Medicare reimbursement issues take toll on shares of MDxHealth

Medicare Reimbursement Issues; Drug Co. Spinout

Two small publicly traded healthcare companies based in Orange County in recent weeks made announcements that Wall Street didn’t like.

Medicare is becoming “more rigorous” in its reimbursement for new molecular diagnostic technologies, reported Michael McGarrity, chief executive at MDxHealth SA (Nasdaq: MDXH), which has its headquarters in Irvine and also has a base in Belgium.

As a result, the company, which makes tests to diagnose prostate cancer, on Nov. 29 slashed its 2022 revenue forecast to $36.5 million to $37.5 million, from the $40 million to $42 million range. Analysts had expected $40.5 million this year.

“We remain confident in our ability to address any remaining questions” with Medicare regulators and should get a “positive reimbursement decision” in the first half of 2023, McGarrity said.

The company also reported an independent, multi-institutional clinical study was recently recognized as “a best poster” by the

American Urological Association. The company initiated a 2023 forecast for sales of $65 million to $70 million. The average of three analysts is for 2023 sales of $67 million.

Investors weren’t so sanguine, as the shares fell 10% to $7.01 and a $114 million market cap late last week.

Spinoff

The outlook looks a bit cloudier for Anaheim-based BioCorRx Inc. (OTC: BICX), which is trying to develop treatments to solve drug addictions.

The company’s board of directors on Nov. 22 approved exploring a potential spinoff of BioCorRx Pharmaceuticals Inc., a unit that is developing clinical stage drugs, into a separate publicly traded company “on a major exchange.” “If completed, such a transaction would allow us to better align resources, while enabling shareholders to participate in the upside potential,” Lourdes Felix, CEO, chief financial officer and a director, said in a statement.

BioCorRx develops and provides treatment programs for drug abuse and weight loss. The unit to be spun off is researching an injectable called BICX101 with the goal of future regulatory approval by the Food and Drug Administration. The National Institute on Drug Abuse, part of the National Institutes of Health, last year gave the company a $5.7 million grant last year to develop a program to fight opioid use disorders and overdose.

“Notably, BioCorRx Pharmaceuticals Inc. has made tremendous progress over the past three years advancing BICX104, an implantable naltrexone pellet for the treatment of opioid use disorder,” Felix said. “We look forward to rapidly advancing our clinical activities towards commercialization of BICX104, as well as expanding our development pipeline.”

The company last month reported thirdquarter revenue of $94,400 and a net loss of $949,000. It has $63,500 in cash and restricted cash on hand as of Sept. 30.

The company, which dates to 2008, has attracted a variety of investors over the years as its stock price almost touched $28 each in 2018. Shares have fallen about 31% since October when it made a presentation at an investor conference to $1.85 and a $14 million market cap as of last week. ■