MiMedx Sues Organogenesis Over Business Interference

On Dec. 31, MiMedx Group Inc. received a subpoena from the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) in connection with a civil investigation into matters primarily related to the Company’s sales and marketing activities. On the same day, the provider of human amniotic tissue-based orthopedic products filed a lawsuit against Organogenesis Inc., claiming business interference.

According to MiMedx, In June 2013, allografts from the Marietta, Ga.-based company were suddenly and unexpectedly removed from the 65IIA Federal Supply Schedule (FSS) of the United States Department of Veterans Affairs (VA). Immediately after the removal, MiMedx challenged that action. Within days, the VA determined that the action to remove the MiMedx allografts was not warranted and they were fully restored to the FSS. The VA then issued an apology letter to MiMedx for the action.

On Dec. 3 2014, MiMedx received an answer as to why the VA took that unusual abrupt action the previous year. According to the department’s response, which was obtained via a Freedom of Information Act request, Organogenesis provided material misinformation to the VA in order to improperly influence it to take action against MiMedx products. The current lawsuit alleges that Organogenesis engaged in malicious actions that “tortuously” interfered with MiMedx’s contractual relationship selling into the VA. MiMedx’s investigation of Organogenesis’s improper tactics is ongoing, and company officials state it will “pursue any and all remedies available to it to address the actions undertaken by Organogenesis.”

In addition to tortuous interference, MiMedx’s suit against Organogenesis asserts unjust enrichment. The damages sought in the lawsuit were not specified. The lawsuit was filed in the United States District Court for the Northern District of Georgia.

MiMedx Chairman and CEO Parker H. “Pete” Petit said that Organogenesis has displayed a pattern of attempts to disrupt MiMedx’s business, and that “these types of improper actions are well beyond the boundaries of legitimate business practices.”

Canton, Mass.-based Organogenesis, which is a regenerative medicine company focused on bio-active wound healing and soft tissue regeneration, has not publicly responded to the allegations.