Ladies and gentlemen, thank you for standing by, and welcome to the Mymetics 4th Quarter 2020 Operating and Financial Results Conference Call. At this time, all participant lines are in a listen only mode. After the speakers' presentation, there will be a question Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jack Howards.
Thank you. Please go ahead, sir.
Thank you, operator, and good morning, everyone. Welcome to the Mymetics' 4th quarter and full year 2020 operating and financial results conference call. With me on today's call are Chief Executive Officer, Tim Wright Chief Financial Officer, Pete Carlson Executive Vice President and Chief Commercial Officer, Doctor. Rohit Kashyap and Executive Vice President of Research and Development, Doctor. Robert Stein.
Tim and Pete will provide details on operating the financial results for the Q4 and full year 2020. And at the conclusion of their remarks, Tim, Pete, Doctor. Keshav and Doctor. Stein 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.mymedix.com.
Also, our comments today will include forward looking statements. Although the company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions, 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 yesterday as well as the risk factors set forth in MiMedics 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. With that, I'm now pleased to turn the call over to Tim Wright.
Tim? Thank you, Jack. Good morning, everyone, and thank you for joining us. 2020 was a foundational year for MeMedics. We focused on a number of operational and financial initiatives in order to move the company forward in its transformation, propel its pipeline and regain momentum.
Before I get into 2021 strategic initiatives, let me review some of the many accomplishments from last year. First, let me talk about the efforts to restore the business and our accomplishments there. We recruited experienced high integrity leaders with subject matter expertise across the board. We've converted 90% of our executive and senior management during this period. We also did a fantastic job of reconstituting the Board, focusing on improved governance, diversity and expertise.
We're also pleased to announce Doctor. Phyllis Gardner is joining our Board. Doctor. Gardner is regarded for her contributions and accomplishments across academia, biotechnology and the healthcare industry. Doctor.
Gardner is a professor of medicine at Stanford University School of Medicine and a distinguished business leader. She brings more than 35 years of experience to the company marked by numerous national awards and honors. She has conducted extensive research in cell biology and gene therapy and is widely published in the fields of cell biology and pharmacology. Her insight, perspective and strategic expertise, combined with our existing Board, will be invaluable as we propel our late stage pipeline towards biologic registration and guide MeMedics into the future of regenerative therapeutics. The efforts to restore our business start with getting current on our financial reporting.
In addition, we raised needed capital, dollars 150,000,000 through financing led by EW Healthcare. Also, an important aspect of restoring the business was relisting on NASDAQ on November 4. In addition to restoring the business capability and capacity was creating value in the business, long term value for shareholders. We completed the NEOA enrollment of our Phase 2b study. We completed plantar fasciitis enrollment in a Phase 3 study.
We launched a new product out of our Epicord franchise called EpiCord Expandable. This offers the potential to provide physicians and patients with expanded wound coverage economically. In addition, we received Epifix diabetic foot ulcer coverage from the largest U. S. Commercial payer in the U.
S. 2020 was a busy, busy year. I'm proud of everything that we accomplished and now we're in a position to begin really focusing on the operating assets of our business and investing in it. We are the pioneers in using birth tissue as a platform for regenerative medicine. And we believe our biologics pipeline and our advanced wound care business will create extraordinary value for our shareholders.
Our primary goal is 2 fold, improve access and utilization of our wound care products, number 1. And by doing so, we will grow our top line by over 10%. Number 2, accelerate our novel late stage pipeline of regenerative medicine. In addition to those two primary objectives to support that, we have reorganized, re incentivized and reinvested in our sales force in order to capture momentum and support for the growth of our core wound care business. We're confident also about completing the registration process for EpiFix in Japan.
We anticipate we will receive registration approval mid year 2021. This presents another attractive growth opportunity for Lumetix. These are very, very exciting times for our company. So let me get started by giving you an overview of 2 very impressive pipeline assets. 1st pipeline opportunity is plantar fasciitis.
As you know, our Phase 2b study was completed and demonstrated a 76% reduction in pain versus control at 3 months. Now, we completed enrollment of our Phase 3 study, which included 277 patients in September of 2020. Our last patient out is anticipated to be Q2 2021. Let me give you our estimates on BLA filing. We anticipate on filing our BLA in the first half of twenty twenty two.
We also have plans to accelerate that and if at all possible, we will file in the late Q4. We anticipate FDA approval and product launch predicated on when we submit our application. Earliest would be Q4 of 2022 or later the first half of twenty twenty three. The market for plantar asciitis has been articulated before in some of our calls. Just as a reminder, approximately 2,000,000 patients are treated annually for PM.
About 10% of those patients are recalcitrant and require advanced therapies like corticosteroids. We believe in the 1st year, the potential candidates for an injection of our Amniofix product would be about 20000, 50000 patients. It's important to note that recovery from chronic plantar fasciitis tends to be a lengthy and recurrence is very common in this patient setting. Our second pipeline opportunity is in knee osteoarthritis. As you all know, this is a very significant unmet need.
