Earnings call transcript: MiMedx Q2 2025 beats earnings forecasts, stock rises

MiMedx Group Inc reported strong financial results for Q2 2025, with earnings per share (EPS) of $0.10, doubling the forecast of $0.05. The company also surpassed revenue expectations, reporting $98.61 million against a forecast of $90.62 million. Following the announcement, MiMedx’s stock rose 2.7% in aftermarket trading, reflecting investor confidence in the company’s performance and outlook. According to InvestingPro analysis, the company maintains strong financial health with a "GREAT" overall score, supported by robust profitability metrics including an impressive 82% gross profit margin. InvestingPro’s Fair Value analysis suggests the stock is currently undervalued.

Key Takeaways

• MiMedx’s EPS of $0.10 exceeded forecasts by 100%.
• Revenue grew to $98.61 million, surpassing expectations.
• Stock price increased by 2.7% in aftermarket trading.
• Full-year revenue growth outlook revised upward.
• New product launches and innovations announced.

Company Performance

MiMedx demonstrated robust performance in Q2 2025, with net sales reaching $99 million, a 13% increase year-over-year. The company reported significant growth in both wound and surgical sales, contributing to its strong financial results. This performance aligns with industry trends of increasing demand for advanced wound care solutions. InvestingPro data reveals the company holds more cash than debt on its balance sheet and maintains a healthy current ratio of 4.7, indicating strong operational efficiency. Get access to 7 more exclusive ProTips and comprehensive financial analysis with an InvestingPro subscription.

Financial Highlights

• Revenue: $98.61 million, up 13% YoY
• Earnings per share: $0.10, up from previous forecasts
• Adjusted EBITDA: $24 million, representing 25% of net sales
• Cash and cash equivalents: $119 million, an increase of $12 million

Earnings vs. Forecast

MiMedx delivered a substantial earnings surprise with an EPS of $0.10, compared to the forecasted $0.05, marking a 100% beat. Revenue also exceeded expectations by 8.82%, highlighting the company’s strong market position and operational efficiency.

Market Reaction

Following the earnings announcement, MiMedx’s stock price rose by 2.7% in aftermarket trading, reaching $6.85. This positive movement suggests investor confidence in the company’s ability to sustain growth and navigate upcoming regulatory changes. The stock remains closer to its 52-week low of $5.47, with analyst targets ranging from $11 to $13, suggesting significant upside potential. InvestingPro analysis indicates the company maintains strong cash flows that sufficiently cover interest payments, though investors should note that stock price movements have been quite volatile.

Outlook & Guidance

MiMedx has revised its full-year revenue growth outlook to low double digits, reflecting optimism about its product pipeline and market opportunities. The company plans to end the year with over $150 million in cash and is preparing for Medicare reimbursement changes set to take effect in 2026.

Executive Commentary

CEO Joe Capper expressed confidence in the company’s competitive position, stating, "When the market is acting rationally, we win." He emphasized MiMedx’s robust clinical evidence and commitment to advocating for fair provider compensation amid reimbursement changes.

Risks and Challenges

• Potential impacts from Medicare reimbursement reforms.
• High sales and marketing expenses, consuming 50-51% of net sales.
• Market consolidation and reduced spending due to regulatory changes.
• Dependence on successful product launches and innovation.
• Economic pressures affecting healthcare spending.

Q&A

During the earnings call, analysts inquired about the potential impacts of reimbursement changes on market size and MiMedx’s competitive strategy. The company expressed confidence in its ability to maintain market share and emphasized the efficacy of its products as a key competitive advantage.

Full transcript - MiMedx Group Inc (MDXG) Q2 2025:

Conference Operator: Good afternoon, and thank you for standing by. Welcome to the Mimetics Second Quarter twenty twenty five Operating and Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

I would now like to turn the conference over to Mr. Matt Matoriani, Head of Investor Relations for Mimetics. Thank you, Matt. You may begin.

