UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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| Item 7.01 | Regulation FD Disclosure |
Beginning on September 21, 2020, certain executive officers of MiMedx Group, Inc. (the “Company” or the “Registrant”) will hold conference calls with institutional investors. A copy of the presentation materials to be used during these calls is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. All information in the presentation materials speak as of the date thereof, and MiMedx does not assume any obligation to update such information in the future.
| Item 8.01 | Other. |
On September 21, 2020, the Company (1) announced a range of expected net sales for the quarter that will end September 30, 2020, and (2) announced that it will hold the 2020 annual meeting of the Company’s shareholders (the “2020 Annual Meeting”) on November 20, 2020. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
Any shareholder proposals or nominations under the Company’s Amended and Restated Bylaws must be received by the Company on or before October 1, 2020 and otherwise comply with the Company’s Amended and Restated Bylaws. For any proposal to be included in the Company’s proxy statement for the 2020 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, such proposal must be received by the Company on or before October 1, 2020 and otherwise comply with the requirements of Rule 14a-8.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Slide presentation dated September 21, 2020. | |
| 99.2 | Press release dated September 21, 2020. | |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MIMEDX GROUP, INC. | ||||||
| Date: September 21, 2020 | By: | /s/ Peter M. Carlson | ||||
| Peter M. Carlson Chief Financial Officer | ||||||
MANAGEMENT PRESENTATION SEPTEMBER 21-25, 2020 Exhibit 99.1
IMPORTANT CAUTIONARY STATEMENT This presentation contains forward-looking statements. Investors are cautioned against placing undue reliance on these statements. All statements relating to events or results that may occur in the future are forward-looking statements, including, without limitation, statements regarding the following: our expectations regarding third quarter results; our expectations regarding our ability to fund our ongoing and future operating costs, future growth, and future profitability; the regulatory pathway for our products, including our existing and planned investigative new drug application and pre-market approval requirements, the design and success of our clinical trials and pursuit of biologic license applications (“BLAs”) for certain products; the timing of clinical trials, expected results of clinical trials, whether the FDA will approve future products and indications, and market acceptance of such products; the timing of planned international expansion, and regulatory approval and market acceptance in those countries; our expectations regarding our ability to manufacture certain of our products in compliance with current Good Manufacturing Practices (“cGMP”); our expectations regarding costs relating to compliance with regulatory standards, including those arising from our clinical trials, pursuit of BLAs, and cGMP compliance; our ability to continue marketing our micronized products and certain other products during and following the end of the period of enforcement discretion announced by the United States Food and Drug Administration (“FDA”); expectations regarding future revenue growth and future research and development expenses; ongoing and future effects arising from the COVID-19 pandemic and the Company’s plans to adhere to governmental recommendations with respect thereto; and demographic and market trends. Forward-looking statements generally can be identified by words such as “expect,” “will,” “change,” “intend,” “seek,” “target,” “future,” “plan,” “continue,” “potential,” “possible,” “could,” “estimate,” “may,” “anticipate,” “to be” and similar expressions. These statements are based on numerous assumptions and involve known and unknown risks, uncertainties and other factors that could significantly affect the Company’s operations and may cause the Company’s actual actions, results, financial condition, performance or achievements to differ materially. Factors that may cause such a difference include, without limitation, those discussed under the heading “Risk Factors” in our most recent Form 10-Q and in our Form 10-K for the year ended December 31, 2019. Unless required by law, the Company does not intend, and undertakes no obligation, to update or publicly release any revision to any forward-looking statements, whether as a result of the receipt of new information, the occurrence of subsequent events, a change in circumstances or otherwise. Each forward-looking statement contained herein is specifically qualified in its entirety by the aforementioned factors. Non-GAAP Financial Measures This presentation includes non-GAAP financial measures to describe the Company’s performance. Additional information and reconciliations of those measures to GAAP measures are provided in the appendix to this presentation beginning at slide 34.
