Biotech MiMedx Group said on Thursday it had replaced its chief financial officer and would restate financial statements following an internal investigation into its sales and distribution practices, sending shares more than 25 percent lower.
The announcement is the latest sign of trouble at the Marietta, Georgia-based company, which has delayed making previous financial filings and faced a series of attacks by short sellers.
MiMedx said in March that the U.S. Department of Justice was also reviewing the company’s practices on a preliminary basis, following media reports of a federal probe into whether the company had overcharged the government for its tissue repair treatments.
On Thursday, the company appointed Edward Borkowski as its interim chief financial officer and said that Michael Senker had stepped down as CFO, along with corporate controller and treasurer, John Cranston.
Borkowski, a pharmaceutical executive with over 31 years of experience in public company audit and accounting, will also oversee the company’s legal, finance, and investor and public relations.
MiMedx said it would restate statements from fiscal 2012 to 2016 as well as for the first three quarters of 2017.
It said that was due to the accounting treatment of practices used by two distributors “for which certain implicit arrangements modified the explicit terms of the contracts, impacting revenue recognition during specified periods.”
MiMedx also said financial information for the fourth quarter of 2017 and the first quarter of 2018 should not be relied upon.