MiMedx (NASDAQ:MDXG) recently announced that it has received a warning letter from the FDA concerning the production of its placental-derived tissue product, Axiofill. The communication relates to the product classification by the agency and the associated production requirements.

This development has put the biotech company on its toes, as it navigates through the intricacies of the regulatory landscape. MiMedx has expressed its ongoing engagement with the FDA regarding the proper designation of the product, demonstrating its commitment to compliance and patient safety.

It is noteworthy that the warning letter does not make any claims regarding product safety or adverse events linked to Axiofill. MiMedx emphasized that Axiofill, which has been available in the market since September 2022, boasts a robust safety record.

The company is diligently preparing its response to the warning letter within the stipulated 15-day period. Moreover, it plans to provide detailed commentary on the matter during its Q4 earnings conference call in late February, underlining its transparent communication with stakeholders.

In addition, MiMedx indicated that Axiofill is projected to contribute to less than 5% of its total net sales for 2023. This disclosure showcases the company’s diversified revenue streams and the relative impact of the FDA’s warning on its overall financial performance.

Furthermore, the company reaffirmed its 2023 net sales forecast, anticipating strong growth in the high teens. It also shared its Q4 adjusted EBITDA margin target of above 20%, which adds a layer of optimism amidst the regulatory challenges faced by MiMedx.