MiMedx signs definitive agreement to divest Stability Biologics subsidiary as part of company’s strategic focus on biopharma.
MiMedx Group, Inc., a biopharmaceutical company developing and marketing regenerative and therapeutic biologics utilizing human placental tissue allografts and patent-protected processes for multiple sectors of healthcare, announced that it has signed 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.
The recent announcement by the company to transition into a biopharmaceutical company was an impetus for this divestiture initiative. Acquired by MiMedx in January 2016, Stability Biologics developed and processed bioactive bone graft products and tissue allografts including structural/particulate bone, structural allografts, demineralized bone matrix (DBM), skin products for burns and traumatic wound care, and Physio, a bone grafting material.
MiMedx acquired 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.
“We have determined that the Stability Biologics business is not a strategic fit with our new focus on becoming predominantly a biopharmaceutical company,” Parker H. Petit, MiMedx CEO, said. “While we believe the potential of Stability Biologics products continues to be significant, we expect to have better return on investment (ROI) opportunities in biopharma compared to those in the cadaver tissue category. A major incentive for the MiMedx acquisition of Stability Biologics was its independent sales representative organization. As part of the transaction, MiMedx will retain access to this sales rep organization via a distributor agreement with Stability. This group of sales reps will continue to focus on certain areas of our surgical business.”
Petit continued, “Our human placental tissue allografts are the source material for our primary asset base, which is a key technology differentiator in regenerative biologics. We are focusing our efforts on continuing down the Investigational New Drug/Biologics License Application (IND/BLA) regulatory pathways for numerous new therapeutic applications of our placental-based technology. MiMedx will continue to demonstrate, through scientific and clinical studies and trials, the clinical and economic effectiveness of our regenerative biologics and therapies. After this divesture, MiMedx’s gross profit and operating profit margins are expected to improve.”
(Source: PR Newswire)
