According to the Complaint, AxoGen, Inc. purports to provide surgical solutions for physical damage or discontinuity to peripheral nerves. Its products include nerve allografts and extracellular matrices.

The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges that Defendants failed to disclose: (1) that the Company aggressively increased prices to mask lower sales; (2) that the Company’s pricing alienated customers and threatened the Company’s future growth; (3) that ambulatory surgery centers form a significant part of the market for the Company’s products; (4) that such centers were especially sensitive to price increases; (5) that the Company was dependent on a small number of surgeons whom the Company paid to generate sales; (6) that the Company’s consignment model for inventory was reasonably likely to lead to channel stuffing; (7) that the Company offered purchase incentives to sales representatives to encourage channel stuffing; (8) that the Company’s sales representatives were encouraged to backdate revenue to artificially inflate metrics; (9) that the Company lacked adequate internal controls to prevent such channel stuffing and backdating of revenue; (10) that the Company’s key operating metrics, such as number of active accounts, were overstated; and (11) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

On April 30, 2019, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on June 19. Defendants filed a Motion to Dismiss the amended Complaint on July 22. On April 21, 2020, the Court issued an Order granting Defendants' Motion to Dismiss. Lead Plaintiff was given leave to amend the Complaint.

On June 22, 2020, Lead Plaintiff filed a second amended Complaint. Defendants filed a Motion to Dismiss the second amended Complaint on August 6. On March 19, 2021, the Court issued an Order granting Defendants' Motion to Dismiss. The case was dismissed with prejudice. Lead Plaintiff filed a notice appealing the Court's Dismissal Order on April 14. On August 1, 2022, the Court of Appeals affirmed the District Court's Dismissal Order.