Alachua, FL-based AxoGen has been building a portfolio of nerve repair products since it was founded in 2002.
Its first product-the Avance nerve graft-clears the chondroitin sulfate proteoglycans that inhibit the regeneration of axons, maintains the three-dimensional structure of the nerve and clears cells that can trigger tissue rejection.
"It's very similar to autograft nerve," which promotes the development of axons, says CEO and co-founder Jamie Grooms. "The more axons you get, the better the outcomes."
Dr. David Muir of the McKnight Brain Institute from the University of Florida and Dr. Christine Schmidt from the University of Texas Austin provided the scientific insights the company needed to get started. Because its product is regulated as human tissue, the company didn't have to mount clinical trials to get marketing approval. Efficacy was demonstrated in the preclinical phase and validation studies are done to back up their claims.
"February ‘08 was when we launched, just over a year ago," says Grooms. "Now we have studies that are ongoing; case studies and randomized trials."
The new research work is aimed at proving their approach is superior over conduits and even autografts. "We believe that it's better to use our product," says the CEO, "with better size matching."
Two more products are slated for launch this summer. "We also have a pipeline of what's next," adds Grooms, "other things we can do to increase and improve performance."
AxoGen wrapped a $12.1 million venture round in 2007 to help build the sales force and get moving on its pipeline work. The developer has received funding from SynoGen of Gainesville, FL, Emergent Growth Fund of Gainesville, FL, Accuitive Medical Ventures of Atlanta, GA, Cardinal Partners of Princeton, NJ, De Novo Ventures of Menlo Park, CA and Springboard Capital II, LLC of Jacksonville, FL.
Now it's time for another round.
"Actually we are looking at another round as we speak," says Grooms. "We can still last through this year, close to the end of the year, but we're starting to raise more money now. Somewhere around $15 million is the sweet spot.
"We feel pretty fortunate," he adds. "We have good revenues, we are growing and this should be our last round. The clinical case studies are phenomenal. These are big motor nerve deficits and it's awesome to be a part of it. That involves walking where it hadn't been possible, shrugging shoulders, chewing food."
Other applications are being studied, such as restoring sensation after breast augmentation, reconstruction or implants as well as reanimating the face after certain medical procedures. Adds Grooms: "We're going to continue to ID new markets."
AxoGen has 46 staffers, with much of the work force focused on marketing and sales. There are also product development staffers. Manufacturing is outsourced.
"If we raise the $15 million," says Grooms, "we would bring in maybe a VP of marketing and sales."
"We have a distribution deal with Stryker Orthopaedics," says the CEO. "They have rights in the extremity market - the arms and legs - we're after the head, neck, trunk and a potential cardiac application. We will explore all those with a direct sales force. If something really focuses a market, we could talk to other players."
The company is based near the University of Florida in Gainesville. And Grooms says its
Locations has been a real plus.
"The University of Florida gets it," he says, "they know how to license it. You don't have to travel the world any more."
Ultimately, though, AxoGen could land just about anywhere.
"I always plan companies to be qualified for an IPO," says Grooms, who took another company public in 2000. "That means we continue to develop our portfolio. In this environment, though, it's probably an acquisition-type exit. The way we're structuring it, we can be a bolt-on company to be just in that space, or absorbed into a company."