MDXG Stock Price Drops Significantly on MiMedx’s Announcement of Delayed Financial Results – Internal Investigation Regarding Allegations of Certain Sales and Distribution Practices
Kehoe Law Firm, P.C. is investigating claims on behalf of investors of MiMedx Group, Inc. (“MiMedx”) (NASDAQ: MDXG) to determine whether MiMedx and certain of its officers and/or directors engaged in securities fraud or other unlawful business practices.
According to its corporate profile, “MiMedx is an integrated developer, processor and marketer of patent protected and proprietary regenerative biomaterial products and bioimplants processed from human amniotic membrane and other birth tissues and human skin and bone.”
On February 20, 2018, MiMedx announced that MiMedx is postponing the release of its Q4 and FY 2017 financial results. Specifically, MiMedx issued a press release which, in relevant part, stated that the Audit Committee of MiMedx’s Board of Directors ” . . . has engaged independent legal and accounting advisors to conduct an internal investigation into current and prior-period matters relating to allegations regarding certain sales and distribution practices at [MiMedx].” Further, MiMedx advised investors that “[MiMedx] executives are also reviewing, among other items, the accounting treatment of certain distributor contracts.” (Emphasis added)
On this news, MiMedx’s stock price fell sharply during intraday trading on February 20, 2018 to close at $8.75, more than 39% lower than MiMedx’s previous closing price.
According to foxbusiness.com (“Why MiMedx Group, Inc. Is Crashing Today”):
MiMedx Group is a heavily shorted stock, so it isn’t surprising to see shares falling so hard in response to Tuesday’s news. This update also adds fuel to the long-term bear case against the company, so it is unknown how long it will take for MiMedx to regain Wall Street’s trust.
Given the uncertainty, [MDXG’s] drop does not represent an opportunity to get in. Investors who are looking for bargains in the biotech sector would probably be better served by turning their attention elsewhere. (Emphasis added)
MiMedx Group Investors and Shareholders
If you purchased, or otherwise acquired, MDXG shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].