Introducing Axonics Modulation Technologies

With the recent addition of Inari to Saul’s portfolio, I’ve been screening for other smaller market cap, fast growers that are similar. Here’s one that looks worthy of consideration. Would be happy to hear what others have to say.

Introducing, Axonics Modulation Technologies ($AXNX).

Based in Irvine, Calif., Axonics has developed and is commercializing novel implantable sacral neuromodulation (SNM) devices for patients with bladder and bowel dysfunction, and through its acquisition of Bulkamid®, offers a best-in-class urethral bulking agent for women with stress urinary incontinence. These conditions significantly impact quality of life for millions of adults in the U.S. and Europe. Axonics’ clinically proven products are offered at hundreds of medical centers across the U.S. and abroad. Reimbursement coverage is well established in the U.S. and is a covered service in most European countries.

Main competitor is Medtronic Interstim II.
• Axonics SNM product lasts 3-4x longer (15 years vs 4-5 years), 60% smaller, half the weight.
• 83% of patients would recommend Axonics Therapy to a friend, while only 5% would recommend the InterStim™ II System.

Q4 2020 Results:…
Announced Bulkamid acquisition - offers solutions for patients with stress urinary incontinence. Very complimentary.

Annual Report:…

Let’s compare some of the key financial metrics to Inari.

Market Cap:
AXNX: $2.4b
NARI: $5.7b


| Quarter   | AXNX      | NARI   |
| 2019Q1    | 1.08m     | 6.95m  |
| 2019Q2    | 1.49m     | 10.07m |
| 2019Q3    | 1.31m     | 14.22m |
| 2019Q4    | 9.95m     | 19.90m |
| 2020Q1    | 26.30m    | 26.95m |
| 2020Q2    | 15.21m    | 25.39m |
| 2020Q3    | 35.24m    | 38.72m |
| 2020Q4    | 34.78m    | 48.60m |

Revenue Guidance:
AXNX: None provided, but inferred from analyst q&a $157-$160m for core business (SNM) + $16-20m for Bulkamid = $173-180m for 2021 → 56-62% yoy
NARI: $225-235m → 61-68% yoy

Gross Margin:
AXNX 64%
NARI 91%

AXNX $241m
NARI $164m

From Earnings Call:
• The 2020 results speak to the quality of our product, the quality of our people and the market opportunity that’s estimated to be several billion dollars. The future of sacral neuromodulation modulation and that business is bright, and we expect to continue delivering strong growth this year and in the years ahead as the market for sacral neuromodulation expands.
• In general, we see women’s health and incontinence as an underpenetrated market opportunity. And as it turns out, we were opportunistic and able to leverage our strong balance sheet and stock price to acquire a very hot product line sooner than we might have expected. As you may know, stress urinary incontinence is a very common condition that afflicts women of all ages, with childbirth as one of the main contributing factors. In the U.S. alone, this impacts about 20 million patients with only – or women, in fact, with only a small fraction of those having been treated. SUI is caused by a weakness in the pelvic floor, preventing the urethra from closing fully when pressure – when sudden pressure is put on the bladder. This can allow urine to leak out during normal daily activities, such as coughing, laughing, exercising or lifting an object. SUI is different from overactive bladder. And when I talk about overactive bladder, I’m specifically referring to urinary urge incontinence or urinary frequency. These conditions are not related to pelvic floor weakness and is treated with either drugs or BOTOX or the more permanent solution, sacral neuromodulation.
• Now many patients present with both stress urinary incontinence and urge urinary incontinence, and this is referred to as a patient with mixed incontinence. Physicians will differentially diagnose between those 2 forms of incontinence to understand which is predominant in order to properly treat the patient. Now I cannot overstate how perfect a strategic fit Bulkamid is for Axonics. The acquisition leverages our expansive commercial footprint, which we believe will greatly accelerate Bulkamid’s adoption, in particular, in the United States.
• Bulkamid is a best-in-class urethral bulking agent for women with SUI. It is unique. It’s patented. And it is a nonparticulate hydrogel that is injected into the urethral wall to restore the national – the natural closing pressure of the urethra. It is a simple, fast, easy-to-learn and perform procedure that is minimally invasive and can be performed literally in minutes in either a physician’s office or an outpatient facility.

