MDXG - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to the MiMedx Second Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference call over to Hilary Dixon, MiMedx's Vice President of Investor Relations and Corporate Communications. ahead. go Please

Hilary Dixon

and Wright, operator Financial With today me Thank Executive good Officer; Tim Chief Chief and are you, morning. Pete Officer. Carlson,

to of also members management answer available your Additional question. senior be will

press Development. Dr. Robert I Chief want and Commercial President President also to out issued key Before we Stein as to Vice highlight releases management the Research to announcing team begin, recently senior and Dr. as Kashyap want that Executive Officer; point on filed I definitive results proxy August remind we and include XXXX two Rohit XX, statements. that during X, August issued our our Vice additions Executive and X, was that second The on will on Annual a made today's in call hold reviewing virtual format. on website. to August statement our like and available I'd announced also XXXX press you is Shareholders financial Meeting our forward-looking remarks XXXX of that release we quarter we

actual forth forward-looking of cause Principles as the to EBITDA obligation are calculated the GAAP. quarterly to financial outcomes will many Reconciliations and release this annual presented Although the that, EBITDA company that in our and except with reasonable to financial and anticipated measures, the and report Executive Investor materially with Accounting measures, materially comparable or in and GAAP statements, to the such to non-GAAP those to the factors outcomes report The of or not XXXX those such by are portion Officer, in reflected press Listeners required forward-looking could MiMedx's results set and Tim turn XXXX second call assumes over earnings on for update references quarter adjusted on XX-K, actual assumptions, based reflected law. in Form results that Chief Relations certain statements Form from statement. on XX-Q available from expectations no differ Wright. are accordance the to and I'm forward-looking call risk may in pleased upon Accepted are also MiMedx, risks measures adjusted due uncertainties differ believes to margin directed factors Generally factors. as the subject the accordance company website. most calculated in include any to This are supplement With that

Tim Wright

I requirements, quarter you, thank Thank Hilary. to MiMedx's could milestone be Form the second quarterly time everyone And pleased say MiMedx that company. current more annual filing represents us morning. the filed call XX-Q a has XXXX our reporting since report. joining an financial its you the on that significant to timely or this not and first It's for

our build team, the matters, of company's refining financial company, management priorities to the Over leadership have products, of compliance the the discretion restore capable in growth FDA's and is pipeline. my those resolution cohesive the integrity approach team. the regulatory tissue the of progressing and past in been steps year, priorities primary our enforcement a company's strengthening our advancing for cell legal around refine and and the human Each guidance next future with

We both MiMedx well leaders. to are highly regarded attracted are have whom high seasoned fortunate to of two performing executives

medical XX years transforming of brings of more product market wounds diseases record such clinical delivering and device and Dr. communicate track high MiMedx portfolios successful strategic can drive such his Officer. and breadth in Rohit First, awareness growth a and growth MiMedx Kashyap of Vice Dr. as leader cause and with building, teams. we with and Commercial developing and late diabetes President experience Executive confident he a and global the performance will healthcare to track growing than July, Chief experience is difficult systems. I'm the Dr. with operations Kashyap commercial that deliver in announced wounds for joining business, brands, solid impact portfolio. building that record industry Kashyap accomplished as an prevalence for our creation and models to value product in-market patients commercial our strategies and chronic expand with market experience, heal economic to will of value of that of and

is registration medical Second, development, for Bob eight years numerous and He biology, things. President other and and will drug companies. more and more biochemistry, our XX and as animal XX Stein his pharmaceutical marketed of Executive accomplishments and pipeline in drugs groups pharmacology, Noted yesterday Dr. significant particularly Dr. in biotech Research than lead of and his assessment, in in and areas of the Dr. and areas. across therapeutic research metabolism, for contributor MiMedx for we of welcomed priorities. multiple broadly contributions sciences. years as major respected led Vice expertise development has Bob a experience regarded among lead cellular to Stein Stein, of molecular industry than and product scientists of and phases large He the Development. product known discovery and is in physicians development, safety supervised highly brings served

