MiMedx Group, Inc

Ladies and gentlemen, thank you for standing by and welcome to the MiMedx third quarter 2021 operating and financial results conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Jack Haworth. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Welcome to the MiMedx Third Quarter 2021 Operating and Financial Results Conference Call. With me on today's call are Chief Executive Officer Tim Wright, Chief Financial Officer Pete Carlson, and Executive Vice President and Chief Commercial Officer Dr. Rohit Keshe. Tim and Pete will provide a summary of our operating and financial results for the quarter And at the conclusion of their remarks, Tim Peete and Dr. Kashyap will be available for your questions. Before we begin, I would like to remind you that our comments today will include forward-looking statements, including potential timelines for our ongoing clinical trials and FDA submissions and approvals, and expected market size for these products. These expectations are subject to risks and uncertainties, and actual results may differ materially from those anticipated due to many factors. Actual timing and FDA approval would depend on a number of factors, including the results of our clinical trials, our interpretation of those results, the impact of COVID-19, actions by others that affect our timelines, and other factors that the FDA deems important. Additional factors that could impact outcomes and our results include those described in the risk factors section of our annual report on Form 10-K and our quarterly reports on Form 10-Q. Also, our comments today include non-GAAP financial measures, and we provide a reconciliation to GAAP in our press release, which is available on our website at www.memetics.com. With that, I'm now pleased to turn the call over to Tim Wright. Tim?

Thank you, Jack. Good morning, everyone, and thanks for joining us on the call today. Yesterday, following the close of the financial markets, we issued a press release reporting our third quarter operating and financial results. Today, Pete and I would like to highlight three primary topics of interest to investors. Our growing commercial business and recent operating highlights, status of our detailed analysis of the top line readouts from our plantar fasciitis and knee osteoarthritis clinical studies that we reported in mid-September, and our financial resources. Pete will also discuss our financial results for the quarter. I'm extremely pleased to report third quarter net sales of 63.1 million and adjusted net sales of 62.8 million, which include a 13% increase in sales of our core portfolio of tissue and cord products versus the third quarter of 2020. Adjusted net sales of the same portfolio of products drove an impressive 16% increase year over year for the first nine months of 2021. Our expansion into surgical recovery applications, as well as continued solid execution by our commercial sales team, has placed us ahead of our 2021 top-line growth outlook of 10% plus in our tissue and cord products. We have the right people in the right places, and despite disruptions during the quarter caused by COVID-19 in two major markets, our direct and agency teams exceeded our internal expectations. Our AmnioFix brand is demonstrating utility in a number of surgical applications, and this diversified revenue growth reflects that effort. In addition, we're gaining traction with our EpiCord product line with the successful launch of an additional size targeting smaller, lower extremity wounds in a cost-effective way. Our targeted focus on growing the base acute and chronic wound care business has achieved significant growth by leveraging the strength, clinical efficacy, and the differentiation of our Purion process tissue technology. The commercial team is working aggressively to continue positive sales momentum achieved in the first nine months of this year into the fourth quarter and beyond. These positive results from our tissue and cord portfolios help support our ongoing cash flow requirements, enable investments into expanded research, product development, including portfolio innovation and expansion, as well as clinical operations initiatives. Ultimately, we are driving better outcomes for patients in need of advanced evidence-based treatment options. Turning now to two late-stage musculoskeletal clinical trials of our AmnioFix injectable product. Since announcing the top-line data in mid-September, we have been extensively reviewing the study results to determine reasons behind the observed differences between patient cohorts in the knee osteoarthritis trial. As part of our statistical analysis plan, third-party biostitians have validated the probability values, or p-values, from the Phase IIb NEOA study and substantiated both a statistically significant and clinically meaningful outcome in Western Ontario McMaster's University Osteoarthritis Index, WOMAC, total WOMAC pain and WOMAC function scores for the pre-interim analysis cohort of 190 patients, with p-values less than .05 at three months and less than .01 at six months. It is important to note the clinical improvement in all WOMAC scores for these 190 patients increased as they progressed from three-month observation to