addition a in larger, we've up production one-time some preprocessed take costs our we additional the get some inventory on inventory. facility. in where that, to

significant increasing we notable that's but we costs do a out some But organization and future. it in for to to the continue and build into go in the quarter. the have issue, as was, expect obviously, something see the as not growth. organization we Not prepare would seen But

Samuel Brodovsky

Great. Thanks.

Operator

[Operator Instructions] Our next Rose state Please from question Canaccord question. Genuity. Kyle your with comes

Kyle Rose

Thank Great. for you taking very the much question.

to XX of accounts wanted commentary that on the the just XX% some or the a little just bit I So around of of accounts the follow-up represent XX% revenues.

to Just maybe levels? of takes get of as accounts as context us those some there it could if far those give some to you historical how long some high-performing

on productivity trying curve that other same walk that of and some to of year, to XX accounts that And to driving XX higher? then of relative type was type to you're towards also the maybe as that account understand accounts the last – mix that truly to guess, hoping well? I revenue just your success an much at driving up make what's accounts you're basis somebody drive were happening those accounts levels. accounts, contribute able it other Was it XXX

Karen Zaderej

high-value Yes. We top that noticed something for that our the number just in of fourth of has XX% this not yielding place measure of our that's and revenue in, popped so the these quarters, mean accounts of Pretty grow. the year additional same sorts added does which saw much have accounts trends, and then we we've year last accounts to that in a been of XX% to before through continued the quarter.

to because say, varies. like they that I obviously grow quickly, long see take, is of we we look would at interesting it It some more terms In with see how accounts would we and like XX%. through of really usage products. their go at in It the and of champion at that their can the accounts which treatment a confident a become expand to looks surgeon top algorithm speed AxoGen

so And add step in continuing back that algorithm. and getting to the them to around next it's go us, in for

going back keep is for their and usage their have And follow and their that, so that make and into them to treatment. results they rep that identifying add work the gaps in the try sure

surgeons So will most for example, nerve injuries. digital start with

to the We way injuries get then want continue more but from arm nerve work rep our that with to and work the injuries, those complex that's outcomes the does. digital more up and the

that want heal nerves quickly It's as doing possible pull that the the we still surgeon not slowly. to to months. as possible. rapidly to rep Again, make So do hopefully as that patients and sure engages in is as

cases with the but years, algorithm. So through this the surgeon is than work rep you – the that in to others move generally constant to go pipeline can faster push some than with with

Kyle Rose

some I Great. course of last little ramps color significant just and assumed That's in respect the back sales this made then increases a in kind very to year? force the right And what's on here, gone the provide Help just two last to productivity – those the circle just you've with over years. wanted XX those can us Maybe questions what's one also the XX of previous cohorts, the regarding understand of you guidance force sales productivity and on helpful. months? of

has to How types it's whether or hiring of changed rep that's when XXXX, the the last hiring productivity? about different that target. to reps you how the trying And how go the How XX changed? think informed the in has you're – about training different think programs maybe months you the

Karen Zaderej

Yes.

a reps we're foundation solid very the some give hiring done that to in we've think things nerve good I repair. new

solve understand issues. well are very approach we've to our them training is sales our increased as on still That's in be direction our sell the their surgeons need nerve so to technical repair. help really as job with to what and working how to able a both We're their what issues in sell, surgeons. and we but And clinical

improved we've surgeon to really the think I training it a patient So as our their partner sales issues. solve trying approach to to in

type to are think we nice in that very recruiting. job standardizing I also of we're that think talent for we're people that shown in that looking in. And hiring the what we've sure consistent we I done make new bring associates sales to that the clarifying continue in of a and we're

have profile seen and we to make happen on to we territory. to create hiring that not challenges we've that focus think who market, somebody Even the people hire their in really we've in this more and competitive changing wants identified been job able change

I they meet we've that so that that of rep works so a need. a And got can think profile

Kyle Rose

taking for the you Thank Great. questions.

Operator

Ladies it you. at gentlemen, this for there management turn remarks. Thank I'll questions are Thank time. you. further no and to back closing

Karen Zaderej

City followed you, York seeing Investor the Global Diego. week, on be BTIG New on and us the at SVB in attendance Utah Global joining for today's in you Healthcare forward We'll Conference conferences XX, much. to March want in by Conference Leerink very in on and everyone you Barclays the many weeks later this Technology XX. Miami Thank thank we Healthcare March Thank look to Snowbird, of at the ahead. in Conference Medical call I

Operator

you. all you This Thank concludes today's you Thank your may your and disconnect time. participation. at all for conference, lines this

AxoGen (AXGN) 24 Feb 202019 Q4 Earnings call transcript