Earnings call: CorMedix Inc. reports Q3 financials, DefenCath drives growth

In a recent financial results conference call, CorMedix Inc. (NYSE American: CRMD) reported substantial progress in the third quarter of 2024, with net revenue reaching $11.5 million, primarily fueled by the successful rollout of its flagship product, DefenCath. The company has secured agreements with dialysis operators to provide access to approximately 60% of U.S. dialysis clinics, with purchases expected by the end of Q4 2024. Despite reporting a net loss of $2.8 million for the quarter, CorMedix anticipates a positive EBITDA in Q4, supported by strong sales and a stable cash position.

Key Takeaways

• CorMedix achieved Q3 net revenue of $11.5 million, mainly from DefenCath sales.
• Agreements with dialysis operators are set to increase DefenCath access to 60% of U.S. clinics.
• The company expects to be EBITDA positive in Q4, subject to order timing.
• A net loss of $2.8 million was reported for Q3, with a decrease in total operating expenses.
• CorMedix has a cash position of $46 million, sufficient for 12 months of operation.

Company Outlook

• CorMedix anticipates being EBITDA positive by Q4 2024.
• The company plans to submit a refined clinical protocol for TPN to the FDA by mid-November, with approval expected by late 2027 to 2028.
• A real-world evidence study with U.S. Renal Care and a pediatric hemodialysis study are underway.

Bearish Highlights

• The net loss for Q3 2024 is $2.8 million, although it is an improvement from the previous year.
• Operating expenses have increased to $14.1 million.
• The company reports net cash used in operations of $45 million, an increase from the previous year.

Bullish Highlights

• DefenCath has been successfully implemented with U.S. Renal Care, accounting for over 90% of Q3 sales.
• Gross margins for DefenCath are expected to remain high through 2025.
• The company has sufficient finished dosage inventory to meet demand for the next year.

Misses

• No specific misses were highlighted in the provided summary.

Q&A Highlights

• CEO Joe Todisco emphasized the importance of institutional protocols in driving DefenCath adoption.
• The company is focusing on expanding its product portfolio beyond DefenCath.
• Transition from WAC to ASP reimbursement is expected to have minimal impact on orders.
• Future financing may include limited ATM use and consideration of business development opportunities.

CorMedix Inc. has demonstrated a strong performance in the third quarter of 2024, with its product DefenCath being a key driver for revenue growth. The company’s strategic partnerships with key dialysis operators position it to capitalize on a significant portion of the U.S. market. While CorMedix faces increased operating expenses and a net loss, its outlook remains positive with expectations of achieving EBITDA positivity in the near term. The company’s clinical developments and ongoing studies signal a commitment to expanding its therapeutic offerings and addressing unmet medical needs. Despite the challenges, CorMedix’s management remains confident in their strategy and the potential for continued growth.

InvestingPro Insights

CorMedix Inc.’s recent financial results and outlook align with several key metrics and insights from InvestingPro. The company’s strong revenue growth of 2107.4% in the last twelve months as of Q2 2024 reflects the successful launch of DefenCath, which has driven the impressive Q3 2024 net revenue of $11.5 million reported in the earnings call.

InvestingPro data shows that CorMedix has a market capitalization of $584.54 million, indicating significant investor interest. This is further supported by the stock’s strong performance, with a 306.58% price total return over the past year. These figures underscore the market’s positive reception of DefenCath’s rollout and the company’s expanding market access.

However, investors should note that CorMedix is currently operating at a loss, with a negative gross profit margin of -64.79% and an operating income margin of -7212.47% in the last twelve months. This aligns with the company’s reported net loss in Q3 2024, although management expects to achieve EBITDA positivity in Q4.

InvestingPro Tips highlight that CorMedix “suffers from weak gross profit margins” and is “not profitable over the last twelve months.” These tips are consistent with the financial results discussed in the earnings call. However, the tip that “liquid assets exceed short term obligations” supports the company’s statement about having sufficient cash for 12 months of operation.