We completed our enrollment in our Phase IIb trial in September as well. Let me remind you that that trial enrolled 4 47 patients, a large Phase 2b trial. The last patient out for the 6 month blinded observation will be late 2021. Included in this trial is also a 6 month open label extension that allows patients the option to receive microdized the Hakam or handiopics. What's important to note from our 2 pipeline assets here is that there are several enabling factors that are afforded by filing our plantar fasciitis registration.
One, we're advantaged by GMP readiness that's afforded here by by filing the This means that we don't have to go through that process again with the agency. Also, as you know, the company was first to receive our MAT designation. This advantages the company in having frequent dialogue around a clinical trial, protocols, surrogate endpoints, etcetera, as also it allows us the opportunity to discuss our manufacturing process and release criteria. The current timelines in the market is as follows. Obviously, we'll be meeting with the FDA in mid-twenty 1.
We'll be reviewing our Phase 2b trials, presenting our Phase 3 protocol. And we plan to initiate our Phase 3 trial in the first half of twenty twenty two, if not sooner. We would then anticipate a BLA filing in the second half of 'twenty four or the first half of 'twenty five. FDA approval, we anticipate would be the second half of twenty 25 and the first half of twenty twenty six. So, both pipeline opportunities we think offer this company exciting potential to create value for our shareholders, more importantly, value for patients who are suffering from these particular issues.
As we know, the knee OA market is very, very large. It's growing around 2% a year off of a base of 17,500,000 patients. Today, about 4,400,000 patients are being treated with intra articular injections and there are about 8,800,000 injections per year. When you do the math around this and you look at what we think based on our lading, what we how we penetrate this market, We think annually, we would treat 1,000,000 to 1,500,000 patients. That would be on an annual basis.
If proven in Phase if the efficacy is proven in our Phase 3 trial, this will be very, very important new tool for physicians to treat knee osteoarthritis. Shifting to our commercial organization, as I mentioned earlier, we have redesigned the organization, re incentivized them to focus on distinct areas of promotion with our products that are used for DFUs and BOUs. Importantly, we have a very robust commercial infrastructure that is supported by our expanding medical science liaison program, clinical evidence and improved reimbursement. Today, we cover over 300,000,000 lives. So, contractually to support our efforts to pull through and provide access to our products, we currently have multi year contracts in place with the largest GPOs and IDNs.
Our field based reimbursement and national account teams are also used to accelerate the commercial adoption of our products. I've covered off our strategic initiatives, which can be summarized as focused on our pipeline, focused on our core business. Now, I'm going to turn the call over to Pete Carlson. Thank you, Tim, and good
morning, everyone. Today, I will discuss our Q4 and full year 2020 results and comment on some of the underlying trends we are seeing in the business. I do want to take a moment and reiterate some of the achievements NeMedx accomplished in 2020. As a company, the reason we are working to restore our financial reputation is to support the continued delivery of products that make a difference in the lives of patients and their families. Many of us have seen the impact that our Purion engineered technology can have as an advanced treatment option for hard to heal acute and chronic wounds.
Our 700 plus employees are dedicated to delivering the level of quality and excellence our customers deserve. And I appreciate the team's commitment to elevating the standard of patient care. In 2021, as we have talked about, we are increasing our investments in both parts of our business, our core Advanced Wound Care portfolio and our late stage pipeline. All amniotic tissue products are not the same and we believe our differentiated platform is positioned to exceed market growth. Recent efforts in our commercial organization position us for this growth in the coming year.
We are 265 sales personnel strong and plan to increase that number in 2021 by 10% or more, along with aligning territories to ensure we have the right people in the right places. The team is leveraging recent coverage by the largest U. S. Commercial payer for Epifix, our flagship brand, as a proven and medically necessary treatment option for diabetic foot ulcers. We are also increasing our medical education efforts and personnel to help pull this through with our customers.
Returning to 2020 results, I would note that the impact of the company's transition and revenue recognition methodology on quarterly results is now behind us. However, I do want to clarify the impact on our reported full year results. Net sales for the full year ended December 31, 2020 were $248,000,000 primarily recognized on an as shipped basis compared to $299,300,000 for 20 19, primarily recognized on a cash receipt basis. Net sales for 2020 2019 include the benefit of $7,800,000 $29,600,000 respectively, resulting from the change in revenue recognition methodology. Adjusted net sales, which excludes impacts of the company's transition in revenue recognition, were 240 $500,000 in 2020, a decrease of 11% from 2019.
