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Organogenesis Holdings (NASDAQ:ORGO) fell ~16% on Thursday after the biotech withdrew its full-year guidance with its Q2 2023 financials, citing concerns about reimbursement for its wound care products.
However, the company topped Wall Street forecasts for Q2 as its total net revenue exceeded the high end of its previously issued estimates, adding $117.3M despite a ~3% YoY decline.
Advanced Wound Care products and Surgical & Sports Medicine contributed $110.1M and $7.2M in net revenue, respectively, with 3% and 5% YoY declines.
However, Organogenesis’ net income fell ~39% YoY to $5.3M as income tax expense expanded ~58% YoY to $3.9M.
“As expected, we leveraged our diversified portfolio and leadership position in Wound Care Centers and physician offices across the U.S. to deliver better-than-expected revenue and profitability performance in Q2,” CEO Gary Gillheeney remarked.
However, he cited uncertainty from recent local coverage determinations ((LCDs)) published by Medicare Administrative Contractors ((MACs)), Novitas, First Coast Services, and CGS related to the treatment of wounds due to diabetic foot ulcers and venous leg ulcers.
Noting that MAC’s decision to exclude five commercialized products and consider only Apligraf and Dermagraft products clouds the demand outlook, the company withdrew its guidance issued in May.
However, Organogenesis (ORGO) is in communication with relevant parties regarding the issue, as the LCDs are set to take effect on September 17, 2023.