It’s worth noting that InvestingPro offers 15 additional tips for CorMedix, providing a more comprehensive analysis for investors interested in deeper insights.

The company’s volatile stock price movements and high revenue valuation multiple, as mentioned in the InvestingPro Tips, suggest that investors should carefully consider the risks and potential rewards associated with CorMedix’s growth trajectory and future prospects in the medical device sector.

Full transcript – CorMedix Inc (CRMD) Q3 2024:

Operator: Good day and welcome to the CorMedix Inc. Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I’d now like to turn the conference over to Dan Ferry of LifeSci Advisors. Please go ahead.

Dan Ferry: Thanks, operator. Good morning and welcome to the CorMedix third quarter 2024 earnings conference call. Leading the call today is Joe Todisco, Chief Executive Officer of CorMedix. He is joined by Dr. Matt David, Executive Vice President and CFO; Beth Zelnick Kaufman, EVP and Chief Legal Officer; Liz Hulburt, EVP and Chief Clinical Strategy and Operations Officer; and Erin Mistry, EVP and Chief Commercial Officer. Before we begin, I would like to remind everyone that during the call, management may make what are known as forward-looking statements within the meaning set forth in the Private Securities Litigation Reform Act of 1995. These statements are statements other than statements of historical facts regarding management’s expectations, beliefs, goals and plans about the company’s prospects and future financial position. Actual results may differ materially from the estimates and projections on which these statements are based due to a variety of important factors, including the risks and uncertainties described in greater detail in CorMedix’s filings with the SEC, which are available free of charge at the SEC’s website or upon request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements and investors should not place undue reliance on these statements. CorMedix does not intend to update these forward-looking statements, except as required by law. At this time, it is now my pleasure to turn the call over to Joe Todisco, Chief Executive Officer of CorMedix. Joe, please go ahead.

