Ladies and gentlemen, thank you for standing by, and welcome to the Mymedex First Quarter 2021 Operating and Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. I would now like to hand the conference over to your speaker, Mr. Jack Howarth.
Please go ahead.
Thank you, operator, and good morning, everyone. Welcome to the MiMedx First Quarter 2021 Operating and Financial Results Conference Call. With me on today's call are Chief Executive Officer, Tim Wright Chief Financial Officer, Pete Carlson and Executive Vice President and Chief Commercial Officer, Rohit Kesha. Tim and Pete will provide a summary of the operating and financial results for the Q1 2021. And at the conclusion of their remarks, Tim, Pete and Doctor.
Keship will be available for your questions. Before we begin, I would like to remind you that comments made during today's call include non GAAP financial measures and we provide a reconciliation to GAAP in our press release, which is available on our website at www.meMedix.com. Also, our comments today will include forward looking statements. While we discuss some reasons why we are optimistic, actual outcomes and results are subject to risks and uncertainties and may differ materially from those anticipated due to many factors. Listeners are directed to the cautionary notes in the press release issued today, as well as the risk factors set forth in the Mimetics 2020 Annual Report on Form 10 ks for factors that could cause actual outcomes and results to differ materially from those reflected in the forward looking statements.
The company assumes no obligation to update or supplement any forward looking statements, except as required by law. In particular, Tim will mention expected clinical trial, FDA submission and approval and product launch timelines for both plantar fasciitis and knee osteoarthritis. Obviously, there can be no assurance that our clinical trials will produce favorable results and the actual timing of trials, BLA submissions to the FDA and approval will depend on a number of factors, including COVID, the results of our clinical trials and other factors that may be outlined in our meetings with the FDA. Today's prepared remarks will be followed by our typical question and answer session, during which time you will have the opportunity to ask management about our most recent quarter. As a reminder, the purpose of the call is to discuss our financial and operating results, and we appreciate you keeping your questions focused on that topic.
Please be advised that the company, its directors and certain of its executive officers are participants in the solicitation of proxies from the company's shareholders in connection with the 2021 Annual Meeting. The company intends to file a definitive proxy statement with the SEC in connection with any such solicitation of proxies. Shareholders are strongly encouraged to read such proxy statement once available and all other documents filed with the SEC carefully and in their entirety as they contain important information. Information regarding the identity of the company's participants and their direct or indirect interests by securities, holdings or otherwise can be found in the company's annual report on Form 10 ks for the fiscal year ended December 31, 2020, the company's definitive proxy statement for the 2020 annual meeting and other materials filed with the SEC, and updated information will be included in the company's definitive proxy statement for the 2021 Annual Meeting and other materials to be filed with the SEC. These materials can be obtained free through the company's website in the section titled Investors or through the SEC's website at www.sec dot gov.
With that, I'm now pleased to turn the call over to Tim Wright. Tim?
Thank you, Jack. Good morning, everyone, and you for joining us on today's call. Yesterday afternoon, we issued a press release reporting our Q1 2021 operating and financial results. I'd like to start today's call with a review of our commercial business and then move right into an overview of our progress to date on our promising late stage pipeline. After I complete my opening remarks, Pete Carlson, our CFO, will take you through a full discussion of our Q1 results.
Vamedics reported 4% growth in adjusted net sales in the Q1, driven by our Wound Care business. This included the positive impact from sales of our recently launched EpiCord Expandable product. We further attribute the recent growth in our business to a number of strategic changes and investments we've made with our commercial organization. These fundamental changes, coupled with the addition of talented representatives, are designed to accelerate our top line growth. Not only are we making the right changes, investments within our core business, we are retaining the right people to keep our transformation and momentum going.
We continue to recruit highly skilled individuals with experience in biotechnology and tissue segments of the healthcare industry, supplementing these hires by focusing on supplying them with a refreshed training model and clinically oriented selling tools. The people we are onboarding are focused on selling our current portfolio of products and understand the fundamental science that differentiates our products and believe in our core mission, vision and values. I'm pleased to report that our sales representative headcount stands at 2 84 people strong. To further supplement our sales representatives with the right tools, our market access group continues to expand the availability of Mimetics products to the wound care patients through increased coverage by leading payers around the country. As you recall that in November of last year, the largest commercial payer in the United States added Epifix to their list of covered products.