guidance. and the executives in our the with to advancing of with a to the over promise In company of addition, Adding recent The committed science science, demonstrates in and extensive technology science team care and to pleased registration they tissue category and formation in extensive demonstrating we regenerative need. value care share commitment that development the access Dr. have experience two our rigor advance year tremendous to to our transition new advanced these holds leaders, past the advance the is brings of qualified responsibility of regulatory Scientific Stein's our strengthening and wound along Advisory placenta-based the accelerate industry our patients can registration. necessary will highly honor He include attracted of expertise to to FDA category so I'm the of pipeline line the Board. leadership

over to the products employee and of MiMedx expand me restore, organization the in or act upcoming stakeholders, category training why Shareholders. I introducing virtually XXXX differentiate I look team science. also Annual of this our came whether a management on team the potential formidable the is to existing forward for and strategically, senior to at they're MiMedx, lead Our year meaningful tissue innovation with leaders I joined the an Meeting the and these and leadership to the our within allow to to those roles, transform our leadership into or have talent our an experience a stepped both past It from future who skills, you When joining company is in why order possess to integrity patient make investor, difference all came. reshape, this.

in sets areas, studying to apart the growth process And rigorous for a Our wound useful products not human platform but from care that whole. a are today. in her us and such medical advanced derived create is to placenta is The system in placenta the which mother clinic as through the donate MiMedx, other products to wound placenta develop healing. biological consents care applications innovative possibility What are and the supports a purposes. a whereby as sophisticated category musculoskeletal we transform only

Our placental utility other experience in the properties wound of guide tissue understanding and applications. in our care of can

reinforces we uses the science our and the products company, opportunity science-based the form safety efficacy the platform to and responsibility science and a As placental potential that have of advance the technology. to

the We in in value investing primary commercial research potential. manufacturing company's place have in growth that cGMP realize are and the our organization, excellence. We to drivers in leaders believe development as for now operational we

Now, let me impact the turn of the COVID-XX on to business.

across business. indicators We key the continue to monitor performance closely

indicators across towards Some a the recovery, ability country. sites do company The significant the has care although there uncertainty. pandemic is impacted various of ongoing access to point still

across you. stayed the of areas and in extension discretion of I'd additional FDA Administration facilities. FDA. in month, away from announced his continue its in the cellular the presented warranted clinical cells, recruiting participants the XXXX or shortly policy FDA Drug and public extension conducting in Food industry. during health Pete This patients trials discussion enforcement and from clinical will challenges away, some XX, the like COVID-XX to address As products Last U.S. and enforcement and stay the details the light an tissues, other tissue-based recent by and applies medical pandemic. human is provide The extension to the trial outline XX, of to in May unique hospitals in November emergency discretion with XXXX.

the application. that we IND required the in FDA to criteria products to or to they if to marking give if drug investigational manufacturers determine the IND And deadline, not submit new application. and Although, an the time the intent or state marketing application extending FDA produced, applied is those an additional prepare its on like views did tissue the its to regulatory developed did based change need

welcome with important including the guidance with further proactive the towards on to clarify and agency, FDA therapeutic manufacturing that cGMP, implementation quality Now manufacturing and of previously or advancement strengthen the improvements the work support continue includes of matters, communications leader we'll as we This the discretion with a standards on the increased this FDA's and the proposals agency. the to to dialogue enforcement and category, proactively well systems of pipeline compliance MiMedx in IND that our processes practices our and described. way the we've of INDs company's its advancements additional filing with along clinical studies. of is regulatory

continued enforcement discretion drive extension does aggressively period, transition products the compliance our affect appreciate of While to to biological we with not our FDA's pipeline the standards. within extension

and purity, We and a to rigorous manufacturing identity process chemistry, are focus consistency advancing reliability test on and demonstrate manufacturing through the controls. potency our of

trials We our are our safety IND and patients enroll the of continuing to demonstrate to in efficacy products.

