Q1 2021 CorMedix Inc Earnings Call

Within the meaning set forth from the private Securities Litigation Reform Act of 1095. These.

Unknown Executive: and the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainies and include that are not limited to any of the following. Any statements other than statements of historical fact regarding management's expectations, beliefs, goals, and plans about the company's prospects, including its clinical development program and marketing approval, for Defendcast in the U.S. and other product can, future financial position, future revenues and projected costs, and potential market acceptance of Defendcast, Neutral, and other product, More specifically, forward-looking statements include any statements about our clinical development plans and the timing, costs, results, and interpretations thereof, projections as to the company's future capital raises, spending and cash positions, expectations as to the timing and nature of anticipated regulatory action possible product licensing, business development, or other transactions, any commercial plans and expectations, market projections for our product candidates, and expectations as to manufacturing and product components.

These statements are subject to certain risks and uncertainties and include but are not limited to any of the following.

Any statements other than statements of historical facts regarding managements expectations beliefs goals and plans about the company's prospects.

<unk> its clinical development program and marketing approval for defend Caf in the U S and other product candidates.

Future financial position.

Future revenues and projected costs.

And potential market acceptance of defend cash neutral and other product candidates more specifically forward looking statements include any statements about our clinical development plans and the timing.

Costs.

<unk> and interpretations thereof.

Projections as to the company's future capital, raising and spending and cash position.

Expectations as to the timing and nature of anticipated regulatory actions.

Possible product licensing business development or other transactions any commercial plans and expectations.

Market projections for our product candidates and expectations as to manufacturing and product component costs.

Unknown Executive: Actual results may differ materially from these projections or estimates due to a variety of important factors, including but not limited to uncertainty, clinical development, regulatory approvals, and commercialization. These risks are described in greater detail in CoreMedics' filing, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Cormor. CoreMetics may not actually achieve the goals or plans described in these forward-looking statements. An investor should not place undue reliance on them. Please note that CoreMatics does not intend to update these forward-looking statements, except as required. At this time, it is now my pleasure to turn the call over to Mr. Koetsa Beloshe, Chief Executive Officer of Corment. Koso, please go ahead.

Actual results may differ materially from these projections or estimates due to a variety of important factors, including but not limited to uncertainties related to clinical development.

<unk> approvals and commercialization these.

These risks are described in greater detail in <unk> filings with the SEC copies of which are available free of charge at the SEC's website at Www Dot SEC Dot Gov.

Or upon request from <unk>.

<unk> may not actually achieve the goals or plans described in these forward looking statements and investors should not place undue reliance on these statements. Please note that <unk> does not intend to update these forward looking statements, except as required by law at.

At this time, it's now my pleasure to turn the call over to Mr coats to below <unk>.

<unk> Executive officer of Chromatics Caso. Please go ahead.

Kozo Beloshe: Thank you, Dan. Good afternoon, everyone, and thank you for joining us on this call. On today's earnings call, we will discuss the first quarter of 2021 financial information and the overall progress CoreMedics is making in bringing DefendCath to the U.S. market for its first indication for use as a Cateralloc solution for haemodalysis patients to reduce Catherall-related bloodstream infection. Joining me on this call are Phoebe, Matt, Liz, and Tom, Nuss Pickle, who So let's begin on the people's side first.

Thank you Dan.

Good afternoon, everyone and thank you for joining us on this call.

On today's earnings call, we will discuss the first quarter 2021 financial information.

And the overall progress cosmetics is making in bringing defense to the U S market.

Its first indication for use as a catheter lock solution for hemodialysis patients to reduce catheter related bloodstream infections.

Joining me on this call CDB.

Matt.

And Paul Maass.

Most people.

Joining <unk> this morning.

So let's begin on the people side first.

Kozo Beloshe: As announced this morning, I'm pleased to have Tom Nus Pickle join Corps Medic as executive vice president and chief commercial officer. Tom brings with him a depth of experience on the commercial side from his time at Amgen, Pfizer, and Opco. Of particular note for call medics is Tom's time at Amgen, where he gained several years of experience operating in the hemodalysis space, both in the US and international. Tom brings marketing, market access, and government affairs experience that will augment the commercial expertise of the team that CoreMedics has already built.