Joe Todisco: Thanks, Dan. Good morning, everyone and thank you for joining the call. As we approach the end of our first calendar year of commercial launch of DefenCath, I am incredibly proud of the team’s efforts and pleased with the commercial results thus far. The third quarter marks the first full quarter of product shipments of DefenCath, as well as the first quarter of outpatient product utilization. Our net revenue for the third quarter of $11.5 million exceeded Street consensus and was largely driven by our initial anchor customer, U.S. Renal, which has done an exceptional job with DefenCath implementation within its clinics. We have recently announced new agreements with two midsized dialysis operators and one large scale operator, which combined with our existing customers, will provide patients access to DefenCath and roughly 60% of dialysis clinics in the U.S. We are currently working diligently with our new partners to operationalize those agreements and currently expect purchases to commence for all three before the end of the fourth quarter. While we have not issued revenue guidance for the fourth quarter, based upon our current forecast, we do expect to be EBITDA positive for the fourth quarter. With respect to guidance, there was a wide potential variability for fourth quarter revenue driven by the timing and scale of purchases by our LDO customer as well as the scale of purchases by our newly announced mid-sized customers. DefenCath, for the most part, is being protocolized by the outpatient customers that adopt the product, meaning they are establishing criteria for patients in their system for which DefenCath is appropriate and then implementing protocols based on those criteria. This requires a significant pre-implementation effort with each customer to establish protocols, order sets and conduct training on an enterprise level and in the case of our LDO customer requires implementation on a much larger scale to allow a rollout at over 2,000 clinics. The upside of having our drug protocolized in this manner is that once a customer goes live, we expect the patient conversion ramp to move fairly quickly. The downside is that setup can take anywhere from several weeks to a few months. Currently, we are expecting our LDO customer to begin ordering in December, but a couple of weeks movement in either direction from a customer of this scale would obviously have a material impact on our fourth quarter revenue. For our new MDO customers, we expect orders to begin in November. With respect to our inpatient launch activities, we have made significant progress in terms of building DefenCath champions within hospitals and health systems and scheduling P&T meetings with those institutions. A large number of P&T meetings occurred in the third quarter and we are in the process of fielding questions and providing additional information required for a formal decision. These P&T committee discussions require both a comprehensive review and collaboration across multiple stakeholders, including clinical and financial within the health system. To that extent, we expect the inpatient update process to be longer and the ramp to be more consistent with traditional inpatient launches in comparison to the more rapid uptake we have seen on the outpatient side. We have started to see some utilization in the handful of hospitals that have completed P&T review early and added DefenCath formulary. And we are optimistic to build on that progress in 2025 as we continue our field efforts with DefenCath advocates. Focusing now on our clinical developments, we announced in the second quarter that we received supportive feedback from FDA related to our proposed clinical pathway for adult total parenteral nutrition, or TPN. Since then, we have received FDA feedback and conducted extensive market research and clinical feasibility studies. And accordingly, we are refining the clinical protocol and anticipate submitting it to FDA by mid-November to align with our plans to operationalize the study in the first half of 2025. The company’s goal for TPN is to obtain FDA approval for an expanded use of our taurolidine and heparin catheter lock solution in the late 2027 to 2028 timeframe and we estimate annual peak sales potential in this indication to be in the range of $150 million to $200 million. We will provide investors with updates on progress as we move forward. From a clinical budget standpoint, we anticipate the study to cost between $10 million and $12 million with the majority of expense spanning the 2025 and 2026 calendar years. During our previous earnings call, we also announced three additional clinical initiatives, all expected to commence in the 2024 or early 2025 timeframe. Most meaningful of three, from a data value standpoint, is our real world evidence study that we will run in cooperation with our study partner, U.S. Renal Care. Our hope with this study, in which we expect to evaluate outcomes of roughly 2,000 patients over 24 months, at a cost of less than $1 million a year, would be to generate real-world evidence around the impact of DefenCath utilization on cost of patient care, infection rates, hospitalizations, mortality and multiple other metrics such as lost chairtime and antibiotic use. Ultimately, we would intend to utilize this data in our post TDAPA period to negotiate future sustainable reimbursement from Medicare Advantage plans and other value based care contracting entities. Data collection for this study has already commenced. Simultaneously with our adult TPN and real world evidence studies, we will also be commencing a study in pediatric hemodialysis. This will be a relatively small study spread over several years as we expect patient enrollment to be a challenge, given an extremely small patient population and the need for very personalized protocols for these ultra-vulnerable patients. This pediatric study is a post-marketing requirement under the Pediatric Research Equity Act by the FDA and we have FDA’s concurrence on the final study protocol. We have plans to begin patient enrollment in early 2025 and we expect the study to cost between $4 million and $6 million spread over 5 years. Lastly, in addition to our other clinical initiatives, we plan to commence an expanded access program for high-risk populations, including, but not limited to pediatric TPN, peritoneal dialysis patients with refractory peritonitis and neutropenic oncology patients utilizing a CVC. These high-risk patients are those that have exhausted other infection prevention methods and unfortunately, remain at significant risk for comorbidities and mortality. The cost for the expanded access program is expected to be less than $750,000 a year, primarily in the form of free product and distribution costs. And we expect to generate data that supports further label expansion and complements our adult TPN program. I’d now like to turn the call over to Matt to discuss the company’s third quarter financial results and financial position. Matt?

