MIMEDX Confirms Fourth Quarter and Full Year 2022 Net Sales Expectations, Comments on Evolving Medicare Reimbursement Landscape and Provides Corporate Updates
09 Janeiro 2023 - 10:02AM
MiMedx Group, Inc. (Nasdaq: MDXG) (“MIMEDX” or the “Company”), a
pioneer and leader in placental biologics, today provided the
following updates about its business.
Reaffirms Fourth Quarter and Full Year
2022 ExpectationsThe Company announced that it expects its
fourth quarter and full year 2022 net sales to be in the ranges of
$73 million to $76 million and $266 million to $269 million,
respectively, unchanged from the outlook provided during the
Company’s third quarter 2022 results conference call in November
2022.
Comments on Potential Exposure to
Changes for Medicare Reimbursement of Skin
SubstitutesRecently, several wide-ranging proposals have
been published for public comment and are under consideration by
the U.S. Centers for Medicare and Medicaid Services (“CMS”). In
addition, three Medicare Administrative Contractors (“MACs”) have
recently published for public comment changes to their Local
Coverage Determinations (“LCDs”) that they are considering. If
adopted, these proposals would significantly change Medicare
policies governing the reimbursement of skin substitute products
principally when used for wound treatment in the private physician
office setting.
MIMEDX business in the private physician office
setting accounted for approximately 28% of the Company’s 2022
sales, of which roughly three-quarters were likely reimbursed by
CMS. By product type, over 90% of its sales to this site-of-service
are derived from sales of EPIFIX® (Q4186), with the remainder
primarily coming from EPICORD® (Q4187) product sales.
While there remains uncertainty regarding the
timing, form or extent to which these proposals may be adopted, if
at all, MIMEDX has taken steps to mitigate its risks associated
with these potential changes.
- With regard to the CMS proposals,
MIMEDX continues to advocate for fair competition and cost control
and has recommended CMS immediately publish all skin substitute
products on the Medicare Part B Drug Average Sales Price file (“ASP
list”). Currently, MIMEDX’s entire product offering sold to this
customer base is included on the ASP list.
- The LCDs in the proposals could
adopt a new standard of clinical evidence required as a
prerequisite to coverage. In addition, the proposals all require a
confirmation that the products are regulated solely under Section
361 of the Public Health Service Act as a prerequisite to continued
coverage. This confirmation can be demonstrated through receipt of
a Tissue Resource Group (“TRG”) letter or equivalent documentation
from the U.S. Food & Drug Administration (“FDA”). In December
of 2022, the Company received a TRG letter from the FDA confirming
that EPIFIX meets the criteria for regulation solely under Section
361, and the Company is currently pursuing the required
confirmation for its EPICORD product with the FDA.
- The proposed LCDs also include
language that could lower the number of allowed applications of a
product below what is commonly used in standard practice by
physicians today, supported by clinical evidence, and reflected by
LCDs currently in force with the MACs. The Company as well as
industry stakeholders across the wound care industry do not support
lowering the applications.
Commenting on the potential future Medicare
reimbursement changes, MIMEDX interim Chief Executive Officer Todd
Newton stated, “With significant focus from CMS on the
reimbursement of skin substitute products such as ours, MIMEDX has
worked to identify and mitigate these risks, based upon what we
know about these proposed rules. We believe that with our current
products on the ASP list, the receipt in December of the EPIFIX TRG
letter and the body of evidence for the use of our products in
clinical literature, we have mitigated much of the controllable
risk to the continued reimbursement of our products. We have
provided comments regarding these proposals to CMS and the MACs and
expect to reiterate our views and concerns at the upcoming CMS Town
Hall meeting scheduled for January 18, 2023. Our overriding
objective is to ensure that well-intentioned policy changes do not
have the unintended consequence of reducing the access to care of
high-risk patient populations suffering from hard-to-heal
wounds.”
Additional Corporate UpdatesIn
the fourth quarter, the Company continued steps to restructure its
corporate costs. The associated headcount reductions are expected
to reduce costs by approximately $5 million on an annualized basis.