ADVANCED WOUND CARE AND THERAPEUTIC BIOLOGICS COMPANY Pioneer with leading brands and a late-stage pipeline 40+ Scientific & clinical publications 1,900,000+ Allografts Distributed1 84% Gross Margin4 $281M Net Sales2 $711M Market Cap1 696 Employees3 Reimbursement coverage: 286M+ lives MDXG (OTC PINK) Founded in 2008 Total # patients studied under IND clinical programs7 1,000+ 5-year shelf life Room temp storage 300+ regulatory proteins 30M with diabetes5 (U.S.) 2.9M chronic wounds 11.2% prevalence of U.S. adults with diagnosed diabetes6 (1) As of September 17, 2020; (2) Trailing twelve months period ended June 30, 2020, as reported in applicable SEC filings. Amount includes amounts recorded in net sales to reflect certain effects of the transition to revenue recognition at the time of shipment. Refer to slide 22 f or more information; (3) As of December 31, 2019; (4) Represents gross margin for the trailing twelve months period ended June 30, 2020. (5) Sen CK. Human Wounds and Its Burden: An Updated Compendium of Estimates. Adv Wound Care (New Rochelle). 2019;8(2):39-48. doi:10.1089/wound.2019.0946; (6) Lin, J., Thompson, T.J., Cheng, Y.J. et al. Projection of the future diabetes burden in the United States through 2060. Popul Health Metrics 16, 9 (2018). https://doi.org/10.1186/s12963-018-0166-4 (7) MiMedx IND Clinical Trial Programs; Plantar Fasciitis Phase 2B: 147; Plantar Fasciitis Phase 3: 276; Knee Osteoarthritis Phase 2B: 430+; Achilles Tendonitis Phase 3: 158. Strong Brand Awareness
ADVANCED WOUND CARE SECTOR IS LARGE AND GROWING, WITH CONSIDERABLE UNMET NEED Source: Global Data 2019 Market Size and Growth Report: United States, Wound Care Management Market 2019. BioMed GPS SmartTrak; CAGR 2019-2024E U.S. Wound Care $3B are advanced wounds $12B 4% CAGR Growth drivers: Aging population Growing prevalence of diabetes and chronic wounds Increasing number of wound care procedures Rising physician awareness of new treatment options Focus on clinical efficacy and cost effectiveness 6% CAGR $1B skin substitutes
6% CAGR $1B skin substitutes AMNIOTIC TISSUE REPRESENTS LARGEST & FASTEST GROWING PORTION OF SKIN/DERMAL SUBSTITUTE MARKET Amniotic Tissue Allografts Xenograft Skin Substitutes ~$233M Others +8-10% CAGR U.S. Amniotic Tissue Market Source: BioMed GPS SmartTrak; CAGR 2019-2024E Competitor A Others Competitor B Competitor C
TRANSFORMING THE BUSINESS 2021 + 2020 2019 New CEO New external auditor Debt financing New board members Key hires Restatement Resolution of SEC/VA cases Recapitalization Product launch Completed trial enrollment Profitable growth International expansion Pipeline maturation SUSTAIN STABILIZE GROW
INVESTMENT HIGHLIGHTS 1 2 3 4 5 7 6 Leader in tissue-based products for advanced wound care Strong & differentiated infrastructure to deliver growth Versatile product offerings supported by robust clinical evidence Underserved, growing market opportunity Promising pipeline targets unmet needs in large markets Experienced, new leadership team Business now positioned for sustainable & profitable growth
STRONG AND DIFFERENTIATED INFRASTRUCTURE TO DELIVER GROWTH 40+ clinical & scientific publications in peer-reviewed, indexed journals Best-in-class evidence recognized by AHRQ1 Robust publication strategy with accompanying medical education support Universal tissue with broad applicability Proprietary process provides power, quality, safety & product logistics Broad protection for core & growth technologies, including trade secrets Span of control from recovery to distribution managed by direct employees Rigorous quality manufacturing process with attractive gross margins Geographically distributed and scalable placenta donation & recovery network Experienced sales team with extensive reach & established customer relationships Reimbursement coverage of 286+ million lives (Medicare, Medicaid, Commercial) Current multi-year contracts, including commitment tier, with largest GPOs2 BODY OF EVIDENCE MARKET-LEADING PLATFORM VERTICALLY INTEGRATED COMMERCIAL SCALE (1) Agency for Healthcare Research and Quality; (2) Group Purchasing Organizations
THE PLACENTA IS A SOPHISTICATED BIOLOGICAL SYSTEM THAT SUPPORTS GROWTH AND HEALING Demonstrated Power of the Placenta EpiFix in Venous Leg Ulcer (VLU) Day 42 Day 1 Day 7 Day 35 EpiFix in Diabetic Foot Ulcer (DFU) Regulator of angiogenesis2 Modulates inflammation Barrier membrane Inhibitor of fibrosis and scars Promoter of epithelialization3 Non-immunogenic material Known Properties of Amniotic Tissue1 (1) N. G. Fairbairn, M. A. Randolph, R. W. Redmond, J Plast Reconstr Aesthet Surg. 2014 May; 67(5): 662–675. Published online 2014 Jan 31. doi: 10.1016/j.bjps.2014.01.031; (2) Angiogenesis is the formation of new blood vessels. This process involves the migration, growth, and differentiation of endothelial cells, which line the inside wall of blood vessels; (3) Epithelialization is an essential component of wound healing used as a defining parameter of a successful wound closure
VERSATILE PLATFORM WITH BROAD POTENTIAL ACROSS MULTIPLE APPLICATIONS new! (1) 361 HCT/Ps (Human Cell Tissue/ Products) for homologous use only; HCT/P is intended for homologous use only, as reflected by the labeling, advertising, or other indications of the manufacturer’s objective intent. As defined in 21 CFR 1271.3(c), homologous use means the repair, reconstruction, replacement, or supplementation of a recipient’s cells or tissues with an HCT/P that performs the same basic function or functions in the recipient as in the donor. (2) Clinical trials in planning or underway; Final indication for use to be confirmed at FDA product approval. Amnion/Chorion Umbilical Cord Placental Tissue Matrix Injectable Amnion/Chorion Applications1: Acute & Chronic Wounds Diabetic Foot Ulcers Venous Leg Ulcers Applications1: Acute & Chronic Wounds Diabetic Foot Ulcers Venous Leg Ulcers Indications2: Soft Tissue Defects Indications2: Musculoskeletal & Sports Medicine: Knee Osteoarthritis Plantar Fasciitis Advanced Wound Care: Chronic Wounds Surgical Incisions