This decrease primarily reflects access restrictions, decreases in elective procedures and cost saving measures implemented by hospitals as a result of the COVID-nineteen pandemic. In looking at a breakdown of our tissue and umbilical cord products, the skin substitute part of our Advanced Wound Care business, the decline is much less in 2020 compared to 2019. This can also be seen in our quarterly trends. Reported adjusted net sales for the 4th quarter are flat compared to the same period in 2019. Excluding the impact of out of period accruals in the Q4 of 2020, adjusted net sales are down slightly, while our tissue and the milk record products are up slightly in that period.
Gross margin in the Q4 of 2020 was 84.2% compared to 83.4% in the Q4 of 2019, reflecting improved manufacturing efficiencies and lower levels of scrap. For full year 2020, we saw a slight gross margin decline from 85.6% in 2019 to 84.2% in 2020, primarily a result of the higher quality standards of current good manufacturing practices we have been implementing since the second half of twenty nineteen. Selling, general and administrative expenses or SG and A for the Q4 of 2020 were $48,700,000 or an increase of 7.2% compared to the Q4 of 2019. Spending on corporate initiatives and non executive stock based compensation contributed to this increase for the quarter. For the full year, we saw a decrease in SG and A, driven in part by the company's efforts to manage expenses in response to the COVID-nineteen pandemic.
As previously disclosed, we implemented a number of initiatives, including a temporary salary reduction and travel restrictions. In addition, reduced commissions resulting from a reduction in sales contributed to the full year decrease. Research and development expenses were $3,400,000 for the Q4 of 2020 compared to $3,700,000 for the Q4 of 2019. For the full year, our research and development expenses were $11,700,000 in 2020 compared to $11,100,000 in the prior year. Consulting fees related to the company's clinical research efforts drove this increase.
The company expects these costs to increase as much as threefold in the coming year. As previously mentioned, this investment supports our future growth objectives that Tim outlined, although the amount could vary depending on the results of our clinical study readouts in the Q2 of this year. We plan to continue working towards the filing of our biologic license applications, filed new or additional investigational new drugs in the first half of the year and published further clinical and scientific research, including efficacy and economic data. Investigation, restatement and related expenses for the Q4 of 2020 were $20,400,000 consisting of costs incurred under indemnification agreements with the company's former management and directors and costs related to certain legal matters involving the company, including resolution of some matters as I have previously indicated. In the year ago period, these totaled $20,100,000 and consisted of legal and restatement expenses.
For the full year 2020, investigation restatement related expenses were $59,500,000 compared to $66,500,000 in 2019. In 2021, the company expects a significant decline in investigation restatement and related expenses prior to any resolution of the pending securities class action matter. Of course, actual results may vary and depend in part on the outcome of certain legal matters we disclosed in Note 14 of our 2020 Form 10 ks. I remind you that the audit committee investigation was completed in mid-twenty 19 and the restatement was completed in mid-twenty 20. We do not expect to incur those related expenses going forward.
Further, we are not currently incurring advancement in indemnification expenses for the former CEO and COO because judgments of conviction have been entered against these individuals and it is the company's position that the judgments as they now stand cut off our advancement and indemnification obligations. Turning to the bottom line, net loss in the Q4 of 2020 was $16,600,000 compared to a net loss of $7,500,000 in the Q4 of 2019. Net loss for the full year 2020 was $49,300,000 and includes an $8,200,000 loss on extinguishment of debt of the company's previous term loan as well as a $6,700,000 benefit from the change in revenue recognition. Net loss for the prior year was $25,600,000 including a $24,500,000 benefit from the change in revenue recognition. Adjusted EBITDA was $10,300,000 in the Q4 of 2020 compared to $14,100,000 in the Q4 of 2019.
The full year adjusted EBITDA was $30,600,000 or 12.7 percent of adjusted net sales compared to $42,100,000 or 15.6 percent of adjusted net sales in the prior year period, reflecting the factors I have already discussed. Now let me review our cash position. As of December 31, 2020, the company had $95,800,000 of cash and cash equivalents compared to $69,100,000 as of December 31, 2019. Our healthy cash position gives us the financial flexibility to invest in initiatives that strengthen our core business and invest in research and development activities as I outlined earlier. Turning to 2021.
We expect our adjusted net sales will increase 10% or more over the prior year, assuming we are able to sell our micronized, articulate and umbilical cord products for the full year. Again, actual results may differ materially and there are some caveats as we have indicated. Specific to our micronized and particulate products as an example, if these products are required to be removed from the market following the period of enforcement discretion, we estimate the negative impact on our expected 2021 net sales could be in the range of $20,000,000 to $25,000,000 As Tim mentioned, our dialogue with the FDA continues and we expect to gain additional clarity on the full impact and timing of enforcement discretion in the coming months. You will note that we have included our umbilical cord products within those that could potentially be impacted by the end of the period of enforcement discretion. This disclosure is primarily based on a limited number of communications from the FDA to other companies selling umbilical cord products, some of which are marketing their products outside of the diabetic foot ulcer and venous leg ulcer areas where our products are currently utilized.
