MIMEDX Sales Tumble as Medicare Changes Hit Wound Business
Adjusted EBITDA swung to an $8.1 million loss as lower pricing compressed margins.
MIMEDX Group Inc. (MDXG), a wound-care products maker, reported a 35% drop in second-quarter sales as Medicare reimbursement changes sharply reduced demand and pricing in its Wound business.
The decline reversed the 27% growth recorded in the fourth quarter and marked a break from the 13% increase a year earlier. Sales improved 9% from the first quarter, though they remained 45% below the fourth-quarter level.
Net sales fell to $64.4 million from $98.6 million a year earlier. MIMEDX posted a net loss of $14.8 million, or $0.10 a share, compared with net income of $9.6 million, or $0.06 a diluted share.
Wound sales plunged 61% to $25.1 million as the January reimbursement changes weighed on demand and prices, reversing the franchise's 28% growth in the fourth quarter. Wound revenue rose about 11% sequentially while volume increased 22%, indicating that pricing and product mix limited the recovery.
Surgical sales rose 15% to $39.3 million and increased about 8% from the first quarter, though year-over-year growth slowed from 25% in the fourth quarter. Surgical accounted for about 61% of total revenue, up from roughly 35% a year earlier, as the Wound contraction reshaped the sales mix.
Gross margin narrowed to 69% from 81% a year earlier, reflecting lower Wound pricing, the mix shift and one-time cost-reduction expenses. Adjusted EBITDA improved sequentially from an implied $11.6 million first-quarter loss after MIMEDX's April cost reductions, which targeted about $40 million in annual operating-expense savings.
MIMEDX continues to expect 2026 sales of $260 million to $290 million, whose midpoint is $75 million below its initial outlook, and now expects full-year adjusted EBITDA to approach breakeven. The restructuring put the company on a path toward profitability in the second half.
The company also agreed to acquire Sanara MedTech for about $350 million in enterprise value, offering $33 in cash and 0.4735 MIMEDX shares for each Sanara share. MIMEDX plans a new $300 million term loan to help finance the transaction as it works through the reimbursement-driven reset.