CLINICAL EVIDENCE DEMONSTRATES DIFFERENTIATION & SUPPORTS REIMBURSEMENT Statistically significant results* Randomized controlled trials across multiple applications Head-to-head study results demonstrate superior clinical outcomes & substantially lower cost-to-closure compared to Apligraf® Studies demonstrate Low Risk of Bias* *Skin Substitutes for Treating Chronic Wounds Technical Brief; Technology Assessment Program; Agency for Healthcare Research and Quality, Feb 2, 2020 **Please see Appendix for Clinical Study Summary and references; “intended to help health care decision makers — patients and clinicians, health system leaders, and policymakers, among others — make well-informed decisions and thereby improve the quality of health care services” VALIDATION OF DATA IN RECENT AHRQ* REPORT BEST-IN-CLASS CLINICAL EVIDENCE **
DONATION PROGRAM PROTECTS QUALITY WITH INTEGRATED SUPPLY AND DELIVERY NETWORK 1 2 3 4 5 6 7 Expectant Mom Introduced to Donation Program Mom Consents to Donate; Completes Medical History & Risk Assessment Questionnaire Delivery of Healthy Baby via Caesarean Section Micro-biological & Viral Testing of Donor Tissue Donated Placental Tissues Recovered Proprietary Processing and Terminal Sterilization Shelf-stable Packaged Product 75,000+ Placentas Recovered1 1.9+ million Allografts Distributed1 <0.01% Reported Events1 (1) As of September 17, 2020
INVEST COMMERCIALLY TO DRIVE GROWTH ADVANTAGED BY STRONG INFRASTRUCTURE Enhance Sales Effectiveness New commercial leadership Structure, deployment and scale Value-based selling Invest in Market Development Medical education Brand & digital assets New products Highlight Differentiation from Competition Clinical evidence Contract positions Health economic data Invest and Execute for Growth Leverage Commercial Infrastructure Scale Field-based sales team Independent agent network Inside sales team Relationship Across care continuum Multiple specialties 2,500+ physician users for Medicare patients in Outpatient setting Reach and Access 4,000+ customers Favorable contracts with top 3 GPO’s 286+ million covered lives Support Field-based reimbursement support team 50,000+ patients supported annually with insurance verification requests
TARGETED INVESTMENT FOR GEOGRAPHIC EXPANSION UK GERMANY JAPAN Total Wound Care Market ~$380M ~$740M ~$430M DFU + VLU 225K 500K 650K MiMedx Addressable Market 35K 80K 100K Regulatory Status Approved Approved Anticipated 2021 Reimbursement Status In process In process 3-6 months post-approval Current primary market 1-2 year expansion 2-3 year expansion Source: Global Data Tissue Engineered – Skin Sub Data Model Wound Management Japan, Germany and UK Year 2020_ retrieved Sept 2020; Management estimates; MiMedx Addressable Market represents assumed, eventual 15% penetration of the addressable market. Reaching this level is subject to numerous risks and uncertainties, including regulatory and market acceptance, and appropriate reimbursement. Investors are cautioned that actual results may differ materially.
Existing Core Business Drive disease state awareness across care continuum Publish additional data Expand into additional wound applications FOUR KEY DRIVERS TO ACHIEVE CORE GROWTH Portfolio Expansion Advance market assessments and analytics Leverage clinical and regulatory expertise Invest in prioritized new markets Maximize core business Enhance sales force productivity and commercial analytics Highlight clinical and economic value Continue product innovation Explore additional priority markets Identify wound care adjacencies PURSUE INTERNATIONAL EXPANSION ENHANCE PORTFOLIO VALUE TARGET NEW BUSINESS EXPAND THE MARKET 2 1 3 4
LATE-STAGE PIPELINE LEVERAGES LEADERSHIP IN PLACENTAL SCIENCE Potential to address unmet patient needs as a platform technology across multiple markets * Clinical study initiation will depend on FDA feedback for program PRE-CLINICAL PHASE 1 PHASE 2 PHASE 3 MUSCULOSKELETAL/SPORTS MEDICINE Plantar Fasciitis (PF) Achilles Tendonitis (AT) Knee Osteoarthritis (KOA) ADVANCED WOUND CARE Chronic Wounds* Surgical Incisions* Soft Tissue Defects*
2020 2021 2022 2023 2024 2025 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H INJECTABLE AMNION-CHORION Plantar Fasciitis Achilles Tendonitis Knee Osteoarthritis LATE STAGE CLINICAL PROGRAMS MATURING PHASE 3 PHASE 2 PHASE 3 LPI LPO LPI LPO LPI = last patient in LPO = last patient out End of Enforcement Discretion Estimated BLA Filing Estimated BLA Approval BLA Filing dependent on data readout According to recently updated FDA guidance, FDA generally intends to exercise enforcement discretion through May 31, 2021, with respect to the IND and the premarket approval requirements for certain HCT/Ps, provided that use of the HCT/P does not raise reported safety concerns or potential significant safety concerns.; Timeline represents current plans and estimates only. Actual results and timing may differ materially. There can be no assurance that clinical trials are conducted or completed on schedule, that trial results are favorable, or that we obtain regulatory approval for our products and indications PHASE 3 LPI LPO
