MiMedx Group Inc, a biopharmaceutical company, reported on Friday that it has received a warning letter from the U.S. Food and Drug Administration (FDA) regarding its placental-derived tissue product, Axiofill. The letter, received last week, has led to a 7% drop in MiMedx shares after the bell.
The FDA’s concerns are related to the classification of Axiofill, and MiMedx clarified that the warning is not linked to any safety issues associated with the product. Axiofill, launched in September of the previous year, is a human placental-derived product primarily used in surgical recovery procedures.
According to MiMedx, the FDA contended that the production of Axiofill involves more than “minimal manipulation,” a stance that the company disagrees with. The FDA, following a routine inspection in the current year, concluded that Axiofill does not fall under Section 361 of the U.S. Public Health Service Act. Instead, the regulator suggested that Axiofill should be classified under Section 351, which governs biologics requiring premarket approval.
Section 361 typically regulates human tissues, focusing on concerns related to infectious disease transmission. MiMedx emphasized that Axiofill was developed and manufactured to comply with the requirements of Section 361, as it is used to “replace or supplement damaged or inadequate integumental tissue.”
Axiofill constitutes less than 5% of the company’s anticipated total net sales for 2023. MiMedx stated that it has been in collaboration with the FDA and will provide further updates on the matter in late February.
Investors and stakeholders will be closely monitoring MiMedx’s engagement with the FDA and any potential impact on the regulatory status and market presence of Axiofill.