Matt David: Thanks, Joe and good morning everyone. I am pleased to be here today to provide an overview of our third quarter 2024 financial results as well as an update on CorMedix’s cash positions. The company has filed its quarterly report on Form 10-Q for the quarter ended September 30, 2024. I urge you to read the information contained in the report for a more complete discussion of our financial results. With respect to our third quarter of 2024 financial results, our net revenue for the third quarter of 2024 amounted to $11.5 million. As Joe indicated, this marks the first full quarter since DefenCath became commercially available this past spring. Our net loss was approximately $2.8 million or $0.05 per share compared with a loss of $9.7 million or $0.17 per share in the third quarter of 2023. The smaller net loss recognized in 2024 compared with 2023 was driven by the gross profits associated with the net sales of DefenCath. Operating expenses in the third quarter of 2024 increased approximately 33% to $14.1 million compared with $10.5 million in the third quarter of 2023. The increase was driven by higher selling and marketing and G&A expenses offset by a decrease in R&D. CorMedix is now reporting selling and marketing expense and general and administrative expense as separate line items. On an apples-to-apples basis, selling and marketing expense increased 66% to $6.7 million in the third quarter of 2024 compared with $4.1 million in the third quarter of 2023. G&A expense increased 76% to $6.6 million in the third quarter of 2024 versus $3.7 million in the third quarter of 2023. The increase in selling and marketing expense was attributable primarily to increased marketing efforts and new personnel inclusive of our field sales organization and support for the commercial launch of DefenCath. The increase in G&A expense was primarily due to increases in personnel costs in preparation for support activities related to the commercial launch as well as certain expenses previously expensed as a component of R&D prior to FDA approval. R&D expense decreased by approximately 73% to $0.7 million driven by the approval of DefenCath. As a result of the post FDA approval of commercial operations, costs related to medical affairs and certain personnel expenses that supported R&D efforts prior to the FDA approval of DefenCath, have been recognized in selling and marketing or G&A expense. In addition, a portion of the costs related to the manufacturing of DefenCath previously recognized and are indeed – are now capitalized as a result of the FDA approval. With respect to our 9 month year-to-date 2024 financial results, total net revenue during the 9 month year-to-date of 2024 amounted to $12.3 million. Total operating expenses during 9 months year-to-date of 2024 amounted to $45.5 million compared with $33.3 million in the first 9 months of 2023, an increase of 37%. R&D expense decreased 80% to $2.2 million, driven primarily by the approval of DefenCath. Selling and marketing expense increased approximately 106% to $20.5 million compared with the first 9 months of 2023 and G&A expense increased approximately 83% to $22.9 million compared with the comparable period in 2023. The increases in selling and marketing and G&A were driven primarily by new personnel and cost to support the commercial launch of DefenCath. We recorded net cash used in operations during the 9 months year-to-date of 2024 of $45 million compared with net cash used in operations of $27.7 million in the same period in 2023. The increase is primarily driven by an increase in trade receivables and inventories offset by a smaller net increase of accrued expenses and accounts payable. The company has cash and cash equivalents of $46 million as of September 30, 2024. While we expect to begin to see cash collection from our accounts receivable in Q4, our cash position was supplemented in Q3, with approximately $12.4 million in net proceeds from ATM issuance. We believe our cash, cash equivalents, short-term investments and projected future operating cash flow gives the company the ability to fund operations for at least 12 months. Assuming we maintain our current trajectory of sales from existing outpatient accounts and see initial shipments to new accounts during Q4, we believe we can achieve positive EBITDA in the fourth quarter. I will now turn the call back to Joe for closing remarks. Joe?

Joe Todisco: Thanks, Matt. CorMedix is executing well on our launch of DefenCath and focused on growing the business with existing customers as well as expanding utilization and new ones. We are also actively working to expand the label for DefenCath beyond hemodialysis and beginning to scale for commercial stage business development opportunities to expand our product portfolio beyond DefenCath. I appreciate everyone’s continued support for CorMedix and I am happy to take questions.

Operator: [Operator Instructions] Our first question comes from Jason Butler with Citizens JMP. Please go ahead.

Jason Butler: Hi, thanks for taking the questions and congrats on the quarter. I guess just a couple from me. Can you speak to the use you are seeing today to what extent it’s being driven by individual doctors or sensors decision to use the product versus the overall institution already implementing SOPs? Second question, you’ve laid out reimbursement dynamics before for the outpatient setting including the split between Medicare fee-for-service and Medicare Advantage. How do those broader population dynamics compare to what we’re actually seeing during the launch? And then just lastly from me, can you speak to what you think about the trend for expenses, operating expenses in 4Q? Thanks.