PLANNED IND / IDE FILINGS BROADEN PIPELINE 2020 2021 2022 2023 1H 2H 1H 2H 1H 2H 1H 2H INJECTABLE AMNION-CHORION Chronic Wounds Surgical Incisions PLACENTAL TISSUE MATRIX Soft Tissue Defects Proof of Concept IND / IDE Filing Proof of Concept IND Enabling Studies IND Enabling Studies IND Enabling Studies Proof of Concept IND = Investigational New Drug IDE = Investigational Device Exemption End of Enforcement Discretion According to recently updated FDA guidance, FDA generally intends to exercise enforcement discretion through May 31, 2021, with respect to the IND and the premarket approval requirements for certain HCT/Ps, provided that use of the HCT/P does not raise reported safety concerns or potential significant safety concerns.; Timeline represents current plans and estimates only. Actual results and timing may differ materially. There can be no assurance that clinical trials are conducted or completed on schedule, that trial results are favorable, or that we obtain regulatory approval for our products and indications
PF STUDY INFORMS SAFETY, EFFICACY AND OTHER FUTURE INDICATIONS (1) Tong KB, Furia J. Economic burden of plantar fasciitis treatment in the United States. Am J Orthop (Belle Mead NJ). 2010;39(5):227-231; (2) Ang TW. The effectiveness of corticosteroid injection in the treatment of plantar fasciitis. Singapore Med J. 2015;56(8):423-432. doi:10.11622/smedj.2015118; (3) Plantar Fasciitis Primary Research/Conjoint Analysis (n=171) performed by Market Vision December 2019 https://www.mv-research.com/ (data on file). Plantar Fasciitis (PF) 2M+ U.S. Patients treated for PF annually1 200K+ Candidates for advanced therapies2 ~20K-50K Potential candidates for injectable amnion/ chorion3 Conservative (RICE/NSAIDS) Custom orthotics Corticosteroid injections Emerging therapies Current Treatments Recovery for chronic PF tends to be lengthy and recurrence is common
RETROSPECTIVE STUDY PROVIDED INSIGHT INTO POTENTIAL FOR REDUCING PAIN AND IMPROVING FUNCTION Knee Osteoarthritis (KOA) (1) Alden KJ, Harris S, Hubbs B, Kot K, Istwan NB, Mason D. Micronized Dehydrated Human Amnion Chorion Membrane Injection in the Treatment of Knee Osteoarthritis-A Large Retrospective Case Series [published online ahead of print, 2019 Nov 28]. J Knee Surg. 2019;10.1055/s-0039-3400951. doi:10.1055/s-0039-3400951. (2) OARSI (Osteoarthritis Research Society International) Dec, 2016. (3) Murphy L, Schwartz TA, Helmick CG, et al. Lifetime risk of symptomatic knee osteoarthritis. Arthritis Rheum. 2008;59(9):1207-1213. doi:10.1002/art.24021; (4) US Bone and Joint Initiative. The Burden of Musculoskeletal Diseases in the United States (BMUS). https://www.boneandjointburden.org/fourthedition/iiib10/osteoarthritis. Accessed August 2020. Injectable Amnion / Chorion (mdHACM) in the Treatment of KOA1 Evaluated 82 KOA patients and 100 knees injected with 100mg mdHACM by a single physician, over a 14-month period Represents largest single-physician experience with injectable amniotic tissue for treatment of KOA reported to date Findings: mdHACM injection clinically effective in reducing pain and improving function in the setting of KOA No serious or ongoing, unresolved adverse events were observed in this cohort ~242M Patients worldwide with symptomatic OA of the hip and/or knee2 ~45% Lifetime risk of developing KOA3
GAPS IN CURRENT TREATMENT OPTIONS PROVIDE OPPORTUNITY TO ADVANCE NON-SURGICAL TREATMENT ALGORITHM Knee Osteoarthritis (KOA) Offers non-surgical treatment option to reduce pain & improve function (1) Global Data Knee Reconstruction Data Model United States 2020 (2) 2014 IQVIA Claims data with 2% growth rate; (3) Bannuru RR, Brodie CR, Sullivan MC, McAlindon TE. Safety of Repeated Injections of Sodium Hyaluronate (SUPARTZ) for Knee Osteoarthritis: A Systematic Review and Meta-Analysis. Cartilage. 2016;7(4):322-332. doi:10.1177/1947603516642271; Management Estimates based on at least two injections per patient; (4) Knee OA Primary Research/Conjoint Analysis (n=182) performed by Market Vision December 2019 https://www.mv-research.com/ (data on file) >17.5 million U.S. KOA patients (growing 2% per year)1 8.8 million intra-articular injections across ~300K-800K Potential candidates for injectable amnion/ chorion4 Corticosteroid injections Viscosupplementation (e.g. Hyaluronic Acid) Platelet Rich Plasma (PRP) Emerging therapies Current Treatments 4.4 million patients 2,3
ADJUSTED NET SALES TRENDS REFLECT STABILIZATION POST COVID-19 DOWNTURN Net Sales Adjusted Net Sales1 (1) Adjusted Net Sales excludes impact of Revenue Transition amounts. See Appendix for reconciliation to Net Sales. ($ millions) $60-$63 Revenue presentation includes impact of 2019 transition in revenue recognition $61-$64
Financing transactions1 provide ability to: RECENT TRANSACTIONS PROVIDE FINANCIAL FLEXIBILITY Stabilize business Prioritize investment in growth drivers Pursue attractive growth opportunities Initial holders are affiliates of EW Healthcare Partners (90%) and Hayfin Capital Management (10%) Two board members: Bill Hawkins and Marty Sutter Conversion price of $3.85 Dividends at 4% through June 2021; 6% thereafter Term loan of $50 million Maturity in July 2025 No principal payments Interest rate at L+6.75% Counterparties are affiliates of Hayfin Capital Management Issued $100 million in convertible preferred stock Entered into $75 million loan facility (1) For a discussion of the transactions and more information on these and other terms, refer to Item 9B, Other Information, in the MiMedx Group, Inc. Form 10-K for the year ended December 31, 2019.
