BCBS of Texas No Longer Covers Amniofix Injectable

The only way Amniofix Injectable is reimbursed is through billing/medicare/insurance fraud now.

This is a very big deal! People are starting to pay attention!

Read the links from the above image detailing the 2017 vs 2018 medical drug benefit lists here and here

Amniofix Injectable is a dangerous, unapproved drug that should NOT be on the market. Clinical Studies need to be done by Doctors  who are not on the “take” from MiMedx.

BCBS needs to audit all past reimbursement.

Shady Dealings at MiMedx

This looks to be impossible to explain without some form of Medicare/Medicaid Fraud attached to it.

Clearly large sizes are more profitable but not used that often. Why would you try to defraud the government? Good business acumen?

I wonder how many 7×7’s were shipped to the Greenville, SC CBOC (community based outpatient clinic) on March 31st 2016? My guess would be around 30. Or exactly 30. That would equate to $182,491.80…on the last day of the quarter. Kickbacks? Yes. Proven. Kickbacks to buy the ability to Channel stuff their shelves?? There is more to today’s story. What outpatient wound care center would ever use 7×7’s like that in a reasonable amount of time??? Great question for any one of the managers that had access to the shipping reports from 2016. I’d be will to bet you won’t find POs for them. I’d also be willing to bet that if you look at the bigger consultants MdXG was paying (i.e. Garfoulis), they would be the same locations that got shipped 15, 20, or 30 7×7’s the last 5 days of the each quarter.

7x7s VA pricing = $6083.06
15 7x7s = $91,245.90
30 7x7s = $182,491.80
The shipping reports don’t show what sizes are shipped, just dollar amount shipped to what location. If you have anyone that has those shipping reports, you will see the pattern of the numbers listed above (note that the numbers above are without the 9% commission that Avkare received).

Here are the Five Best Candidates to be Indicted Next for Taking Payments from MiMedx

The Time to Come Clean is Now

THE DATA BEHIND THE POSTERS AND STUDIES IS TAINTED AND CAN’T BE RELIED UPON DUE TO UNDISCLOSED MONEY PAID TO THESE DOCTORS.

How many of these VA Docs received undisclosed Bribes from MiMedx?

Read the full press release exposing the doctors here.

The Alder Lane Sunshine Act is working hard to expose doctors like Matthew Garoufalis and Jeffrey Frenchman who have received undisclosed payments. I’m guessing 90% (at least) of the doctors on this page received $$ and/or gifts from MiMedx.  There are a couple on here authored by MiMedx employees (Massee), but Frykberg wasn’t the only one forced out of the Phoenix VA last month.  Edward Tierney and Arthur Tallis (who are both listed with him on his poster) were forced out at the same time.

The ghost of Advanced Biohealing is a contributing factor that should not be underestimated, as well, isn’t that right Ricky Palmer? Have you no shame?

 

MiMedx Numbers Cannot Be Relied Upon

My thoughts on these numbers:

The term “unreviewed” is important as it is a term of art that describes one of the two levels of financial reporting that can offer the reader “assurance” that the numbers are in any way accurate. By issuing “unreviewed” numbers, we do not know if they were “compiled” (which would at least require a CPA to look them over, but not fact check them completely) or if the numbers are, in fact, an even lower tier of bookkeeping.

“The Alder Lane Farm Sunshine Act”

Shining a Bright Light on the Doctors MiMedx is Paying to Hype Their Products with Bogus Claims

If you thought Insys speaker programs were bad, MiMedx makes them look tame!

More on Dr. Hawkins:

Speaking at MiMedx AND taking the family to Disneyland…if you are going to sporting events and Disneyland, how do you use so much Epifix? Do you work 24 hours a day?

You are a greedy scum bag and on the take from MiMedx. How can you live with yourself? You should tell your patients how much you are being paid.

The Sunshine Act is here to expose this kind of graft! Parker, you are NOT above the law.