Joe Todisco: Okay. Alright, thanks, Jason. Appreciate the questions. So what I think we’ve seen most or almost entirely with the initial rollout has been a protocolization of the product meaning, it’s more of a top-down driven approach in the outpatient setting. I don’t – we don’t see as much of this being driven on a patient by patient or doctor-specific basis. So the centers are putting protocols in place. They are setting – they are establishing criteria within their systems for whom DefenCath is appropriate and then they are implementing based on their criteria. And as I mentioned in the script, specifically with respect to our LDO customer, which we expect to follow the same pattern, right, the downside is that setup takes a couple of extra weeks leading in, but the upside is we expect patient conversion to move fairly quickly. We expect to see a similar type ramp to what we saw with our initial rollout with U.S. Renal. So overall, we view that as a positive. Now your question on reimbursement, I just want to make sure I understand, you were asking about what we are actually seeing in claims, is that….

Jason Butler: Exactly. Are you seeing that roughly similar balance between fee-for-service and Med Advantage?

Joe Todisco: Yes. Well, the claims data lag. So what we’ve seen with our initial customer rollout, I think is patients or the facilities rather utilizing fee-for-service patients first right and then expanding use into other payers. So we are seeing claims that are being filed with Medicare Advantage with commercial with Medicaid. So we are seeing like I’d say a broad dispersion of claims, I’d say overall though – in terms of you just look at the aggregate number of patients that are getting DefenCath, it’s – I believe it’s starting in the fee-for-service patients first and then expanding outlook. And your third question, Jason, I apologize was…

Jason Butler: How should we think about expenses?

Joe Todisco: Yes. For the fourth quarter, I think that we’ve guided to the year, that’s 15 to 18 by quarter. We’ve been on the low end of that range. We have a lower range for this quarter. I think we’ll be somewhere in the 15 to 17 range for the fourth quarter is what I would expect. I just want to verify that with Matt, that’s…

Matt David: Yes, I think that’s probably correct, Joe. We have said to people we are going to begin to see things start to uptick related to R&D, but it’s really the 2025-2026 timeframe.

Joe Todisco: Yes, not for Q1.

Operator: The next question comes from Gregory Renza with RBC Capital. Please go ahead.

Gregory Renza: Thanks. Good morning, Joe and team. Congratulations on the progress and thanks for taking my questions. Yes, great to see the setup for the long-term Joe. Of course, as there is always interest in the fourth quarter and nearer term we certainly appreciate all of the uncertainties and the drivers. But just on the pushes and pulls, could you just remind us of just a few items when it comes to the stocking of DefenCath facilities, the holding time and the order frequency, just how to think about that? And maybe on another topic related just when we think about the fourth quarter, how would we anticipate maybe some of the climate, the hurricanes are given you are certainly Southeast based focus for sure with facilities, just any drivers on sort of the macro as it affects getting DefenCath to facilities and to patients? Thanks.

Joe Todisco: Thanks, Greg. That was a good question. So, for the initial customer that we have rolled out, we’ve been shipping direct to clinic and to that extent we are not seeing a lot of stocking. I think the estimates we are giving maybe they are holding it at 10 days on hand. As we onboard our LOD customer, we do think there will be some stocking that they may hold 15 days to 30 days of inventory on hand. So, it will be a little bit more of a call it a – maybe a traditional turnover of inventory. Now, the first quarter, we did see a little bit of impact. Our initial customers and one of the new MDO customers that are deployed through the Southeast have a lot of clinics down there. So, we saw little bit of disruption over the first week of the month, but largely back the trend we are seeing is going back to what we had when we exited Q3. So we are focused now on onboarding new customers and trying to build our camp as well.

Gregory Renza: Great. That’s helpful. And maybe just on the manufacturing and API, can just remind us of what you are doing just to ensure you’ve got the sufficient quantities for future demand? Thanks again and congrats.