PATIENTS ARE WHY WE ARE HERE WE HAVE AN OPPORTUNITY AND RESPONSIBILITY TO MAKE A DIFFERENCE FOR THESE PATIENTS. AND IN DOING SO, GROW A SUCCESSFUL AND MEANINGFUL HEALTHCARE COMPANY.” “ TIMOTHY R. WRIGHT CHIEF EXECUTIVE OFFICER MATT – VLU PATIENT IVY – BURN PATIENT
= Joined since 2018 EXPERIENCED LEADERSHIP TEAM NOW IN PLACE ROBERT STEIN, MD, PhD EVP, Research & Development SCOTT TURNER SVP, Operations & Procurement MARK ROGERS VP, Global Quality Assurance & Regulatory PETE CARLSON Chief Financial Officer MARK GRAVES Chief Compliance Officer STAN MICEK SVP, Business Development ROHIT KASHYAP, PhD Chief Commercial Officer BUTCH HULSE General Counsel & Secretary TIMOTHY R. WRIGHT Chief Executive Officer
APPENDIX
CLINICAL STUDY SUMMARY (1) Zelen, C.M., Serena, T.E., Denoziere, G. and Fetterolf, D.E. (2013), A prospective randomised comparative parallel study of amniotic membrane wound graft in the management of diabetic foot ulcers. Int Wound J, 10: 502-507. doi:10.1111/iwj.12097; (2) Zelen CM, Serena TE, Snyder RJ. A prospective, randomised comparative study of weekly versus biweekly application of dehydrated human amnion/chorion membrane allograft in the management of diabetic foot ulcers. Int Wound J. 014;11(2):122-128. doi:10.1111/iwj.12242; (3) Zelen CM, Gould L, Serena TE, Carter MJ, Keller J, Li WW. A prospective, randomised, controlled, multi-centre comparative effectiveness study of healing using dehydrated human amnion/chorion membrane allograft, bioengineered skin substitute or standard of care for treatment of chronic lower extremity diabetic ulcers. Int Wound J. 2015 Dec;12(6):724-32. (4) Zelen CM, Serena TE, Gould L, et al. Treatment of chronic diabetic lower extremity ulcers with advanced therapies: a prospective, randomised, controlled, multi-centre comparative study examining clinical efficacy and cost. Int Wound J. 2016 Apr;13(2):272-82. (5)Tettelbach, W, Cazzell, S, Reyzelman, AM, Sigal, F, Caporusso, JM, Agnew, PS. A confirmatory study on the efficacy of dehydrated human amnion/chorion membrane dHACM allograft in the management of diabetic foot ulcers: A prospective, multicentre, randomised, controlled study of 110 patients from 14 wound clinics. Int Wound J. 2019; 16: 19– 29. https://doi.org/10.1111/iwj.12976 (6) Serena, T.E., Carter, M.J., Le, L.T., Sabo, M.J., DiMarco, D.T. and (2014), Dehydrated amnion/chorion membrane. Wound Repair Regen, 22: 688-693. doi:10.1111/wrr.12227; (7) Bianchi, C., Cazzell, S., Vayser, D., Reyzelman, A.M., Dosluoglu, H., Tovmassian, G. and (2018), A multicentre randomised controlled trial evaluating the efficacy of dehydrated human amnion/chorion membrane (EpiFix®) allograft for the treatment of venous leg ulcers. Int Wound J, 15: 114-122. doi:10.1111/iwj.12843; (8) Tettelbach, W, Cazzell, S, Sigal, F, et al. A multicentre prospective randomised controlled comparative parallel study of dehydrated human umbilical cord (EpiCord) allograft for the treatment of diabetic foot ulcers. Int Wound J. 2019; 16: 122– 130. https://doi.org/10.1111/iwj.13001; (9)Skin Substitutes for Treating Chronic Wounds Technical Brief; Technology Assessment Program; Agency for Healthcare Research and Quality, Feb 2, 2020; ` STUDY RESULT EpiFix DFU RCT Study1 Complete Wound Closure: 92% at 6 weeks (p=.001) EpiFix DFU RCT – Weekly vs. Biweekly Application2 Overall Complete Wound Closure: 92.5% healing in 12 weeks Mean time to Healing: – Weekly applications: 2.4 weeks – Biweekly applications: 4.1 weeks EpiFix DFU RCT – EpiFix vs. Apligraf® vs. SOC Study3,4 Complete Wound Closure: 85% at 4 weeks 95% at 6 weeks Cost Effectiveness: Subjects receiving EpiFix used 58% fewer grafts Median cost of graft material for EpiFix was 83% less than Apligraf® EpiFix DFU Multicenter RCT5 Complete Wound Closure: 81% at 12 weeks (PP: Per-Protocol) 70% at 12 weeks (ITT: Intent-to-Treat) EpiFix VLU Surrogate Endpoint Study6 62% of patients achieved ≥ 40% wound closure at 4 weeks EpiFix VLU Multicenter RCT7 Complete Wound Closure: 60% at 12 weeks 71% at 16 weeks EpiCord Multicenter RCT8 Complete Wound Closure: 81% at 12 weeks (PP: Per-Protocol) 70% at 12 weeks (ITT: Intent-to-Treat)
REGULATORY ENVIRONMENT OVERVIEW 361 351 Human Tissue (i.e., placental tissue) When minimally manipulated When more than minimally manipulated Indication for use Homologous use* As indicated by clinical trial Manufacturing process cGTP cGMP FDA Oversight Regulated by the FDA for risk of disease transmission Approved by the FDA for a specific indication for use * Homologous use means that the donated tissue serves the same basic function in a recipient as the tissue as in the donor Enforcement Discretion: According to recently updated FDA guidance, FDA generally intends to exercise enforcement discretion through May 31, 2021, with respect to the IND and the premarket approval requirements for certain HCT/Ps, provided that use of the HCT/P does not raise reported safety concerns or potential significant safety concerns.