Dr. John Roy Senatore

Why are you touting MiMedx stock and bad mouthing the skeptics? How much have you been paid? Isn’t doing the Amniofix study at your hospital, a  significant conflict

Senatore’s hospital, MedStar Union Memorial Hospital, is involved in MiMedx’s vaunted Plantar Fasciitis trial for the injectable.

How unethical are you Dr. Senatore and why do you care? You should withdraw from the study ASAP.

Yet he chirps critics on Twitter…

Dr. Som  Kohanzadeh,  Dr. David Pougatsch, and (the one that started it all): Dr. Lee Rogers

All three are paid consultants for MiMedx and avid users of Epifix and MiMedx products. The below seems suspicious, doesn’t it?

Click here and here to see more about their work with the wound institute. And here to see their work with MiMedx and EpiFix.

Also! Pete claims to be a staunch Georgia Republican and has raised money for Donald Trump, Tom Price, and Johnny Isakson among others. Why then would Pete and his wife, Janet, donate a combined $5,200 to the primary campaign for a Democrat representing a congressional district in California? What could possibly be the MOTIVE behind this donation other than to bribe another doctor? Click here to see Pete’s donation to Rogers’ campaign.

Below is an excerpt from Rogers’ Wikipedia page

Political endeavors
Rogers, a Democrat, ran for US Congress in California’s 25th district.[16] He lost after giving incumbent
Congressman Buck McKeon a strong challenge.[17] After speculation that Congressman Buck McKeon will retire
in 2014,[18] Rogers announced his candidacy for the seat again[19] and was endorsed by the Los Angeles Times.[20]
Two Republicans edged out Rogers in California’s new top two primary for the run off in the June 2014 election.
Rogers endorsed Republican Steve Knight over Republican Tony Strickland which drew criticism from the
Democratic Party,[21] but Rogers stated, “I didn’t create the rules and I care too much about our district to let it fall
to a dishonest carpetbagger who is interested only in himself, like Tony Strickland.”[22] He later withdrew his
endorsement of Knight over his refusal to ban the sale of the Confederate Flag in the California Capital

It’s interesting that Dr. Rogers wrote in an article that stated “the Sunshine Act could hinder podiatric education in the future.” Click here to read more about his attempt to cover up the money he receives from corporations.

Dr. Matthew Garoufalis

He is the Associate Chief of the Podiatry Section at Jesse Brown and Hines VA Medical Centers. Dr. Garoufalis is a past president of the Illinois Podiatric Medical Association and of the American Podiatric Medical Association. He is the current Vice President of the International Federation of Podiatrists.

How much has MiMedx bribed you Dr. G? Click here to read more.

Does a VA DOC pay his own way to Florence, Italy to tout MiMedx products?
Dr. G, back on May 4th at a company sponsored symposium:

How much have you been paid in cash and stock from MiMedx?  Based on information and belief, Advanced [Garoufalis company] billed insurance companies over $300,000.00 for services it performed for which no accounting has been provided. Click here to read more. How can you sleep at night pushing this? Have you no shame? No wonder you are attached to the hip of Parker Petite.

Click here to watch a video of Dr. G sponsored by MiMedx.

Dr. Hawkins.

How much have you been paid by MiMedx?

Dr. Ko

Dr. Ko, has been a “consultant” for MiMedx for 6 years while working at the Bronx VA.

Dr. Ko, care to share what MiMedx pays you as a “consultant”? Just money? Or money AND stock?

I wonder if the government is concerned that this could be a conflict of interest?

You would think the VA would be concerned with their Doctors taking “unreported compensation” from MiMedx.

MiMedx is like Advanced Biohealing 2.0, But Worse

“We don’t get paid, if you don’t get paid” … “due to our error”

What Kind of Medicare/Insurance Fraud is MiMedx trying to pull off here?

