CG MEDTECH, DIAGNOSTICS AND DIGITAL HEALTH & SERVICES FORUM - MIMEDX GROUP INC

Financial Performance:

• Reported third-quarter net sales of $62 million, with the surgical franchise accounting for approximately two-thirds of revenue.
• Surgical segment grew 9% in dollars and mid-teens in volume year-over-year; mature wound franchise faced headwinds due to Medicare reimbursement reforms in 2026.
• Achieved an 80% gross margin in Q3 and swung to positive adjusted EBITDA and positive free cash flow.
• Ended the third quarter with $121 million in cash and zero debt.
• Announced a $25 million structured settlement with a wound care competitor regarding IP infringement.

Guidance and Future Outlook:

• Anticipates a combined company (MiMedX + Sonara) with a top-line revenue of roughly $400 million in the first year of combination.
• Projects combined adjusted EBITDA margins greater than 20% post-acquisition.
• Targets achieving over 75% of total revenue from the surgical segment once Sonara is integrated.
• Expects recovery in the wound care market to be non-linear but views Q3 as an inflection point following the Medicare reset.
• Two 510(k) FDA submissions for surgical innovations are pending, with launch expected in the near term.
• Planning to release RCT data for the EpiEffect product later in the current year.

Business Segments and Product Lines:

• Surgical Franchise: Now the primary growth engine, leveraging a "Particulate" lineup with above-market growth and expanding evidence supporting cost/complication avoidance (e.g., reduced anastomotic leak rates).
• Wound Care Franchise: An industry pioneer with the largest compendium of clinical evidence for placental tissue; facing short-term revenue pressure from 2026 Medicare reimbursement changes, though 2027 rates are confirmed as status quo.
• Inorganic Growth: Recently acquired Heliogen and G for Derm Plus to augment the surgical portfolio.
• Sonara Integration: Sonara's 100% operating room-focused product line (including no-rinse irrigation and bone fixation) will expand addressable markets by over $4 billion and leverage existing third-party agent networks.
• Product Framework: Sonara utilizes a "Prepare, Promote, Protect" framework to increase share of wallet within single procedures.

Market and Competitive Landscape:

• Addresses a U.S. market of nearly 100 million annual surgical procedures, with a long-term aspiration to be used in all of them.
• Competitive moats include a broad IP portfolio, vertically integrated supply chain, extensive payer coverage, and a robust evidence base.
• Recent legal victory includes a favorable court ruling on the Axiophil surgical product.
• MiMedX views itself as the largest truly dedicated regenerative medicine company post-combination with Sonara.

Risks and Challenges:

• Reimbursement Reform: 2026 Medicare reimbursement changes have dramatically reduced spending and complicated recovery in the wound care segment.
• Regulatory Timing: The Sonara acquisition is pending Federal Trade Commission (FTC) approval, currently navigating a "second request," though all other requisite approvals are secured.
• Market Volatility: Chronic wound recovery is described as "sluggish" and non-linear following the market overhaul.

Management Commentary and Tone:

• Management expressed high confidence ("bullish") regarding the company's 2026-2027 trajectory.
• Emphasized a strategic pivot away from the volatile wound market toward the durable, higher-growth surgical franchise.
• Highlighted financial discipline achieved through infrastructure right-sizing earlier in the year.
• CFO Doug Rice framed the company as having a "different mindset" compared to historical iterations, citing strong cash generation and balance sheet strength.

Analyst Questions and Answers:

• Q: How has the Medicare reimbursement reset impacted strategic planning?
• A: Management confirmed a strategic reorganization earlier in the year to align with the new market dynamics. They noted a shift of patients into wound care centers is driving volume growth in that specific setting, and no further strategic changes are planned for next year.
• Q: What is the status of the Sonara deal?
• A: The team is working constructively with the FTC to resolve a "second request" and aims to close the acquisition as quickly as possible.

Other Key Points:

• The company's "why statement" is "helping humans heal," driving focus across surgical and wound franchises.
• The Sonara acquisition is expected to be immediately accretive to both revenue growth and profitability.
• Management cited a strong cultural fit and shared experience with Sonara's leadership team.
• MiMedX retains a vertically integrated tissue processing network from C-section delivery through donor recovery.