Joe Todisco: Sure. Well, first I would say that we have more than sufficient finished dose inventory on hand today to take us through a decent part of next year. So, from a finished dosage inventory standpoint, I think we are in a really good position. We’ve also stockpiled a large amount of bulk of our key active ingredients and we are intend to purchase more in 2025 to kind of – to show that up. We have two finished dosage manufacturers as well. We have [indiscernible] in Spain and we have Siegfried in Germany.

Operator: The next question comes from Brandon Folkes with Rodman & Renshaw. Please go ahead. Brandon, your line maybe muted.

Brandon Folkes: Hello. Can you hear me?

Joe Todisco: I can, Brandon.

Brandon Folkes: Yes, okay. Let me start again, apologies about that. Well, congrats on the quarter first and foremost and thanks for taking my questions. Just two questions from me. Firstly, just in terms of patient types of the different providers. Have the mid-sized operators identified the patient types that were initially used in DefenCath? With how much consistency are you seeing across the providers in terms of where they are expecting to use DefenCath? And perhaps other side of that if you are seeing any variability, does that provide an opportunity to perhaps sort of cross-sell or educate providers on where other providers are using DefenCath?

Joe Todisco: Thanks, Brandon. Yes. So look, I think, we’ve talked about this over the last couple of quarters that some customers are triaging their patients based on the benefits, verification. Others are looking at it on a high risk basis kind of first. And I think that’s certainly how they are doing in their respective institutions. So I don’t know that there is consistency across all customers uniformly, but I think your question about opportunity is that, yes, it is absolutely an opportunity for growth right beyond whichever initial kind of triage criteria the customers have used. They are certainly already in my discussions with some of our customers that have identified patients that are high risk as to what is the next cohort and how much more broadly can we implement beyond high risk.

Brandon Folkes: Great. Thanks. And then secondly for me, gross margin in the quarter looked extremely strong. How should we think about gross margin going forward given this was your first full quarter of DefenCath in the market? And then especially with as you bring on these sort of larger contracts just even if it’s just directionally, how do we think about gross margin from here?

Matt David: Look, I think gross margins are going to remain high. I mean the initial gross margins you are seeing a lot of that inventory was expenses R&D. These batches were manufactured prior to getting our approval. But that said the cost of goods sold currently relative to the net selling price, it’s a healthy gross margin that we would expect through 2025.

Brandon Folkes: Great. Thanks for taking my questions and congrats on all the progress.

Matt David: Thank you.

Operator: The next question comes from Les Sulewski with Truist Securities. Please go ahead.

Les Sulewski: Good morning guys. Thank you for taking my questions and congrats on the progress. Just to look at 3Q, any sort of metrics you can provide, whether it was a patient count or vital usage. And then second, out of the 60% access to dialysis centers that you have provided, do you have a sense of what percentage of that is utilized with DefenCath? And then how do you capture the rest of those patients within that pool? And then the second part of that question is, what is the strategy to capture the other 40% operators, to get them onboard, and how concentrated is that share? And I have a follow-up. Thank you.

Joe Todisco: Okay. Thanks. So, I mean that concern in terms of third quarter metrics, I think we have put out currently what we are comfortable putting out. We can certainly revisit that as we move forward. So, whether we want to put out any patient numbers or potentially unit information, but right now, I think we are just comfortable putting out our sales data. So, in terms of 60% access, right, that that is measured based on the number, the total number of clinics where DefenCath could potentially be available, right, relative to the total number of clinics. In the U.S. now, first, DefenCath is indicated for patients with CVCs, which were about 20% dialysis patients overall. And what we are seeing varies by customers. Some customers, as I have said, that are already implementing more broadly, it’s probably a much higher percentage of the overall catheterized population. The initial LDL customer, which we have talked about in the past, looking to roll out with 4,000 patients, would be about 10% of their catheterized population. And then certainly we are working with them to grow beyond just that initial cohort. So, that’s – so there is a decent amount of I think upside opportunity potential as we move into 2025 across all customers. Now, you asked about the remaining 40%, obviously, that most of that is concentrated with one other LDL. We have been engaged with them over the past 1.5 years. They took a wait and see approach at the launch. We are in the process of reengaging with them now generating some additional data that we think that they will find compelling, and hopefully, we can make some progress with them in the fourth quarter or into early next year, if not, I think we are very comfortable. We have got a really good trajectory with the four of the top five dialysis providers in the U.S.