Matt Matoriani, Head of Investor Relations, MiMedx: Thank you, operator, and good afternoon, everyone. Welcome to the Mimetics second quarter twenty twenty five operating and financial results conference call. With me on today’s call are Chief Executive Officer, Joe Capper and Chief Financial Officer, Doug Rice. As part of today’s webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at mimex.com.

Joe will kick us off with some opening remarks and a summary of our operating highlights as well as a discussion of our financial goals, and Doug will provide a review of our financial results for the quarter, and then Joe will conclude before we make ourselves available for your questions. Before we begin, I would like to remind you that our comments today will include forward looking statements, including statements regarding future sales, operating results and cash balance growth, future margins and expenses, our product portfolios and expected market sizes for our products. These expectations are subject to risks and uncertainties and actual results may differ materially from those anticipated due to many factors, including competition, access to customers, the reimbursement environment, unforeseen circumstances and delays. Additional factors that could impact outcomes and our results include those described in the Risk Factors section of our annual report on Form 10 ks and our quarterly report on Form 10 Q. Also, our comments today include non GAAP financial measures, and we provide a reconciliation to the most comparable GAAP measures in our press release, which is available on our website at mimex.com.

With that, I’m now pleased to turn the call over to Joe Capper. Joe?

Joe Capper, Chief Executive Officer, MiMedx: Thanks, Matt. Good afternoon, everyone. We appreciate you all joining us for today’s call. I am pleased to report that we had an excellent and, as you will hear today, action packed second quarter. We grew our top line by 13%, generating the highest quarterly revenue and highest adjusted EBITDA in the history of the company.

Both our wound and surgical franchises rose by double digits. We also posted improved margins and generated solid cash flow. Naturally, we are very happy with this exceptional performance and expect it to continue. Therefore, we are raising top line guidance today to reflect the strong momentum we anticipate in the 2025. We are also preparing the company to operate under the long overdue reform to Medicare reimbursement system, which is now set to take effect 01/01/2026.

I will discuss these steps in more detail shortly. But first, let me touch on some of the highlights of the quarter as well as an update on our strategic priorities. During the second quarter, net sales grew year over year by 13% to a record $99,000,000 representing another excellent performance by the team. Our adjusted gross profit margin was 84% in the quarter. Adjusted EBITDA was $24,000,000 or 25% of net sales.

We continue to build cash, ending the quarter with $119,000,000 an increase of $12,000,000 for the period, and we expect to end the year with a cash balance of more than $150,000,000 Our Surgical business grew by 15% with contributions across the portfolio, including another uptick in HelioGen sales as adoption gains traction. We continued enrollment in our randomized controlled trial for EpiEffect. We began collaborations to offer a few complementary wound care solutions, and we continue to evaluate additional products to expand our portfolio for both our wound and surgical businesses. Turning to a quick update on our strategic priorities. As articulated on prior calls, we have our team’s collective efforts organized and focused on three primary areas.

Our top strategic priority is to continue to innovate and diversify our product portfolio. As a reminder, this objective stems from our belief that there remain numerous unmet needs in both the wound care and surgical markets for which placental derived allografts are uniquely capable of assisting. We are confident we can continue to strengthen our market position by adding complementary skin substitutes and other adjacent products and services. This was the thinking that led us to add HelioGen to the portfolio and that continues to guide our evaluation of additional solutions. To that end, we have made recent progress worth mentioning.

Starting with EpiEffect. As a reminder, we launched this product at the 2023 and began a randomized controlled trial late last year. We are still in the enrollment phase and expect to soon be positioned for an interim report out. This is a critical milestone given the reliance the LCDs place on RCTs. Next, we received a TRG letter, which confirms the product is regulated under Section three sixty one by the FDA for another product line extension named EpiExpress, clearing the way for its launch later this year.

Epi Express is a fenestrated allograft designed to be used in cases where the flow or extraction of fluid is of critical importance to the healing process. As mentioned on our last call, to remain competitive in the private office marketplace until reform is enacted, we began marketing Solara, a higher priced amnion chorion allograft. During the quarter, we also began selling another iteration of this product called Emerge. Naturally, we expect these products will be deemphasized next year as Medicare reform takes hold. Last, we were excited to begin pilot programs for a few non skin substitute complementary wound care solutions.

