MiMedx’s market opportunities
MiMedx Group’s (MDXG) key markets are wound care, burns, surgery, orthopedics, spine, sports medicine, ophthalmology, and dentistry.
Wound care market
The wound care market includes dressings such as bandages, gauzes, and ointments that are used to treat nonsevere wounds. Advanced wound care products, including mechanical devices, advanced dressings, and biologics, are used to treat chronic wounds that do not appropriately close after four weeks of treatment with traditional dressings.
According to the company, in 2015, there were 6.5 million reported cases of patients suffering from a hard-to-heal wounds in the US, with three million of these cases being eligible for treatment with advanced wound care products. Of these 3 million patients, MiMedx estimates that 1.4 million suffered from either diabetic foot ulcers or venous leg ulcers.
The cost of treating chronic wounds is rising, and the current annual estimated overall cost exceeds $25 billion.
Wound biologics is the largest segment in the advanced wound care market. In 2015, wound biologics sales touched $957 million, with skin and dermal substitute products achieving sales of $587 million.
Advanced wound care
These products represent the largest segment of the advanced wound care market in the US. The skin and dermal substitute market growth in the US is expected to be driven by the aging population, the rising incidence of obesity and diabetes, and the acceleration in the shift away from traditional wound care products toward advanced wound care products.
MiMedx estimates that the domestic skin and dermal substitute market will reach sales of $1.1 billion in 2020. Amniotic tissue is expected to capture 49% share of this market—up from 29% in 2014.
For fiscal 2017, MiMedx group is expected to incur R&D (research and development) expenses of $19.4 million, while peers Atricure (ATRC), Globus Medical (GMED), and Inogen (INGN) are expected to incur R&D expenses of $35.9 million, $44.3 million, and $5.36 million, respectively, for fiscal 2017.
Notably, MiMedx Group makes up about 0.08% of the iShares Russell 2000 ETF’s (IWM) total portfolio holdings.
In the next part of this series, we’ll take a closer look at the market opportunity for MiMedx Group in physician office pain management.