month, completed corrective XXXX FDA's December last have all XX we responded noted from actions. the committed As observations to and

to Timing and/or meetings dependent and with We next upon outline FDA this progress the proposed availability. clinical in for trials to view feedback are schedule the with steps. FDA face our our will ongoing preparing be

of in the to results. to file would industry, compliance the standards. standards evaluated you our the provide our and placental other in this for with to necessary matrix treatment on a products I our our are overview which reach tissue with These turn standard outline actions regulatory micronized regulatory commenced companies by and that being guidance in financial like adopt care moving in to have injectable impacts. similar call transition the We the fully focus placental now tissue range our support forward the biological standards steps of who Pete demonstrate product Carlson, expeditiously and they to encourage product I INDs patient. of of to over before the to this we're from broad sector elevate of

Pete Carlson

the continue five thank and statements, to financial position goals has reporting five company point Thank you, we past MiMedx of the Tim controls talk practice Tim. are reasons we Good our the discussed a you reestablish in help systems. at for morning, and regular pleased for basis. today. in These us on quality more with company raise our filed to the noted taking at am XX-Q's. and everyone. for In the his transparently demonstrate we about I audited here of bar company growth the the XX-Ks a joining action, the timely months, And the transparency operating I two information team. joined on the the of to as that milestones can financial leadership role where business

a Now, and let COVID-XX commitment and for me employees minute our take diligence and second results the managers responsibility, our pandemic. to about during thank particularly their talk quarter

of receipts XXXX quarter recognized sales $XX.X families. patients impact XX, efficiently period and same to solutions to we the were our recognized for shift actions a the for containment quarter as product decrease second service been the primarily operating efforts The basis, and on in on a is and ensure pandemic cost have sales access our have to Our and cash on net support and Net the XX.X% offset sales. XXXX, million ended continue customers effective effective for compared an for June business our basis. helped

revenue on the cash on companies. Form a the an is October similar reminder, forward, primarily consistent from basis XX, From shift treatment with XXXX most As a January to was recognized revenue XX, recognized basis X XX-K. in XXXX, September to as XXXX

physician including $X.X affected COVID-XX and million For of office notes read and elective XX, loss settings. in-patient, the more transition revenue the cancellations encourage net procedures. service, many in second product in and resulted includes the our primarily across you hospital for June methodology company's related of in the of restatement the the multiple sales for recognition sites quarter Consistent the included materially information. quarter million, September prior revenue collected in address lines which cash the related companies at $X.X applications sector, ended XXXX XXXX. sales causing this many XXXX to for to financial across decrease I expenses. million all was XX, hospital to restrictions postponements minute. I out-patient, and statements of investigation more The impacted made from product to Net a will $XX.X pandemic,

Our was improvement adjusted XXXX of $XX.X EBITDA in million, the volume. despite second lower over quarter XXXX sales an

in the second expense You the the compared of was salaries, Commissions or driven expenses the the of part the a second second and quarter second travel, to XX.X%, adjusted and sales, of the XXXX. mitigating was at XXXX also aimed quarter for see where XX.X% XX.X%, management this COVID-XX and second year, expenses prior XXXX. of pandemic. XX.X% the with Selling of The in Lower margin as quarter decrease the to quarter was part in or decreased XXXX in of other impact percent by the to quarter administrative decrease Gross SG&A margin $X.X temporary in in compared compared second in our the to decrease quarter relatively SG&A. general XXXX. in contributed consistent million, the of XX.X%, of EBITDA

the of consulting containment were quarter we will year. many related because and in the cost this these In and $X implemented note of temporary, the the SG&A were covered company. year-over-year company initiatives to I restatement increase of rest category. expect that expenses almost actions across lower the reported accounting SG&A not legal, a expenses in decrease of addition, million investigation expense and

