Under Pressure: MiMedx Faces an Uncertain Future

An internal investigation has thrown MiMedx into a state of uncertainty. The Marietta, GA-based company said Tuesday it is postponing the release of its financial results and the filing of its Form 10-K for 2017, while independent legal and accounting advisors investigate allegations regarding the company's sales and distribution practices at the company. MiMedx said its executives are also reviewing the accounting treatment of certain distributor contracts.  The company's stock (Nasdaq: MDXG) fell 39.53% Tuesday, closing at $8.75, and at least one analyst decided to downgrade the stock citing "too much uncertainty." If the investigation doesn't find any wrongdoing, MiMedx shares are likely to bounce back, said Mike Matson of Needham & Co. "And if the investigation does find serious issues, we think it could result in further turmoil, potentially including management changes, SEC fines/penalties, and other issues which could drive shares down further," Matson said in a report published Tuesday. "Timing of the investigation is hard to predict but we suspect it will last several months or longer." Matson said MiMedx could become an acquisition target, but that is "highly unlikely" until the accounting issues and SEC investigation are resolved. MiMedx said the outcome of the investigation is not expected to have a material impact on revenue guidance for 2018. The company said it had about $33 million in unaudited cash and cash equivalents as of Dec. 31, 2017. The company...
Source: MDDI - Category: Medical Devices Authors: Tags: Medical Device Business Source Type: news