MiMedx is following in ABH’s footsteps. Don’t believe me?
Click here to take a look at the full Qui Tam lawsuit. You’ll see it’s exactly what MiMedx is doing with reimbursements. They also hired 75 former ABH Sales Reps. Who were “vetted” by Parker.

How is the “dermagraft reimbursement hotline” any different from what MiMedx is doing?

If the below is true, why is BCBS paying for AmnioFix? Click here to read the full BCBS medical policy.

 

MiMedx Quick Guide

NEW PARTY MEMBERS!

Take a look at the documents linked below to learn more about MiMedx.

FDA 11/2017 Final Guidance on HCT-P products
Refer to Example 10-2 ( page 14) for micronized products Regulatory Status
Refer to Example 19-4 ( page 22) for amniotic sheet status

Failed FDA Inspections

Wall Street Journal Report: Failure to disclose Doctor Payments under Sunshine Act

Piper Jaffrey Opinion

Mimedx Confirms SEC & DOJ Investigations

SEC Investigation into Channel Stuffing

Whistle Blowers Claim

Whistle Blower Case 0:16-cv-04171 Complaint

 

MiMedx is pro forma bankrupt

With only $33 million in cash on the balance sheet at the end of December, MiMedx is pro forma bankrupt.

Selling General and Administrative (SG&A) expenses ran over $60m in the last reported quarter, or about $55m even without stock based compensation. If MiMedx has had to use its cash to meet payroll, then cash on the balance sheet is already down the drain.

An inability to file timely financial statements will put MiMedx in technical default and choke off their credit line. Ernst & Young said they were reviewing prior years which will not be a quick process, especially with prior years audited by Cherry Bekaert, which is not exactly a household name.

MiMedx’s Real Sales, if any, are now in free fall but expenses are not.

Professional fees for an army of lawyers and forensic accountants will run into the tens of millions and accelerate cash burn.

MiMedx is now in what is known as a “death spiral” as it struggles to stabilize sales while cash evaporates and employees leave or are fired.

Look for more shoes to drop. There’s never just one cockroach in the kitchen.

MIMEDX FINANCIAL STATEMENTS NUMBERS CANNOT BE RELIED UPON.

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Parker Petit should resign for his lies like “We expect the audit to go smoothly.”

Why did Parker the Barker host a special “Shareholder Call” on January 18th during which he made a “formal presentation” to the investing public and said,

“We expect the audit to go smoothly. We expect our interaction with the SEC investigation to continue to move along at a good pace, and we look forward to separating fact from fiction with them”

Parker knowingly lied about the audit. Nothing he says should be trusted.

It’s time for MiMedx to come clean about the multiple federal agencies investigating them. It’s time for Parker to resign until the investigations are complete.

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In final desperate act, Parker influences FBI to coerce critics

Bloomberg reports about Parker the Barker’s attempt to use the FBI as his own personal gestapo to coerce me from exposing the fraudulent and illegal activities at MiMedx.

I will NOT be silenced.

The FBI agents sent as Parker’s henchmen to invade my home:

  • had no warrant
  • admitted I was NOT the subject of any investigation
  • refused to leave a business card
  • refused to show complete credentials
  • threatened me to return “with consequences” if I didn’t shut up
  • and wouldn’t leave until I called the sheriff, whose report can be found here 

Please click here for the full letter my lawyer sent the FBI.

Is it the proper role of the FBI to suppress a whistleblower exposing the corrupt criminal acts of a man who calls himself “The Donald Trump of Georgia?”

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Time to re-read this email from a MiMedx current employee

Lost in all the rhetoric is the email from a current employee whistleblower that raises very serious claims about misconduct by MiMedx and its executives.

Everyone should re-read this email and the letter I sent CEO Parker about it:

Please click here to download pdf.

Because he doesn’t want investors to know the facts exposed in this email, Parker wants investors to believe the email is fake.

We stand by the email’s authenticity and demand Parker resign so an independent investigation can begin.

