Axogen Shares Climb on Landmark FDA Approval for Nerve Repair Graft
The U.S. regulator's decision validates AVANCE® Nerve Graft as a biologic, a pivotal milestone expected to accelerate market adoption and solidify the company's leadership in nerve repair.
Axogen Inc. (NASDAQ: AXGN) saw its shares rise Wednesday after the company announced it had secured a long-awaited Biologics License Application (BLA) approval from the U.S. Food and Drug Administration for its flagship product, the AVANCE® Nerve Graft.
The decision marks a critical turning point for the Florida-based medical technology firm, officially validating the safety and efficacy of AVANCE and elevating its regulatory status from a human tissue product to a biologic. This reclassification is expected to strengthen Axogen's competitive position and support broader market access for the treatment of peripheral nerve injuries.
Shares of Axogen traded up 2.3% to $28.33 in Wednesday's session, pushing the company's market capitalization to approximately $1.28 billion. The stock is now trading near its 52-week high of $29.32, reflecting growing investor confidence ahead of the landmark regulatory decision.
"The approval of the AVANCE Nerve Graft BLA is a landmark achievement for Axogen and a significant advancement for patients with peripheral nerve injuries," said Karen Zaderej, Axogen's chairman, CEO, and president, in a statement released Wednesday. "This milestone validates over a decade of clinical use and foundational science, and solidifies AVANCE Nerve Graft as the first and only commercially available, off-the-shelf, processed nerve allograft to restore nerve function after injury."
For years, AVANCE has been available to surgeons as a human tissue product under Section 361 of the Public Health Service Act. The BLA approval under Section 351, however, represents a much higher level of FDA scrutiny and validation, requiring extensive clinical data to prove both safety and effectiveness. This rigorous process provides a significant barrier to entry for potential competitors.
The approval also expands the product's indications for use. It is now formally approved for bridging nerve discontinuities in patients from one month of age and older, covering sensory, mixed, and motor nerves. Crucially, the FDA granted accelerated approval for certain indications, including motor nerve gaps, which will help address some of the most debilitating types of nerve injuries.
The peripheral nerve repair market, while specialized, is a growing field projected to reach over $220 million in 2025. Axogen has positioned itself as the dominant player, and this BLA approval is expected to cement that leadership. The company had already signaled its confidence in a positive outcome, raising its full-year 2025 revenue guidance to at least 19% growth after a strong third quarter.
Wall Street has maintained a bullish outlook on the company. Of the eight analysts covering Axogen, six rate the stock as a "Buy" and two as a "Strong Buy," with no hold or sell ratings. The consensus price target sits at $30.33, suggesting further upside even as the stock approaches its yearly peak.
With the BLA now secured, Axogen can more aggressively market AVANCE to hospitals and surgical centers, leveraging the FDA's official stamp of approval. The transition to a biologic also provides a stronger foundation for securing favorable reimbursement from insurers, a key factor in driving widespread adoption.
Investors will now watch to see how the approval translates into accelerated revenue growth and market share gains in the quarters ahead, as Axogen moves to capitalize on a regulatory victory that was more than a decade in the making.