As announced this morning.

Pleased to have Tom joined.

Joined cosmetics as executive Vice President and Chief Commercial Officer.

Tom brings with him a depth of experience on the commercial side from his time at Amgen Pfizer and optical.

Of particular note for cosmetics was Tom's time at Amgen.

Again, several years of experience operating the hemodialysis space.

The U S and internationally.

Tom brings marketing market access and government defense experience that will augment the commercial expertise of the team that Palmetto has already built.

Kozo Beloshe: We're pleased to have Tom join us at this important stage for CoreMedics as we continue to refine our launch plan. Although today is Tom's first day, we have already started the process of bringing Tom up to speed on the ongoing activities and strategic priorities for the company. Later during this call, Tom will share some of his thoughts. So, welcome, Tom.

We're pleased to have Tom join us at this important stage per core medics.

We continue to refine our launch plans.

Although to date as Tom's per day, we've already started the process of bringing Tom up to speed on the ongoing activities and strategic priorities for the company.

Later during this call Tom would share some of his thoughts so welcome Tom.

Kozo Beloshe: On April 14, CoreMedics issued a press release that provided an update of our meeting with the FDA. What we stated in that press release included that there was an agreed-upon protocol for the manual extraction study identified in the CRL, and that FDA is requiring us confirmation of an in-process control to demonstrate that the label volume can be consistently withdrawn from the vial. In addition, addressing FDS concerns regarding the qualification of the filling operation at the third-party manufacturing facility may necessitate adjustments in the process and generation of additional data on operating parameters for the manufacturing of DefendCare.

On April 14th correlate ex issue a press release that provided an update of our meeting with the FDA.

What we stated in that press release included.

That there wasn't a agreed upon protocol for manual extraction study identified is the CRM.

FDA is requiring us confirmation often in process control to demonstrate that the label volume can be consistently withdrawn from the bottom.

And in addition, addressing fda's concern regarding the quantification of our selling operations at <unk>.

Third party manufacturing for 17 main necessitate adjustments in the process and generation of additional data.

On operating parameters for the manufacturing of defend GAAP.

During this call Phoebe will provide you an update of the progress <unk> made to date on addressing the deficiencies identified by.

Phoebe: During this call, Phoebe will provide you with an update on the progress Core Medicines has made to date on addressing the deficiencies identified by FDA at the third-party manufacturing facility, in addition to the continued effort to bring Defend Cath across the finish line for hemodialysis patients. CoreMedics has been making progress by initiating the work required for the label expansion of different gases for use in TPN and oncology patients using a central venous catheter once the FDA has approved the NDA for the initial indication for use.

FDA at the third party manufacturing facility.

In addition to the continued effort to bring defend cap across the finish line for hemodialysis patients.

<unk> has been making progress by initiating the work required to enable expansion of different cash reduce and TPN oncology patients using a central venous catheter once the FDA has approved the NDA.

The initial indication for use.

Phoebe: Liz Wood provides an update of the work her team, in conjunction with the medical group and the regulatory group, is doing to prepare the ground required to enter into clinical studies for label expansion when Defend Cap is approved. We are proceeding with these plans while limiting our cash burn so that, financially, we have the resources required to successfully bring defense cats to patients in the U.S. Math will provide you with an update on our quarter one, 2021 financials, and provide color regarding the strength of the core medics balance. So now, let's move to the first topic, the introduction of Tom Nus Pickle.

What Liz would provide us an update of the work our team in conjunction with the medical group and the revenue revenue Creek group are doing to prepare the growth required to enter into clinical study for label expansion when deferred GAAP is approved.

We are proceeding with these plans while limiting our cash burn so that financially we have the resources required to successfully bring defend cash to patients from the U S.

Matt will provide you an update of our quarter, one 2021 financials and provide color regarding the strength of <unk> balance sheet.

So now let's move to the first topic the introduction of tall Speaker Tom.

