As a biotech company on the forefront of nerve repair treatment, Axogen has always been near the front of the scientific curve.
But they’ve also done okay on the real estate front.
Three years ago, the company, founded in Gainesville, signed a 75,000-square-foot lease for a second headquarters at Tampa’s Heights Union, which was at that point still under construction — as were office buildings in developments like Water Street Tampa and Midtown Tampa. Since then, many of those office buildings have opened up and signed even more tenants. Heights Union, for example, recently signed pharmaceutical giant Pfizer to a lease of more than 100,000 square feet.
“We were trying to think about what attracts talent,” CEO Karen Zaderej said of Axogen’s headquarters search. “We wanted the work environment to be that work-live-play environment, where you can pop in and grab food easily at a restaurant, you can go for a run or a walk, you can go work out. Those are the things that we were looking for. We just felt the Heights offered all of those things.”
Axogen is still recruiting hard, even while bouncing back from a year that cut into its bottom line. The company designs and manufactures technology designed to restore skin sensation to victims of burns, surgeries and other injuries.
The pandemic curbed non-essential medical treatments in some key segments, such as oral surgery and sensory restoration to breast cancer patients who’ve had mastectomies. Axogen’s stock dipped to just over $9 per share last summer, a four-year low. But now it’s back above $20 per share, and Zaderej believes that if the pandemic continues to subside, the company’s business will improve.
“We think it’s still a little down, but people are starting to move pretty quickly, or have been moving pretty quickly to normalcy,” she said.
Over Zoom, Zaderej chatted about moving to Tampa and the future of nerve and pain treatment. (This conversation has been edited for length and clarity.)
When people talk about Tampa as an emerging biotech hub, what does that mean?
We’re looking at people who have technical degrees like neuroscience or biomedical engineering, and we’re also looking for MDs who want to think about technique and surgical development, sort of the clinical side of how you develop these products. And much of that (talent pool) resides in some other location. It’s primarily in Boston, Minneapolis, (North Carolina’s) Research Triangle park and the San Francisco corridor. Opening up in Tampa, we found, has really opened up the opportunities for people to think about moving here. Tampa isn’t what I would consider cheap, but when you compare it to Boston and the San Francisco corridor, it’s a good value.
Is it one of those things where success breeds success — when you have one company and another company move in, you suddenly have this broader talent pool to pull from?
We actually do very limited recruiting locally today, because of the specialization of what we’re looking for. But it creates a sense that it’s okay to move here, because you’re not hanging out there in the only place you can possibly work in Tampa. So the more people who have heard of Tampa, the easier it is to recruit.
Earlier this year, Pfizer announced they were going to lease space in Heights Union. Does Axogen see any benefit from that sort of proximity to a global pharma brand?
I do. If you look at the two buildings we’re in, some large percentage of them are going to be in healthcare. Pfizer has four floors of the building next to us; we have three floors of our building. That makes it a community of these high-level health care jobs, which makes it an attractive area for health care.
Axogen sees nerve repair as a market opportunity worth $2.7 billion. Beyond the segments that are going to come back stronger after the pandemic, what are the biggest opportunities for growth?
It’s clearly continuing to build surgeon education and usage, and you do that by making them aware that there’s something new out there. This is a surgical technique, so it’s not just writing a prescription; they need to understand how they implant it, what they need to do to make sure they have successful outcomes. We have an extensive education program, and we support that with strong clinical data. Those are the elements we do to really help develop this market and increase our penetration where nerve injuries occur.
How does a manufacturer of a product aimed at nerve pain avoid falling into some of the same pitfalls that companies, medical professionals and patients have fallen into as it relates to the prescription painkiller industry?
There is a place for opiods. There are some people where that’s the only solution that they have, and they should not be reduced to the point of living in excruciating pain. But opiods became overly used. You’d come back from a simple surgical procedure with a vial of opiods. I think the fact that it’s surgery in and of itself makes people stop a moment and think, “Is this something I want to do?” What we’re proposing is there’s an alternative. If you remove the source of the pain, you can take these people from pain levels up in the highest echelon, maybe not to zero, but very manageable levels.
Axogen hasn’t turned an annual profit to this point. What are the biggest obstacles to that, and how do you see the company overcoming them?
We’ve not been profitable. We’ve had a few quarters of positive cash flow. Our goal right now is to continue to invest in the business. We’re just in the early stages of penetrating this market. We don’t want to have any kind of cash concerns, but it may be better for us to invest in another new product or another new clinical study to support data, rather than pushing towards profitability. So at this point, we’ve told the investment community our goal is to continue to grow.