The reasoning and analysis here is different than the micronized and particulate products, which are viewed as more than minimally manipulated. The discussion for the core products focuses on the homologous use standard and the way these products are described and marketed. We are working to gain additional clarification of the potential impact within the FDA guidance and we'll keep you updated. Throughout recent presentations, we have outlined key drivers to achieve growth in our core business, including enhancing the value of our portfolio, expanding the market through awareness and data, targeting new business with product innovation and pursuing international expansion. While we are optimistic about our 2021 growth potential, I remind you that we still are in the midst of the pandemic and in certain areas local or regional surges of COVID-nineteen have continued.
We do know that chronic non healing wounds are not getting better without treatment
and our
commercial team is positioned to address the need of this patient population. In closing, as you expect, we are continuing our other outreach efforts and dialogue with investors and analysts. Another benefit of our NASDAQ listing is the increased opportunity to participate in industry conferences and we have enjoyed the chance to continue sharing our story with members of the financial community. I will now turn the call back to Tim.
Thank you, Pete. Looking forward, we have our focus for the company is on our growth drivers for 2021. They're broken down in R and D, operations and commercial. Let me just quickly review those. We plan the second half of the year to do an interim data readout, accelerate our late stage pipeline, for example, accelerate the filing of our application into the Q4.
On knee OA, accelerate our Phase III clinical trial into the first half of the year. We have an ongoing effort through our medical affairs organization and R and D to continue to publish peer reviewed articles that are clinically oriented, scientifically oriented and have a position on economics. Additionally, we plan to file new INDs in 2021 as well to continue to support the company to achieve its goal of advancing scientific rigor of this category in a way that makes a significant difference for patients. Moving from R and D to operations, we plan to validate our manufacturing facilities to a current good manufacturing practice standard. In addition, we'll continue our high rate of fulfillment above 95%.
Commercially speaking, we plan to grow our top line by 10%, our sales force by 10 year end. Additionally by year end. Additionally, we'll continue to evaluate organic growth opportunities inside our R and D and product development organizations. Finally, as you can see from Pete's presentation in mind, we are investing in the core business for expanded growth. In addition, we have a laser like focus on accelerating our pipeline.
I'd like to thank you for listening today. Operator, you can now open up the lines for questions. Thank you.
Thank you. And our first question comes from Sean Kang with H. C. Wainwright. Your line is now open.
Hi. Thanks for taking my question. So my first question is, how confident are you that FDA might allow you to continue marketing your micronized product for the full year 2021?
Sean, that's a great question. This is Tim. It's hard to anticipate exactly when the FDA is going to fall down on that. I don't have a crystal ball. However, over the last 18 months, we've had communication with them about everything that we're doing in our manufacturing facility to convert that to GMP, as well as continue to conduct clinical trials, as well as file new INDs.
And I think this is perfectly in line with what the agency is asking the industry to do.
I see.
And also, how much of a pandemic impact do you expect for 2021? Obviously, things are hopefully getting better with the vaccination program. And like what is your plan to like mitigate potential risk?
Sean, it's Pete Carlson.
We haven't given any specifics one way or the other about the Q1 relative to expectations or what's any numeric about what's going on. As I mentioned in my remarks, there is does continue to be some local and regional impact and I use the term mixed again, it's not very technical, but that's what we talked about earlier in the year or a year ago. It's I think is more isolated than certainly what we saw 10 months ago, 10, 12 months ago. And then the other thing, we did have somewhat there was a little bit of lost time from weather. Everybody knows that there was a 3 extreme in Texas.
Texas is a high populous state, has a high incidence diabetes. So but otherwise, we haven't given any specifics.
Okay. That's good. One last quick one. So I apologize if I missed this during the call earlier, but is there any like data readouts from the pipeline product for this year? Maybe I missed that.
Let me it's Pete again. I'll just give you some calendar and Doctor. Stein can fill in. Yes, there are readouts coming in the first half of the year on really all three of the trials we have going on in the muscular skeletal area. Doctor.
Stein? Yes. Hi. So as Pete said, we will be completing the last patient out of our Phase IIIs for plantar fasciitis and Achilles tendinopathy in the first half of the year, describe those results
and
we're very much looking forward to the outcomes. And the NEOA trial, the last patient will have completed the 6 month blinded observation period at the same time as the other 2 Phase 3 is complete, that's in the Phase 2. We'll still have a 6 month open label extension that the FDA requires, and we'll be moving that program forward as rapidly as we can. You may remember we have RMAT designation for that product, and we will be discussing the results with the FDA. However, we'll time our public description of the results so that they don't interfere with our opportunity to progress the product successfully through the regulatory path and towards registration.
