Axogen Stock Soars 22% as Nerve Repair Company Posts 26% Sales Jump, Raises 2026 Outlook After BioCircuit Deal

Shares of Axogen Inc. jumped nearly 22% on Wednesday. The nerve repair company reported third-quarter results that beat Wall Street's expectations and raised its full-year sales forecast after completing an acquisition.

Axogen shares rose $8.22, or 21.94%, to $45.68 in early trading on the Nasdaq. More than 1.5 million shares had changed hands shortly after the open, above the stock's three-month daily average of about 1.26 million. The gain lifted the company's market value to about $2.7 billion.

The stock is up about 68% over the past 52 weeks.

Quarterly results

For the third quarter, Axogen reported:

Revenue of $75.8 million, up 26.2% from $60.1 million a year earlier Net income of $2.3 million, or 4 cents a share, up from $700,000, or 1 cent a share Adjusted net income of $13.1 million, or 21 cents a share, up from 12 cents Adjusted EBITDA of $13.4 million, up from $9.2 million

Both earnings and revenue topped analysts' expectations. Adjusted earnings beat the consensus estimate by 8 cents a share, according to Investing.com.

Gross margin narrowed slightly to 74.8% from 76.6% a year earlier.

"We are delighted with our third-quarter and year-to-date revenue performance," President and Chief Executive Michael Dale said.

Guidance raised

Axogen raised its 2026 revenue outlook to at least $290 million, implying growth of at least 29%. The forecast includes at least $7 million in revenue from BioCircuit, a company it acquired on Oct. 1.

Excluding BioCircuit, Axogen expects organic revenue of at least $283 million, growth of at least 26%. That is up from its previous forecast of at least 24% growth.

The company kept its forecast for gross margin of at least 73% and said it expects positive free cash flow for the full year.

"We remain well positioned to achieve our 2026 revenue guidance and longer-term strategic objectives," Dale said.

BioCircuit acquisition

Axogen completed its purchase of BioCircuit, a privately held developer of NerveTape, a nerve repair product, on Oct. 1. It funded the deal with a public offering of about 5.6 million shares that raised $225 million in net proceeds. About $200 million went to the acquisition.

As a result, Axogen ended September with $350.1 million in cash, restricted cash and investments, up from $113.4 million at the end of June. It had no long-term debt at quarter-end.

Expanding insurance coverage

Axogen also reported progress on insurance coverage for Avance, its processed human nerve graft used to repair damaged peripheral nerves. Health insurers Elevance Health and Aetna made positive coverage decisions, bringing commercial payer coverage for Avance to about 96% of covered U.S. lives, the company said.

Broader insurance coverage can drive adoption by making it easier for surgeons to use the product and for hospitals to be reimbursed.

About Axogen

Axogen, based in Alachua, Florida, develops products to repair and regenerate damaged peripheral nerves. These nerves carry signals between the brain and spinal cord and the rest of the body. Its products are used in procedures to treat nerve injuries from trauma, surgery and other causes, including injuries to the hands, arms, face and breasts.

The company has been building its portfolio and sales force to capitalize on what it sees as a large, underserved market for nerve repair.

Return to profit

The quarter marked continued progress toward sustained profitability. Axogen reported a net loss of $18.8 million for the first nine months of the year, but that was driven mainly by a $16.8 million loss related to paying off debt early. Operating results have improved as revenue has grown.

Market reaction

Axogen's strong gain came on a busy day for corporate earnings. Investors were also preparing for the Federal Reserve's interest rate decision Wednesday afternoon and quarterly results from major technology companies this week.

Medical device stocks with strong growth and improving profitability have drawn investor interest this year.

What to watch

Investors will watch the integration of BioCircuit, adoption of its NerveTape product and whether Axogen can keep growing revenue at its current pace while expanding margins.

_This article is for information only and does not constitute financial advice._