Since OTW’s April 15th Story About MiMedX
Here’s what’s happened since we last checked in on the MiMedx brawl:
- The current board had also been seeking to delay the stockholder meeting. On May 15, the Florida court denied its plea for a stay. The board has appealed, but no date has been announced to hear it.The company wanted the delay while it completed a restatement of financials back to 2012 under Petit’s management; the audit was triggered by allegations of “channel stuffing” (shipping products not ordered and booking them as revenue). Other allegations have also emerged: bribery of federal buyers and alleged price-gouging during his reign as CEO.
- Petit has said that if there were any irregularities, they were minor and were done by rogue employees, not under management direction. His group is not alone in pursuing the three board seats.
- On May 7, Prescience Point Capital Management LLC named three candidates for the three board seats.
- Prescience Point also said it had raised its stake in MiMedx from 7.3% in April to 9.98%, just under the 10% stake which would trigger a so-called “poison pill” which the post-Petit board created. A Wall Street Journal news report on November 7 theorized that “Mr. Petit may be the potential acquirer the rights offering aims to thwart.”
- Prescience Point’s proposed directors differ starkly from Petit’s. Both of Petit’s choices are lawyers (one is also an accountant) with no prior experience either managing or directing a medical or health care company. One is a corporate tax lawyer with expertise in “complex civil litigation and commercial matters…including multi-forum litigation and risk related management,” according to Petit proxy statements. The other has experience in “tax matters related to M&A and other strategic initiatives [and] has also negotiated settlements with the Internal Revenue Service…”
- In contrast, three of Prescience Point’s four nominees (it has argued that one seat up for election in 2019 should also be filled at the June stockholder meeting) have experience building pharmaceutical, biotech, and medical device companies. Their bios are in this announcement.
- On May 15, MiMedx said in an email to us, “The MiMedx Board has not yet announced its slate of directors,” but the company does plan to have its own candidates.
- Another big new stockholder lurks silently. An investment fund, MAK Capital One of New York City, reported on April 18 that it owned 5.2% of MiMedx as of April 9. MAK didn’t respond to our query asking about its intentions.
- On May 9, MiMedx announce that it had replaced its interim CEO, David Coles, whose expertise was helping stressed companies, with Timothy R. Wright, effective May 13. Wright has 30+ years’ experience as an executive in the pharmaceutical, biotech and medical devices industries. MiMedx said.
- The fact that Wright is replacing Coles before both the financial restatements and the stockholder meeting might be interpreted as a board effort to counter arguments made by both the Petit and Prescience Point groups that the company needs new, strong strategic leadership. The company said:
“We are confident that Tim’s business, operations, sales and scientific acumen make him the right person to lead MiMedx forward on a trajectory of ethical and sustained growth. Furthermore, Tim’s experience working with companies that operate in a regulated space is directly relevant to our business going forward.”