In addition, the Company completed a sales force realignment effort
expected to improve sales productivity and the operating margin
contribution of its Wound & Surgical business unit. Other
updates in the fourth quarter included:
- Entered into a distribution
partnership with Gunze Medical to support the launch of EPIFIX in
Japan;
- Appointed Ricci S. Whitlow as Chief
Operating Officer, a role that will head up responsibility for the
Company’s manufacturing, supply chain, procurement, quality, and
regulatory functions; and
- Announced worldwide exclusive
license to Turn Therapeutics’ proprietary antimicrobial technology
platform, PermaFusion®.
“On our third quarter call, we discussed four
key fundamentals that this business is executing on with a sense of
urgency,” stated Mr. Newton. “In a relatively short period of time,
we have implemented and achieved a number of measures that we
expect will position us to expand the reach of our products to a
large and growing population of physicians and patients in the U.S.
and also internationally, beginning with Japan. We expect these
recent changes and accomplishments put us in position entering 2023
to continue to build a growing and profitable Wound & Surgical
business with exciting and amplified R&D potential.
Additionally, we expect to commence our next registrational study
for the use of our mDHACM product in the treatment of knee
osteoarthritis in early 2023.”
The Company will provide additional commentary
on its fourth quarter and full year 2022 results as well as its
expectations for 2023 when it reports results, currently scheduled
for March 1, 2023.
About MIMEDX
MIMEDX is a pioneer and leader in placental
biologics, developing and distributing placental tissue allografts
to help address unmet clinical needs in multiple sectors of
healthcare, including the Advanced Wound Care market as well as in
surgical recovery settings. MIMEDX is also focused on advancing a
promising late-stage pipeline opportunity targeted at decreasing
pain and improving function for patients with knee osteoarthritis.
Our products are derived from human placental tissues and processed
using our proprietary methods, including the Company’s own PURION®
process. We employ Current Good Tissue Practices, Current Good
Manufacturing Practices, and terminal sterilization to produce our
allografts. MIMEDX has supplied over two million allografts,
through both direct and consignment shipments. For additional
information, please visit www.mimedx.com.
MIMEDX Safe Harbor
Statement
Some of the information and statements contained
in this press release and certain oral statements made from time to
time by representatives of MIMEDX constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 that do not directly or exclusively relate to
historical facts. Forward-looking statements include statements
regarding: (i) our expectations for our net sales and other
financial results for the fourth quarter and full year 2022; and
(ii) our expectations regarding CMS and MAC reimbursement policies
and the impact of CMS and MAC reimbursement policy proposals on our
business and financial results in 2023 and beyond; (iii) our belief
that we have mitigated much of the controllable risk to the
continued reimbursement of our products; (iv) our expectation that
our headcount reductions will reduce costs by approximately $5
million on an annualized basis and that our sales force realignment
effort will improve sales productivity and the operating margin
contribution of our Wound & Surgical business unit; (v) our
belief that recent changes and our accomplishments put us in
position entering 2023 to continue to build a growing and
profitable Wound & Surgical business with exciting and
amplified R&D potential; and (vi) our expectation that we will
commence our next registrational study for the use of our mDHACM
product in the treatment of knee osteoarthritis in early 2023.
Additional forward-looking statements may be identified by words
such as "believe," "expect," "may," "plan," “goal,” “outlook,”
"potential," "will," "preliminary," and similar expressions, and
are based on management's current beliefs and expectations.
Forward-looking statements are subject to risks and uncertainties,
and the Company cautions investors against placing undue reliance
on such statements. Actual results may differ materially from those
set forth in the forward-looking statements. These statements are
based on numerous assumptions and involve known and unknown risks,
uncertainties and other factors that could significantly affect our
operations and may cause our actual actions, results, financial
condition, performance or achievements to differ materially from
any future actions, results, financial condition, performance or
achievements expressed or implied by any such forward-looking
statements. Factors that may cause such a difference include,
without limitation, those discussed in the Risk Factors section of
the Company’s most recent annual report and quarterly reports filed
with the Securities and Exchange Commission. Any forward-looking
statements speak only as of the date of this press release and the
Company assumes no obligation to update any forward-looking
statement.
ContactMatt NotarianniInvestor
Relations470-304-7291mnotarianni@mimedx.com
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