Tom Nus Pickle: Thank you, Kozo, for the warm welcome and kind introduction. I am excited to be joining CoreMedics at this pivotal time for the company. DefendCath is a novel catheter lock solution with the potential to prevent catheter-related bloodstream infections in several large markets, addressing significant clinical and economic needs. As DefendCath approaches potential approval by FDA for reducing CRBSIs in patients with kidney failure receiving haemodialysis through a central venous catheter, the company will be accelerating its activities to be able to bring DefendCath to hemadialysis patients who can benefit from it as quickly as possible after FDA approval.

Thank you.

A warm welcome and kind introduction.

I'm excited to be joining <unk> at this pivotal time for the company.

Deferred cash is a novel catheter lock solution with the potential to prevent catheter related bloodstream infections in several large markets addressing significant clinical and economic needs.

As deferred cash approaches the potential approval by FDA for reducing <unk> in patients with kidney failure, receiving hemodialysis through a central venous catheter the company will be accelerating activities to be able to bring dependent cash the hemodialysis patients who can benefit from it.

As quickly as possible after FDA approval.

There is total mentioned in his introduction.

Tom Nus Pickle: As Kozo mentioned in his introduction, I spent my career in the pharma industry where I gained significant leadership experience in launching products and developing commercial strategies, including highly relevant experience in the chronic kidney disease space. This experience and my relationships within the nephrology community will enable me to build a high-impact commercial organization as we move closer to the company's first approval and subsequent launch in the hemodialysis market.

I've spent my career in the pharma industry.

And significant leadership experience in launching products and developing commercial strategies.

All day highly though what we experienced in the chronic kidney disease space.

This experience and my relationships within the Nephrology community will enable me to help <unk> build a high impact commercial organization as we move closer to the company's first approval and subsequent launch in the hemodialysis market.

As I have learned more about core metrics I am extremely impressed with the clinical foundation that team has built with the current cash.

Tom Nus Pickle: As I have learned more about Cormetics, I am extremely impressed with the firm clinical foundation the team has built with FENCAT. My objective will be to lead the commercial team as it works to realize the promise of Dependentat to become the new standard of care for haemodialysis, oncology, and TPN patients using central venous catheters. I am energized by this opportunity, and I'm excited to join Kermetics today as we prepare to bring Pencast to patients. Let me hand it back to Kozo. Thank you, Tom. Now I'd like Phoebe to provide the regulatory update starting from the press release of April 14 following the FDN.

My objective will be to lead the commercial team as it works to realize the promise with the 10-K to become the new standard of care for hemodialysis oncology and TPN patients using central venous catheters.

I am energized by this opportunity and I'm excited to join <unk> today, as we prepare to bring to parent cash to patients.

Let me hand, it back to coastal.

Thank you Tom.

Now I'd like to provide a regulatory update starting from the press release on April 14, after the FDA meeting.

Phoebe: Thank you, Koso. Good afternoon, everyone.

Phoebe.

Thank you <unk> good afternoon, everyone.

Phoebe: I am pleased to report that the Cormetic CMC and regulatory teams are continuing to work collaboratively with our third-party manufacturing facility to resolve the deficiencies identified by FDA during its review of the DefendCath NDA. As we previously discussed, the complete response letter, or CRL, sent to Cormetics by the FDA required a manual extraction study to demonstrate that the labeled Robbuk to FENCath can be consistently withdrawn from the vials to confirm the manufacturing in process control.

I am pleased to report that the <unk> CMC and regulatory teams are continuing to work collaboratively with our third party manufacturing facility to resolve the deficiencies identified by FDA during its review of it from Caf NDA.

We previously discussed the complete response letter or C O L. Two.

<unk> by the FDA required manual extraction study to demonstrate that's labeled Ross must defend cash can be consistently withdrawn from the vials to confirm the manufacturing and process controls.

Phoebe: I am pleased to report that the study has been completed successfully. As noted by COSO, we announced after the meeting with FDA that we had an agreed-upon protocol that has now been executed. The data clearly demonstrate consistent withdrawal of the labeled volume from the bio.

