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Petit Backing 'Biomaterials' Biz MiMedx

Atlanta Business Chronicle - by Urvaksh Karkaria, Staff Writer

Friday, September 11, 2009

Having knocked the ball out of the proverbial park with last year's $900 million sale of Matria Healthcare Inc., Atlanta biotech big shot Parker "Pete" Petit is giving it another shot this time with a medical implant firm.

Petit, who took over as chairman, president and CEO of MiMedx Group Inc. earlier this year, plans to steer the spine and orthopedic implant company to profitability in about two years. Marietta-based MiMedx develops biomaterial-based products for use in the musculoskeletal specialties. The company is also backed by biotech entrepreneur Steve Gorlin, who was formerly MiMedx chairman and remains on the board.

Petit, a major investor in MiMedx, was chairman and CEO of Matria, which sold to Inverness Medical Innovations Inc. (NYSE: IMA). Matria was a former subsidiary of Healthdyne, which Petit founded in 1971. Petit, who was traveling, could not be reached for comment.

Petit has been a major player, particularly around health-care information technology and disease management, said Tom Callaway, managing director at Georgia Venture Partners Inc.

"Now, he's putting his footprint in life sciences," Callaway said.

Seeing value in science

MiMedx, which went public through a reverse merger in February 2008, holds exclusive rights to eight issued and 33 pending U.S. and foreign patent applications, according to documents filed with the Securities and Exchange Commission.

"The company's intellectual property revolves around tissue-engineered products," Callaway said. "This is an important new space where biologic products are proving themselves as early applications."

MiMedx subsidiaries include LeveL Orthopedics, which develops implants for use in the upper extremities, and SpineMedica, which owns a license for a polyvinyl alcohol polymer that may be used to treat damaged soft-tissue trauma and disease in the spine and as a barrier for scar-tissue formation after surgery.

A third business unit is developing a proprietary collagen-based fiber that may be used to repair tendons and ligaments. The collagen-based biomaterial products act as platforms or "scaffolds" on which a patient's tissue grows during the healing process to achieve healthy tissue reconstruction without major scarring.

MiMedx is a "combination of lots of technologies discovered at different places that's been merged together into a unique whole," Callaway said. "I don't think they've ever lacked in science. What they've needed is somebody to propel it to product."

And that skill set is what Petit brings to the table. An engineer by background, Petit has the chops to understand the science and grasp the commercial value of the technologies.

"[Petit] is a commercialization expert," Callaway said. "He knows how to look at a product, identify customer needs and develop expanding products to meet that need."

Funding progress

MiMedx hopes to go from pre-revenue to profitability by the end of 2011. The company expects annual earnings of about $7.2 million on net revenue of about $36 million in 2012, according to SEC filings.

The exit strategy for medical device firms such as MiMedx almost always involves getting acquired by major orthopedic companies, Callaway noted.

"Orthopedic companies are looking for novel platforms to acquire," he said.

Petit not only commercializes research, he has helped finance it.

At Georgia Tech, Petit funded a professorial chair for "Engineering in Medicine," endowed the Petit Institute for Bioengineering and Bioscience, and assisted with the funding of the Biotechnology Building that bears his name.

At Georgia State University, he assisted with the funding of the Science Center building that also bears his name. Petit is an inductee of the Technology Hall of Fame of Georgia and the Georgia State Robinson College Business Hall of Fame.

Petit recognizes that universities are the heart of innovation in the community, said Mike Cassidy, president of the Georgia Research Alliance, a partnership between Georgia universities, businesses and state government. "He is an innovator," Cassidy said. "He has been willing to invest in stimulating more of that innovation within the universities."