So in all cases, we'll share the data as soon as it's prudent to do so with regard to regulatory interactions.
Our next question comes from John Vandermosten with SCRZacks. Your line is now open.
Good morning, everyone. It sounds like the FDA has only had limited communication on enforcement discretion. So I wanted to see how you think conversations might go with them. Would you reach out to them as we get closer to that end of May time period or will they reach out to the industry or will there be some kind of public announcement on how they're going to address this? And obviously, it will be company specific or maybe not obviously, but it could be company specific given that some companies are doing studies and some aren't and there's different positions out there.
Can you look at from that perspective for
me? Yes, this is Tim. We've had fairly frequent dialogue with the agency over the last 18 months. Doctor. Stein can opine on this as well.
I believe that the agency is being very thoughtful about how they address this particular issue. As you stated in your comments, some companies are not conducting any trials. While there are limited number of companies that are actively engaged in filing INDs and conducting clinical trials, which would be more in line with what the agency provided in their 2017 guidance letter. I feel confident we've done everything that we can do to support the agency and their efforts to implement their guidance from 2017. Bob, do you have any additional comments?
I think that Tim summarized it very well. We support the FDA and their interest in trying to get better regulatory oversight for the products that are derived from tissues that are more than minimally manipulated and or being used for something other than what they did in the donor. And we've worked hard to get our agents that are covered under the 351 regulations appropriately moved into clinical trials after filing INDs or in some upcoming cases, IVEs. We do believe that we'll be able to demonstrate that our products are safe and effective when used as directed in the indications we can specify. And we believe that we'll be making a successful transition to making them under cGMP, which are the conditions that the FDA is looking for.
And we are engaged in some constructive dialogues with the FDA either through the RMAT interaction that we've fortunately got the designation for the NEOA product of regenerative medicine advanced therapy or through other interactions that the company is pursuing with the agency.
Okay. Thank you, Bob. I'm sorry, go ahead. I was just thinking, Bob. Go ahead, please.
And just another question on that same topic. What happens to product in the channel if enforcement discretion has ended. Will you I guess you may anticipate that and hold back or will it be able to be used or how do you anticipate that going
forward? The FDA has not provided any perspective on that to us. Clearly, there's a strong track record in our own pharmacovigilance database around safety. And as you think about what the FDA's central role is to the safety of the American public. So I would be speculating to say that we would just let our if enforcement discretion expires, I would be really speculating one way or the other where the FDA would view that.
But obviously, we've looked at different scenarios with respect to your question, and I think we're prepared either way how that rolls.
Okay, great. And as was mentioned, one of the facilities is CGMP compliant and the other is almost there. What remains to be done at I think it's the Marietta facility. What remains to be done to get that up to the cGMP standard as well?
John, it's Pete. Let me comment and Tim may want to add. What you're seeing there is just the response from the FDA. We have approached the remediation efforts at both facilities at the same time. So we have submitted really in the middle of 2020 are what we felt like was a completed response to the findings.
And the FDA, relative to response to that. Tim, anything else to be done relative to response to that. Tim, anything?
I think you covered it off well. We have over the past for the first half of twenty twenty, we made a significant effort to address any deficiencies that were noted in the December 'nineteen audit. So and I think the agency is pleased with our response so far.
Okay. And a big part of the growth plans include the health plans, commercial payers and getting them on board. And you've already put the largest commercial payer on included them with Mymetics. So what additional efforts are you making to add on others in this category? And obviously, having the largest payer is a pretty big feather in your cap.
And are you able to leverage that to continue the trend to penetrate these targets?
John, it's Pete again. Let me start. With the addition of that largest commercial payer, we really have some indication coverage with all the commercial payers and obviously with the Medicare Medicaid system. So, it is now more about getting additional payers' perspective and that's clinical evidence. So, I'll let Tim and or Bob comment on that.
I think that Bob can comment certainly on the clinical evidence, the peer reviewed evidence that we're generating as well as the work that we've done on a retrospective basis to look at the health economic impact of our products. Bob, do you want to comment on that more?
Yes. I believe that we have an interesting circumstance and that we've distributed over 2,000,000 of our various products to patients for use since their introduction, and we have an excessively clean safety track record for those products. And we've been able to do some very interesting retrospective work in the Medicare database to demonstrate the utility of the sheet products in diabetic foot ulcer and some work in conjunction with analysis about how they would function in the United Kingdom in terms of the cost for additional quality of life years, all of which demonstrate quite nicely the value of the interventions. We've also been ahead of the curve in conducting randomized controlled trials of our chief products in diabetic foot ulcer and venous leg ulcer, including comparisons to some of the competitor products and shown superior performance. And we are continuing to gather data on the sheet products in the real world and how they perform.