The most notable being the collaboration we began with Vaprox Incorporated to co market their Vaporous Hyperoxia Therapy or VHT device. At the same time, we made an investment in Vaprox providing us with certain limited acquisition rights. VHT is a five ten ks clear device that delivers ultrasonic mist and concentrated oxygen for the treatment of nine types of hard to heal chronic wounds, including diabetic foot ulcers, venous leg ulcers and pressure ulcers. Vaprox’s VHT has been researched in three IRB clinical studies demonstrating wound healing rates exceeding eighty percent at twenty weeks when combined with standard wound care. Additionally, VHT is an adjunct therapy that has shown promising signs of efficacy in real world use cases with Mimetics’ advanced wound care products, such as EpiFix.

Together with our leading placental allografts, VHT provides clinicians across numerous care settings another innovative option to treat chronic hard to heal wounds. We view VHT as highly complementary to our portfolio. Our second priority is to develop and deploy programs intended to expand our footprint in the surgical market. In addition to seeking opportunities to expand our offering, this objective requires significant commitment to the production of real world clinical and scientific research. As such, we continue to fund work to produce tangible evidence in support of our technology for a variety of surgical procedures.

The May 2025 issue of Journal of Drugs and Dermatology included a study on the cost effectiveness of using MieMedix placental allografts following those surgeries. We also had the opportunity to highlight the growing body of evidence that supports the use of our products in certain surgical procedures while attending high profile conferences during the spring months. These efforts and the expansion of other commercial activities continued to pay dividends as evidenced by our Q2 top line Surgical growth of 15% led by Amneal effect. As stated in the past, we believe we are in the early innings as it pertains to the use of placental derived products in many surgical applications. The development of these markets will take time and perseverance, but the potential clinical benefits for patients, the healthcare economic payoff and the immense business opportunity for years to come make it well worth the investment.

Our third initiative is to introduce programs designed to enhance customer intimacy. As we prepare for the transition to a reimbursement environment, our profit potential is no longer a primary driver in product selection. We believe the company’s comprehensive value offering will heavily influence vendor selection. As such, we have been focused on developing programs which improve customer relationships and ultimately lower turnover. We have several initiatives underway aimed at institutionalizing customer centric behavior throughout the organization.

We continue to experience excellent adoption of Mimetics Connect, our proprietary customer portal, and we are actively developing additional features designed to improve workflow and strengthen the bond between Mimetics and our customers. We believe our commitment to this approach will lead to enhanced customer relationships, improved Net Promoter Scores, higher margins and ultimately an increase in the average lifetime value of customer. In addition to our superb performance in the quarter, the other big news of the day relates to recent announcements by the federal government on the steps they are taking to finally address the wildly inappropriate Medicare reimbursement for skin substitutes in private office and associated care settings. As you know, we have spoken about this issue at Lent on numerous occasions and have been longtime hardy advocates for action necessary to address the obvious fraud, waste and abuse that have plagued this industry and taxpayers. We have met with or spoken to nearly every relevant three letter agency which could enact reform, and we enthusiastically welcome these recent developments.

First, at the June, CMS announced the introduction of the Wasteful and Inappropriate Service Reduction or WISER model, which is focused on leveraging artificial intelligence and machine learning in concert with human clinical review that curb fraud waste and abuse in health care. This voluntary model, which aims to encourage safe and evidence supported best practices for treating Medicare beneficiaries, will run from 01/01/2026 to 12/31/2031 in five states and will examine several product categories, including skin substitutes. Next, several weeks ago, CMS posted the proposed physician fee schedule or PFS and the outpatient prospective payment system or OPPS for calendar year 2026. CMS will accept comments until September 12 and the final rules are expected to be published in November to take effect at the start of the New Year. According to the proposed schedule, CMS is moving away from the ASP methodology in the private office and away from the bundle in the wound care centers.