INTELLECTUAL PROPERTY OVERVIEW PATENT PORTFOLIO OVERVIEW Domestic patents issued: 91 Domestic patents pending: 40 Foreign patents issued: 97 Foreign patents pending: 54 Placental Tissue: 52 domestic 33 foreign CollaFix: 36 domestic 64 foreign HydroFix: 3 domestic ISSUED PATENTS BY TECHNOLOGY CATEGORY 12 issued 1 pending 15 issued 1 pending 3 issued 3 pending 1 issued 1 pending FENESTRATED Trade Secrets
SUMMARY BALANCE SHEETS ($ millions) 1Q19 2Q19 3Q19 4Q19 Unaudited 1Q20 2Q20 Assets Cash and Cash Equivalents 28.4 96.9 94.1 69.1 53.5 48.2 Accounts Receivable, net 0.0 0.0 21.4 32.3 31.9 30.1 Inventory, net 16.4 15.0 12.0 9.1 9.2 10.6 Other Current Assets 12.4 10.6 6.5 12.7 21.2 18.7 Total Current Assets 57.2 122.5 134.0 123.2 115.9 107.6 Property and Equipment 16.4 14.7 13.2 12.3 11.8 10.8 Other Assets 33.9 33.1 32.1 31.6 31.2 32.5 Total Assets 107.4 170.3 179.3 167.2 158.9 150.9 Liabilities and Stockholders’ Equity Current Liabilities 64.3 78.1 73.4 67.3 63.7 63.7 Long Term Debt, net 0.0 63.1 62.2 61.9 61.6 61.5 Other Liabilities 4.7 4.5 4.2 3.5 3.2 2.9 Total Liabilities 69.1 145.6 139.7 132.8 128.6 128.1 Stockholders’ Equity 38.4 24.7 39.6 34.4 30.3 22.9 Total Liabilities and Stockholders’ Equity 107.4 170.3 179.3 167.2 158.9 150.9
SUMMARY INCOME STATEMENTS ($ millions) 1Q19 2Q19 3Q19 4Q19 Unaudited 1Q20 2Q20 Net Sales 66.6 67.4 88.9 76.4 61.7 53.6 Cost of Sales 7.4 9.7 13.2 12.7 10.0 8.2 Gross Profit 59.1 57.7 75.7 63.7 51.7 45.4 Research & Development 2.9 2.8 2.7 2.7 2.7 2.3 Selling, General, and Administrative 50.9 50.6 51.3 45.4 46.9 37.3 Investigation, Restatement, and Related 18.1 21.0 7.2 20.1 15.6 11.4 Amortization of Intangible Assets 0.2 0.3 0.3 0.3 0.3 0.3 Impairment of Intangible Assets 0.4 0.0 0.0 0.0 0.0 0.0 Operating Income (Loss) (13.4) (17.1) 14.2 (4.9) (13.7) (5.9) Interest Expense, net 0.2 (0.3) (2.3) (2.4) (2.4) (2.6) Other (Expense) Income, net (0.0) 0.2 0.1 0.0 0.0 (0.0) Pretax Income (Loss) (13.2) (17.2) 12.1 (7.3) (16.1) (8.4) Income Tax Provision (Expense) Benefit (0.0) (0.0 0.3 (0.2) 11.3 (0.0) Net Income (Loss) (13.3) (17.2) 12.4 (7.5) (4.8) (8.5)
SUMMARY CASH FLOW STATEMENTS ($ millions) 1Q19 2Q19 3Q19 4Q19 Unaudited 1Q20 2Q20 Net Income (Loss) (13.3) (17.2) 12.4 (7.5) (4.8) (8.5) Effect of Change in Revenue Recognition 0.0 0.0 (17.4) 0.0 0.0 0.0 Share-Based Compensation 3.0 3.5 2.7 2.9 3.3 4.4 Depreciation 1.7 1.6 1.6 1.6 1.5 1.4 Other Non-Cash Effects 1.8 0.9 1.1 1.2 1.2 1.3 Changes in Assets (0.0) 3.6 1.3 (14.2) (8.2) 2.9 Changes in Liabilities (8.4) 9.7 (4.9) (7.0) (5.3) (4.7) Net Cash Flows Used in Operating Activities (15.3) 2.1 (3.2) (23.1) (12.3) (3.1) Purchases of Property and Equipment (0.6) (0.3) (0.2) (0.7) (1.0) (0.4) Principal Payments from Note Receivable 0.4 0.0 2.3 0.0 0.0 0.0 Patent Application Costs (0.2) (0.1) (0.1) (0.1) (0.1) (0.1) Net Cash Flows Used in Investing Activities (0.4) (0.3) 2.1 (0.8) (1.1) (0.5) Proceeds from Term Loan 0.0 72.8 0.0 0.0 0.0 10.0 Repayment of Term Loan 0.0 0.0 (0.9) (0.9) (0.9) (10.9) Deferred Financing Cost 0.0 (6.0) (0.6) (0.0) 0.0 (0.0) Stock Repurchased for Tax Withholdings on Vesting of Restricted Stock (1.0) (0.1) (0.2) (0.2) (1.5) (0.8) Proceeds from Exercise of Stock Options 0.0 0.1 0.0 0.0 0.3 0.0 Net Cash Flows Used in Financing Activities (1.0) 66.7 (1.7) (1.1) (2.2) (1.8) Beginning Cash Balance 45.1 28.4 96.9 94.1 69.1 53.5 Change in Cash (16.7) 68.5 (2.8) (25.1) (15.5) (5.3) Ending Cash Balance 28.4 96.9 94.1 69.1 53.5 48.2
