Research Desk Line-up: Myomo Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 22, 2017 /Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for MiMedx Group, Inc. (NASDAQ: MDXG) ("MiMedx"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=MDGX. The Company, a global premier processor, marketer, and distributor of human amniotic tissue, announced on August 18, 2017, that it has entered into a definitive agreement with the former stockholders of Stability Inc. to divest the Company's subsidiary, Stability Biologics LLC (f/k/a Stability Inc.) back to those stockholders. MiMedx's purpose of signing this agreement is to transition into a biopharmaceutical company. For immediate access to our complimentary reports, including today's coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Medical Appliances & Equipment industry. Pro-TD has currently selected Myomo, Inc. (NYSE American: MYO) for due-diligence and potential coverage as the Company reported on August 14, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Myomo when we publish it.
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MiMedx Acquired Stability Biologics in 2016
On January 13, 2016, MiMedx completed the acquisition of Stability Biologics with a combination of cash and stock paid at closing, with future contingent consideration to be paid through a two-year earn-out arrangement.
Founded in 2010, Stability Biologics is a provider of human tissue products to surgeons, facilities, and distributors serving the surgical, spine, and orthopedics sectors of the healthcare industry. Stability Biologics is headquartered in Nashville, Tennessee and its state-of-the-art tissue processing center is located in San Antonio, Texas.
Stability Biologics to Issue Promissory Note in favor of MiMedx
The transaction is expected to close in Q3 2017. The consideration will include a promissory note issued by Stability Biologics in the principal amount of $3.5 million in favor of MiMedx. In addition, Stability Biologics is required to issue a waiver by the former stockholders of Stability Inc. of all claims and rights to the Earn-Out consideration. The Company is likely to book a one-time gain on this transaction of approximately $8 million to $10 million.
Parker H. Petit, Chief Executive Officer (CEO) of MiMedx, expressed his opinion about the recent announcement by stating the following:
MiMedx Confident to Meet Increased Revenue Guidance without Stability Biologics Contribution - The Company remains confident in its growth trajectory continuing and in its ability to meet or exceed the revenue projections set previously for 2017. In its press release made on July 26, 2017, the Company raised its annual revenue guidance to the range of $309 million to $311 million, assuming this transaction closes in Q3. MiMedx is confident to meet its increased revenue guidance for the year, even without the Stability Biologics revenue contribution in Q4.
Better ROI Opportunities Expectations in Biopharma than Cadaver Tissue Category - MiMedx focus is to become predominantly a biopharmaceutical company and expects to have better return on investment (ROI) opportunities in Biopharma compared to those in the cadaver tissue category, which is Stability Biologics' core business area. Therefore, Stability Biologics' business is not considered to be a strategic fit with MiMedx's new focus.
MiMedx to Retain Access to Stability's Sales Rep Organization via a Distributor Agreement - MiMedx's main incentive for acquiring Stability Biologics was its independent sales representative organization. The Company will retain access to this sales rep organization via a distributor agreement with Stability Biologics, as part of the transaction.
Divesture to Result in MiMedx's Improved Gross Profit & Operating Profit Margins - MiMedx will continue to demonstrate, through scientific and clinical studies and trials, the clinical and economic effectiveness of its regenerative biologics and therapies. The divesture is likely to result in improved gross profit and operating profit margins of the Company.
MiMedx Infrastructure Carefully Assembled to Pursue Biopharma Strategy
Commenting on the agreement, Bill Taylor, President and Chief Operating Officer (COO) of MiMedx, mentioned that the Company's infrastructure has been carefully adjusted and assembled to pursue the Biopharma strategy. With this new strategic focus, the long-term strategy of Stability Biologics is no longer a strategic fit for MiMedx. He added that through a new private label distribution agreement with Stability Biologics, MiMedx has retained the former's key sales relationships for the spine and orthopedics areas of its surgical business.
Last Close Stock Review
On Monday, August 21, 2017, the stock closed the trading session at $16.87, rising 2.12% from its previous closing price of $16.52. A total volume of 1.18 million shares have exchanged hands. MiMedx's stock price skyrocketed 17.73% in the last three months, 100.59% in the past six months, and 131.10% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have soared 90.41%. The stock is trading at a PE ratio of 91.19. At Monday's closing price, the stock's net capitalization stands at $1.85 billion.
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