As a reminder, Epifix is the only amniotic tissue based product to receive coverage for diabetic foot ulcers by this payer. Following this big market access win, we were pleased to announce that on April 1, Premier awarded Mimetics an amniotic tissue supplier agreement under their Surpass purchasing program. The agreement allows Surpass members take advantage of special pricing and terms pre negotiated by Premier for tissue products. We believe that this agreement strengthens our position as an industry leader in amniotic tissue based products backed by the best class clinical evidence along with broad coverage and reimbursement. We're excited about these new partnerships and remain committed to increasing patient access to our amniotic tissue products to heal intractable wounds.
I'm also pleased to share with you, we have just received notification that another large national commercial payer added coverage for EpiChord as a medically necessary option in the treatment of diabetic foot ulcers. This in addition to the previously existing Epifix coverage marks another win for the Mometics team. I want to shift gears now and provide some important updates on our late stage pipeline. Last week, we announced the final patient visits for our novel therapeutic biologic and the OFYX injectable in the Phase 3 plantar fasciitis and Achilles tendinitis studies, as well as the final blinded efficacy visits for the Phase 2b knee osteoarthritis trial. The achievement of these milestones represents a pivotal advancement to bring amniotic tissue platform technology to market as a treatment option for a range of musculoskeletal conditions with substantial unmet patient need.
As we previously discussed, existing treatments for neosar arthritis and plantar fasciitis are suboptimal. There is significant patient interest for alternative options that relieve pain and improve functionality. Today, there continues to be a lack of approved The MOMETYX studies were initially designed to prove clinical efficacy and safety of Amiofix injectable in reducing pain and improving function of these chronic conditions. With the last patient business now complete, we will lock the databases and conduct the appropriate statistical analysis and anticipate announcing top line results from all three studies summer. As you may recall, our long standing hypothesis and the feedback from interested physicians is that Amiofix injectable certainly has the potential to work in Achilles tendinitis.
However, the original study design including patient selection criteria may not have been sufficiently designed or powered to demonstrate statistical significance and capture all elements of a clinical response. For these reasons, that is why we do not anticipate filing a BLA for Achilles tendinitis at this time. We continue to believe that the safety results from this study could add valuable information to the Amneofix injectable database and we intend to include them. Turning now to Amneofix injectable for plantar fasciitis. The Phase 3 study was designed following promising results from our large Phase 2b prospective trial, which was a single blinded randomized controlled trial of 145 patients.
We have previously shared that this trial demonstrated statistically significant reduction in visual analog score or VAS score for pain and improvement in the foot function index score. The Phase 3 trial enrolled 277 patients with an investigator confirmed diagnosis of plantar fasciitis. The primary endpoints are change in VAS for pain at 90 days and an incident related adverse events at 180 days and serious adverse events and unanticipated events during the 1st 12 months post injection. The secondary endpoints include self reported responses to the foot function index at 90 days. In this case, the BLA filing will require gathering data from 2 adequate and well controlled clinical trials.
Development of these tests to demonstrate consistency and reliability of our manufacturing process, along with satisfactory manufacturing facilities to comply with the agency's good manufacturing practice regulations. At this point, we believe we are on target to meet all these criteria in the coming months and remain on track to file our first BLA in the first half of twenty twenty 2. Another potentially significant opportunity coming out of our pipeline is the initiation of a Phase 3 study in knee osteoarthritis. We are currently exploring ways to accelerate the timeline for this clinical study, assuming a positive outcome from our Phase 2b results. From our announced plan to initiate Phase 3 is in the first half of twenty twenty two.
Osteoarthritis or OA is by far the most common joint disease and millions of adults experience pain and decreased quality of life every day because of joint destruction caused by OA. According to published data, osteoarthritis is responsible for a staggering public health and economic impact. More than 242,000,000 people worldwide currently suffer from symptomatic OA of the knee and hip. 45% of all people have a lifetime risk of developing OA of the knee and OA is responsible for $71,000,000,000 in lost earnings annually in the United States. Although knee replacement is an option for those with advanced knee arthritis, it carries significant risk and current treatments including oral anti inflammatory medications, cortisone injections and hyaluronic acid injections are all limited in the amount of relief they can provide.