Pleased to report that the study has been completed successfully.

As noted by co. So we announced after the meeting with FDA that we have an agreed upon protocol that has now been executed.

The day that clearly demonstrate consistent with trial of the labor volume from the vials.

Phoebe: The Cormetic CMC and regulatory teams continue to focus their efforts on resolving the deficiencies sent to the contract manufacturer or CMO in the post-application action letter. As we have explained previously, the major focus of FDA's concerns was on the qualification of the filling operation, and CoreMedics and the CMO have been evaluating available data to assess the need for adjustments in the manufacturing process and generation of additional data on operating parameters for the manufacture of DefenCal.

The cosmetic CMC and regulatory teams continue to focus our efforts on resolving the deficiencies.

So the contract manufacturer or CMO and net.

Post application action letter.

As we have explained previously the may.

Major focus of Fda's concerns was on the qualification of the filling operations.

In core medics, and the CMO had been evaluating available data to assess the need for adjustment in the manufacturing process and generation of additional data on operating parameters for manufacture of defend accounts.

Phoebe: Based on our analyses, we have concluded that additional process qualification will be needed with subsequent validation to address the deficiencies identified by FDN. As a result, our current plan is to be able to resubmit the DefendCath NDA in the fourth quarter of 2021.

Based on our analysis, we have concluded that additional process qualification will be needed with subsequent validation to address the deficiencies identified by F. T I S.

As a result, our current plan is to be able to resubmit to defend caf NDA in the fourth quarter of 2021.

Phoebe: At the meeting with FDA in mid-April, FDA stated that the review timeline would be determined when the NDA resubmission is received. FDA also expects all corrections to facility deficiencies to be complete at the time of resubmission, so that all corrective actions may be verified during an on-site evaluation in the next review cycle, if FDA determines it will do an on-site evaluation. Our goal is to ensure that FDA can conclude that the manufacturing facility is ready to support commercial operations for DefendCath without the need for an on-side inspector.

At the meeting with FDA in mid April FDA stated that the review timeline would be determined when the NDA. Resubmission has received FDA also expect all corrections to facility deficiencies to be complete at the time of Resubmission.

With that I'll corrective actions may be verified during an onsite evaluation and the next review cycle. If the F. D. A determined it will do an onsite evaluation.

Our goal is to ensure that FDA can conclude that the manufacturing facility is ready to support commercial operations per defend cats.

Without the need for an onsite inspection.

Phoebe: As I have explained on a previous call, FDA identified the deficiencies based on a review of records that it requested from the CMO. There were no on-site inspections due to travel restrictions in place because of the ongoing COVID-19 pandemic.

As I have explained on our previous call F. D. A identified the deficiency is based on a review of records that are requested from the CMO.

There was no onsite inspection due to travel restrictions in place because of the ongoing COVID-19 pandemic.

Phoebe: We are hopeful that FDA will continue to recognize the potential for Defendcast to address an unmet medical need for reducing life-threatening, catheter-related bloodstream infections and complete the review of the manufacturing facility using the record review approach to approve the NDA as quickly as possible. However, we are gratified that if FDA decides that an inspection of the CMO is required before the FENCath NDA can be approved, it now has the option to use a remote interactive inspection. In a guidance document recently released by FDA, the agency will decide when it is appropriate to conduct a remote interactive inspection for a pre-approval inspection to assess a marketing application.

We are hopeful that FDA will continue to recognize the potential for defend cast to address an unmet medical need of reducing life threatening catheter related bloodstream infections and complete the review of the manufacturing facility using the record review approach to approve the NDA as quickly as possible.

Ever we are gratified that if FDA decides then an inspection of the CMO is required before then disciplined cash NDA can be approved it now has the option to use the remote interactive evaluation.

And a guidance document recently released by F D. A.

The agency will decide when it is appropriate to conduct remote interactive evaluation for preapproval inspection to assess our marketing application.

