By Dhirendra Tripathi
Investing.com – MiMedx stock (NASDAQ:) plunged by more than 52% in Monday’s premarket after the scandal-plagued company suffered setbacks in two late-stage musculoskeletal clinical trials.
The company said in a regulatory release that its key product – the dehydrated Human Amnion Chorion Membrane (mdHACM) – failed to meet critical endpoints in two separate clinical trials: a Phase 2B trial for the treatment of Knee Osteoarthritis (KOA) and a Phase 3 clinical trial for the treatment of Plantar Fasciitis (PF).
The findings do not support an application for a biologics license in the latter case, it added. The company said it will still pursue phase-III KOA confirmatory studies.
The results are a body blow for a company that has been overshadowed by the past wrongdoings of its previous management. Former chief executive Parker Petit and chief operating officer William Taylor was sentenced to a year in jail in Februaryy after being found guilty of inflating the company’s financial statements in the middle of the last decade. The fraud had come to light in the course of a bitter public fight between Parker and short-sellers led by Mark Cohodes.
MiMedX’s product pipeline had enough support on Wall Street and in financial media such as Bloomberg Opinion to fuel a 65% rally this year.
“If the $MDXG products do not work, as evidenced by the two failed clinical trials announced this morning, then the years of arguing are done, right?” tweeted Stat News’s Adam Feuerstein.
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