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Marietta-based MiMedx Group, Inc. (NASDAQ: MDXG) has signed an agreement to divest the company's subsidiary, Stability Biologics LLC, back to its original stockholders.

MiMedx's said its transition into a biopharmaceutical company was an impetus for this divestiture initiative.

MiMedx was founded in 2008 by serial Atlanta entreprenuer Pete Petit. 

JOANN VITELLI

MiMedx Group is developing and marketing regenerative and therapeutic biologics with human placental tissue allografts and patent-protected processes for multiple sectors of health care. In January of 2016, the company acquired Stability Biologics, which developed and processed bioactive bone graft products and tissue allografts. MiMedx disclosed that it acquired Stability Biologics with a combination of cash and stock paid at closing, with future contingent consideration to be paid through a two-year earn-out arrangement.

MiMedx CEO Parker "Pete" Petit, said in a press release that Stability Biologics' business is not a strategic fit with the company's new focus on biopharmaceuticals.

"We remain very confident in our growth trajectory continuing and in our ability to meet or exceed the revenue projections we have previously set for 2017," Petit said in a press release. He added that as of July 26, the company raised its annual revenue guidance to the range of $309 million to $311 million. "Assuming this transaction closes in the third quarter, we will maintain our full year revenue guidance. Even without the Stability Biologics revenue contribution in the fourth quarter, we are confident in our ability to meet our increased revenue guidance for the year...

"... While we believe the potential of Stability Biologics products continues to be significant, we expect to have better return on investment (ROI) opportunities in biopharma compared to those in the cadaver tissue category," Petit added in the release. "A major incentive for the MiMedx acquisition of Stability Biologics was its independent sales representative organization. As part of the transaction, MiMedx will retain access to this sales rep organization via a distributor agreement with Stability. This group of sales reps will continue to focus on certain areas of our surgical business."