Additionally, anti inflammatories have negative cardiovascular effects and injectable steroids may cause further joint deterioration with chronic use. Current projections indicate that nearly 18,000,000 Americans suffer from knee osteoarthritis annually. Today, we estimate the injectable size of the market for our products to range from 1,000,000 to 1,500,000 patients per year. And that is only based upon 1 injection in 1 knee per year. The opportunity for MeMedix is potentially significant and our goal is to file a BLA in the second half of twenty twenty four or early 2025 with an emphasis in 2021 to accelerate time ability of our Purion processed amniotic tissue, amniofix injectable to slow the progression of knee OA.
Based on our ongoing research, we have uncovered a novel mechanism that may indeed support Purion process amniotic tissue as a candidate for disease modifying osteoarthritic therapy. This is very early research, yet very, very encouraging. In addition to these exciting therapeutic biologics, we are working towards filing 2 INDs for our injectable product in the treatment of chronic cutaneous ulcers and surgical incisions and an IDE or investigational device application for Amneofil in the treatment of soft tissue defects. Last Friday, we received notice from the FDA that the first of 3 of our 3 investigational new drug applications were accepted and now in effect. This IND was filed for cutaneous ulcers and will keep you apprised as to the progress towards filing the additional applications once they've been successfully accepted by the FDA as submitted.
Finally, I'm pleased to announce the appointment of Dirk Stevens, PhD, as a Senior Vice President, Quality Assurance and Regulatory Affairs. Doctor. Stephens brings more than 35 years of strategic leadership experience in quality management and regulatory compliance across multiple device and pharmaceutical companies. The addition of Doctor. Stephens exemplifies our ongoing commitment to advancing the quality standards for both science and manufacturing in our industry.
His extensive operational insight, relevant experience in regulatory review and submission processes and proficiency and quality system assurances will be instrumental as we continue to advance our late stage pipeline under good manufacturing practices. Doctor. Stephens joins us from Smith and Nephew, where he was accountable for regulatory submissions, compliance and commercial quality assurance. Before we get into the Q1 results, I'd like to spend a minute putting into perspective our business development thinking. Consistent with our fiduciary responsibility to all shareholders, we continuously evaluate the most productive choices for investments and capital deployment.
Several months ago, we stated that we would consider inorganic growth as an option with the goal of potentially adding to top line growth in 2021 and to support other aspects of our BLA filings. As a company, we intend to adhere to a stringent criteria whenever we consider and evaluate potential business development opportunities, and we'll continue to leverage valuable input and oversight from our highly experienced Board of Directors. I will underscore that in general, we employ a rigorous process in evaluating any business development opportunity and steadfastly adhere to our commitment to build shareholders value in all that we do. The evaluation of business development opportunities is no exception. In 2021, we began the year evaluating opportunities that could mitigate any risk from change in our business environment, such as the end of enforcement discretion and our thinking proved correct in this matter.
We also employ a process where we look for products with low regulatory risk in the field of regenerative medicine. That can be integrated easily into our portfolio predominantly through a licensing agreement. As a general rule, we require that any transaction enhance our competitive position by expanding either our intellectual property estate, operating margins or international footprint. Lastly, it is critical that any transaction be accretive to adjusted EBITDA within 2 years of acquisition. While we have a clear set of standards for inorganic growth, our focus today is rather than inorganic growth.
We are on the verge of some very important data readouts that are likely to change the future of MuMedix going forward. And we look forward to providing you those updates at the appropriate time. Now, I'd like to turn the call over to Pete to take you through our financial results in Q1.
Pete? Thank you, Tim, and good morning, everyone. I will provide an overview of our Q1 2021 financial results, starting with an update on some of the underlying trends in our business. Overall, we saw growth in demand across our core portfolio as patients return to the hospital for treatment of their wounds and hospitals return to a more normal operational work flow. Additionally, as Tim noted, our new Epicord Expandable product line launched this past September drove additional increased demand during the Q1.
Net sales for the Q1 ended March 31, 2021, were $60,000,000 compared to $61,700,000 for the same period in 2020. Net sales for the Q1 of 2021 2020 included the benefit of $300,000 $4,500,000 respectively, resulting from the change in revenue recognition methodology. Adjusted net sales, which excludes impacts of the company's transition in revenue recognition, were $59,700,000 in the Q1 of 2021, an increase of 4.2% from the same period a year ago. Gross margin in the Q1 of 2021 was 83.9% compared to 83.8% in the Q1 of 2020. Selling, general and administrative expenses, or SG and A, for the Q1 of 2021 were $45,200,000 or a decrease of 3.8% compared to the Q1 of 2020.