ADJUSTED EBITDA RECONCILIATION ($ millions) 3Q19 4Q19 1Q20 2Q20 Net Income (Loss) 12.4 (7.5) (4.8) (8.5) Depreciation & Amortization 1.9 1.8 1.8 1.7 Interest Expense 2.3 2.4 2.4 2.6 Income Tax (0.3) 0.2 (11.3) 0.0 EBITDA 16.2 (3.0) (12.0) (4.2) Investigation, Restatement & Other 7.2 20.1 15.6 11.4 Revenue Transition (18.6) (5.9) (3.9) (1.5) Share-Based Compensation 2.7 2.9 3.3 4.4 Adjusted EBITDA1 7.6 14.1 3.1 10.2 (1) Adjusted EBITDA consists of GAAP net loss excluding: (i) depreciation, (ii) amortization of intangibles, (iii) interest expense, (iv) income tax provision, (v) costs incurred in connection with Audit Committee Investigation and Restatement, (vi) the effect of the change in revenue recognition on net loss, and (vii) share-based compensation. Investigation, Restatement & Other: Audit Committee Investigation completed in 2Q19 Restatement activities completed in 2Q20 Going forward, remainder is legal costs for Company matters, resolution costs for Company matters, and indemnification costs under agreements with former officers and directors Revenue transition excludes gross profit impact of shipments prior to 10/1/19 (see slide 35)
RECONCILIATION OF ADJUSTED NET SALES (1) Impact of revenue transition includes the Transition Adjustment during 3Q2019 and cash collected in 4Q2019, 1Q2020 and 2Q2020 related to the remaining contracts. For a discussion of the revenue transition and the defined terms, refer to Item 8, Notes to the Consolidated Financial Statement in the MiMedx Group, Inc. Form 10-K for the year ended December 31, 2019, and the respective Form 10-Qs for the noted quarterly periods. ($ millions) 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 (Low Est) 3Q20 (High Est) Net Sales – Reported $ 66.6 $ 67.4 $ 88.9 $ 76.4 $ 61.7 $ 53.6 $ 61.3 $ 64.3 Less: Revenue Transition Impact1 ─ ─ 21.5 8.2 4.5 1.7 0.9 0.9 Adjusted Net Sales $ 66.6 $ 67.4 $ 67.3 $ 68.2 $ 57.2 $ 51.9 $ 60.4 $ 63.4 Gross Profit $ 59.1 $ 57.7 $ 75.7 $ 63.7 $ 51.7 $ 45.4 Less: Revenue Transition Impact1 ─ ─ 18.6 7.1 3.9 1.5 Adjusted Gross Profit $ 59.1 $ 57.7 $ 57.1 $ 56.6 $ 47.8 $ 44.0
JUNE 30, 2020 BALANCE SHEET DOES NOT REFLECT IMPROVED LIQUIDITY FROM TRANSACTIONS (in millions) AS REPORTED IMPACT OF TRANSACTIONS1 AS REPORTED PLUS IMPACT OF TRANSACTIONS WHEN CONVERTED2 Cash $ 48.2 $ 65.4 $ 113.6 Other 102.7 0.9 103.6 Total Assets $ 150.9 $ 66.3 $ 217.2 Long-term debt, including current portion $ 65.2 $ (18.5) $ 46.7 Other 62.8 0 62.8 Total Liabilities 128.0 (18.5) 109.5 Convertible Preferred Stock 0 91.2 91.2 0 Stockholders’ Equity 22.9 (6.5) 16.4 108.4 Total Liabilities and Equity $ 150.9 $ 66.3 $ 217.2 Shares outstanding – simple 110.3 0 110.3 136.3 Shares outstanding – diluted 110.3 26.0 136.3 (1) Transactions include (i) issuance of $100 million of Series B convertible preferred stock; (ii) $75 million loan facility with Hayfin; (iii) repayment and termination of the Blue Torch loan agreement. For a discussion of the transaction, refer to Item 9B, Other Information, in the MiMedx Group, Inc. Form 10-K for the year ended December 31, 2019. (2) Changed amounts only.