And in addition, we have the 351 products, the micronized chreonine and chorion membrane that are in advanced clinical trials and have already been in many thousands of patients, probably more than 100,000 patients. The number there is a little bit more difficult to determine. And they have an exceptional safety record and lots of evidence for their utility in settings such as plantar fasciitis and the osteoarthritis and earlier studies have formed the basis for the current later stage programs that we've described in the call. Okay.
Yes, it sounds like you've got a lot of ammunition for your sales team to use to go out there and get further penetration. So you're also adding 10% in sales reps, I think was that maybe 26 to 30 people over the next year. So when you talk about 10% growth, our overall top line, I guess does that just include these new sales reps that you're adding on or is there some kind of individual sales rep growth in there as well? And how will that all come together over the next year?
Rohit, would you like to address the question?
Yes. Thanks, Tim. Yes, in terms of the growth, I think there are multiple factors driving it. Growth is a factor of sales force effectiveness. Obviously, as we add and increase our sales team scale, people will come on board.
But it will typically take anywhere between 6 12 months for the sales people who come on board to be fully effective. So the sales growth is a combination of both your existing sales team growing with the market or above the market with the clinical evidence and data that we just talked about utilizing it with the support of getting more people informed and aware of the different options that are available to them for treatment as well as the addition of the new headcount. So there are multiple factors that lead up to achieving above market and above 10% growth.
Okay. That's very helpful. And then jumping to the KOA indication and the grants of an RMAT designation, It seems like what you're providing now in your estimates is a very conservative approach that doesn't really take advantage of that RMAT designation and some of the benefits that confers such as expedited them treatment of that. Can you talk about perhaps some benefits that are possible for that to perhaps get it approved with maybe data that you've already generated or perhaps an extension on studies that you've done. I just want to hear some hypothetical opportunities that might be available to a company with what you have on your plate right now.
Yes. As you know, there are probably less than 50 products that have received RMAT designation. The prior management team here was very successful in achieving RMAT test. I think it's probably the first biologic like this to do that. All said, you're absolutely correct, it does afford you the luxury of more frequent dialogue with senior management at the FDA, and we're taking advantage of that for sure.
In the two areas, I think, are very important to have dialogue with the agency on. Number 1 is your clinical trials. As you know, we're preparing a protocol for our Phase 3 trial in knee osteoarthritis. We will definitely exercise our RMAT status to be aligned with the FDA on the Phase 3 trial. And I think it's particularly important that Doctor.
Stein can articulate more. We conducted a very large Phase 2b trial. And if we replicate the results in that Phase 2b trial to the ones that Doctor. Alton in his retrospective trial conducted, I think we'd be in good shape there. The currency for the agency is data.
And I think that's what our team is focused on is working with the agency around creating the best data we can. And that data is not only clinical data, but also data that we produce in our manufacturing area, all the chemistry manufacturing and controls. And that's another area of dialogue that's very important with the agency. Now, RMAT doesn't subordinate the FDA's standard around product approval. It just is enabling you to have more frequent dialogue, so you can streamline your decision making process around manufacturing, manufacturing release and clinical trials.
Bob, would you like to add to that, please?
I think you said it very well. I think that the RMAT designation is an indication that the FDA believes you have a potentially important medicine and indicates that they are interested in a somewhat more collaborative way of progressing the product through the regulatory process. And so we're very glad to have that. It's not an easy designation to get. And I think it is based on the exciting data that were presented up until a point where the discussion was held with the FDA.
Okay, great. Last question for me is just on the new INDs that you're going to be filing this year. I think they're in advanced wound care. Can you give a little bit more detail there on what you'll be pursuing and some of the exciting indications that you may be able to solve if these are successful?
Bob? Yes, I'd be happy to give you a little bit of information about that. We have both the micronized injectable material for outpatient use where it's often used in patients with chronic non healing wounds. Sometimes you can't have the sheet products be fully effective either for compliance or other reasons. So we're interested in looking at injecting the micronized material around the edges of diabetic foot ulcer and helping to recruit stem cells and drive the healing process there.
And then there's also interest in the surgical use of the micronitis material. It's often being employed to help surgical incisions heal. And we're going to be filing an IND to support that application. Many patients who are either obese or diabetic or older or malnourished or smokers are known to have a lower likelihood of having successful healing after surgical incisions. And so there's use in that setting and we're going to be exploring that.
And then the material that is larger particle size called Amnufill is often used to fill soft tissue defects in the operating room, either in things like amputations or traumatic wounds or perinatal cysts or other settings where you have a missing tissue and you want to put in something that provides matrix and growth factors and that's what AmliorPhyl does. We'll be exploring that under investigational application as well.
Great. Thank you, guys.
Thank you, John.
Thank you.
Our next question comes from Eyad Aspahi with Prescience Point. Your line is now open.