Phoebe: Virtual interactions hosted by FDA's IT platforms and equipment will be scheduled when the manufacturing facility is operational. The pre-approval inspection will assess whether the facility can perform the manufacturing operations in conformance with current grid manufacturing practice requirements. FDA expects that the use of remote interactive evaluations should help the agency operate within normal timeframes in spite of the COVID-19 pandemic. As we have consistently stated, we are committed to providing updates as we move through resolution of the deficiencies. Thank you, and I will now turn the call to Liz for an update on clinical activities at Gormetics. Liz?

Virtual interactions hosted by F. D H I T platforms and equipment will be scheduled one the manufacturing facility is operational the preapproval inspection will assess whether the facility can perform the manufacturing operations and conformance with current good manufacturing practice requirements.

Do you expect that the use of remote interactive evaluations.

Should help the agency operate within normal timeframe in spite of the COVID-19 pandemic.

As we have consistently stated we are committed to providing updates as we move through resolution of the deficiencies.

Thank you and I will now turn the call to Liz for an update on clinical activities are chromatics Liz.

Liz: Thank you, Phoebe. Good afternoon, everyone.

Thank you Phebe and good afternoon, everyone I'm excited.

Liz: I'm excited about the recent efforts and activities of the clinical team as it relates to Defendcast. Given the versatility of Defendcast, we are able to explore potential opportunities for label expansions, as well as potentially expanding the hemodialysis market. To start, we have been researching the standard of care and patient profiles of pediatric patients receiving chemo dialysis via a C. These young patients come to hemodialysis very differently than the adult population we studied in Lockett 100. In children, the most common causes for dialysis are congenital defects, small or non-functioning kidneys, or scarring in the glomeruli, the filters in the kidney.

The recent efforts that activities of the clinical team as it relates to defend cash.

Given the versatility of the fantastic, we are able to explore potential opportunities for label expansions as well as potentially expanding the hemodialysis market.

To start we have been researching the standard of care and patient profiles of pediatric patients receiving hemodialysis yeah. It's interesting.

These young patients come to hemodialysis very differently than the adult population. We studied in the lock it 100.

Children, the most common causes per dialysis or congenital defect.

All are nonfunctioning kidney or scarring in the colonial life the filters in the kidney.

Liz: Similar to adults, pediatric patients using a catheter experienced complications like bloodstream infections and clotting, and given the inherent vascular challenges, maintaining catheter patency and the health of the patient are critical. Furthermore, while pediatric patients often move to a fistula for primary access, there is a subgroup of patients that remain on long-term catheter care, and these patients specifically have unmet needs. They have had numerous in-depth conversations with key thought leaders in pediatric hemodialysis and gained support to develop a pediatric program for Descentec. The outpatient Hemosyellysis Center serving pediatric patients is often hospital-based, with significant involvement from the treating physician. Centers are often affiliated with esteemed academic medical institutions that house experts in the pediatric renal space.

Moving to adult pediatric patients using a profit or experienced complications like bloodstream infections, and clotting and given the inherent vascular challenges maintaining catheter patency and health of the patient are critical.

Furthermore, while pediatric patients often move to a fistula or primary access there is a subgroup of patients that remain on long term catheter care in these patients specifically have an unmet need.

We have had numerous in depth conversations with key thought leaders in pediatric hemodialysis.

<unk> support to develop a pediatric program for at the center.

The outpatient hemodialysis centers, serving the applications are often hospital base with significant involvement from the treating physicians.

These centers are often affiliated with it seemed academic medical institutions that house experts in the pediatric renal space.

Liz: Based on our many interviews and feasibility questionnaires, we have developed a robust clinical protocol that expands the use of Defendcast into pediatric patients. This study is designed to include pediatric patients younger than 18 years old with varying catheter sizes. Cormetic submitted this protocol to FDA and is awaiting review contingent upon the NDA. As we previously discussed, Descendcast's antimicrobial protective properties are potentially beneficial to a number of patient populations, including vulnerable patients undergoing chemotherapy and those receiving total parental nutrition, or TPN.

Based on our many interviews and its ability questionnaires, we have developed a robust clinical protocol that expands the use of deferred cash into pediatric patients.

This study is designed to include pediatric patients younger than 18 years old with varying catheter sizes.

