Qui Tam Complaint Against MiMedx Is Fully Dismissed

Oct 12, 2015, 13:30 ET from MiMedx Group, Inc.

MARIETTA, Ga., Oct.12, 2015 /PRNewswire/ -- MiMedx Group, Inc. (NASDAQ: MDXG), the leading regenerative medicine company utilizing human amniotic tissue and patent-protected processes to develop and market advanced products and therapies for the Wound Care, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic, and the Dental sectors of healthcare, announced today the qui tam complaint which had been filed against the Company has been dismissed by the court. 

Toward the end of 2014, MiMedx received a civil subpoena issued by the Office of Inspector General of the Department of Health and Human Services ("OIG"). The subpoena was prompted by an underlying qui tam complaint. Parker H. Petit, Chairman and CEO, stated, "As we suspected, this case was brought by an individual who is an executive at one of our major competitors, Organogenesis, acting as the relator or plaintiff.  In all my years in healthcare, I have never seen business tactics more egregious than what has been perpetrated by this competitor in approaching numerous government agencies to take action against MiMedx. Even though their CEO departed this company last December, it appears their interactions with the VA, CMS, FDA and DOJ began as early as 2012.  Unfortunately, while it has been costly, we have resolved this last matter."

In March 2015, the Department of Justice ("DOJ") indicated it was declining to intervene in the case, as announced by the Company in its press release of March 23, 2015.  The relator in the underlying qui tam complaint still had the option of pursuing the claims without the government, but ultimately decided not to continue with the case.  Thus, on October 6, 2015, the court dismissed the qui tam action in full.

Petit said, "We believe the underlying claims of the relator in this case were without merit and full of ridiculous innuendo. In my judgement, they were predominately outright lies.  It is quite unfortunate that our government had to expend its resources on such an investigation.  But ultimately, the system worked as it should and the case was dismissed.  We are pleased with the result, and we are especially appreciative of the professional manner in which the DOJ conducted its thorough investigation and the speed at which they came to their conclusions.  I am very pleased with the way our management assisted the government with its investigation and expedited the process.  As mentioned in our March 23rd press release, we provided in excess of 100,000 lines of electronic data to the government, and we quickly produced the required documents." 

Bill Taylor, President and COO, "Our culture embraces and demands the utmost in business integrity and ethics. We have a comprehensive compliance program, and we continually stress adherence to our policies in every way possible. As the leader in our sector of healthcare, we are constantly striving to improve in all areas. We believe we are setting the industry standard for ethical business practices and hope that all industry participants will follow suit. This certainly is in the best interest of patients, physicians, service providers and all others involved in advanced wound care."

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 are AmnioFix®, EpiFix® and CollaFix™. AmnioFix® and EpiFix® are our tissue technologies processed from human amniotic membrane derived from donated placentas. Through our donor program, a mother delivering via full-term Caesarean section birth 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 450,000 allografts to date for application in the Wound Care, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic and Dental sectors of healthcare. CollaFix™, our next technology platform we plan to commercialize, is our collagen fiber technology, developed with our patented cross-linking polymers, designed to mimic the natural composition, structure and mechanical properties of musculoskeletal tissues in order to augment their repair.  CollaFix™ is the only biological, biodegradable, biomimetic technology that matches human tendon in strength and stiffness.

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, that the Company embraces and demands the utmost in business integrity and ethics, the breadth and strength of the Company's compliance program, the significance of the government declining to intervene in the case and the dismissal, and that MiMedx is setting the industry standard for ethical business practices. 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 the Company's compliance program may not be as effective as anticipated, the compliance policies may not have been consistently applied, 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, 2014 and its most recent Form 10Q filing. 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.