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Petite Parker’s history of selling to dead people

When an audience member at the JP Morgan conference pointed out Parker’s history of “selling to dead people,” Parker had no answer, only muttering “This is how ridiculous this nonsense is.”

When Viceroy proved his involvement in Matria’s illegal conduct of selling to dead people, Parker also had a similar non-response:

The discrediting of the Viceroy Report Part 13 is very simple. As usual, they have amassed a tremendous amount of publically available financial and business information on Matria Healthcare. However, they either do not understand this information or they purposely misrepresent their hypotheses on such information to make their fallacious “conclusions.” The report is full of confused conclusions, misinformation and in some cases lies. There is no impact of this report on MiMedx because of Viceroy’s inability to draw correct and reasonable conclusions from financial and business information.

Parker’s “argument” is nothing more than an empty ad hominem. His history of selling to dead people is well documented fact.

Parker and his management team have a track record as bad actors which they have continued at MiMedx.

Parker has still not answered the question about who he has given shares as “advisors” and “independent contractors.”

This question needs to be answered.

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Answer the question Parker: You issued the shares to whom and for what?

The issuance of shares is (barely) disclosed but never EXPLAINED in MiMedx’s filings.

If the 1.4 million shares issued is only one part of the more than 3 million shares MiMedx issued since the end of 2016, then the question is expanded not answered: In 2016, MiMedx issued more than 3 million shares of restricted stock to whom and for what?

“Mike Senken, the Company’s CFO, told him those were shares issued to employees,” but what do you say, Petite Parker?

Were ALL the shares issued to employees, or what shares were given to “consultants and advisors” or “independent contractors?”

Did you give Tom Price MiMedx shares as an “independent contractor?”

How many doctors are “independent contractors” and how much stock did they receive?

Were ALL the shares issued to employees, or what shares were used in “transactions” to “acquire companies” or “distribution agreements” as mentioned in the risk factors to the 10-K?

Were ALL the shares issued to employees, or what shares were given to “any entity which is a wholly- owned alter ego of such employee?”

“The MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan” referenced in Footnote 9 gives MiMedx broad discretion in who is “eligible” to receive shares if Petite Parker “determines that such Person or entity has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or any Affiliate or if it is otherwise in the best interest of the Company or any Affiliate for such Person or entity to participate in this Plan.”

Excerpts from MiMedx’s 2016 proxy:

ELIGIBILITY

Any employee of the Company or an Affiliate (including an entity that becomes an Affiliate after the adoption of this Plan), a member of the Board or the Board of Directors of an Affiliate (including an entity that becomes an Affiliate after the adoption of the Plan) (whether or not such Board or Board of Directors member is an employee), an Independent Contractor of the Company or an Affiliate (including an entity that becomes an Affiliate after the adoption of the Plan) and any entity which is a wholly- owned alter ego of such employee, member of the Board or Board of Directors of an Affiliate or Independent Contractor is eligible to participate in this Plan if the Committee, in its sole discretion, determines that such Person or entity has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or any Affiliate or if it is otherwise in the best interest of the Company or any Affiliate for such Person or entity to participate in this Plan. With respect to any Board member who is (i) designated or nominated to serve as a Board member by a stockholder of the Company and (ii) an employee of such stockholder of the Company, then, at the irrevocable election of the employing stockholder, the Person or entity who shall be eligible to participate in this Plan on behalf of the service of the respective Board member shall be the employing stockholder (or one of its Affiliates). To the extent such election is made, the respective Board member shall have no rights hereunder as a Participant with respect to such Board member’s participation in this Plan. An Award may be granted to a Person or entity who has been offered employment or service by the Company or an Affiliate and who would otherwise qualify as eligible to receive the Award to the extent that Person or entity commences employment or service with the Company or an Affiliate, provided that such Person or entity may not receive any payment or exercise any right relating to the Award, and the grant of the Award will be contingent, until such Person or entity has commenced employment or service with the Company or an Affiliate.