Les Sulewski: Got it. Very helpful. Second question, I guess is – can they – when can we expect some sort of a meaningful contribution from the inpatient side? And then I believe you had ND license agreement, is there – that has been triggered, I believe based on your 10-Q, what is the amount and when that will be paid out? Thank you.

Joe Todisco: Thanks. So, I will start with the inpatient, and I will kick the ND Partners over to Matt. Look, so inpatient, if you look at the size of the opportunity right now, outpatient is about 90% of our volume opportunity. Certainly, it’s got a much steeper ramp in terms of the ability to convert patients more quickly. So, that’s certainly what’s going to driving and what’s going to drive our material revenue, certainly in the short-term. But when we think about inpatient contribution, we look at it much more as a long-term potential revenue contributor. We see a lot of value in that segment, as we have talked about over the last 2 years. We see potentially better price durability there. But it’s going to be – it’s going to take a longer time to build share and penetration there to the nature of the inpatient market. So, I have a long-term view there. I think we are very happy with the trajectory we have seen for sales on the outpatient side. And then we are going to continue to plug away on the inpatient side, building relationships and making progress. Matt, do you want to comment on ND Partners?

Matt David: Yes, sure, no problem. I will just mention real briefly. Earlier this year, the company determined it was probable with the net sales milestones related to this would be achieved. And so as a result, we recorded a license intangible asset, which is included in accrued expenses in the consolidated balance sheet. The milestones were met during the three-month period ended September 30, 2024. So, this is something that you should probably see. We would expect over the coming year to be paid.

Les Sulewski: Got it. Thank you, guys.

Operator: The next question comes from Serge Belanger with Needham & Company. Please go ahead.

Serge Belanger: Hi. Good morning and congrats on the quarter. A couple of questions around your anchor customer, U.S. Renal Care, I guess the first one just what percentage of 3Q sales that they represents. And then secondly, it sounds like it’s been a solid partnership so far. They have had a successful debt and cap prioritization process. Just curious if this customer operates differently and whether you could replicate this partnership with some of the other partners that you have enlisted over the third quarter. Thanks.

Joe Todisco: Thanks Serge. So, yes, I think – and I think we have put – there might be some numbers in the Q around concentration of receivables. But yes, so U.S. Renal accounted for an incredibly large percentage of our third quarter sales, more than 90%. And I think in terms of trying to replicate how well a job they have done with implementation, yes, that’s certainly something that we are trying to duplicate with other customers, particularly, our LDO customers. So, we are hopeful for that and we are just going to keep executing over the next couple of months.

Serge Belanger: Maybe one follow-up, TDAPA currently reimbursed at the WAC price. I think it’s going to transition to ASP sometime in the early part of 2025. Just curious what that transition will look like and whether it could impact ordering patterns.

Joe Todisco: I don’t think it’s expected to impact ordering patterns. So, this is something that’s anticipated, and we have structured our agreements around the transition from WAC ASP. And we don’t expect ASP to erode that drastically initially, right. So, yes, this is somewhat of a known commodity. I think government will publish ASP at some point in late-November or early-December. I understand for QBO, and I don’t think it’s going to be something that’s problematic.

Serge Belanger: Okay. Thanks for taking my questions.

Operator: This concludes the audio portion of the Q&A session. I will now turn it over to Dan Ferry for written questions from the audience.

Dan Ferry: Thank you, operator. So, Joe, we have some written questions from the audience. The first one is why isn’t the company providing guidance? Do you have a sense when it may be possible to provide guidance for investors and analysts alike?