However, going increase costs. our do can normal forward, run in we leverage rate that anticipate an with sales, operating we

company investigation were for restatement coverage the related of Officers. received As results former I the second litigation Directors $XX.X to for a is a mentioned, former and and million expenses the related current from quarter benefit involving Included million. quarter payments $X in its and insurance

second costs in filing the ended XXXX the investigation Form our July. completed the of in in filings, committee quarter restatement indicated essentially in early XXXX. the As audit was And the with XX-K

relate stemming the such, category this can from to As be remaining investigation, three into legal classified committee buckets. audit in costs which matters the

legal which for named. services company for expenses isn't the First, in matters

to with commitments matters. for for and MiMedx. costs if legal officers resolution incurred directors And related those time Second cost former any, has trial of quarter clinical development $X.X expenses the million the the XXXX other results their current third, for quarter involved former in indemnification and companies, and Research reflect this. for and were matters our second under COVID-XX affected to enrollment similar

these companies, down as help our April in the and pandemic growth and commercial XXXX The are May expects our the Net volume. a country future highest. the the understand to to XXXX, sales expenses Kashyap data, on sales areas and that the infection sales Beginning time, health demand, pandemic is to and that of care to our product April country, that while and pipeline. rates Stein sales. elective efficacy sales line future impact supportive down early company's with future were visit the of compared and of while COVID-XX and our severity on the some That and where particular in or care, that on again to the postpone May XXXX areas of many portfolio being in compared on portion trends were across future put said, future monthly year in of However, demonstrate our with depend belief The line the net reasonably respectively, economic development to in preclinical sales or financial in country, and estimate the on prior internal core do year, research objectives. and research, XXXX We the clinical impact on net including willingness been invest and cannot ability development, are a July, in Like of place significantly research June, sales to have need the net procedures for products. ago. July, over pay of in for company's certain of larger patients net sales in behavior, restrictions additional contribute Dr. future company COVID-XX the effect clinical forces, to of the caution XXXX in access scientific leadership July, we healthcare depending patient one pandemic will to sales. increase the outbreak consistent were we providers costs limit providers including XXXX, category commitment of basis, and investment additions operations in in providers, additional waves

actions resilient And public wounds our to Unfortunately, policy. supply. the wounds resources actions remained able the people where federal an needed workforce accordance inventory urgency medical when urgency donor of build with to will care have have people and their health treating collections continue not in consistent local Our protect the receive ensure recovery throughout and to set that take management adjust to now, for to reflecting safety health pandemic, with of we state greater even those face and and unhealed possible sources later. that

working for are ensure our we patients. to customers that in ready caring are We these support to

are back Tim we that upcoming for process I have remind it event initiated beginning Before common will of occur discuss the milestones, will quarter. the the I to optimistic our relisting you before that communication stock the and fourth this turn to

With the to interest we members over encouraged back volume our in that, I community. financial of We over stock forward I with turn the that and Tim. increasing to metric liquidity progress. trading you look reengagement important to month call has the and on market are of are our note an past our will updating grown

Tim Wright

Thank you, Pete.

our also that the and Annual vision Shareholders hold of week, interest our next are at filing are By on be meeting, efforts we that over of we this Meeting progress the of XXXX have of plan of our to our going several the XXXX month August Meeting for us. the ahead of there. and we end where how where achieve we for share measurable best statement everybody. XX. the of we in tell along we will will scheduled work year, the will virtually we've our proxy saw The meeting end meeting, you years, to the outline held in get we At plan Annual last with As At safety to you Shareholders.

products effective the platform technology millions needs pipeline heal a wounds, patient tissue of is have multiple address promise and tremendous with We The with to as chronic difficult to promising our suffer people of technology a science and potential applications. so unmet regenerative culture, across category who holds for new to is that to and company's the realizing excellence The patients the and demonstrate access category transforming value and they the company is significantly MiMedx instilling care experienced need. potential. and advance science the our across under leadership operational value team can dedicated commitment

to continue our moving patients, and resiliency, forward. restore or focus business enhance take financial We the our and reputation integrity company's actions on that

questions. We take up will now your

Operator

Our first from is question question. [Operator Instructions] with [indiscernible]. Please proceed your

Unidentified Analyst

This is Ed.