1.27 Participant

Participant means an employee of the Company or an Affiliate, a member of the Board or Board of Directors of an Affiliate (whether or not an employee), an Independent Contractor of the Company or an Affiliate and any entity which is a wholly- owned alter ego of such employee, member of the Board or Board of Directors of an Affiliate or Independent Contractor and who satisfies the requirements of Article V and is selected by the Committee to receive an Award.

1.29 Person

Person means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint- stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or any other entity of any kind.

1.21 Independent Contractor

Independent Contractor mans an independent contractor, consultant or advisor providing services to the Company or an Affiliate.

1.02 Affiliate

Affiliate, as it relates to any limitations or requirements with respect to incentive stock options, means any “subsidiary” or “parent” corporation (as such terms are defined in Code Section 424) of the Company. Affiliate otherwise means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Code Sections 1563(a), 414(b) or 414(c), except that, in making any such determination, fifty percent (50%) shall be substituted for eighty percent (80%) under such Code Sections and the related regulations.

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CEO Parker H. Petit, CFO Senken and MiMedx management are knowingly deceiving investors and just lie when challenged

We are aware of MiMedx paying significant undisclosed kickbacks to physicians.

We WILL name names.

It’s best to come forward and turn yourself in before you’re disgraced.

No questions on this website, Viceroy Research, or Aurelius Value have been even remotely addressed.

Petite Parker wants investors to think the email I received from a current MiMedx employee that I sent to him in my still unanswered letter from October is somehow “fraudulent” and written by an “illegal short seller,” but Parker offers no evidence of any kind.

Bernie Madoff got away with his scheme for years, so “if I were guilty they would have got me by now” is not a convincing excuse to avoid answering difficult questions.

Since Parker is knowingly deceitful, MiMedx needs an independent reputable law firm to conduct an investigation and dig the answers out of him.

Why was Tom Price at the MiMedx presentation? Did MiMedx compensate him?

If you have credible information about healthcare providers, politicians, or others receiving kickbacks in stock or otherwise, please share your story.

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CEO Parker and CFO Senken lie about share count without reading safe harbor

At the JP Morgan Healthcare conference in San Francisco on January 10, 2018, CEO Parker and friends were asked some tough questions about share count. In response, they chose to LIE ABOUT THEIR OWN FINANCIAL STATEMENTS rather than answer the question.

You’ve issued 1.4 million shares of restricted stock since the end of 2016 which is unexplained in your filings. That’s not stock issued to executives, employees, or consultants for share based compensation or stock issued for services performed because those are separate line items. So were those stock issued to

-pay for MiMedx product

-induce MiMedx sales

-factor MiMedx receivables

-or if not where did they go?

Instead of answering the question, both CEO Parker and CFO Senken shouted “your figures are incorrect,” which is an OUTRIGHT LIE.

Did they lie to cover up shares issued to, for example, Tom Price, in attendance at MiMedx’s presentation:

Please note MiMedx management failed to read the safe harbor disclaimer, making their LIE to investors about a material amount of shares particularly problematic.

Since the SEC is asking Parker questions “EVERY DAY,” they should demand to see all MiMedx shares issued, who they were issued to, for what, whether they were used as collateral for a loan, and what they have done with them since.

MiMedx needs an internal investigation by an independent and reputable law firm not Parker’s “friend from Georgia Tech,” which even Parker admits is “fair,” while continuing to refuse do it.

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How close is MiMedx to the end of death row?

“An off-balance sheet agreement that says [physicians] don’t have to pay [MiMedx] unless [physicians] have been paid” breaks Anti-kickback law. It’s easy to see why it’s illegal because it allows MiMedx to gain market share while the physician takes no risk.

Crossing this line means MiMedx could receive what’s known as “the death penalty” for medical product manufacturers because “Violation of the Anti-Kickback Statute may also lead to exclusion from Federal health care programs.”