Instead, CMS will move to a fixed payment for skin substitutes of $125.38 per square centimeter in all outpatient sites of care, private offices and wound care centers alike. We plan to submit comments in support of the new reimbursement methodology with certain recommendations regarding payment levels and requests for clarification. Before I turn the call over to Doug for his detailed financial review of the quarter, I want to share with you a few comments regarding our updated guidance. As a result of our strong performance year to date and the current momentum in the business, we increased our full year revenue growth outlook from the high single digits to the low double digits. We also expect our full year adjusted EBITDA margin to

Conference Operator: be above 20%.

Joe Capper, Chief Executive Officer, MiMedx: Importantly, our expectations regarding long term prospects for the business are even more positive given the changes pending to the Medicare reimbursement methodology. Now let me turn the call over to Doug for a more detailed review of our financial results. Doug?

Doug Rice, Chief Financial Officer, MiMedx: Thank you, Joe, and good afternoon to everyone on today’s call. I’m excited to review our results with you all today. As a reminder, many of the financial measures covered in today’s call are on a non GAAP basis, so please refer to our earnings release for further information regarding our non GAAP reconciliations and disclosures. Moving on to the results. As Joe mentioned, our second quarter twenty twenty five net sales of $99,000,000 represented 13% growth compared to the prior year period.

By product category, second quarter wound sales of $64,000,000 increased 12% versus the prior year period, while surgical sales of $34,000,000 were up 15%, which marks the second consecutive quarter of mid teens growth for surgical. We saw significant contributions across our business in the second quarter. In Wound, our second quarter sales performed faced a tough comparable due to solid EpiFX sales last year. However, this was overcome by strong sales of Solara and, to a lesser extent, initial contributions from Emerge. In our Surgical franchise, AmnioEffect and AmnioFix once again delivered strong year over year increases in sales and uptake of HelioGen accelerated in the quarter as well.

Our second quarter twenty twenty five GAAP gross profit was about $80,000,000 up nearly $8,000,000 compared to the prior year period. Our GAAP gross margin was 81% in the second quarter twenty twenty five compared to 83% last year. Excluding the incremental acquisition related amortization expense from intangible assets of roughly 2,500,000 in this quarter, our non GAAP adjusted gross margin was 84%, roughly flat compared to the 2024. We continue to expect our full year non GAAP gross margin to be around 82% to 83%. Turning to our operating expenses.

Sales and marketing expenses were $48,000,000 in the second quarter compared to $42,000,000 in the prior year period. The increase was due to a combination of increased sales costs, including higher commissions associated with higher sales as well as the changes we made to our sales commission plans in the 2024. Looking ahead, we continue to expect our full year 2025 sales and marketing expenses to be between 5051% of net sales, which would be flat one percentage point increase on a percentage of sales basis to 2024 and up in absolute dollars. General and administrative expenses or G and A were $16,000,000 in the second quarter compared to $14,000,000 in the prior year period. Over the balance of the year, continue to expect G and A expenses to be around 13% of sales on an adjusted basis, which would be a decrease of around one percentage point on a percentage of sales basis to twenty twenty four and up in absolute dollars.

Our second quarter R and D expenses were 3,000,000 just up slightly compared to the prior year period. Our R and D expenses are primarily comprised of the costs associated with our ongoing Epi effect RCT as well as additional spend related to the development of future products in our pipeline. As we continue to ramp enrollment in the trial this year and prepare for an interim readout, we now expect our full year R and D expenses to be about 4% of net sales. GAAP income tax expense for Q2 twenty twenty five was around $3,000,000 reflecting an effective tax rate of 26. Please note that this tax expense number does not reflect the third quarter tax reform that was enacted earlier this month.

As a result of this bill, we expect modest impacts in our effective tax rate. We also expect the new tax reform to significantly decrease our cash tax payments in the near term as a result of immediate expensing of domestic R and D expense. We continue to expect our long term non GAAP effective tax rate to be 25%. Our second quarter GAAP net income was $10,000,000 or $06 per share on a diluted basis compared to GAAP net income of $18,000,000 or $0.12 per share in the prior year period. Adjusted net income for the second quarter was $15,000,000 or $0.10 per share compared to $11,000,000 or $08 per share in the prior year period.