The year over year decrease was driven by lower travel expenses due to government and company imposed restrictions on travel to mitigate the effects of the COVID-nineteen pandemic. Research and development expenses were $4,300,000 for the Q1 of 2021 compared to $2,800,000 for the same period last year. The increase reflects our planned investments to support the company's clinical research efforts and includes increased consulting fees, headcount additions and additional activity in our preclinical studies. We continue to expect that these costs will increase over time as we plan to file the additional INDs and continue working towards the filing of our BLAs, as Tim discussed. Investigation, restatement and related expenses for the quarter were significantly lower at $7,200,000 compared to $15,600,000 in the Q1 of 2020.
As a reminder, we do not anticipate incurring any more costs related to the Audit Committee investigation or restatement of our prior period financial information as both of these are complete. Other decreases were driven by fewer expenses incurred relative to obligations to advance litigation defense costs to former members of management. The company is no longer advancing costs to certain former members subsequent to their sentencing in late February. Turning to the bottom line, Net loss in the Q1 of 2021 was $8,400,000 compared to a net loss of $4,800,000 in the Q1 of 2020. Adjusted EBITDA was $4,700,000 in the Q1 of 2021 compared to $3,100,000 in the Q1 of 2020, reflecting the factors I've just discussed.
Now let me review our cash position. As of March 31, 2021, the company had $84,700,000 of cash and cash equivalents compared to $95,800,000 as of December 31, 2020. Our healthy cash position continues to provide us the flexibility to invest in our key initiatives for both our core business and R and D pipeline. Moving now to an update on enforcement discretion. On April 21, 2021, the FDA reaffirmed that the period of enforcement discretion would not be extended and would therefore end on May 31, 2021.
As you know, this applies across the industry to products that do not meet the criteria for minimal manipulation and homologous use as outlined in Section 361 of the Public Health Service Act. Our understanding is that the FDA intends to, and I quote, take action regarding unlawfully marketed products that do not have an IND in effect or an approved biologics license. We believe without approval of such a license, this means companies are no longer able to actively market the Section 351 products to health care providers and patients after May 31, 2021. To put things in proper perspective, sales of marketized and particulate products have represented approximately 14% of the company's net sales for the 3 months ended March 31, 2021 13% for the year ended December 31, 2020. Given the FDA's reaffirmation of the end of enforcement discretion, the company now expects adjusted net sales for 2021 to be consistent with that amount in the prior year.
This is in line with the expected impact previously disclosed in our 2021 outlook within the company's annual report on Form 10 ks for the year ended December 31, 2020. It's important to understand that we regularly engage with representatives at the FDA and are committed to adhering to their standards and requirements. We agree with and welcome their rigor to ensure quality, and we continue to align our plans with theirs in an effort to remain fully compliant with their guidance and direction on enforcement discretion. I will now turn the call back to Tim. Tim?
Thanks, Pete. In summary, we've made significant progress on our transformation strategy in a compressed period of time and are starting to see tangible results stemming from our efforts and initiatives. We continue to meet with and take calls from a variety of interested in
our business and our
pipeline. Significant financial investments in R and D and commercial are now possible with most accounting and legal issues resolved. We have several priorities and milestones ahead for 2021. Pipeline acceleration, improving our understanding of the full potential of our products based on their mechanism of action, sales force expansion, successful registration of Epifix in Japan, cGMP compliance and building a world class regulatory quality and medical affairs team, just to name a few. We're building on a strong foundation we created in 2020 and are committed to delivering operational excellence across all functions for all stakeholders, increasing the value of our Purion amniotic tissue based platform, expanding the body of scientific evidence for our product portfolio of products, increasing patient access to the best possible wound care through an expanded coverage and advancing our innovative pipeline of musculoskeletal therapies are 4 key priorities that we will unlock the value for shareholders and our entire company is ready to deliver.
Now before we open the call for questions, I'd like to briefly address Crescents Point's nomination of 4 director candidates to stand for reelection at our 21 Annual Meeting. The Mimetics Board is made up of 9 experienced and highly engaged directors who are committed to acting in the best interest of all Mimetics shareholders. As part of this commitment, the company maintains a consistent and open dialogue with shareholders, including Precious Point. It's unfortunate that Precious Point is pursuing a potentially costly and distracting proxy contest instead of working constructively with the company. Among the Board Directors, Pressings Point is seeking to replace 2 of their own nominees from 2019, our Board Chair, Doctor.
