MiMedx (NSDQ:MDXG) said yesterday that it’s bailing out of a lawsuit filed against Organogenesis, alleging tortious interference related to business with the U.S. Veteran’s Affairs Dept., so it can widen the scope of its investigation of its rival.
Marietta, Ga.-based MiMedx revealed the lawsuit last month, alleging that the U.S. Veterans Affairs Dept. stopped using its allografts in June 2013 based on "malicious actions" and interference from Organogenesis. MiMedx’s EpiFix allograft competes with the Apligraf and Dermagraft skin substitutes made by Organogenesis.
"The company continues to believe that Organogenesis has engaged in misconduct against MiMedx," according to a press release.
"However, the company has determined that, rather than expend its time and resources in a protracted litigation with Organogenesis at this juncture, the company’s efforts would be better spent continuing its investigation into the Organogenesis activities against MiMedx involving not only the Veterans Administration, but also other governmental agencies as well as MiMedx customers. MiMedx believes that proceeding in that fashion will be more efficient because it will enable the company to address any and all improper conduct engaged in by Organogenesis against MiMedx at 1 time," MiMedx said.
Organogenesis blasted back, calling the MiMedx lawsuit "frivolous" and saying its tough stance forced MiMedx to back down.
"Organogenesis informed MiMedx that the lawsuit was frivolous and had no factual or legal basis, and that unless the case was dismissed on or before February 5, Organogenesis would seek sanctions against MiMedx and its counsel," Canton, Mass.-based Organogenesis said in a statement.
"As anticipated, MiMedx has withdrawn its lawsuit against Organogenesis, which was completely without merit," added president & CEO Gary Gillheeney Sr. "We want to reiterate that Organogenesis holds itself and its employees to the highest standards.
"Providing the best evidence-based products to our customers, in the most ethical and compliant way possible, is a commitment that is deeply rooted in the company’s heritage," Gillheeney said. "We are disappointed that MiMedx continues to blame Organogenesis for its problems. We prefer instead to let our products do the talking."
MiMedx is also contending with a subpoena over sales and marketing of its regenerative biomaterial products and bioimplants made from human amniotic membrane and is beefing with the FDA over proposed new regulations regarding the use of human cells, tissues and cellular/tissue based products to treat patients.