This article may have been created or edited in return for undisclosed payments, a violation of Wikipedia's terms of use. It may require cleanup to comply with Wikipedia's content policies, particularly neutral point of view. (April 2021)
MiMedx Group is a biomedical company based in Marietta, Georgia, founded in 2008. It is traded on the NASDAQ as MDXG.[1] The CEO is Tim Wright. Using tissues from birth such as the placenta, amniotic sac, and umbilical cord, MiMedx creates skin for skin grafts. With the arrival of Wright in May 2019, the company accelerated the process of working with auditors and regulators to resolve legal and financial issues created by the previous management (see ‘History’). Wright also began a cultural and financial turnaround, assembling a new senior management team by August 2019 to instill “transparency, truthfulness, and timeliness” in communications and business dealings.[2] As of December 2020, the company had approximately 735 employees.[3]
By August 2020, MiMedx had raised $150 million in concurrent private equity and debt financings; completed a required financial restatement; and filed its 2019 annual report and 2020 first-quarter report.[4]
MiMedx's application to relist its common stock on the NASDAQ was approved on October 30, 2020.[5] The company had been delisted from the NASDAQ in November 2018 and had traded on OTC Pink[6] until relisting.
As of November 2020, MiMedx had supplied more than two million allografts for skin grafts to address persistent wounds such as diabetic foot ulcers that often result in amputation, burns, and other urgent health issues.[7]
History
In 2008, Parker H. Petit, who formed Life Systems in the 1970s, founded MiMedx and became CEO in 2009. Life Systems went public as Healthdyne Inc. in 1981. Healthdyne split into multiple companies, one of which became Matria Healthcare and Petit was named CEO in 2000. He retired from Matria in 2008 when it was acquired by Alere. MiMedx joined the NASDAQ exchange in April 2012 as MDXG. The company's 2012 revenue was around $27 million[8] and MiMedx was named one of Fortune's fastest-growing companies in 2017.[9] MXDG was delisted in November 2018 after fraud and other impropriety and began trading on OTC Pink.[10]Motley Fool said "delisting might be the least of the company's problems."[10][11][12][13][14] After several fraud scandals, Petit was terminated from MiMedx in June 2018.[13][15]
In 2013, the FDA investigated MiMedx's amniotic products to determine if they were Section 361 eligible. If not, they would need to meet the more stringent requirements of a pharmaceutical.[8] In August 2013, the FDA stated the products weren't Section 361 eligible, making them unlawful for sale until meeting more stringent standards.[16] Petit suspected a rival, Organogenesis, had lobbied for this.[17]
Also in 2013, the U.S. Department of Veterans Affairs reclassified allografts from MiMedx and stopped purchasing from the company.[17] Parker Petit suspected that Organogenesis lobbied for this reclassification and the VA reversed the policy change a week later.[17] However, after this reclassification, according to Bloomberg, Georgia Senator Johnny Isakson made at least eight calls on behalf of MiMedx and Petit to the VA, the FDA and the FBI.[17] Although the federal agencies provided some relief to MiMedx, there was no evidence that Isakson influenced the relief.[17]
In December 2014, MiMedx sued Organogenesis for interfering in its VA business, but withdrew the suit a month later.[17]
In 2016, a VA rule change on the storage of medical products meant MiMedx would have to take product back, causing a revenue drop since the sales were already booked. Petit reported to MiMedx executives that this wouldn't happen, as they had been talking to the VA and were "having our senator make some phone calls", referring to Isakson. The VA rule change was reinterpreted, causing lower impact to the company than previously expected.[17]
Beginning in 2017, investors and short-sellers such as Marc Cohodes started publicizing fraud, accusing the company of channel stuffing. John Fichthorn of Dialectic Capital said the company was in a "revenue fraud situation". Petit blasted the "'wolf pack' of short sellers with making 'fraudulent and unethical accusations' .. [taking] short selling into a fraudulent and also illegal mode", filing a lawsuit against three blogs run by Dialectic, Sparrow Fund Management, and Viceroy Research,[18] all short sellers. Other investors investigating the company at the time included Aurelius Value[19] and Citron Research. Cohodes accused Petit of defamation, and wrote a series of threatening tweets toward Petit. Following this, Sen. Isakson reached out to the Atlanta FBI on Petit's behalf, and the FBI arrived at Cohodes's doorstep in response.[20] MiMedx's website contained a section rebutting the short sellers.[21][22][17] In March 2017 the company announced that a yearlong internal audit didn't uncover any wrongdoing.[23] In August 2017 the company fired their outside auditor, Cherry Bekaert LLP and hired Ernst & Young.[23]
The accounting fraud allegations led to a SEC investigation in September 2017, a Justice Department investigation in 2018, and subpoenas from the VA Department. Petit (CEO), William Taylor (COO), and Michael Senken (CFO) resigned in June 2018, but MiMedx stated the three had not resigned but were terminated for cause. The SEC opened a lawsuit, naming Petit and Senken.[24][25][15] Three VA employees were indicted in May 2018 for accepting bribes from the company.[26]
The company delayed its earnings announcement in February 2018 and stated it wasn't aware of any Justice Department investigations. A week later the Justice Department investigation was made public.[23]
