MiMedx, the Marietta biopharma company rocked by allegations of inflated earnings and improper sales practices, said Monday the company’s longtime chairman and CEO has resigned.
Parker H. “Pete” Petit, a fixture in metro Atlanta’s business community, has stepped down, though he will remain a member of the MiMedx board, the company said in a news release. Also out is Bill Taylor, the company’s president and chief operating officer.
MiMedx makes tissues from donated placentas for wound care and other uses. But the company has been under siege for months after accusations by former employees the company participated in improper sales practices, including alleged over-shipping product to Veterans Affairs hospitals.
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The company is currently under scrutiny by several federal agencies, including the Department of Justice, the Securities and Exchange Commission, the Department of Veterans Affairs and the Food and Drug Administration.
Last month, the company announced it would restate more than five years of its corporate earnings reports and said it had parted with then-Chief Financial Officer Michael Senken and John Cranston, MiMedx’s treasurer.
In Monday’s news release, MiMedx said the actions “are based on the Board of Directors’ business judgment regarding the Company’s leadership and direction, and arise, in part, from information the Audit Committee has identified through its previously announced independent investigation.”
“This investigation is ongoing and there may be other actions taken based, at least in part, on information from the investigation,” the release said.
Charles Evans, MiMedx’s lead independent director, has been named chairman of the board.
David Coles, a senior leader at turnaround firm Alvarez & Marsal has been named interim CEO.
“The Board is confident that now is the right time for MiMedx to transition its leadership team as we look to the future and prepare our Company for its next chapter,” Evans said in the release.
MiMedx has been battered by short sellers of the company’s stock who have alleged wrongdoing by Petit and MiMedx management. The company under Petit went to great lengths to push back against short sellers, creating an unusually public war of words. Petit blamed his company’s travails on “rogue” salespeople and a misinformation campaign waged by greedy short sellers looking to drive down stock values.
Petit did not immediately return messages from the AJC on Monday.
“When the CEO, the president and the CFO are all gone – this thing’s a bankruptcy,” he told the AJC Monday morning. “It’s a massive fraud. It’s been a massive lie, all the way through.”
MiMedx shares were trading for less than $5 per share in pre-market activity, less than a third of the stock’s value of its 52-week high in January.
Petit is a well-connected member of Atlanta’s business elite. He has ties to President Donald Trump and U.S. Sen. Johnny Isakson and is a major donor to Georgia State University. The school’s new football field is named for him.
This is a developing story.
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