MiMedx: Regenerative Gains

11/18/2014 7:00 am EST

Focus: STOCKS

James Oberweis

President, Oberweis Asset Management, Inc.

Small-cap expert Jim Oberweis, Jr. often finds intriguing opportunities that are under the radar of most investors. Here, the money manager and editor of The Oberweis Report, looks at a highly specialized play in wound care.

MiMedx (MDXG) is an integrated developer, manufacturer, and marketer of patent protected regenerative biomaterial products and bioimplants processed from human amniotic membrane.

Their biomaterial platform technologies include AmnioFix and EpiFix, their tissue technologies processed from human amniotic membrane that is derived from donated placentas.

Through their donor program, mothers delivering full-term Cesarean section births can elect in advance of delivery to donate the placenta in lieu of having it discarded as medical waste.

The company processes the human amniotic membrane utilizing their proprietary Purion Process, to produce a safe and effective implant, which is referred to as an “allograft.”

MiMedx is the leading supplier of amniotic tissue, having supplied hundreds of thousands of allografts to date for application in the Wound Care, Surgical, Sports Medicine, Ophthalmic, and Dental sectors of healthcare.

In addition to their own AmnioFix and EpiFix brands, they supply products on a private label or OEM basis. Its EpiFix allograft is designed to enhance healing of wounds, as well as to reduce inflammation and scarring.

Currently, EpiFix is being used to treat chronic wounds, including diabetic foot ulcers, venous stasis ulcers, arterial ulcers, and pressure ulcers, burns, and surgical wounds (such as wounds following plastic surgery).

The company’s AmnioFix product line is used to treat conditions such as tendonitis, including plantar fasciitis, lateral epicondylitis, and medial epicondylitis; bursitis; strains, and sprains.

In the company’s latest reported third quarter, sales increased approximately 108% to $33.5 million from $16.1 million in the third quarter of last year. MiMedx reported earnings per share of $.03 in the latest reported third quarter versus breakeven in the same quarter of last year.

Clients of Oberweis Asset Management own approximately 542,000 shares. These shares may be appropriate for risk oriented investors.

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