MARIETTA, Ga., Aug. 18, 2017 /PRNewswire/ -- MiMedx Group,
Inc. (NASDAQ: MDXG), the leading biopharmaceutical company
developing and marketing regenerative and therapeutic biologics
utilizing human placental tissue allografts and patent-protected
processes for multiple sectors of healthcare, announced today that
it has signed a definitive agreement with the former stockholders
of Stability Inc. to divest the Company's subsidiary, Stability
Biologics LLC (f/k/a Stability Inc.) back to those
stockholders.
The recent announcement by the Company to transition into a
biopharmaceutical company was an impetus for this divestiture
initiative. Acquired by MiMedx in January 2016, Stability Biologics developed and
processed bioactive bone graft products and tissue allografts
including structural/particulate bone, structural allografts,
demineralized bone matrix (DBM), skin products for burns and
traumatic wound care, and Physio®, a bone grafting material. MiMedx
acquired Stability Biologics with a combination of cash and stock
paid at closing, with future contingent consideration to be paid
through a two-year earn-out arrangement.
Parker H. "Pete" Petit, MiMedx CEO, said, "We remain very
confident in our growth trajectory continuing and in our ability to
meet or exceed the revenue projections we have previously set for
2017. In our press release of July 26,
2017, we raised our annual revenue guidance to the range of
$309 million to $311 million.
Assuming this transaction closes in the third quarter, we will
maintain our full year revenue guidance. Even without the Stability
Biologics revenue contribution in the fourth quarter, we are
confident in our ability to meet our increased revenue guidance for
the year. As such, we are also reaffirming all other guidance
ranges for the third quarter and full year 2017 as communicated in
our July 26 press release."
Petit added, "We have determined that the Stability Biologics
business is not a strategic fit with our new focus on becoming
predominantly a biopharmaceutical company. While we believe the
potential of Stability Biologics products continues to be
significant, we expect to have better return on investment (ROI)
opportunities in biopharma compared to those in the cadaver tissue
category. A major incentive for the MiMedx acquisition of Stability
Biologics was its independent sales representative organization. As
part of the transaction, MiMedx will retain access to this sales
rep organization via a distributor agreement with Stability. This
group of sales reps will continue to focus on certain areas of our
surgical business."
Petit continued, "Our human placental tissue allografts are the
source material for our primary asset base, which is a key
technology differentiator in regenerative biologics. We are
focusing our efforts on continuing down the Investigational New
Drug/Biologics License Application (IND/BLA) regulatory pathways
for numerous new therapeutic applications of our placental-based
technology. MiMedx will continue to demonstrate, through
scientific and clinical studies and trials, the clinical and
economic effectiveness of our regenerative biologics and therapies.
After this divesture, MiMedx's gross profit and operating profit
margins are expected to improve."
Mike Senken, MiMedx CFO,
commented, "The transaction is expected to be completed in the
third quarter of 2017, and the consideration will include a
promissory note issued by Stability Biologics in the principal
amount of $3.5 million in favor of
MiMedx and a waiver by the former stockholders of Stability, Inc.
of all claims and rights to the Earn-Out consideration. The Company
expects to book a one-time gain on this transaction of
approximately $8 million to $10
million."
Bill Taylor, MiMedx President and
COO, commented, "Our infrastructure has been carefully adjusted and
assembled to pursue our biopharma strategy. With this new strategic
focus, the long-term strategy of Stability Biologics is no longer a
strategic fit for MiMedx. That said, through a new "private label"
distribution agreement with Stability Biologics, we have retained
their key sales relationships for the spine and orthopedics areas
of our surgical business."
Brian Martin, CEO of Stability
Biologics LLC, added, "We have enjoyed our association with MiMedx
and believe we have benefited a great deal during our time as part
of the MiMedx organization. We believe this transaction is a very
positive event for both companies."
About MiMedx
MiMedx® is a biopharmaceutical company developing and marketing
regenerative and therapeutic biologics utilizing human placental
tissue allografts and patent-protected processes for multiple
sectors of healthcare. "Innovations in Regenerative
Medicine" is the framework behind our mission to give
physicians products and tissues to help the body heal itself. We
process the human placental tissue utilizing our proprietary
PURION® Process among other processes, to produce safe and
effective allografts. MiMedx proprietary processing methodology
employs aseptic processing techniques in addition to terminal
sterilization. MiMedx is the leading supplier of placental tissue,
having supplied over 1,000,000 allografts to date for application
in the Wound Care, Burn, Surgical, Orthopedic, Spine, Sports
Medicine, Ophthalmic and Dental sectors of healthcare. For
additional information, please visit www.mimedx.com.
Important Cautionary Statement
This press release includes forward-looking statements,
including statements regarding the Company's confidence in its
overall growth trajectory in 2017 and ability to meet revenue
projections for the year even without revenue from Stability
Biologics, the Company's expectations regarding the gain on the
transaction, the Company's belief that the potential for Stability
Biologics continues to be significant, the Company's belief that it
will have better return on investment in the biopharma category
compared to cadaver tissue, that the Company's placental tissue
allografts are its technology differentiator, that the Company will
continue to be able to demonstrate the clinical and economic
effectiveness of its regenerative biologics and therapies, the
Company's belief that its gross profit and operating margins will
improve post-divestiture, and the Company's belief that the
distributor agreement with Stability Biologics retains key sales
relationships for the Company. Forward-looking statements also may
be identified by words such as "believe," "except," "may," "plan,"
"potential," "will" and similar expressions, and are based on our
current beliefs and expectations.
Forward-looking statements are subject to significant risks and
uncertainties, and we caution investors against placing undue
reliance on such statements. Actual results may differ materially
from those set forth in the forward-looking statements. Among the
risks and uncertainties that could cause actual results to differ
materially from those indicated by such forward-looking statements
include that any of the Company's growth, revenue, and gross profit
and operating margins may not continue as expected or may decline,
Stability Biologics may not continue to have great potential
post-divestiture, that the financial impact of the transaction may
not occur as predicted, that the Company may not experience better
return on investment in biopharma over cadaver tissue or may not be
able to adequately transition into the biopharma space to realize
its perceived advantages, that the Company's placental tissue
allografts do not continue to be a technology differentiator as
competition increases and/or new and different technologies are
developed, and that the distributor agreement may fail to retain
key sales relationships for the Company. For additional risks that
might affect the Company, please review the Risk Factors section of
our most recent annual report or quarterly report filed with
the Securities and Exchange Commission. Any forward-looking
statements speak only as of the date of this press release and we
assume no obligation to update any forward-looking statement.
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SOURCE MiMedx Group, Inc.