Kathy Behrens and our Audit Committee Chair, Mr. Todd Newton. Both have been outstanding leaders and made significant contributions to our successful turnaround and to the creation of additional shareholder value. Under this board's stewardship, the Mimetics management team is executing on its strategy and driving enhanced shareholder value and patient value. Over the course of 2020, Amedix successfully implemented a number of governance, operational and financial initiatives that were critical to the company's future success and potential.
Our significant progress has created a strong foundation for growth in 2021 and beyond. With that, I'd like to underscore that the purpose of today's call is to talk about our financial results. We will not be commenting further on Pressions Point on this call. We appreciate you keeping your questions focused on our results. Operator, you may now open the lines for questions.
Thank you. Our first question comes from Swayampakula Vamakan with H. C. Wainwright. Please go ahead.
Thank you. Good morning, Tim and team. A few questions from me. So starting off on the top line, in the press release, you stated there was a decline in year over year sales due to a decrease in recognition of contracts, which was not quite a bit, which was $300,000 but compared to $4,500,000 from the previous time period. I'm just trying to understand what this statement means.
Does this mean that you did not receive contracts of similar or increasing value in 2021? Or you're ending up some existing contracts and they were not renewed for 121? I'm just trying to understand how to think about this number going forward.
RK, it's Pete. Good morning. Those remaining contracts simply relate to our transition in the accounting treatment or the for revenue recognition. So at September or October 1st 2019, when we transitioned from the cash receipts to as shipped method, we had a series of contracts of shipments that had been made, bills that had been processed, the cash that had not yet been received, and we have isolated that. And so those are just the numbers that are difference between net sales as reported and adjusted net sales.
We just simply use the accounting term remaining contracts. So there was a fixed amount, it was about $40,000,000 as of October 1 or during Q3. And by the end of 2020, there was $1,800,000 of that remaining or $1,200,000 sorry, that still needed to be collected. So the point 3 this year is just that collection. We fully expected that amount to wind down as we collected these are sales that occurred back in the prior to the Q4 of 2019.
So the point of that disclosure is to isolate those numbers to get to the more comparable amounts of adjusted net sales. So those are not lost contracts or anything in that manner. It is just the amount we've collected on that remaining balance and it has been declining for these last quarters.
Okay. Thanks for that explanation, Pete. Then regarding the April 21 announcement that FDA made through the PHS Act saying that the enforcement discretion will be starting by end of May and your statement that the impact was about the impact or the sales that came from that was about 13% of your 2020 revenues. So I understand all that, but what is both your commercial team and management as such are trying to do in terms of mediating that loss going forward either by expanding other revenue lines or bringing in any other forms of revenue, so that it doesn't become a bigger issue going forward? Just on the sales, I understand you have a big R and D and so that's a different question, but just on the top line.
Thank you. Thank you. This is Rohit. That's an excellent question about what are we trying to do. In terms of the products and where they are used in clinical practice, we are trying to understand and we do know some places where there's an alternate therapy that can be used, which is some of our sheet products that can be deployed where they might have used micronized products that would no longer be available with the 361 path.
At the same time, that will help us retain some of that business. We are also launching more focus on our sheet products to expand. There's again an untapped potential for that opportunity. So we'll continue to push in that area to make up for some of the gaps. And we're also deploying our medical education team in order to deploy those resources to more effectively communicate our value proposition.
And we recently came out with our health economics data on the sheet side, which will further help us mitigate some of the impact. So while we can't promote those products directly and we haven't been promoting them in compliance with enforcement discretion, As we go forward, we will look for those opportunities for untapped potential to continue to expand and grow our business and mitigate that impact. We are optimistic and confident that we can still continue to show above market growth rate at above 10% as we go forward beyond the enforcement beyond the period when enforcement discussion ends.
Yes. Thank you, Rohit. This is Tim RK. On the BD front, as we said earlier in the call, we've been approached by several companies around licensing deals that some meet our criteria, whether it's scientific criteria, clinical criteria. And it's we're constantly scanning that to drop something into our representatives' bag.
But those are licensing types of deals. We have no interest in, if you will, M and A type of deal to compensate for loss of sales and we've read now. So I do believe what Rohit's team is doing in transitioning from our injectable products in certain settings, utilizing our tissue products, I think we'll be successful in that transition.