Second quarter adjusted EBITDA was $24,000,000 or 25% of net sales compared to $20,000,000 or 23% of net sales in the prior year period. In addition to the highest ever quarterly sales in this company’s history, our second quarter adjusted EBITDA was also a new record and a testament to the work our team has done to scale our business as we continue to grow our wound and surgical footprints. Turning to our liquidity. We had $119,000,000 of cash and cash equivalents on 06/30/2025, a sequential increase of over $12,000,000 During the second quarter, we generated free cash flow of $14,000,000 representing a sequential step up of $9,000,000 compared to the first quarter. In turn, our net cash balance now sits at about $100,000,000 up from $88,000,000 just last quarter and also double our $50,000,000 net cash balance from just a year ago.

We continue to pursue several opportunities to deploy our strong balance sheet and borrowing capacity on growth opportunities that support our strategic priorities. I will now turn the call back to Joe. Joe?

Joe Capper, Chief Executive Officer, MiMedx: Thanks, Doug. As you’ve just heard, we had an outstanding quarter, and MiMedx is well positioned to have a terrific secondhand. Importantly, we are in an even better position to excel once the industry resets to the proposed more orderly reimbursement guidelines. We set record highs for revenue and adjusted EBITDA with strong growth in both wound care and surgical businesses. We continue to generate strong cash flow.

We kicked off a few pilot programs to co market complementary solutions in the wound care market and increased our guidance meaningfully to reflect our strong momentum. In closing, I would like to sincerely thank the Mimetics team for an outstanding quarterly performance and for your unwavering commitment to the company and to the many individuals who rely on our products each and every day. With that, I’d like

Conference Operator: to open the call to

Joe Capper, Chief Executive Officer, MiMedx: questions. Operator, we are now ready for our first question. Please proceed.

Conference Operator: Thank you. We’ll now be conducting a question and answer session. Your line is now live.

Chase, Analyst: Good afternoon, guys. Congrats on the nice quarter here. Joe, maybe first, would love to get your thoughts on kind of how you see this market post reimbursement change. It’s certainly going to come down a bit as that $12,000,000,000 of spend is reduced. If we assume the $125 sticks and there’s, call it, limited product discounting, do you guys have a first blush estimate on kind of the skin submarket size across physician office and HOPD together that you’d be willing to share?

Conference Operator: Chase, first of let me

Joe Capper, Chief Executive Officer, MiMedx: start with a couple of high level comments. I think as I stated in the prepared remarks, we welcome this change, and we firmly believe it will be better for Himetics long term. Number two, reform was inevitable. We can all agree hopefully, we can all agree that things have got completely out of control, and reform is a good thing for not just U. S.

Taxpayers but our industry and for Medicare beneficiaries. Number three, the fee schedules are the proper mechanism to address pricing. Number four, fixed pricing is a better way to reimburse skin substitutes than either the ASP methodology or bundling. We can debate the most appropriate price point, but the fixed price method is a better methodology. Number five, the future state is certainly better for MiMedx in the long run.

Why am I so confident about that? We have the most robust evidence in support of our technology. So when we are back to competing with product efficacy, we feel very confident in our ability to prevail. When the market is acting rationally, we win, as evidenced by our double digit growth in the surgical market, where we do not compete primarily on price. Instead, product performance typically drives the decision.

And next, we’re a fully integrated company. We have our own donor network, our own manufacturing, again, the best evidence and the most evidence, and our own high performing direct commercial organization. While there may be some short term choppiness in the industry as things adjust, again, we’re well positioned to compete relative to our peer group, certainly in the long term. We have full access to all care settings. We have the most private insurance coverage, which is important for Medicare co pays.

And we’re certainly going to be in a position to pick up share, and we have the capacity to handle any ramp of share. So again, we’re certainly going to advocate for clarification on some of the rules as well as certain modification. But again, when the market is active, Rationally, it’s better for us.