See page 139-140 of the deposition posted yesterday:

Q. So there was a document that you produced. And that is an invoice that you received from MiMedx?


A. After, it looks like, 90 days after the use of the product.


Q. You seem to be focusing on that. What’s the — what is your meaning of pointing that piece of information out?
A. Because usually it takes 90 days to get paid after we use the product. So this invoice was generated 90 days after the use of it. So somebody went to the little freezer, pulled out the product, had the procedure. The invoice was not generated for 90 days. Which is inconsistent with the letter from Pete Petit below the Anti-kickback statements that state in exhibit — wherever — that we only had 30-day terms.

Please click here for the full “Spreadsheet Evidence of [MiMedx] breaking anti-kickback.

Why wouldn’t the CFO send a letter, why Petite Parker? Because Petite Parker knows MDXG is breaking the law and trying to snuff this guy out from making it a bigger issue through a form of polite intimidation. If the invoices need to be paid then why suddenly extend terms from net 30 to net 60?

Petite Parker knows.

Q. Well, tell me about the conversation that y’all had.
A. I still was uncomfortable. It seems very strange. And I said to them, I said, you — it seems very strange. We have an agreement for however many years in the way we do business. A controller shows up and says that agreement never existed.
Within 24 hours the CEO of a public company sends me a letter reiterating that that never existed. Extends the terms. It just — it was just — it made me very nervous. Because I have been doing this for awhile. It just didn’t make sense.
And then we had dinner. And I contacted the doctor, I said, hey, if this all — how many patients — again, it all comes down to the patients. It this stuff stops, how bad are the patient outcomes? Because, again, I can’t mess with the patients. That’s our job to care.
And the doctor said, hey, let’s try to quell your nervousness and we had dinner with the sales guys. And I explained to them. And their response was, geez, I wish the letter never — no, there’s nothing to it and la-da-da, whatever.
And still my instincts tell me it just seems very odd that we would have a normal course of business and then — in fact, it just seems very odd that on the second visit they still totally deny that this whole methodology exists. And a letter comes from the CEO, not the CFO, but the CEO saying it never existed. And, oh, by the way, Anti-kickback and all this. The facts are the facts.

How could MiMedx have 60 days of receivables with unpaid balances from 2013? None of these options are good, and “the real answer” is the worst:

A. So I asked him [Mr Cranston]. I said, well, one of three things is happening. One, you are really bad at your job and you just don’t know how to collect because these are 2013 invoices. It’s 2016, and we owe you a boatload of money.
Two, you are just gouging the heck out of us and you don’t care whether we pay or not.
Or, three, there is an off-balance sheet agreement that says we don’t have to pay unless we have been paid. Which is the real answer. But there’s no way that he’s going to say that. So when he says, Answer Number 1, I’m really bad at my job. I’ve got patients out there scheduled for surgery. And I figure we are going to — if I say, current with regards to the monies owed. Now, we do owe money. I will tell you that we owe money. Because even though once we pay when we get paid, the margins on this were still upside-down.

Whistleblowers have been flooding in to corroborate:

What Village Podiatry is saying is absolutely how Mimedx operated. Consignment inventory was sent in, reps would run the insurance verification, the product was applied, reps would work will the billers to ensure it was coded and billed correctly, we’d check the eob when it came back to ensure it was fully reimbursed. Only at that point did we enter the implant information into Salesforce, which generated the invoice, which had the 30-day payment terms. If the insurance denied payment, the reps would just change the consignment product to “no charge evaluation” [i.e. SG&A expense] units so the doctor and patient weren’t out the money. We were told by managers that this was legal because as long as the insurance company didn’t reimburse the product, it wasn’t fraud.

But since Petite Parker knows it is indeed fraud, knowingly ordering his managers to carry it out would mean MiMedx is systematically breaking the law.

Note: Even though the exhibits above are public court documents, we blocked out the patients’ names because we care about them. Evidently, MiMedx does not.

