CY27 HOPPS +7-11% Facility Rate Hike; More NT +ve Catalysts on Horizon; Buy

研报英文原文证据摘录

CY27 HOPPS +7-11% Facility Rate Hike; More NT +ve Catalysts on Horizon; Buy

e and also support AXGN's ability to take price. We note CMS proposed roughly similar

increases for direct repair in hard or foot nerves (CPT code 64834) of 13% y/y.

We see multiple NT catalysts on the horizon for AXGN. We expect to see an updated commercial

coverage policy from Aetna. According to Aetna's website, the insurer had a Nerve Grafting and

Reconstruction coverage policy review date of 4.23.26. We are awaiting the posting of the updated

policy, which we think should occur soon. Based on recent positive coverage updates from

Elevance (formerly Anthem) and Cigna, we see a high likelihood of the Aetna update being

positive. We have not been able to quantify potential impact from the Elevance and Cigna

decisions, but we have heard anecdotally from mgmt that AXGN field reps are seeing fewer

denials following the two coverage updates.

We also expect 2Q results will likely be a positive catalyst. As a reminder, AXGN reported ~27%

top-line growth in 1Q and the current consensus estimate for 2Q sales is $67MM, +18% y/y. We

view consensus estimates as conservative and believe buyside expectations for 2Q sales growth

are closer to 23-24%, which we believe are achievable given momentum. As of our last catch

up with AXGN in mid-June, mgmt did not flag any negative changes to the procedure environment Michael Sarcone, CFA * | Equity Analyst

through 2Q. 1 (212) 778-8606 | msarcone@jefferies.com

Matthew Taylor, CFA * | Equity Analyst

We also expect AXGN to provide an update on its efforts in PCa. Based on our recent convos 1 (212) 778-8721 | matt.taylor@jefferies.com

with mgmt, we believe AXGN remains confident in the PCa application and is planning to Young Li * | Equity Analyst