Conference Operator: We’re going

Joe Capper, Chief Executive Officer, MiMedx: to win. It’s certainly better for the industry. The industry becomes more investable. And last, we also have an excellent balance sheet, which provides us maximum flexibility as the industry goes through some change. Your second part of your question in terms of market size, it’s just too early to tell, right?

So obviously, we’ve done a lot of internal sensitivity modeling at this price and at a range of prices and certainly a range of volume levels. So again, we’re pretty confident we’re going to pick up a fair amount of share. Suffice it to say,

Conference Operator: we feel very comfortable that we’re going

Joe Capper, Chief Executive Officer, MiMedx: to be able to compete regardless of how these rules ultimately shake out.

Chase, Analyst: That’s helpful. Maybe kind of another one along those lines, just as it relates to kind of your model specifically. Kind of based off your ASP today, is there a way that we can kind of think about if we assume the sticks again, how we should kind of think about the dollar impact that you’ll need to make up with volume? And then just can you kind of speak to your confidence level that with all those points you just made that you can kind of take enough share next year to kind of counteract any headwind that would be there and then grow and to be able to grow wound in 2026? I’m just kind of trying to get some initial thoughts on our model next year.

Thanks.

Joe Capper, Chief Executive Officer, MiMedx: Yes. We’re super confident we can do it. And again, clearly, we’re doing a lot of modeling around this. But I would say kind of high levels, we would have to pick up some share, but not a ton, right? And so if we these price levels are not foreign to us.

If you go back and look at what our average pricing was a few years ago, we’re not that far off. Obviously, ASPs crept up a little bit with the introduction of some new products, but we’re in really good shape.

Chase, Analyst: Got it. And just last for me. Just on epi effect, is there a time line that we can kind of think of for that readout as we have the LCD potentially still going into effect next year? Just kind of a little bit more specific on that readout, if you would.

Joe Capper, Chief Executive Officer, MiMedx: Yes. Hopefully, later this year, we’re going to have some good data to take a look at. The RCT is going a little bit slower than we had hoped for, probably because there’s 1,000,000 of these things being run at the same time, there’s capacity issues to run RCTs in the marketplace. There’s only so many patients, only so many doctors that are qualified to participate in studies like this. So we’re moving forward, we’re making traction.

But knock wood, hopefully, we’ll have something to report out by the end of the year. Good news is we have two really high performing products that are already on the list of DLCs go through as proposed.

Chase, Analyst: Great. Thanks, Joe.

Joe Capper, Chief Executive Officer, MiMedx: Yes.

Conference Operator: Thank you. Next question today is coming from Carl Byrnes from Northland Capital Markets. Your line is now live.

Doug Rice, Chief Financial Officer, MiMedx: Thanks for the question. Congratulations on the results. I’m wondering if you have any feel for CMS’ flexibility maybe in the comment period on the single fixed rate of $125.38 In other words, I mean, would expect that that might and should migrate higher, but sort of what is your anticipation with that process? And then I have

Conference Operator: a follow-up as well. Yes.

Joe Capper, Chief Executive Officer, MiMedx: Carl can’t handicap it. Have they done it in the past? Yes. They’ve made modifications throughout or I would say as a result of comments, but can’t handicap it, right? I’m sure there’s a lot of logic that went into the price point that they selected.

There’s a lot of pricing available in the market that would direct them to kind of settle in on a price like this. But we’ll provide our comments and some recommendations on other ways to look at it as I’m sure a lot of other stakeholders in the market will. So but I’m not going to handicap whether or not it’s this price or at some price point higher or how much higher. I think it’s impossible for any of us to know at this point.

Doug Rice, Chief Financial Officer, MiMedx: Fair enough. And then a follow-up. The potential for the LCDs to become effective in January 26, do you would you foresee any anomalies in stocking given that you’ve got two of the 15 products that will be eligible? Thanks.

Joe Capper, Chief Executive Officer, MiMedx: Yes. It’s a good question, right? And that’s something that we’re going to stay on really close to as we start to close out the calendar year. We’ll monitor kind of inventory levels very, very closely. And clearly, we’re going to have more clarity as we get closer to the end of the year whether or not LCDs are going to effect and what the final price point is and the final rules associated with OPPS and the physician fee schedule.

