Axogen Makes Strategic Investment in Trace Biosciences to Advance Nerve-Specific Intraoperative Imaging Technology
Key Insights
Trace Biosciences (search) secured a strategic investment from Axogen Inc. (search) as part of its ongoing Series A financing round to advance clinical development of its Nerve Trace imaging platform.
Nerve Trace is a near-infrared fluorescence imaging technology designed to provide surgeons with real-time visualization of peripheral nerves during surgery, including nerves obscured by surrounding tissue.
The lead candidate, Nerve Trace Dx (search), received FDA IND clearance in December 2025 and has initiated a Phase I clinical trial evaluating safety and feasibility in surgical patients.
Trace Biosciences (search), a clinical-stage biotechnology company developing nerve-targeted imaging agents, has secured a strategic investment from Axogen Inc. (search) (NASDAQ: AXGN) to support the clinical advancement of its Nerve Trace imaging technology. The investment, announced July 29, 2026, is part of Trace's ongoing Series A financing round, with additional investors expected to join. While financial terms were not disclosed, the company stated that the new capital will fund Phase II and Phase III clinical trials for its lead product candidate, Nerve Trace Dx (search), as it progresses toward submitting a New Drug Application (NDA) to the U.S. Food and Drug Administration.
The partnership brings together Trace's innovative imaging platform and Axogen's established leadership in peripheral nerve regeneration and repair. Axogen, which focuses exclusively on restoring peripheral nerve function, views intraoperative nerve visualization as complementary to its existing surgical solutions portfolio, which includes Avance Nerve Graft, the Axoguard family of nerve protection and repair devices, and Avive+ Soft Tissue Matrix.
Technology Designed for Real-Time Nerve Visualization
Nerve Trace is a near-infrared fluorescence imaging technology designed to provide surgeons with direct, real-time visualization of peripheral nerves during surgical procedures. The platform addresses two primary clinical applications. First, during routine and complex surgeries, the imaging agent renders nerves visible in real time, allowing surgeons to identify and avoid nerves that would otherwise remain hidden beneath surrounding tissue, potentially reducing the risk of inadvertent nerve injury. Second, in cases where nerve damage has already occurred, the technology enables surgeons to localize and assess affected nerves with greater precision, supporting more targeted and effective surgical repair.
"Improving nerve care starts with being able to see the nerve. You can't treat what you can't see," said Michael Dale, President and CEO of Axogen. He emphasized that the investment aligns with Axogen's mission of making restoration of peripheral nerve function an expected standard of care, noting that giving surgeons the ability to see nerves in real time—whether to protect them or to treat them—is foundational to that mission.
Clinical Development Progress and Regulatory Milestones
Trace's lead imaging agent, Nerve Trace Dx (search), reached a key regulatory milestone in December 2025 when the FDA cleared its Investigational New Drug (IND) application. The company has since initiated a Phase I clinical trial evaluating the safety and feasibility of the imaging technology in surgical patients. The latest financing is expected to accelerate development beyond this initial study and support the larger clinical programs required for regulatory approval, with proceeds directed toward Phase II and Phase III trials leading to an NDA submission.
Connor Barth, Ph.D., Co-Founder and CEO of Trace Biosciences (search), expressed confidence in the partnership. "We're pleased to welcome Axogen, a company that shares our commitment to protecting nerve function, as a strategic partner in this next phase of our growth," Barth said. "This investment strengthens our ability to advance Nerve Trace through the clinical work ahead, giving surgeons visibility into nerves they've not been able to see before."
Strategic Rationale and Market Context
The investment reflects growing interest in technologies that combine molecular imaging with surgical decision-making, particularly in procedures where preserving nerve function can significantly affect patient outcomes. By targeting both nerve identification and nerve repair, Trace aims to address an unmet need across a wide range of surgical specialties.
Founded by researchers with expertise in imaging, chemistry, and translational medicine, Trace Biosciences (search) is developing a portfolio of small-molecule imaging agents designed to make nerves visible and measurable in clinical settings. The company's long-term objective is to make nerve visualization a routine component of surgery, improving precision while reducing complications associated with inadvertent nerve injury.
For Axogen, the investment extends its strategy beyond its established portfolio of nerve repair and regeneration products to include imaging technologies that could enhance nerve preservation before repair becomes necessary. The company's commercial portfolio serves surgeons and healthcare providers treating patients with traumatic nerve injuries and surgical nerve damage, and the addition of intraoperative imaging capabilities represents a logical expansion of its peripheral nerve care ecosystem.