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The FDA has warned MiMedx that its wound-healing product derived from human placentas needs agency approval before it can be sold to doctors and hospitals.

In its to CEO Joseph Capper, FDA said the company's Axiofill product isn't regulated solely under the more lax "361" human cell, tissue, or cellular or tissue-based product (HCT/P) pathway. Instead, it's a biological product regulated under the stricter section "351" of the Public Health Service Act.

Therefore, it would need either a biologics licensing application to be on the market, or an investigational new drug application (IND) to be given to people in clinical trials, FDA said, noting that it has neither.

Axiofill is indicated for wound healing, including "trauma wounds" and "diabetic foot ulcers," according to product labeling. It fails to meet "minimal manipulation" criteria, FDA said, "because your processing alters the original relevant characteristics of the placenta related to its utility for reconstruction, repair, or replacement."

Paul Knoepfler, PhD, a stem cell biologist at the University of California Davis who has long been tracking stem cell and birth tissue companies, said the warning letter's focus on placenta-derived material is novel.

"Many of the other firms that get letters in this perinatal space market umbilical cord products, but the MiMedx product is placental," Knoepfler told MedPage Today. "The FDA is reinforcing that placental materials can be biological drugs as well."

The letter came after visits by FDA officials to two MiMedx sites in Georgia last year. Along with the product classification issues, the letter also mentioned "significant deviations" from current good manufacturing practices.

FDA acknowledged replies from MiMedx, dated March and October of last year, but said these were "inadequate to address the deficiencies."

MiMedx did not return a request for comment from MedPage Today, but it that it "does not agree" with the FDA's position that the product doesn't meet "minimal manipulation" criteria.

"Axiofill's product characteristics can be reasonably considered directly comparable to at least one other commercially available HCT/P on the market that the FDA regulates under section 361 and, as a result, the company believes FDA is not consistently applying the rules for permitted use," the company stated in the press release.

MiMedx said Axiofill has been on the market since September 2022 and is expected to generate less than 5% of the company's total net sales for 2023.

The company has faced its share of controversy, including charges involving its and , and allegations that it and booked that as sales.

Then, in 2020, MiMedx Group to resolve allegations that it knowingly submitted false commercial pricing disclosures to the Department of Veterans Affairs, enabling the company to charge inflated prices for its human tissue graft products.

Earlier reporting by MedPage Today on placenta donation programs -- where companies partner with hospitals to collect birth-related tissues -- showed MiMedx had such a program. It also runs the website, .

The FDA has been trying to crack down on so-called "birth tissue" companies -- those that purport to create products using stem cells gathered from afterbirth including the placenta and umbilical cord.

In 2023 alone, the FDA issued warning letters to Signature Biologics over its injectable umbilical cord product; Stratus Biosystems for its amniotic membrane and fluid products; and Regenative Labs over its "Wharton's jelly" products. The agency also issued a safety communication about amniotic fluid eye drops last year.

The U.S. Department of Justice also turned its attention to birth tissue products last year, charging a Texas-based physician assistant with healthcare fraud for allegedly injecting patients with amniotic fluid in a so-called "dubious attempt at pain management."

In 2022, experts told MedPage Today it appeared that FDA may be getting tougher on birth tissue companies, as a warning letter to Re-Gen Active Lab stated outright that its product for "orthopedic diseases or conditions" would not be considered homologous use of human tissue and would need to be regulated as biologics. Experts said the agency hadn't previously been that clear about what didn't classify as homologous use.

The FDA has long been trying to put a lid on unapproved stem cell therapies. In 2017, the agency issued guidance on regenerative medicine products, with a November 2020 deadline for full compliance. That deadline was extended due to the pandemic and . Now, manufacturers must meet FDA's premarket approval or IND requirements for certain products before promoting them to patients.

Knoepfler questioned whether FDA would "do more" in the birth-tissue space.

"Perinatal supplier firms often argue that their products are not drugs and so should not be subject to the regulations that come along with that classification. The FDA does not seem to be budging on this classification though," Knoepfler said. "At the same time, we haven't seen the FDA go beyond issuing warning letters to take any further steps in the birth-related biologics arena."

He noted that "by contrast, in the adipose cell sphere, the agency did pursue two injunctions, and losing the other case, which is pending appeal."

"Do most firms in this [birth tissue] area come into compliance after receiving letters, whereas in the adipose space that didn't happen?" Knoepfler asked. "Could the FDA end up in court with a perinatal firm over the drug classification question?"

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