So we’ll just watch it as tight as we can. As far as pre stocking, etcetera, I don’t know yet. We’ll have to wait and see. Let me just say, look, we’ve been managing inventory closely as we rotate products in and off the market for years. So we know how to do this.

And we’ve had to do it for a long term because we’re operating under the ASP methodology, which requires you to manage inventory a whole lot tighter. So I wouldn’t I’m not that concerned about it, but it is something we will watch incredibly closely as we close out the year.

Doug Rice, Chief Financial Officer, MiMedx: Karl, this is Doug. I would also add, we’ve already done this a couple of times as we are gearing up for the February LCDs to take effect that got delayed until April. We were prepared at that time. So you’ve seen us with our balance sheet and our capital wherewithal, we’ve been able to invest in carrying a little bit more inventory. And with our capacity and the strength of our donor recovery network and the other items that Joe articulated a second ago, we feel like we’re in a good position to be prepared.

Thank you. That’s very helpful. I’ll hop back in the queue. Thanks.

Conference Operator: You. Our next question is coming from Ross Osborne from Cantor Fitzgerald. Your line is now live.

Carl Byrnes, Analyst, Northland Capital Markets: Hey, guys. Congrats on a strong quarter and thanks for taking our questions.

Chase, Analyst: So starting off, maybe wanted

Carl Byrnes, Analyst, Northland Capital Markets: to put a finer point on the market next year, assuming the PFS goes through as proposed, where is the low hanging fruit for you guys to take share? And as a follow-up to that, curious to hear your thoughts on the opportunity on the mobile side of things.

Conference Operator: What was the last part of that

Joe Capper, Chief Executive Officer, MiMedx: opportunity where?

Carl Byrnes, Analyst, Northland Capital Markets: On the mobile wound care market, with the proposed price, assuming a lot of those players will go away, curious to hear if that’s an attractive market opportunity for you all.

Joe Capper, Chief Executive Officer, MiMedx: Yes. I don’t want to really want to speak for the mobile wound care sites. I will let me just put it this way. In ComEd, we’re going to support providers as much as possible. And one of the things that we will advocate strongly for is a higher application fee for providers.

But we would like to see them get paid more for what they’re doing. I do think that the circumstances we are in now partly created because they weren’t getting paid properly for what they were doing. So frankly, were living off margin that they could get on skin subs, which is not a healthy way to pay physicians for what they’re doing. So we will advocate strongly for that. And again, I think it’s a much better way to go.

In terms of what and I think the mobile health market will be affected or will be impacted a bit more as a result of that. So hopefully, they could be compensated properly for the work that they’re doing. Because I think it’s a very important segment that’s developed over the years and likely reaching more patients. Patients that frankly wouldn’t get the care necessary, sort of having that site of service available. What was the first part of your question?

We’ll hang it through. Yes, I’m not going to talk about that. We think we could pick up market share

Doug Rice, Chief Financial Officer, MiMedx: in a

Joe Capper, Chief Executive Officer, MiMedx: variety of different ways. I think we’re in every site of care you can imagine, some are stronger than others. But I think there’s going to be migration from one care setting to another. So we’re going to make sure that we’re well positioned in every one of those care settings. But in terms of like tactically where we think we’ll compete best, I’d rather keep that to ourselves.

Carl Byrnes, Analyst, Northland Capital Markets: Yes, fair enough. And then lastly, regarding the LCD, any feedback or conversations with the MAX, curious to hear probability that ends up going through?

Joe Capper, Chief Executive Officer, MiMedx: Yes. I think that’s been a little quieter as naturally, last word last official word was they were delayed for a Gen one implementation. And we still have all the same advocates and advisors, and we’ll try to get our position heard. But I think it’s important to note that even if the LCDs went into effect back in February or in April, we still would have needed this action by CMS. Because again, the proper way to regulate pricing is through the fee schedules.