six-month observations. These results are very encouraging and lay the groundwork for future analysis and study. The positive efficacy signals, while limited to the pre-intram analysis cohort of 190 patients, provides us with important insights into our approach for our future Phase III studies, and we are confident in the therapeutic potential of Micronystee-Hackam. Prior clinical experience retrospective studies, along with our increased understanding of the product's mechanism of action, give us reason to believe moving ahead into Phase III is the right decision. We have been investigating all of the data points, testing several hypotheses that may have come into play since the study was initiated, and have engaged in dialogue with the FDA to guide our path forward. We are also working with Industry and FDA recognize leaders across the musculoskeletal community, including rheumatologists, orthopedists, and other key treaters of knee osteoarthritis, to advise in the design and execution of a contemporary, randomized, well-controlled studies that can first confirm dose, efficacy, and safety for the knee OA indication. We anticipate these studies could enroll approximately 400 to 500 patients and run concurrently. with WOMAC pain and WOMAC function as potential primary endpoints. With respect to the Phase III plantar fasciitis study, a similar effort is underway to evaluate the study results and other study-related variables that may have influenced this unexpected and puzzling outcome. Importantly, throughout both studies, amniofix injectable was found safe and well-tolerated, with observations confirmed in formal data safety monitoring boards meetings. The data from these trials continue to build upon an already strong safety database for the product. We look forward to reviewing these data and reasons for our continued optimism at our upcoming Investor Day, December 7, 2021. Clinical development of unique patient treatment options is rarely a linear process. Our leadership team is resolute in its commitment to advancing the scientific rigor of the industry and bringing innovative solutions to physicians and patients in need here in the US and in the international markets. At Memetics, we remain dedicated to advancing health economic and scientific research in order to improve patient care and outcomes. To that end, we are furthering our scientific publication strategy to reinforce the differentiation of our products and convey the clinical value of our brands. We recently announced the publication of three peer-reviewed studies designed to enhance our understanding of the mechanism of action and expand our medical education programs. Let me spend a few moments to highlight some of these findings. The first study, published in the journal Wound Care, addresses the observed impact of advanced treatment using skin substitute products and lower extremity diabetic ulcers. The data from this study provide validation that advanced wound care treatment can reduce the suffering and the expense caused by these chronic diabetic ulcers and raise the standard of care for these patients. The second study was published in Osteoarthritis in Cartilage Open. Here we identified a novel mechanism of action by which Purion process micronized eHackam regulates decorative processes in human articular chondocytes, the primary cell type comprising articular cartilage. These results further support amniofix injectable as an investigational new drug candidate for the treatment of osteoarthritis and highlight potential disease-modifying activities. The third study was published in the Journal of Biomedical Materials Research, Part B. It examined chronicity and poor outcomes following tendon injury attributable to prolonged inflammation and hypervascularity. These complications were modeled in vitro for the purposes of evaluating micronized eHackam as a treatment for tendinopathy, which led to the identification of specific mechanisms responsible for counteracting these disease processes. Our research and development activities are focused on demonstrating mechanistic attributes that support our technology platform in a number of clinical indications, including to, but not limited to, knee osteoarthritis, tendinopathies, and rotator cuff injuries, et cetera. As a pioneer in amniotic tissue technology and placental tissue engineering, we believe our investigational studies significantly contribute to the body of knowledge in this field, and ultimately may provide insights into additional indications beyond wound healing and musculoskeletal conditions. Our scientific research is providing mechanism of action insights that we believe will help us effectively design the next round of studies and more convincingly elucidate the pharmacology and the therapeutic effects of amniofix injectable. We know there is considerable market demand for safe and effective alternatives to reduce pain, improve function, and modify disease. And the positive signal within the KOA trial provides a basis to build on these learnings. and pursue additional studies in this indication as well as many others. Jack, that concludes my opening remarks. I'll now turn the call over to Pete, who will take you through the financial results.