Thanks for taking my question, guys. This question is for Tim and Bob. Just from backing up and looking at the pipeline from a modeling standpoint, it sounds like you guys are saying that AmnioPhix has the potential to capture 1,000,000 to 1,500,000 patients with knee OA, which seems to make sense in light of its competitive positioning in terms of its safety profile and benefits relative to those of its alternative treatments such as NSAIDs, corticosteroids and Is it conceivable I've heard you guys talk in some of the previous conferences about knee OA potentially more likely to not taking place in both knees of each patient. How many shots per patient should we be thinking about in terms of modeling this out? Are we thinking 3 shots per patient per patient per year or 4 shots per patient per year?
Can you guys elaborate on how you're thinking about that?
Yes. You're absolutely this is Timmy. I'll let Bob talk about it from his viewpoint. To answer your question directly, it as the patient progresses, the idea in having another injector is certainly realistic. It's just when they decide to treat the other knee, if you will.
But the idea of bilateral treatment is dialed into our calculus. The 1 to 1.5 patients treated, that's 1 injection per patient. That was the initial assumption. As we do more primary research, we talk to our advisory board and key opinion leaders. We're starting to change our perspective on that.
So a patient throughout the year for a 12 month period could receive between 14 injections. So it will be very, very patient dependent depending on where they are in the lifecycle of their degenerative disease. I think we do know that there's a high probability that once you have knee away in one knee, you will eventually get it in your other knee. So it depends on how the physician wants to begin to treat that patient. Bob?
Yes. I think Tim made some good points. In the ad, you're absolutely right that many patients end up with bilateral knee osteoarthritis. Once you have one bad knee, you start to take the weight off that and you put more weight on the other knee and that makes the other knee degenerate more rapidly. And so it's not uncommon that the two knees may not come as affected at the same time, but it's pretty often the case that both knees become affected.
And so I think it's reasonable to believe that many patients will be getting bilateral injection. In our current Phase II study, we're exploring the duration of the effect after one injection and we are going to be administering some patients a second injection. So we'll have a better sense of that. But I don't think it's unreasonable to believe that the frequency of injection might be twice a year, could actually be 3 times a year, but it's probably looks like twice right now and we're continuing to evaluate that. So I think that the exciting aspect of the product is that it may delay the need for expensive knee replacements.
And in the anecdotal experience of Doctor. Alden, who did the earlier work that led to our Phase II trial, Many patients who were scheduled for knee replacements actually probably didn't return for knee replacements, but came back and asked for having the medicine injected into some of their other achy joints. So I think it is not unreasonable to speculate that these multiple injections per year.
Bob, I think it's important to our audience and that could you just drill down a little bit more thinking around adding the option for the patient to receive an injection even though they were on placebo.
The initial design for the Phase 2 study just had a single injection followed either by the active drug, micronized human, young korion or by placebo and then the patients were followed blindly for 6 months. And then there is a 6 month open label extension just for safety. And what we did was we modified the design, let the FDA know that we had done so, so that patients in the second 6 month interval, if they felt like they didn't have adequate pain control, could receive an injection of the active material. So from that design, we'll see what happens with how long the first injection provides relief, whether the second injection restores relief in patients for whom the relief is stated. And we'll have an interesting setting where we'll have people who were in placebo during the 1st 6 months who then receive active drug and we can have a very clear sense of whether the material is providing them relief as well.
So we like that design a lot and I think we'll learn a lot by how it provides us information.
Thank you, Bob.
Thank you for that. So I kind of want to just translate what this all means. The numbers when you think about them are quite staggering. I want to ask you, Tim and I want to ask you guys, Tim and Bob, this is conceivable, But at 1,000,000 to 1,500,000 patients, 3 injections per year and a price per shot of $1500 to $2,000 you get a revenue range, a peak sales range of $4,500,000,000 to $9,000,000,000 Is that conceivable?
It's Ead, it's certainly when you do the math. That's why we have every some of the largest pharmaceutical companies doing research in EOA. It's a complicated area. Yes, if you can do the math on injection per year to injection a year, it's the patients. When you look at other therapies, the viscosupplementation therapies, there is a regimen that's established and something that rheumatologists and surgeons are accustomed to.
And so patients in those settings with those particular type of treatment modalities may be getting on average 2 to 3 injections a year. We have to really understand this from coming out of our Phase 2b trial and our Phase 3 trial, what is going to be in the labeling for our drug. But it's very exciting for our R and D team and for our key opinion leaders to work with us in designing the protocol for Phase 3 and also doing the analysis of Phase 2b. So we're going to have a lot more information about that. But your notion that when you do the math on it, we can't argue with you on the math.
It's just that we know there's work to do ahead to prove this in the clinic. Bob, I don't know if you want to add any more to that, but it's
Well, I'd like to just mention that I do think it has very great potential as a medicine. And to have your knees replaced is not trivial. I had both mine $75,000 a knee to get them replaced. So there's quite a bit of potential savings to the system to have a intervention that delays or perhaps even avoids the need for replacement. And we have so far very promising results with this intervention.