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MDXG needs more than a glorified bandaid to recover from the FDA’s Axe to its forehead

If MDXG wants to continue to sell its tissue as a wound healing product, they will have to do Real FDA approved trials to keep their products on the market before the end of 36 month grace period. The true efficacy of the product will now be exposed.

In the meantime, the company can longer make the claims of healing and superiority over other competing products. See below from the final guidance released yesterday:

amniotic membrane product is used for wound healing and/or to reduce scarring and inflammation. This is not homologous use because wound healing and reduction of scarring and inflammation are not basic functions of amniotic membrane.

Will commercial payers and Medicare continue to reimburse the usage of amniotic membrane as a “wound cover” in treating DFUs considering now they are nothing more than a glorified band aid? Coverage and pricing are material risks now in addition to the material volume risks associated with trying to continue to stuff a stuffed channel. For example, United Health uses the words “Foster Wound Healing” in its coverage decision from February. As of January, the government has used HCPCS (hixpics) code Q4131 for Epifix according to this website. This code is listed as a “type C” meaning “Carrier Judgement,” so the insurance providers can choose to cover or not. They are not mandated by CMS to cover the product. 

In the face of this double threat to top-line, MDXG already has a cost structure so high it earns next to nothing on gross margins of nearly 90%. Now, in addition to these costs, MiMedx will now have to conduct Real clinical trials, and the company reminds us:

Additionally, there are significant costs associated with clinical trials that cannot be estimated until the IND is approved. Moreover, data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval on a timely basis, or at all.

Please click the links below for MiMedx’s now defunct and/or illegal marketing materials:

example 1

example 2

example 3

example 4

example 5

example 6

example 7

example 8

example 9 from Delta Sky Miles Magazine

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Add the FDA to the list of federal agencies who are on to MiMedx

Believe or don’t believe the channel stuffing allegations. We believe MDXG’s channel stuffing is significant, and we believe Petite Parker and friends are breaking the law.

Completely separate from the above, the FDA just put an Axe in MDXG’s forehead.

Today, FDA guidance was finalized that first came out in draft form in 3Q 2015. When the stock crashed to around $7, Petite Parker issued a press release to say:

In terms of the impact to MiMedx, we find the significant price decline in our stock today to be an overreaction of the market to this issue, likely because the market misunderstands the significance of the documents and the lengthy process that is involved in bringing matters to closure,” continued Petit. “What has been released by the FDA is an initial proposed draft, which is subject to modification as comments are received and testimony is submitted. Additionally, a determination will need to be made as to whether the process will involve rulemaking and legislative oversight, which will further extend the process.

On the call, Petite Parker continued,

Now I also want to follow up on the press release we sent out regarding the FDA’s guidance document agenda for 2017. Every year, they publish a calendar year guidance agenda — a calendar for the guidance agenda. This is a schedule that projects the release dates of guidance documents, both draft guidance as well as final guidance documents. The 2017 agenda did not include any reference to the minimum manipulation or homologous use of HCT/Ps. This was not a surprise to us as we’ve been told that the FDA received many thousands of comments; the vast majority of them taking issue with the draft guidance as proposed. So we’re very encouraged that the FDA is taking the time to carefully review the input. And based on the calendar it has published, we don’t expect any significant updates in this area for about a year or possibly more.

Another consideration that we think is very positive is that the people that are in the current consideration for the position of FDA Commissioner generally believe that new technology should be made available to the public once safety is assured, much like what was stated in the 21st Century Cures Act. So that gives us comfort that we are not likely to see something coming out of left field like the untitled letter or the draft guidance that’s coming — in the coming years.

So much for that.