Joe Todisco: Okay. Thanks Dan. But maybe I kind of touched on it in the script a little bit. We have got so much variability around the timing of onboarding our LDO customer. Think about a customer of that scale, and if they begin purchasing December 1st versus December 15th, versus November 15th, there is a lot of variation there in what it could do for fourth quarter numbers. So, we didn’t feel comfortable putting out a range at this point in time. As we move through the quarter, we can certainly reevaluate that decision and see into what we are – once we have orders and see repetition, what we are comfortable putting out there. But right now, I think we are comfortable guiding that we do expect to be EBITDA positive, which is I think an incredible accomplishment in the first six months to nine months of a product launch.

Dan Ferry: Excellent. Alright. Thanks Joe. Another one here, could you expand a bit on TPN, what has the FDA feedback been to-date and what drove the company to make protocol amendments?

Joe Todisco: Yes, I am going to turn that over to Liz in a moment. But we are excited about the TPN opportunity. We put our protocol into FDA. They provided some comments, I think are essentially around the statistics and fiscal calculations. But nothing really that’s going to change our timelines or costs for the study. So, Liz, do you want to go ahead?

Liz Hulburt: Sure. Thanks Joe. So, exactly, we received pretty minor feedback, wholly statistical in nature on the TPN protocol, and we have observed that and integrated it into a new protocol amendment that is forthcoming. There is always really a fine line in protocol development, right, the need to address the critical unmet need of the patient population with a study that’s designed to provide rigor and high clinical value. And one that can be translated post-approval and integrated into clinical practice in a meaningful way. So, I think I am confident now, we have a deeply experienced clinical, regulatory and bio stack team in place to meet those needs. And what we are resubmitting that protocol amendment in the next couple of weeks.

Dan Ferry: Okay. Great. Thanks both. Another one here, Joe, can you share any feedback from the nephrology community regarding product use and practice since launch? Has there been anything in there that has surprised you?

Joe Todisco: I don’t know there is anything that I found surprising. Obviously, I think some of the good things about utilizing DefenCath while there is no change to the workflow. I think the clinical results are really, we don’t understand, but I think overall, the feedback that we get is positive and continues to be overall positive. But Erin and Liz are in the field on a day-to-day basis, so they want to add some comments. Go ahead.

Erin Mistry: Yes. Thanks. Thanks Joe. I think for the – from an implementation standpoint, we have seen very positive feedback from nurses, physicians and also patient advocates. On the inpatient side, the coordination and complexities involved are obviously complex and it takes time. But we have seen a crucial role being played by infectious disease and the infection prevention as well as quality community and guiding those processes across the inpatient setting. Liz, do you have anything else you want to add to that?

Liz Hulburt: No, I think you really covered it. I mean I think we are just continually surprised to learn that despite all of these infection prevention efforts that are out there from a number of groups and a number of initiatives that CRBSIs are continuing to happen, and there is still a great need to educate and raise awareness around them and prevention around them. So, I think we have got a plan for that. The team is actively addressing it. And I think we have really followed stories in our clinician community and nursing communities that have adopted DefenCath and are really working with us to further that awareness within institutions too.

Dan Ferry: Thanks Liz. Excellent. Yes, thanks Liz. Thanks Erin. Joe, one final one here, can you give some thoughts on how CorMedix is thinking about financing going forward?

Joe Todisco: Okay. Yes and I think we didn’t touch on in the script. We have talked about it in past earnings calls. Over the last quarter, with the higher volume and the appreciation in the stock, it made sense to use the ATM a little bit, and we did that, and we may continue to do that in a limited basis. But with the trajectory that we see for the business, obviously, I don’t think we need to do any type of raise from an operational cash flow standpoint, right, to fund the business. The reasons why we may not consider something in the future, we are getting a lot of inbound interest from large institutional investors, long only investors, the type of people that we may want in the stock that can’t currently find liquidity on the market. We also may want to start looking at building up a little bit of dry powder for business development. But we don’t have anything, I would say, eminently planned, but those would be the reasons why we might want to consider something down the road.

Dan Ferry: Okay. Great. Thanks Joe. Operator, you may now close the call.

Operator: This concludes our question-and-answer session and the conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

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