• Revenue growing at a similar pace to Inari
• Margins are not as strong as Inari, but also not bad
• Market and moat seem reasonable to expect high growth to continue

(long Inari, considering position in Axonics)


Thanks for sharing. We do offer InterStim from Medtronics in our gastroenterology practice. I strongly feel this is a great modality and definitely works well. Furthermore, many patients definitely have the need and would benefit greatly. However, here below are the issues and hurdles–

  1. High copay for many patients. For example, Medicare reimbursement released back in 2018 (sorry, need to find time to look up most recent numbers) shows $5,142.15 as the reimbursement per side. Bilateral would equal $10,284.30. Medicare would pay $8,194 and the patient co-pay would be $2,090.30. Over the years, we have had many patients cancelled the procedure due to high copay.

  2. As expected, there have been high number of denials on payment claims related to this procedure by the payers even if prior authorization was obtained and approved. This is particularly relevant on ambulatory surgery center reimbursement–both HCA and Tenet/USPI (have 2 of the largest ambulatory surgery centers in the country) have made it difficult to do InterStim due to high number of denied payment claims.

  3. Many of the patients are senior patients and have lived with incontinence issues for many years and said they are “used to the suffering” and are not willing to do additional test(s) needed for prior to the InterStim placement (eg. anorectal manometry) and pay the copay for InterStim, anorectal manometry, etc.

  4. Many gastroenterology physicians are not willing to go in depth with discussion with patients regarding fecal incontinence as many focus on endoscopy and colonoscopy procedures. Many colorectal surgeons still prefer to do surgeries, colonoscopies, and treat hemorrhoids. Many gastroenterology physicians and colorectal surgeons are not willing to learn this newer modality. For urologists, I have not seen many general urologists perform InterStim but do see more uro-gynecologists perform InterStim.


Our facility uses Axonics only; all placed by our “general” Urologists.

It is a short (30 minutes) procedure requiring only sedation (not general anesthesia). And the reimbursement for the hospital makes it very profitable.



Thanks for bringing Axonics to the board. I am a Colon & Rectal surgeon who has implanted hundreds of sacral nerve stimulators. I echo many of the points made by Endoscopist. I am not willing to buy Axonics without a few more quarters of data for the following reasons:

  • This is not a greenfield market. It is underserved but not greenfield. Medtronic is the first mover and technology leader in this market. Axonics will have to take market share from Medtronic which has a huge advantage of in place sales team.

  • I have reviewed the Axonics literature. I do not see a compelling technical advantage in the Axonics product. The main difference in the Axonics and Medtronic products relate to rechargeable generator vs battery with 5-10 year life. The Axonics product is only rechargeable generator which means the implantable battery is slightly smaller but requires recharging every 1-2 weeks for the life of the product; whereas, the Medtronic product is traditional battery which requires no upkeep but lasts 5-10 years. In the cardiac pacemaker space, both battery options have been available for many years and non rechargeable is the overwhelming patient choice due to lack of upkeep.

  • I do not see much advantage in a smaller battery. The battery is implanted in upper buttock/lower back so it is in a nonpressure bearing area with little cosmetic implication.

I hope both the Axonics and Medtronic succeed since this is an underserved area of medicine! As an investor, I am concerned this is ultimately a winner takes most field with Medtronic having a large advantage.

Hope this perspective helps,



hopefully that disappointing 2020 Q4 revenue is the result of older patients avoiding doctors offices because of Covid. .I know I avoided them during that period. But also note in that other recent quarters revenue was very erratic.
Incontinence is a real problem, it makes for difficult social interaction and wearing something much like diapers is difficult both physically and psychologically. But Bulkamid is only about 10% of their revenue