Thank you both. Thank you Rohit and Tim. One last question for Bob. The AmnioPhix injectable for the indication, what is I know the data is going to come out in the summer. What is it that you need to demonstrate to get an FDA approval?
And also, what else needs to be done between this summer and middle of 'twenty two when you will be filing the BLA?
Yes. That's a good question. On the as you know, we've our last patient out, we've accomplished that. That was pivotal. Now we're in the process of scrubbing that database, blocking it down, implementing our statistical analysis plan and meeting with the FDA.
So the big steps are complete the analysis of the Phase 3 trial, meet with the FDA. The 3rd big important piece of this is ensuring that our manufacturing facility can be validated at GMP. A big component of the BLA filing will be the chemistry manufacturing control section, which we've been working for 2 years since I came on with the company to make sure that we're meeting all the critical quality metrics that the FDA would expect. This is an important area for us. I think we're all over it.
I'm very positive about our ability to file our BLA in the second half of twenty twenty two. I've outlined the 3 big steps there. Obviously, there are a lot of smaller steps. The very encouraging thing for me is our ongoing dialogue with the FDA in this matter. As you know, this isn't a well tread path.
And so the amount of cooperation and dialogue we get from the agency has absolutely been outstanding. That's on the manufacturing side as well as the clindev side or clinical development side. So those are the big buckets of activity that we're focused on. The recent addition of Dirk Stevens to our team was important from a quality standpoint as well from a manufacturing chemistry manufacturing control on GMP. So we're well positioned to get all that done and get our BLA filed.
So quick follow-up, Tim. On the GMP facility, once you have this, audited and validated, what all products will be produced through this facility so that you don't have to kind of answer this question to the FDA in the future on any of your products?
Yes. I don't think we'll have to have a prior approval inspection for NEOA, for example. So that's the benefit of getting out of the shoot early with from a biologic license application standpoint. So I really feel that having an approved facility, having all of your data, whether it's purity, potency, stability, basically inserted into your BLA package for will be very advantageous. Now we plan to produce all of our products under GMP.
I think this is an important consideration for the industry and it's just another focus on the high quality products that we plan to produce in the future. GMP is a critical part of our strategy to make sure that we're producing products the same way every day all the time. So I'll be very comfortable with where we are in our strategy around GMP and that will affect all of our portfolio.
Perfect. Thank you. Thank you very much, Tim. And everybody else and your team. Thank you.
Thank you.
Thank you. Our next question will come from John Vandermosten with Zacks. Please go ahead.
Good morning, everyone. I wanted to build on the previous questions about understanding the impact of enforcement discretion over the next year. And first, just how will the channel look as of May 31? Will everything be continue to go through that was already requisitioned? Or just explain how that might work.
John, it's Pete. You know, the end of enforcement discretion, what happens that day is we are no longer able to sell after that day. So sales up until that day will continue. At this point, some of the details still being worked through, but at this point, there is no product recall aspect of this. So sales up through that day and then after that, we don't ship the product out without pre mark without the biologic license application approved.
Okay. Obviously, we'll have some production going on and some product will be out in the out and about related to our clinical trials. And there might be an opportunity to expand those trials to continue to get product in the patients' hands. There's a lot of guidelines around that. But as far as normal sales, they stop as of May 31.
John, let me I think you
have a good very good question there. Let me just put this in perspective for our patients and physicians. We've had numerous discussions with the FDA regarding patient access. If you're a patient that's been on our product for the last 5 years or the last 2 years, you'd like to have continuity in care. So this is what we've stressed with the FDA is that we feel it's a responsible thing to do to continue to provide patient access to our product.
There is opportunity within the, if you will, FDA's guidelines around expanded access under a cost recovery model. So we're working through that with the FDA. And that is in the interest of the physicians we serve and the patients we serve. So once we get a little more detail around that, I think that we'll be able to share that with our investors. But and equally as important, being able to share that with our physicians and other healthcare workers that have been using these products successfully in a safe manner and in an effective manner.
So from our perspective, we have an obligation and a responsibility to appropriately make sure that the patients have access to our products. And I think we can do that under expanded access.
Okay. And what I know it's only been about a week and maybe that's not enough time to get feedback, but what feedback has there been from the docs and the users of Micronet's products so far about the cutoff coming up in about 4 weeks or so?
