MiMedx(US:MDXG)2021-04-29 21:30Financial Data and Key Metrics Changes - MiMedx reported a 4% growth in adjusted net sales for Q1 2021, driven by the Wound Care business, with adjusted net sales reaching $59.7 million, an increase of 4.2% from the previous year [11][45] - Net sales for Q1 2021 were $60.0 million, compared to $61.7 million for the same period in 2020, reflecting a decline due to changes in revenue recognition methodology [44][45] - Gross margin improved slightly to 83.9% in Q1 2021 from 83.8% in Q1 2020 [46] - Net loss increased to $8.4 million in Q1 2021 from a net loss of $4.8 million in Q1 2020 [50] Business Line Data and Key Metrics Changes - The Wound Care business was a significant contributor to the growth, particularly due to the recently launched EpiCord Expandable product [11][12] - Selling, general and administrative expenses decreased by 3.8% to $45.2 million, attributed to lower travel expenses due to COVID-19 restrictions [46] - Research and development expenses increased to $4.3 million in Q1 2021 from $2.8 million in the same period last year, reflecting planned investments in clinical research [47] Market Data and Key Metrics Changes - The company noted that sales of marginized and particulate products represented approximately 14% of net sales for the three months ended March 31, 2021 [53] - The FDA's end of enforcement discretion is expected to impact sales, with the company anticipating adjusted net sales for 2021 to be consistent with the previous year [54] Company Strategy and Development Direction - MiMedx is focused on pipeline acceleration, expanding patient access to wound care products, and advancing its innovative pipeline of musculoskeletal therapies [58] - The company is exploring inorganic growth opportunities but emphasizes a focus on organic growth at this time [41][42] - The addition of Dirk Stevens as Senior Vice President of Quality Assurance and Regulatory Affairs is aimed at enhancing quality standards and regulatory compliance [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to achieve above-market growth rates despite the challenges posed by the end of enforcement discretion [71] - The company is committed to ensuring patient access to its products and is working with the FDA on expanded access under a cost recovery model [82] - Management highlighted the importance of ongoing dialogue with the FDA and the positive feedback received regarding their compliance efforts [75][86] Other Important Information - The company has completed the final patient visits for its Phase III studies on AmnioFix injectable for plantar fasciitis and Achilles tendonitis, with top-line results expected in the summer [19][22] - MiMedx is planning to file its first Biologics License Application (BLA) in the first half of 2022 for plantar fasciitis [27][75] Q&A Session Summary Question: Clarification on Year-over-Year Sales Decline - The decline in year-over-year sales was due to a change in revenue recognition methodology, not lost contracts [66][68] Question: Mitigation Strategies for Sales Loss - The company is focusing on expanding its sheet products and deploying its medical education team to communicate value propositions effectively [70][71] Question: FDA Approval Requirements for AmnioFix Injectable - Key steps include completing the analysis of the Phase III trial, meeting with the FDA, and ensuring the manufacturing facility meets GMP standards [73][75] Question: Impact of Enforcement Discretion Ending - Sales will continue until May 31, 2021, after which normal sales will stop without an approved BLA [79][81] Question: Market Size for Chronic Cutaneous Ulcers - The market for chronic cutaneous ulcers is expected to be significant, potentially larger than existing markets for diabetic foot ulcers and venous leg ulcers [93][96]