Exhibit 99.2
MiMedx Announces Preliminary Third Quarter 2020 Net Sales
Third Quarter 2020 Net Sales Expected to be Between $61 Million - $64 Million
Latest Corporate Presentation Filed with SEC and Posted to IR Website
2020 Annual Meeting of Shareholders to be Held on November 20, 2020
MARIETTA, Ga., September 21, 2020 — MiMedx Group, Inc., (OTC PINK: MDXG) (“MiMedx” or “the Company”), an industry leader in advanced wound care and a therapeutic biologics company, today provided guidance regarding certain unaudited, preliminary third quarter financial results. Net sales for the quarter ended September 30, 2020, are expected to be between $61 million and $64 million. This compares to $88.9 million reported for the quarter ended September 30, 2019. Net sales for the quarter ended September 30, 2019, include a benefit of $21.5 million resulting from a change in the Company’s methods for recognizing revenue from the time of cash collection to the time of shipment (the “Transition”). For more information regarding the Transition, refer to Note 3 to the Consolidated Financial Statements included in the Company’s 2019 Annual Report on Form 10-K. The Company expects to recognize revenue of approximately $1 million in the quarter ended September 30, 2020 relating to the collection of cash from invoices that were outstanding but not yet collected at the time of the Transition. This amount is included in the range above.
Without the revenue recognition benefits of the Transition, the Company expects net sales will have increased between 16% and 22% from the quarter ended June 30, 2020; and declined between 6% and 11% from the quarter ended September 30, 2019. These preliminary results are not audited and remain subject to the completion of our quarter-end financial close process.
Timothy R. Wright, MiMedx Chief Executive Officer, commented, “We achieved numerous milestones in stabilizing our business and we believe that we created a solid foundation for sustainable and profitable growth as evidenced by the sequential increase in our preliminary third quarter 2020 net sales. Our market-leading platform backed by our best-in-class clinical evidence gives us a strong position in the large and growing advanced wound care sector. Going forward, we will continue to increase the value of our portfolio, innovate through our promising product pipeline, and invest in new market opportunities to maximize value for our shareholders.”
Beginning on September 21, 2020, certain executive officers of the Company will hold conference calls with institutional investors. The Company has filed a copy of the presentation materials to be used during these calls with the Securities and Exchange Commission (“SEC”), and has made it available on the Investor Relations section of its website.
2020 Annual Meeting of Shareholders
MiMedx will hold its 2020 Annual Meeting of Shareholders on November 20, 2020.
In light of public health concerns regarding the coronavirus (COVID-19) outbreak, the Company will conduct the Annual Meeting in virtual format only in order to assist in protecting the health and well-being of our shareholders, directors and employees, and to provide access to our shareholders regardless of geographic location.
Any shareholder proposals or nominations under the Company’s Amended and Restated Bylaws must be received by the Company on or before October 1, 2020 and otherwise comply with the Company’s Amended and Restated Bylaws. For any proposal to be included in the Company’s proxy statement for the 2020 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, such proposal must be received by the Company on or before October 1, 2020 and otherwise comply with the requirements of Rule 14a-8.
About MiMedx
MiMedx® is an industry leader in advanced wound care and a therapeutic biologics company developing and distributing human placental tissue allografts with patent-protected processes for multiple sectors of healthcare. The Company processes the human placental tissue utilizing its proprietary PURION® process methodology, among other processes, to produce allografts by employing aseptic processing techniques in addition to terminal sterilization. MiMedx has supplied over 1.9 million allografts, through both direct and consignment shipments. For additional information, please visit www.mimedx.com.
Important Cautionary Statement
This press release contains forward-looking statements. Statements regarding expected levels of net sales for the quarter ended September 30, 2020 and the timing of the 2020 annual meeting of shareholders are forward-looking statements. In addition, all statements relating to events or results that may occur in the future are forward-looking statements, including, without limitation, statements regarding the following: “possible,” “could,” “estimate,” “may,” “anticipate,” “to be” and similar expressions.
Investors are cautioned against placing undue reliance upon these statements. These statements are based on numerous assumptions and involve known and unknown risks, uncertainties and other factors that could significantly affect the Company’s operations and may cause the Company’s actual actions, results, financial condition, performance or achievements to differ materially. Factors that may cause such a difference include, without limitation, those discussed under the heading “Risk Factors” in our most recent Form 10-Q and in our Form 10-K for the year ended December 31, 2019. Unless required by law, the Company does not intend, and undertakes no obligation, to update or publicly release any revision to any forward-looking statements, whether as a result of the receipt of new information, the occurrence of subsequent events, a change in circumstances or otherwise.
Contact:
Hilary Dixon
Investor Relations & Corporate Communications
770.651.9066
investorrelations@mimedx.com