So this step would have had to happen. As far as putting requirements in for to prove clinical efficacy like RCTs, that’s it’s hard to argue that that’s not a good thing for healthcare, right, to prove that your products are clinically viable to be marketed. How that requirement comes into play remains to be seen, whether it’s through the MAX, whether it’s through FDA. But it’s hard to argue that that’s not a good thing for health care.

Carl Byrnes, Analyst, Northland Capital Markets: Thanks for taking our questions.

Conference Operator: Thanks, Ross. Thank you. Next question today is coming from Anthony Petrone from Mizuho Group. Your line is now live.

Ross Osborne, Analyst, Cantor Fitzgerald: Thanks and congrats on a strong quarter. Maybe I’ll stick on physician fee schedule and hospital outpatient and just have a follow-up on core wound care. Maybe one of the nuances in there Joe was on the distinction of level one, two and three classification of wounds and I think there was basically a linkage into or at least a read through there on max utilization based on that classification. So maybe walk us through that a little bit and maybe bridge that to what is the actual mix of patients that are getting treated according to those classifications? And does that present any risk to volumes?

And then I’ll have one quick follow-up.

Conference Operator: Well, as far as like impact on volumes, etcetera,

Joe Capper, Chief Executive Officer, MiMedx: it’s too get too early to tell. We need more clarification on that. I think what they attempted to do is recognize that there’s different regulatory pathways that are established and potentially setting tiers or categories, however you want to look at it. But at least at First Pass, they recognize it but set the price per square centimeter to be the same for all three. And so we’re working closely with or I would say, advocating strongly on the regulatory side as well.

We think some changes need to take place on the regulatory side.

Ross Osborne, Analyst, Cantor Fitzgerald: Okay. And then the broader question is Joe, you’ve been great in just calling out the expansion of billing in the category to $1,000,000,000 a month. And obviously a lot of players in here, there’s still the 17 approved products on the LCD side. And so just any updated thoughts on the shakeout as we finalize potentially physician fee schedule and outpatient to a final rule, but also these LCDs come in. How much of that $1,000,000,000 per month do you think goes away?

And then ultimately where can MiMedix kind of land in terms of share here? Yes.

Joe Capper, Chief Executive Officer, MiMedx: I think we’re speculating, right? But it’s safe to say that a fair amount of that goes away. First of all, even if all all the current volume was at the lower price point, by definition, the math changes and the market is smaller in terms of total dollars in the market. But I think it’s also safe to say that some of that volume is going to disappear because there was probably a fair amount of overutilization, right? And you don’t have to take my word for that.

There’s been numerous enforcement actions that announced already. I think there was another one announced today. I think you’re going to this is going to be on the DOJ work list for probably the next decade. We’re going to be reading about these things. So there was a ton of bad behavior.

And typically, that means overutilization. So my guess is some of the volume goes away and certainly, price gets adjusted down. We know that it’s a sizable market because we competed in this market very effectively before we saw this run up. And even if we adjust back to you can kind adjust those old volume levels just for demographics, and it’s going be a pretty sizable market, right? So we’re very comfortable.

And I’ve said it numerous times, in a rational marketplace where providers are selecting product based on product performance, safety and efficacy, we’re going to win those battles. We have in the past, and we will continue to win those.

Conference Operator: Thank you. Thank you. Our next question is coming from Karl Burns, a follow-up from Northland Capital Markets. Your line is now live.

Doug Rice, Chief Financial Officer, MiMedx: Thanks for the follow-up. With respect to the partnership, when would it be realistic to see a material contribution?

Carl Byrnes, Analyst, Northland Capital Markets: Thanks.

Joe Capper, Chief Executive Officer, MiMedx: Not anywhere in the near term, Carl. I mean, it’s a collaboration. We still have to work out some of the details in terms of how we’ll work together. But if something hitting our numbers, that won’t be for a while. Not you won’t see anything until next year.

Great. Thanks.

Conference Operator: Thank you. We’ve reached the end of our question and answer session. I’d like to turn the floor back over for any further or closing comments.

Joe Capper, Chief Executive Officer, MiMedx: Thanks, operator. Thanks, everybody, for joining today’s call. Appreciate your interest in the company. We’ll talk to you next quarter.

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