Axogen, Inc. Annual Report Summary for Fiscal Year Ended December 31, 2025

This report offers a clear look at Axogen, Inc.'s performance for the fiscal year that concluded on December 31, 2025.

1. Business Overview

Axogen (Nasdaq: AXGN) is a leading medical technology company dedicated to developing and commercializing innovative surgical solutions for peripheral nerve repair. The company's product portfolio helps patients recover nerve function and improve their quality of life after nerve injuries.

Key products include:

• Avance® Nerve Graft: A unique human nerve tissue graft that has been processed to remove cells, providing a natural scaffold for nerve regeneration.
• Axoguard® Nerve Protector and Axoguard® Nerve Connector: Collagen-based devices designed to shield injured nerves and bridge nerve gaps.

2. Financial Performance

Axogen delivered strong revenue growth in fiscal year 2025, with total revenue reaching approximately $185 million. This marks a 15% increase over the previous fiscal year. Increased adoption of the company's core nerve repair products and expansion into new surgical centers primarily drove this growth.

Despite robust revenue, Axogen reported a net loss of $25 million, or ($0.65) per diluted share. This loss reflects significant investments in research and development (R&D) and sales and marketing initiatives. The company maintained a strong gross margin of 72%. Operating expenses included $60 million for R&D, supporting ongoing clinical trials and product pipeline expansion, and $105 million for selling, general, and administrative (SG&A) expenses, which funded commercialization efforts.

3. Risk Factors

Investors should consider several key risks detailed in the filing:

• Intense competition from other medical device companies.
• Potential regulatory hurdles with the FDA and international bodies for product approvals or modifications.
• Reimbursement challenges from third-party payers, which could affect product adoption.
• The outcome of ongoing clinical trials, which may not always yield positive results.
• The ability to protect intellectual property from infringement.
• General economic conditions and supply chain disruptions, which could also impact financial performance.

4. Management Discussion and Analysis (MD&A) Highlights

Management's discussion of financial condition and operations emphasizes the company's strategic growth investments. Increased surgeon adoption and expanded market access for Avance Nerve Graft and Axoguard products drove the 15% revenue increase. The net loss stems from substantial investments in:

• Research and Development: Particularly for the RECON study and pipeline expansion.
• Selling, General, and Administrative Expenses: To bolster commercial infrastructure and market development.

Key operational achievements in 2025 included:

• Continued progress in the RECON clinical study, with enrollment targets met ahead of schedule.
• The successful launch of an enhanced surgeon training program, leading to a 10% increase in active surgeons using Axogen products.

Management views these investments as crucial for achieving long-term market leadership and future profitability. They believe current liquidity is sufficient to fund operations and strategic initiatives for at least the next 12 months.

5. Financial Health

Axogen maintains a strong financial position. As of December 31, 2025, the company held $120 million in cash and cash equivalents, providing substantial liquidity for planned operations and strategic investments. The company carries no significant long-term debt, relying primarily on equity financing and cash generated from operations. This healthy balance sheet offers considerable financial flexibility to support ongoing operations, R&D investments, and potential strategic opportunities. Axogen's status as a "well-known seasoned issuer" (WKSI) further enhances its financial flexibility, allowing efficient access to capital markets for future funding needs through streamlined registration processes for potential stock or debt offerings.

6. Future Outlook

Looking ahead, Axogen plans to execute strategic priorities to drive sustainable growth and achieve profitability. These priorities include:

• Expanding market penetration within existing and new surgical specialties.
• Advancing clinical evidence supporting its product portfolio through ongoing studies.
• Investing in next-generation nerve repair technologies through targeted R&D.
• Optimizing operational efficiencies to move towards profitability.

The company anticipates continued revenue growth in the upcoming fiscal year, driven by increased product adoption and market expansion. Management remains committed to its long-term vision of becoming the leading provider of peripheral nerve repair solutions.

7. Competitive Position

Axogen operates within a competitive medical device market for peripheral nerve repair. Its primary competitive advantages include:

• Its proprietary Avance Nerve Graft, a unique human nerve allograft backed by strong clinical evidence.
• A comprehensive portfolio of nerve repair solutions.

The company differentiates itself through its focus on clinical education, surgeon training programs, and a dedicated sales force. Key competitors offer nerve conduits, allografts, and other biological or synthetic nerve repair products. Axogen aims to maintain its competitive edge by continuously innovating, expanding its clinical data, and strengthening relationships within the surgical community.

In summary, Axogen achieved solid revenue growth in 2025, driven by product adoption, while strategically investing in R&D and market expansion. Although the company reported a net loss, its strong cash position and "well-known seasoned issuer" status provide a stable foundation for its long-term strategy to become the leading provider of peripheral nerve repair solutions.