In 2018, the Wall Street Journal reported that the company considered the 2013 Physician Payments Sunshine Act not applicable to their business as they were part of FDA Section 361. Competitors reported payments through the act. WSJ found at least 20 physicians who received payments that would normally be reported. MiMedx's website stated they had "received an opinion from HHS's CMS department which confirms that MiMedx does not have a need to report", though CMS stated they do not provide such opinions.[27]
By August 2018, Petit listed had his $15 million mansion in the Florida panhandle for sale. New York Post called him "the Trump of Georgia". Petit is a top Republican fundraiser in Georgia, as well as being the finance chair for Trump's 2016 campaign.[28]
In May 2019, Timothy Wright had been named as CEO, replacing David Coles. By August 2019, 13 of 16 executives were no longer with MiMedx. The company stated that Petit, Taylor, Senken, and former Controller John Cranston had ordered the installation of a secret video surveillance system to expose and undermine whistleblowers, called Project Snow White. They also stated the four had "repeatedly misled or withheld information" from auditors, including Petit in a sworn deposition and Senken in a letter to the SEC. They stated Petit and Taylor "purposely took action to disregard revenue-recognition rules".[29]
In November 2019, MiMedx settled a SEC lawsuit for "wide-ranging fraud" to inflate revenue in quarterly and annual filings, paying $1.5 million. The company hired auditors from Ernst & Young and said they would restate earnings back to 2012 and that they would be delisted. The auditors resigned from the MiMedx audit in December 2018, which is "never a good sign" according to Bloomberg, also stating that Cohodes had gone too far in his attacks.[30][25][31]
On the same day, indictments were unsealed by SDNY's Geoffrey Berman, charging Petit and Taylor with securities fraud over "materially inflated revenue in the second, third, and fourth quarters of 2015, and for the full year 2015", inflating annual revenue by $9.5 million.[32][24][33] Bloomberg stated a dozen "current and former executives and employees of his companies describe a hard-charging leader -- one who didn’t dwell on the rules as he pursued revenue growth".[13] In November 2020, Petit and Taylor were both found guilty for conspiracy but not guilty of securities fraud following a four week long jury trial. They were both sentenced to one year in prison and Petit was ordered to pay a $1,000,000 fine, while Taylor only had to pay a $250,000 fine.[34][35]
On April 6, 2020, MiMedx settled a Department of Justice lawsuit regarding MiMedx charging inflated prices to the VA Department. MiMedx agreed to pay $6.5 million to settle the suit, which was uncovered through whistleblowers.[36]
On April 21, 2020, MiMedx announced they had received $10 million in federally backed small business loans, the maximum allowable amount, as part of the Paycheck Protection Program. The company received scrutiny over this loan, which was aimed at small businesses suffering from the COVID-19 pandemic. The New York Times noted that this payment was given to a company that has had "serious scrapes" with the government, while a company spokesperson stated MiMedx needed the loan since the problems have caused other funding channels to be closed to them.[37][38][39]
As of April 2020, the company had approximately 710 employees.[39]
Related Research Articles
Abbott Laboratories is an American multinational medical devices and health care company with headquarters in Abbott Park, Illinois, United States. The company was founded by Chicago physician Wallace Calvin Abbott in 1888 to formulate known drugs; today, it sells medical devices, diagnostics, branded generic medicines and nutritional products. It split off its research-based pharmaceuticals business into AbbVie in 2013.
Mylan N.V. was a global generic and specialty pharmaceuticals company. In November 2020, Mylan merged with Upjohn, Pfizer's off-patent medicine division, to form Viatris. Previously, the company was domiciled in the Netherlands, with principal executive offices in Hatfield, Hertfordshire, UK and a "Global Center" in Canonsburg, Pennsylvania, US.
Iconix Brand Group is an American brand management company that licenses brands to retailers and manufacturers, primarily in the apparel, footwear and apparel accessory industries.
Comscore is an American-based global media measurement and analytics company providing marketing data and analytics to enterprises; media and advertising agencies; brand marketers and publishers.
Syntax-Brillian Corporation was an American corporation formed on November 30, 2005, by the merger of Syntax with Brillian Corporation. The company sold HDTVs under the brand name of Ölevia and its stock was previously listed on the Nasdaq Stock Market under the ticker symbol BRLC. It was based in Tempe, Arizona. In 2009, it resolved a bankruptcy proceeding by selling all its assets to Emerson Radio Corp.
Kaleil Isaza Tuzman is a former entrepreneur associated with digital media, who spent more than 20 years in that industry before being convicted of multiple counts of fraud in 2017. Tuzman started his career at Goldman Sachs, was co-founder of GovWorks.com, served as President of JumpTV, and then as chief executive officer and chairman of KIT Digital, Inc. On September 7, 2015, he was arrested in Colombia and held in a Bogotá prison until being extradited to the United States to face charges of fraud and market manipulation in connection with the defrauding of investors in KIT Digital and two investment funds. He was convicted on all counts in December 2017.
