MiMedx Declines To Participate In NAD Review Proceeding

May 20, 2014, 13:48 ET from MiMedx Group, Inc.

MARIETTA, Ga., May 20, 2014 /PRNewswire/ -- MiMedx Group, Inc.  (NASDAQ: MDXG), an integrated developer, processor and marketer of patent protected regenerative biomaterials and bioimplants processed from human amniotic membrane, announced today it has declined to participate in the adjudication of an advertising challenge filed with the National Advertising Division of the Council of Better Business Bureaus (NAD).  The NAD administers a self-regulation program designed to ensure the integrity and credibility of national consumer advertising.  As part of this program the NAD will review challenges filed by competitors and consumers.  Participation in the process is voluntary.

The challenge was initiated by Organogenesis, Inc., manufacturer of Apligraf® and Dermagraft®, two skin substitute products that compete with MiMedx's EpiFix® allograft. Specifically, Organogenesis alleged that by comparing MiMedx's allografts to its products, MiMedx implies that its allografts have been approved by the FDA through the same Pre-Market Approval (PMA) process as the Organogenesis products.  Organogenesis further alleged that only PMA approved products may be marketed to promote wound healing.  MiMedx contends that neither of these allegations has merit.

As to the substance of Organogenesis' claims, MiMedx noted that it believes them to be incorrect.  The FDA guidance document cited as authority by Organogenesis in its challenge has no relevance to products regulated as "human cells, tissues, and cellular and tissue-based products" or "HCT/Ps," such as EpiFix. Products that qualify for regulation as HCT/Ps follow a different, but equally legitimate, regulatory path from the PMA regulatory process.  Additionally, the 2006 NAD decision cited in Organogenesis's challenge is distinguishable because the product at issue in that decision was completely decellularized, while EpiFix is not.  Accordingly, EpiFix contains critical cytokines and growth factors that are not present in decellularized products.

MiMedx has the utmost respect for the NAD and its procedures.  The advertising industry self-regulatory process administered by the NAD is extremely valuable to advertisers, competitors, and consumers.  But as MiMedx explained in its response to the NAD, MiMedx does not believe the NAD is the appropriate forum for vetting matters that are within the regulatory purview of the FDA. Moreover, many of the "advertising statements" that Organogenesis cites as objectionable are not even related to advertising nor directed to consumers, such as statements by MiMedx to its shareholders or comments made in a white paper submitted to the Centers for Medicare and Medicaid Services (CMS) in response to CMS' request for industry input on the topic of its proposed methodology for the reimbursement of skin substitutes in the hospital outpatient setting.  For those reasons, MiMedx respectfully declined to participate in the NAD's self-regulatory process.

"Organogenesis is understandably concerned by the rate at which physicians have adopted MiMedx's clinically and cost effective allografts, which have a five year shelf-life and do not require cumbersome and time consuming storage and thawing that increase application costs," commented Parker H. "Pete" Petit, MiMedx's Chairman and CEO. "Organogenesis has made no meaningful changes to its skin substitute product line in ten years, but instead has focused on attempting to thwart competitive advanced wound care therapies.  They lobbied Congress unsuccessfully to stop the CMS reimbursement changes that became effective January 1, 2014. These reimbursement changes discourage the wastage factor inherent in single-size grafts that are significantly larger than many of the wounds they are designed to treat.  When that lobbying initiative failed, Organogenesis filed a lawsuit against the Secretary of the Department of Health and Human Services, seeking to have the reimbursement changes overturned.  That suit was recently dismissed by the court." 

Petit continued, "We view this NAD complaint as another attempt by Organogenesis to hinder the progress of new regenerative medicine technologies and deflect attention from the critical issue, which is wastage.  Providers and payors are migrating to new therapies that can deliver excellent clinical results and do not require payment for products that are many times larger than the wounds they are treating.  Organogenesis seems to believe that the PMA regulatory status of its skin substitute products should entitle it to special protection against the progress of new technology.  There are many non-PMA skin substitute products now in the marketplace that have legitimate regulatory status as well.  Organogenesis needs to justify its products' place in the market like all others – based on the products' clinical effectiveness and cost effectiveness, which is a function of both size-appropriate grafts and ease of use."

About MiMedx MiMedx® is an integrated developer, processor and marketer of patent protected regenerative biomaterial products and bioimplants processed from human amniotic membrane. "Innovations in Regenerative Biomaterials" is the framework behind our mission to give physicians products and tissues to help the body heal itself. Our biomaterial platform technologies include AmnioFix® and EpiFix®, our tissue technologies processed from human amniotic membrane that is derived from donated placentas. Through our donor program, mothers delivering full-term Caesarean section births can elect in advance of delivery to donate the placenta in lieu of having it discarded as medical waste. We process the human amniotic membrane utilizing our proprietary PURION® process, to produce a safe and effective implant. MiMedx® is the leading supplier of amniotic tissue, having supplied over 225,000 allografts to date for application in the Wound Care, Surgical, Sports Medicine, Ophthalmic and Dental sectors of healthcare.

Safe Harbor Statement This press release includes statements that look forward in time or that express management's beliefs, expectations or hopes.  Such statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, provider and payer migration to new therapies and the expected outcome of legal and regulatory challenges. These statements are based on current information and belief, and are not guarantees of future performance.  Among the risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements include that providers and payors may not adopt or may be slow to adopt new therapies, the uncertainties of legal and administrative proceedings and the risk factors detailed from time to time in the Company's periodic Securities and Exchange Commission filings, including, without limitation, its 10-K filing for the fiscal year ended December 31, 2013. By making these forward-looking statements, the Company does not undertake to update them in any manner except as may be required by the Company's disclosure obligations in filings it makes with the Securities and Exchange Commission under the federal securities laws.

SOURCE MiMedx Group, Inc.