MiMedx Group Inc (NASDAQ:MDXG) shares gained nearly 3% after-hours today following the company announcement, according to which it is strategically realigning to focus on accelerating growth in its Wound & Surgical business.
As part of this realignment, MiMedx is suspending its Knee Osteoarthritis (KOA) program and is disbanding its Regenerative Medicine business unit, effective immediately. The CEO assures that the decision was not based on the safety or efficacy of the KOA product or confidence in their team’s ability but on market changes and capital requirements.
The realignment is expected to improve operating margins and free cash flow generation, offering more growth financing options.
“We expect one-time wind down expenses to be approximately $5 million dollars. On a pro forma basis, assuming the realignment had occurred on January 1, 2023, we expect that it would have added approximately $25 million of Adjusted EBITDA1 for the full year 2023,” said Capper.
The company raised its outlook for fiscal 2023 net sales percentage growth from the low-double digits to the mid-teens.