AxoGen secures $21M in financing
Published: Wednesday, October 10, 2012 at 4:43 p.m.
Last Modified: Wednesday, October 10, 2012 at 4:43 p.m.
Alachua-based AxoGen closed on nearly $21 million in financing to expand sales and development of products used in surgeries to repair peripheral nerve damage, the company announced late Tuesday.
The financing comes from PDL BioPharma, based in Incline Village, Nev. PDL developed antibodies used to treat cancer and immunologic diseases and now invests in biotech companies and products.
PDL President and CEO John McLaughlin was elected to AxoGen's board of directors.
The money will be used to expand AxoGen's sales force, its outreach to physicians and to develop new peripheral nerve products, said Greg Freitag, chief financial officer.
"In the current environment for where we are as a company, it's a very nice financing for us," he said. "It allows us to not be looking at additional financing in the near term and focus on the business."
Unlike many financing deals in which the investor takes an ownership stake, PDL will earn royalties on sales.
Of the $20.8 million, $5 million was used to pay off existing bank debt.
AxoGen is based in Progress Corporate Park in Alachua and has more than 50 employees.
The company reported $4.9 million in revenue in 2011, a 61 percent increase over 2010, and a record $2.01 million in the second quarter of 2012, the most recent reporting period, for a 64 percent increase over the same period in 2011.
AxoGen no longer shares certain details about its sales since going public in 2011 but divulged prior to that that its products were used in 400 hospitals and thousands of surgeries, including for soldiers injured in Iraq and Afghanistan.
AxoGen merged with LecTec Corp., a publicly traded company, in a $13 million stock deal. It trades on the Over the Counter Bulletin Board under the symbol AXGN.
Jamie Grooms, also co-founder of public company RTI Biologics, co-founded AxoGen in 2002 with current Vice President John Engels and served as its first CEO. The company started with $1 million in investments and has since had several rounds of venture capital funding worth millions of dollars.
Karen Zaderej, who previously worked for Johnson & Johnson, was hired as chief operating officer in 2006 and was later promoted to CEO.
The company licensed technology from the University of Florida and invented by Dr. David Muir of the McKnight Brain Institute at UF.
Muir developed a process of treating nerves with enzymes that target a protein that would otherwise prevent human donated nerves from regenerating. Prior to that, a patient received a nerve from another part of the body, leaving the patient with nerve damage there.