MiMedx (NSDQ:MDXG) said it received a subpoena over sales and marketing of its regenerative biomaterial products and bioimplants made from human amniotic membrane. The Georgia company also disclosed a lawsuit against a rival it accuses of unfair business practices and a beef with the FDA over proposed new regulations.
First, the civil subpoena: MiMedx said it received the document from the Office of Inspector General of the U.S. Health & Human Services Dept. as part of a probe into its sales and marketing practices.
MiMedx said it was unaware of anything that would have spurred the investigation, with chairman & CEO Parker Petit saying in prepared remarks that executives were “aware of investigations in the wound care market over the past several years” regarding the sales of a rival product. MiMedx expected that the ongoing investigation “could lead to a review of other industry participants,” Petit added, noting the company identified a violation of its compliance policies about 18 months ago and corrected it within 24 hours, firing the offending employee.
MiMedx also said it’s suing archrival Organogenesis, which makes Apligraf and Dermagraft skin substitute products that compete with its own EpiFix allograft. MiMedx alleges that the U.S. Veterans Affairs Dept. stopped using its allografts in June 2013 based on “malicious actions” and interference from Organogenesis. MiMedx said it is basing its allegations on information it received through a Freedom of Information Act request submitted to the VA to determine why their business relationship was severed.
The MiMedx lawsuit, filed in the U.S. District Court for Northern Georgia, alleges “tortious interference” and “unjust enrichment.”
MiMedx also sounded off on draft guidance issued by the FDA regarding the use of human cells, tissues and cellular/tissue based products to treat patients. Petit, again in prepared remarks, noted that the FDA’s view on “minimal manipulation” regarding tissue treatments has evolved. But he blasted the agency for “selective” enforcement of against MiMedx of its proposed policy, based on a citation asking its products to be taken off the market in order to comply with new regulations.
“Federal agencies must treat similarly situated parties similarly,” Petit said. “We intend to urge the FDA to consider a more robust process and formal transition period for industry to come into compliance with any new requirements, similar to the approach the FDA took with respect to laboratory-developed tests.”