Roth starts AxoGen at buy

Roth Capital Partners initiated coverage on AxoGen (NASDAQ:AXGN) with a “buy” rating and target price of $14.50. The stock closed at $10 on March 3.

“Driven by increased market awareness, surgeon education, clinical evidence, sales execution, and new products/market expansion, we believe AxoGen is well-positioned to continue expanding the treatment algorithms of surgeons to include all of its products across its full treatment continuum in peripheral nerve repair,” writes analyst Chris Lewis

“We view AxoGen as one of the premier growth stories in small-cap Med Tech,” he added.

Mr. Lewis said that while AxoGen has driven notable commercial adoption, evidenced by 23 consecutive quarters of double-digit year-over-year revenue growth, it remains in early growth stages.

AxoGen's 452 active accounts represent less than 10% penetration of the 5,100 U.S. centers performing nerve repair surgery today and many of these accounts remain in early penetration stages, both from a product and surgeon perspective, he added.

There are approximately 900,000 nerve repair surgeries annually in the U.S., translating into a total addressable market of $1.8-billion for AxoGen’s products.