Qurate Retail Group is an American media conglomerate controlled by company chairman John C. Malone, who owns a majority of the voting shares.
Martin Shkreli is an American businessman and convicted felon. Shkreli is the co-founder of the hedge funds Elea Capital, MSMB Capital Management, and MSMB Healthcare, the co-founder and former CEO of pharmaceutical firms Retrophin and Turing Pharmaceuticals, and the former CEO of start-up software company Gödel Systems, which he founded in August 2016.
Osiris Therapeutics, Inc. was founded in March 1993 following the identification of mesenchymal stem cells (MSCs) by Dr. Arnold Caplan and colleagues at Case Western Reserve University in Cleveland Ohio. Dr. Caplan contributed a license to certain technology and joined Kevin Kimberlin, James S. Burns, a biotech venture capitalist, and Peter Friedli, a lead investor, to launch Osiris; Caplan and Burns had named the company after the Egyptian god of fertility, resurrection, and the afterlife. Early financing was provided by a number of entities, including Three Arch Bay Health Sciences Fund and Spencer Trask & Co. By 1994, the state of Maryland provided a loan and equity investment ot lure the company from Ohio in 1995.
Muddy Waters Research LLC is an American privately held due diligence based investment firm that conducts investigative research on public companies while also taking investment positions that reflect their research. It has exposed accounting problems and fraud at several companies, primarily in China but also in other countries in Asia, Europe and North America.
Jumia is a Pan-African technology company that is built around a marketplace, logistics service and payment service. The logistics service enables the delivery of packages through a network of local partners while the payment services facilitate the payments of online transactions within Jumia’s ecosystem. It has partnered with more than 100,000 active sellers and individuals and it competes at various levels, indirectly with retailers such as Jiji and Maybrands limited, and is a direct competitor to Konga in Nigeria, and Amazon and Noon in Egypt.
Ligand Pharmaceuticals is a biopharmaceutical company located in San Diego, California. Founded in 1987 as Progenix Inc., the company went public in 1992. Initially focused on developing its own drugs, a period of turbulence in the early 2000s culminated in its CEO being ejected by the shareholders and provoked a change in focus to the acquisition of existing drugs and forming partnerships to develop them further.
Nikola Corporation is an American manufacturer of heavy-duty commercial battery-electric vehicles, fuel-cell electric vehicles, and energy solutions. It presented several vehicle concepts from 2016 to 2020, the first of which was a natural gas fueled turbine-electric semi truck. The company went public on June 4, 2020. In February 2022, the company projected deliveries of between 300 and 500 of its first battery-electric semitrucks — known as the Nikola Tre — to customers. The company delivered its first two battery-electric trucks in December 2021. Like Tesla, Inc., the company is named in honor of Nikola Tesla, but is not related to the inventor. Nikola Corporation is based in Phoenix, Arizona.
Precigen, Inc is an American biotechnology company. Its president and CEO is Helen Sabzevari.
Luckin Coffee Inc. is a Chinese coffee company and coffeehouse chain. It was founded in Beijing in 2017. As of March 2023, it managed 9,351 stores which include 6,310 self-operated stores and 3,041 partnership stores. On June 5, the total Luckin coffee store number reached 10,000. Monthly active customers numbers reached 500 millions in June 2022. The company operates shops, stores, and kiosks that offer coffee, tea, and food. Customers need to download an app to order and pay for drinks online. Luckin is currently headquartered in Xiamen. Luckin Coffee quickly expanded over the years and outnumbered the number of Starbucks stores in China by 2019.
Trevor Robert Milton is an American convicted felon, former businessman and the founder and former executive chairman and CEO of Nikola Corporation. In September 2020, Milton resigned from his position as executive chairman after the U.S. Securities and Exchange Commission and Department of Justice began investigating claims that Milton and Nikola committed securities fraud. In July 2021, Milton was indicted by federal prosecutors on three counts of securities fraud and wire fraud and released on $100 million bail. In June 2022, he was charged with another count of wire fraud. In October 2022, he was found guilty on three of the four counts.
Phunware Inc. is an American mobile software and blockchain company. It produces mobile applications for advertising and marketing purposes such as personalized ad targeting, location tracking, and cryptocurrency brand loyalty programs.
The Holding Foreign Companies Accountable Act is a 2020 law that requires companies publicly listed on stock exchanges in the United States to disclose to the United States Securities and Exchange Commission information on foreign jurisdictions that prevent the Public Company Accounting Oversight Board (PCAOB) from conducting inspections. Under the law, such companies will be banned from trading and delisted from exchanges if the PCAOB is not able to audit specified reports for three consecutive years. The bill requires such companies to declare they are not owned or controlled by Chinese government.
Penumbra, Inc. is a medical device company headquartered in Alameda, California. The company was founded by Arani Bose and Adam Elsesser in 2004. It manufactures devices for interventional therapies to treat vascular conditions such as stroke and aneurysm.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