Today’s significant update shows that comfort was completely misplaced. Don’t take our word for it. Just read MDXG’s risk disclosure in their 10-k:

FDA Untitled Letter and Draft Guidance

On August 28, 2013, the FDA issued an Untitled Letter alleging that the Company’s micronized allografts do not meet the criteria for regulation solely under Section 361 of the Public Health Service Act and that, as a result, the Company would need a biologics license to lawfully market those micronized products (the “Untitled Letter”). Since the issuance of the Untitled Letter, the Company has been in discussions with the FDA to communicate its disagreement with the FDA’s assertion that the Company’s micronized allografts are more than minimally manipulated. To date, the FDA has not changed its position that the Company’s micronized products are not eligible for marketing solely under Section 361 of the Public Health Service Act. The Company continues to market its micronized products but is also pursuing the Biologics License Application (“BLA”) process for certain of its micronized products.

On December 22, 2014, the FDA issued for comment “Draft Guidance for Industry and FDA Staff: Minimal Manipulation of Human Cells, Tissues, and Cellular and Tissue-Based Products.” Essentially the Minimal Manipulation draft guidance takes the same position with respect to micronized amniotic tissue that it took in the Untitled Letter to MiMedx 16 months earlier. The Company submitted comments asserting that the Minimal Manipulation draft guidance represents agency action that goes far beyond the FDA’s statutory authority, is inconsistent with existing human cells, tissues, and cellular and tissue-based products (“HCT/P”) regulations and the FDA’s prior positions, and is internally inconsistent and scientifically unsound.

On October 28, 2015, the FDA issued for comment, “Draft Guidance for Industry and FDA Staff: Homologous Use of Human Cells, Tissues, and Cellular and Tissue-Based Products.” The Company submitted comments on this Homologous Use draft guidance as well. On September 12 and 13, 2016, the FDA held a public hearing to obtain input on the Homologous Use draft guidance and the previously released Minimal Manipulation draft guidance, as well as other recently issued guidance documents on HCT/Ps. The Company awaits further decision from the FDA on the draft guidances, but anticipates this will be a lengthy process.

If the FDA does allow the Company to continue to market a micronized form of its sheet allografts without a biologics license either prior to or after finalization of the draft guidance documents, it may impose conditions, such as labeling restrictions and compliance with current good manufacturing processes (“cGMP”). Although the Company is preparing for these requirements in connection with its pursuit of a BLA for certain of its micronized products, earlier compliance with these conditions requires significant additional time and cost investments by the Company. It is also possible that the FDA will not allow the Company to market any form of a micronized product without a biologics license even prior to finalization of the draft guidance documents and could even require the Company to recall its micronized products.

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Obtaining and maintaining the necessary regulatory approvals for certain of our products will be expensive and time- consuming and may impede our ability to fully exploit our technologies.
The process of obtaining regulatory clearances or approvals to market a biologic or medical device from the FDA or similar regulatory authorities outside of the United States is costly and time consuming, and there can be no assurance that such clearances or approvals will be granted on a timely basis, or at all. As discussed above, we intend to pursue approval of a Biologics License Application (BLA) for certain of our micronized products. Additionally, the FDA may take the position that some of the other products that we currently market require a BLA as well. Some of the future products and enhancements to our current products that we expect to develop and market may require marketing clearance or approval from the FDA. There can be no assurance, however, that clearance or approval will be granted with respect to any of our products or enhancements or that FDA review will not involve delays that would adversely affect our ability to market such products or enhancements. The process of obtaining an approved BLA requires the expenditure of substantial time, effort and financial resources and may take years to complete. The fee for filing a BLA and the annual user fees payable with respect to any establishment that manufactures biologics and with respect to each approved product are substantial. Additionally, there are significant costs associated with clinical trials that cannot be estimated until the IND is approved. Moreover, data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval on a timely basis, or at all. Additionally, the FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the products. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. Like the process of obtaining an approved BLA, the process of obtaining a PMA requires the expenditure of substantial time, effort and financial resources and may take years to complete. The FDA may not grant approval on a timely basis, or at all. Additionally, the FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the products. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.