MiMedx Group Inc. disclosed that the U.S. Justice Department is investigating the company's sales and distribution practices.
The Marietta, Ga.-based company had previously denied a Bloomberg News report that the federal investigators were looking into its distribution procedures and investigating whether it overcharged the government for its tissue repair products.
MiMedx said the Justice Department is reviewing the company's practices on a preliminary basis.
Previously, certain terminated employees had filed a countersuit against MiMedx accusing the company of channel stuffing by booking large orders for the EpiFix product even though customers never ordered it.
Following the lawsuit, the company received a subpoena from the U.S. Securities and Exchange Commission seeking information related to the allegations mentioned in the suit. MiMedx formed an audit committee of its directors to investigate the allegations made by former employees as well as certain short sellers.
MiMedx said it will continue to cooperate with both regulatory agencies but no longer intends to post responses to the allegations due to the committee's investigation.
