If money talks, the stock market said this on May 30 about MiMedx, the embattled wound-care allograft company:
Stock Market to Pete: “Get Lost”
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“Welcome, Prescience Point Capital Management Inc. Welcome, Dr. Wilsey. Uh, Parker (Pete) Petit…not so welcome.”
Here’s What Happened
The background: As followers of this never-ending story know MiMedx’s founder and former CEO Pete Petit was booted out by the board last summer amid allegations of years of improper revenue recognition and investigations by the Department of Veterans Affairs (VA), Department of Defense (DOD), Justice Department (DOJ), and Securities and Exchange Commission (SEC).
Petit filed paperwork in April nominating himself and two allies for seats on the board of directors at a long-delayed 2018 stockholder meeting coming up on June 17, and more recently, added a bid to have another election of three more board members July 26. If he and his allies were to win both, he’d likely be board chair and have control of the company again.
Also in April, a third force, Prescience Point and its allies, which have been accumulating shares since December and now own 9.9% of the company, nominated their own three candidates for the June 17 board seats, and a fourth in case there was a regular 2019 stockholder meeting immediately afterward.
Then, in surprise announcements on May 30, the MiMedx board and Prescience Point said that together, they would nominate six board members, and if stockholders elect their choices, they’d probably make Prescience Point’s lead board nominee, Kathleen Behrens Wilsey, the cofounder and former CEO of oncology services company KEW Group Inc., chairwoman.
The board will nominate or appoint MiMedx’s new CEO Timothy Wright; K. Todd Newton, CEO of Apollo Endosurgery Inc.; James Bierman, former CEO of medical and surgical supplies distribution company Owens & Minor Inc.; and Richard Barry, director at Elcelyx Therapeutics Inc. to board seats. They said Prescience and the board will recruit the sixth member together.
Dr. Behrens, Newton, and Barry are all Prescience Point choices. Bierman is a board choice.
Joseph W. Bleser and Larry W. Papasan will leave the board if the plan is approved by stockholders, and the size of the board will increase by one seat.
Stock Market Response to the News
MiMedx’s stock price soared from its $3.33 per share close the day before to hit $4.99 before subsiding on trader profit-taking to the $4.40-$4.50 range by midafternoon.
That $3.33 close on Wednesday, May 29, was itself a small 4% upward bump after MiMedx announced early Wednesday that it had hired an outside accounting firm. The company had previously said it was having difficulty finding an outside accountant, claiming that none of those interviewed wanted to work for the company with the possibility that Petit would return to the board.
The number of shares traded May 30 was 4,785,458 shares, seven times the average of 684,599 for the past 90 days, an indication that the announcement seems to have broad support.
Through a spokesman, Parker Petit declined to comment for this story; normally, he comments only in SEC filings and at his website; nothing had appeared in either space as of the deadline for this story.
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Discussion
This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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