And it's not surprising because the Microniz contains a large number of active growth factors and anti inflammatory compounds that are perhaps the basis for some of what we're seeing with its efficacy.
Yes. Bob,
it's really important. Eyad laid out a range there. We think this is a big range of opportunity here for us. I also think that
as we
did the analysis around the tissue engineering that the company had conducted or put in studies as a pioneer in this area, the scientists here early on developed a manufacturing process that preserved the inherent qualities of amniotic tissue membrane and also went to the extent of terminally sterilizing this product to make it a safe product. The whole supply chain here was well thought through way before the new management team arrived here. So I think it's fair to say that that will be an important consideration in the overall thinking and approval process. Certainly your clinical data will be important. But also how you make the product and how you make it the same way every time is going to be absolutely critical.
So we do have a strong team led by Scott Turner and Mark Rogers focused on our chemistry manufacturing controls. But Eyad, you're absolutely correct. There's a big range here as we move through and get final labeling, we'll be able to tighten that up.
Thank you for that, Tim. And sorry, go ahead, Bob.
I was going to say that Tim made an important point. The placenta is a remarkable organ. It has a plethora of growth factors that have been selected to work well in conjunction with with each other over maybe 600,000,000 years of evolution of placental mammals. And so you have fantastic starting material, but MiMedx has been particularly good at is converting that into a medical product that is stable and safe and retains the active growth factors in their native formats and is terminally sterilized so that the risk of transmitting any kind of infection is made minuscule. And that's also going to make it a lot easier for us to make the transition to CGMP manufacture and producing a well characterized, stable and consistent product, which is going to be another key aspect of getting this product registered.
So as Tim pointed out, we have a very good team working on very hard in conjunction with the ongoing clinical studies.
Thank you for that. I also think it bears mentioning that the revenue range that I just estimated, it seems to be extremely conservative. When you think about it, and Bob, you made an important point. If the product that laser prevents the need for a knee replacement and our research indicates that that is the case, But if it is true, then the pricing per injection could conceivably fetch $5,000 per injection if you're able to save the insurance companies
the cost
of funding knee replacements. But also, Tim, isn't it true that, that $1,000,000 to $1,500,000 potentially of patients you could potentially capture is in the USA alone?
That is true. That's our estimate range for the U. S. Only. And clearly, this is a global issue.
The company, given its size, we haven't had the capacity to examine that. But you would think that that's certainly is the right time for us to examine that. As you know, our products are we have approvals in the U. K. And Germany for our allografts, our skin substitutes, and we're seeking approval in Japan for our skin substitutes there.
And so we do think there's potential outside the United States that would somewhat mimic the opportunity in the U. S.
And I think it's also worth noting that there are probably north of 17,000,000 people with moderate to severe osteoarthritis in the United States. Many of those have bilateral disease. And the idea that there is fewer than 10% of those that would be suitable for treatment is an estimate based on the current injected products like hyaluronic acid, which frankly is only marginally helpful at best or steroids, which there's a lot of concern about their use or the standpoint of long term effects on joint deterioration. So it may be that if this product performs as we hope it will, it will be suitable for use in a larger swath of that patient population, but that's speculation.
Thank you. This is my final question. As you're probably aware, clinical stage biotech companies with potential blockbuster treatments in their pipeline can and have fetched massive multibillion dollar payout offers following the publishing of Phase 1 or Phase 2 results? For example, just last year, Immunomedics was sold for $21,000,000,000 following the publishing of its Phase 2b results, while $47,000,000,000 was sold for almost $5,000,000,000 following the publishing of its Phase 1 results. Given our belief that Amniofix's peak sales could potentially exceed $8,000,000,000 $12,000,000,000 whatever, We believe that MiMedix could fetch a multi $1,000,000,000 takeout offer following the publishing of its Phase IIb knee OA trial results.
As such, we believe it would be in the best interest of shareholders for the company to explore potential sale to a strategic buyer after its Phase 2 results are published. Is this something that management intends to take under consideration?
Eyad, we're considering every strategic option. Right now, we're focused on executing in our clinical trials, regaining momentum in our current core business, as well as making sure that our facilities are validated to GMP. So there's work to do and your theoretical notion here, certainly there are a lot of examples of this in the industry. We're right now, I think it's most important for us to execute against what we have on our plate for 2021, which includes the readouts for our trials. We have to get the securities behind us.
And I must say that our Board is keenly aware of these types of options. Look, we're running up against other calls that we're going to have to make. 2020 was a very foundational year for us. 2021 is going to prove to be transformational for LaMedix. I appreciate everybody's interest in this and look forward to talking to you throughout the day and next week.
Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.