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CFO of life science startup Axogen shares how firm navigated pandemic’s health care disruptions

Veronica Brezina

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Axogen's lobby in the Heights building. Photo provided by Axogen.

Tampa-based Axogen, a life science company that is developing products for nerve repair, is ramping up hiring for scientists and engineers after navigating through the negative disruptions from the Covid-19 pandemic.

Inside the Tampa lab. Photo provided by Axogen.

Axogen (NASDAQ: AXGN), which works with hospitals in Tampa and St. Pete, has its second HQ in the Tampa Heights building where it currently occupies two floors, the fifth and the sixth, that overlook the Hillsborough River.

“We have the fourth floor, but we haven’t put employees there. Covid gave us a great opportunity to create a large meeting space. We have this 200-foot screen and we can set up these tables where people can be distanced,” Pete Mariani told the St. Pete Catalyst while describing how his team watched the Stanley Cup boat parade from inside the building.

Pete Mariani. Axogen.

Axogen was still in the process of building out its space when the pandemic took hold of the region. The firm had been temporarily using a facility in the Tampa Bay Times building while awaiting completion.

Axogen eventually moved into the building last fall; however, when the pandemic ensued, Axogen deployed a hybrid work-from-home policy for its employees in Tampa and at its Alachua campus, which is where the company was founded and has labs.

“When you take a building with three floors that was meant for 350 people, and you only have 70 people at the time, you have the ability to spread out,” Mariani said.

Axogen also has a distribution center near Dallas and a biologics processing center in Dayton, Ohio. The company shut down the Dayton facility for months while the distribution center remained open.

“Because the volumes were pulled pack, we could survive on 50% percent of our distribution team,” Mariani said, stating how Axogen separated groups into rotating teams to limit the amount of possible exposure. “That process served us well. We had a couple of exposures and positive tests before the vaccines rolled out [not in Tampa]. We were able to continue shipping.”

Axogen used a contract tracing tool in all of its buildings, which records how much time someone is within seven feet of a person. If there’s a Covid-positive person within a building, it allows Axogen to pinpoint exactly who had contact with the Covid-positive individual.

“Like everyone else, we’ve had people in our company get Covid. We are probably about a 70% vaccination rate across the company right now,” he said.

A ripple effect 

The pandemic was disrupting the entire health care space as hospitals were frantically trying to reserve supplies and elective procedures were paused.

“We had a patient in Gainesville who broke their ankle badly–lots of tissue, nerve damage–and they went into the hospital. The hospital put the ankle in a boot and sent them home and said, ‘We will call you when we can do surgery for the rest of the work,’ which is just unheard of…but at the time, the hospital was concerned about supplies,” he said.

Initially, in March, procedures dropped by 30% from a daily sales perspective. In May and June, activity started to pick back up.

Axogen implemented a 10% reduction in force, affecting 40 people who were largely production technicians. Axogen also implemented a 20% pay cut for the senior executive staff and 15% pay cuts were applied to the remaining employees.

“We did that to survive and help protect our equity. We weren’t sure how long this was going to be in a downturn,” he said, explaining one major goal was to protect the strong sales force.

“When things started coming back, we had to ramp up our tissue processing capabilities and then we started gradually adding back clinical trials,” Mariani said. “When that happened and hospitals’ schedules reopened, we were able to quickly recover our revenue in an environment where trauma incidents were still down.”

Axogen planned for its 100 workers in Tampa to make a full return to the office in early August, but the spike in Delta variant cases caused hesitation. Axogen is now maintaining its schedule of rotating teams and is continuously growing its scientific arm.

“A lot of companies like ours put a lab in a dark, damp basement somewhere, but we put ours on the sixth floor with the best views. It’s proven to be a great recruiting tool,” Mariani said.

He said once Axogen reaches a headcount of 150 or more, it will likely convert the fourth floor into office space.


Related: Why a Gainesville life science firm decided to open its HQ2 in Tampa


 

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