I think there's confusion. And every company has a little bit different story around what they can and can't do. Some companies honestly feel that they can if they've got an IND on file, they can continue to sell these products. That's not been our discussion with the FDA. In April 21, Doctor.
Marks laid out with all the work that they've done since 2017, offering companies the opportunity to file INDs, pursue BLAs. They are also very adamant about ending enforcement discretion. So I think there's a lot of confusion out there. I can tell you that I've had discussions with Doctor. Marks and his team about this.
We plan from our standpoint to make sure that we eliminate the confusion for our patients and for physicians and other healthcare and healthcare systems by ongoing dialogue with them that's supported by the FDA.
Okay. Okay. Yes, complex issue. And I guess we'll find out how it comes out in another couple of months. I want to move on to the IND that was cleared chronic cutaneous ulcers.
So how does this indication expand where the product is already used?
Yes. All the clinical work for our products has been done in the DFU, BOU. There are other indications that we'd like to pursue. And if you see where the regulatory environment is heading, it makes sense to have discrete indications that can be reimbursed in the future. Look, the beauty of our amniotic tissue platform, I think is important to state here.
If you think about it, MuMedix was a pioneer in reducing to clinical practice their amniotic tissue membrane that was produced by a proprietary system, engineering system called Purion. I do not believe that all amniotic tissue is created the same. Our Purion process is a unique process. It's pristine in how it delivers a finished product. The first application was in Advanced Wound Care.
This company grew dramatically during that period. It was very disruptive to wound care. It's going to be disruptive in the musculoskeletal space as well. The flexibility, the strength of our amniotic tissue platform is rare to be able to expand into other indications. This whole musculoskeletal space has an enormous amount of unmet need.
We're tackling knee osteoarthritis. If we're successful there, it would change the complexion not only of this company, but of an industry, And it would be well welcomed by patients and physicians. Other indications like Achilles tendinitis or plantar fasciitis is just the start with this platform. We feel we can extend that into other areas and we're exploring those other areas. We're just not ready to initiate and pull the trigger on an IND.
But if you think about it, partial thickness tears of rotator cuff, very important area here. If you can avoid surgery in that area and avoid the recuperation of the rehab process, it's very significant for that patient. So I think this amniotic tissue membrane platform is very unique, is supported by an outstanding product that's been engineered very successfully here. We need to build on the clinical data and we need to produce these products in a GMP environment. So that's the cool thing about this company.
It's very rare where you have a company that has the potential to keep adding indications based on their underlying amniotic tissue platform technology. Now I also noted early in my presentation that we are curious about disease modification. It is a tough standard to hit. Our indications are focused around pain relief and improved function. Those two things together are very important in the near term.
Long term, if we can demonstrate disease modification, that is huge. We got a lot of work to do there. But under the leadership of Doctor. Stein and Doctor. Coop, we're really focused down in this area.
So more on that as we have more and more data that we can share with you.
Okay. And what a follow-up on the chronic cutaneous ulcers indication, and maybe a little snapshot of the background on the etiology and epidemiology. Can you give us a sense of how big that is and how it fits in?
Yes. We're currently quantifying that market. We if you think about where we are, if you look at the number of patients with this particular type of ulcer, it's probably broader than what we're seeing with DFU and BOU. In the future, we'll be able to quantify that much better for you. We have really focused down on getting the IND files.
Obviously, we wouldn't file an IND if we didn't think there was an opportunity to penetrate this market. This has been a request by practicing physicians for us. The other applications that need to be considered along with this cutaneous issue here is other areas such as tissue defects as well as the application of our products potentially in the burn area. And I think that there are really important considerations from a health economic stand point, cost effectiveness or cost benefit or the benefit risk of using our products in those areas. Rohit, you may have another more perspective on this particular indication.
I'll
pass on to you. No, I'll just say the chronic cutaneous wound includes all the pressure ulcers along with the venous and the diabetic foot ulcers and almost the pressure ulcers are almost as big in market opportunity as the other 2 combined. So there's a huge potential that it allows us to access. But as Tim mentioned, where exactly that product with the IND is applicable and how big that opportunity is, we're still quantifying it to give you more precise
aspects of that as we go forward.
Great. Thanks for taking my questions.
Thank you, John. Ladies
and gentlemen, thank you for participating in today's question