XX-K both significant group. the knee, fasciitis treatment most control plantar OA trials, you of showed which Your between separation results recent your the preliminary promising disclosed guys and and

scientists other making personnel? you on credible and major highly dollar could treatments potentially the articulate of now value We're company base hire the value the Our revolutionize company? highly case the adding with to billions assessment of of pipeline? is in the encouraged the by alone, Can of your through an assortment investments of the that degenerative musculoskeletal disorders, the the potential OA pipeline pipeline

Tim Wright

of We're in be is know do share prepared the that August on market. case base position on share we shareholder that characterized upside a with case I believe the well a to not Yes, in or meeting with this. our you as knee you everyone. osteoarthritis to XX today a will

Operator

management end closing I'll over of And session, remarks. for and turn call reached the we the have now to question-and-answer the

Tim Wright

us joining you Thank today. for

caller. another have We

Operator

question. a question with [Brian your have Please We with [indiscernible]. from proceed Finn]

Unidentified Analyst

incremental years, know, on getting a share. the market winning on all a those are guys care sort done do you months question fronts. like can that of I had here. to over of nine had market competing share the Congrats and again basically market? And defense over next six you've guess seems you the of point you. distractions to the play I variety back kind last And wound What fact here two the everything to things are this at on start within behind

Pete Carlson

Brian, good Carlson. It's morning. Pete

two about As we business. the our think between growth components splitted opportunities really of

As size people to still we related just of market to we to need we some refer of understanding what the and and plan the in granular our as an injectable to give do near term, mentioned, micronized. products collectively

XX% around runs our of that business. so And

that what in if we and think think four the act about us XX% ways, growth tissue to skin you So are you're on. substitute really this going the about products, see is

high in The of is people's most advantage digits We the tend first seems ways be some single ground. that. to that on to growth can boots the take that market just growth in including multiple with agree in And we mind.

Secondly, and the there's the to think of normal an sort we biggest market the probably opportunity expand growth. we beyond opportunities, think

You'll hear talk competitor about us a or as barrier. apathy

of this and the our we our efficacy is about so to support, products. data effectiveness well educate as as more more clinical to use people And economic want where

So that's second area. the

is development. business The third

bit focus licensing term. et we or to come And cetera. many the one in to the longer then final, further opportunities [indiscernible] other admittedly talked But that that this have outside is expand on the We can do a ways, there and the we are product. believe little that area, fourth about arrangements, partnerships U.S.

about how growth, development, see. So those market, want AHRQ expanding to the can just market again four we leverage and the do how business are growth international results? opportunities you Tim, talk we areas

Tim Wright

through XX based It included skin in conducted independent discussed there that results. XX with the of we had was which This a our the agency. document. where available search study randomized met randomized of XX on were meta-analysis had criteria their AHRQ XX with controlled submissions low previous studies MiMedx briefing. many was have MiMedx conducted studies trials. randomized as in discussions clinical reviewed, XX trials commercially program. studies other another bias, only and which for are assessed that inclusion an yielding Only the substitutes you of as seats trials Other was final of literature risk of included control AHRQ controlled one the XXX this five say on were basically those Yes, of the was XX calls, XX conducted a

amniotic were other risk had a AHRQ most assessed finding. randomized of The XX risk products the bias first and was control moderate had This membrane of as assessment wounds. statistically bias. the chronic EpiFix that to of reviewed have low for the treatment noted and significant trials was a overall

conclusion needed studies the assessment commit additional in and of of XXXX This standard the elevate course, Of we the fully strategy our is demonstrate is and to perfect support. that care with to in which operational alignment excellence overall are category our leadership.

Pete Carlson

And importance also us Thanks And work will think help growth information with go-to-market will talked that to think people of we're forward those Brian, opportunities our that's we the conclude and understand just product. on working of about. we type data the Tim. help we other

Operator

session. end hand over to the remarks. is for we'll that And our of question-and-answer closing management it And

Tim Wright

this call. joining important for you us Thank today for

forward We Unfortunately, possible. we where ongoing able earlier, conference and support. new with to We're appreciate this be our members team your we introducing you video face-to-face dialogue. our via outreach the increasing our looking to Thank calls you. not transparent the of of be noted preference. continued management goal interest and be creating financial As will will meet to community would

Operator

your participation. end reached this have today's lines Thank of conference, We and you at for may time. the your disconnect you

MiMedx (MDXG) 11 Aug 202020 Q2 Earnings call transcript