<unk> submitted the protocol to FDA and is awaiting review contingent upon NDA approval.

As we've previously discussed this untapped antimicrobial protective properties are potentially beneficial to a number of patient populations, including vulnerable patients undergoing chemotherapy and those receiving total parenteral nutrition or TPN.

Liz: These patients greatly depend on their vascular access to deliver life-saving medicines. The need to protect those catheters is a priority for the patient's treatment. Over the past month, the CoreMedics Clinical Team has conducted a number of in-depth interviews with frontline health care providers and assessed published literature to understand not only the occurrence of CRBSI in these groups but also the management and medical needs of these patients across the continuum of care.

Patients greatly depend on their vascular access to deliver lifesaving medicines and nutrients.

They need to protect per catheter is a priority for the patient's treatment team.

Over the past month, the core medical clinical team has conducted a number of in depth interviews with frontline health care providers, and that's published literature to understand not only the occurrence of CRP outside and his group, but also the management and medical need of these patients across the continuum of care.

Liz: It is clear, based on the ongoing threat of infection, that the need to reduce CRBSI to maintain catheter access remains high. For TPN patients, we have heard from clinicians that there remains a significant unmet medical need in this area. Cancer diagnoses in the United States continue to grow at an alarming rate, and by 2040, it is expected that the number of new cancer cases per year will be approximately 30 million, compared to just over 18 million in 28.

It is clear based on the ongoing threat of infection that the need to reduce the RBS side to maintain catheter access remains high.

For TPN patients, we've heard from clinicians that there remains a significant unmet medical need in this area.

Cancer diagnosis in the United States continue to grow at an alarming rate and by 2040. It is expected the number of new cancer cases per year will be approximately $30 million compared to just over $18 million.

H B.

Liz: Because chemotherapy and other treatment regimens leave oncology patients more vulnerable to infection due to immunosuppression, protecting their catheters is a significant priority. Regardless of the type or stage of disease a patient has, we are confident that the FennCath can provide a reduction in CRBSI. We look forward to expanding our knowledge of these patient populations and the evolving treatment paradigm so that we can appropriately design protocols that align with the healthcare system in place to support these medical needs specifically. Thank you. And I will now turn the call to Matt, the cover of financial news.

Because chemotherapy and other treatment regimen leave oncology patients more vulnerable to infection due to immuno suppressant protecting their catheters is a significant priority.

Regardless of the type of things of disease. The patient have we're confident that the penthouse can provide a reduction in CRB S eyes.

We look forward to expanding our knowledge in these patient populations and evolving treatment paradigm. So that we can appropriately designed protocols that align with the health care system in place to support the medical need.

For these patients.

Thank you and I'll now turn the call to Matt to cover our financial results and cost guidance Matt.

Thank you Liz I'm pleased to be here today to provide an overview of our first quarter 2021 financial results as well as an update on our recent financing activity and cash position.

The company has filed its report on form 10-Q for the first quarter ended March 31, 2021, I urge you to read the information contained in the report from a more complete discussion of our financial results.

Matt: to cover financial results and cash guidance. Matt? Thank you.

Matt: Thank you, Liz. I'm pleased to be here today to provide an overview of our first quarter 2021 financial results, as well as an update on recent financing activity and cash positions. The company has followed its report on Form 10Q for the first quarter ended March 31, 2021. I urge you to read the information contained in the report for a more complete discussion of our financial results.

With respect to our first quarter 2021 financial results.

Our net loss was approximately $7 2 million or <unk> 20 per share compared with a loss of $5 6 million or <unk> 21 per share in the first quarter of 2020, the higher net loss recognized in 2021 compared with 2020 included increased expenses related to our preparations for <unk>.

Matt: With respect to our first quarter 2021 financial results, our net loss was approximately $7.2 million or $0.20 per share compared with a loss of $5.6 million or $0.21 per share in the first quarter of 2020. The higher net loss recognized in 2021 compared with 2020 included increased expenses related to our preparations for Defend Kat's commercial launch. We recorded increases in both SG&A as well as R&D expenses. Operating expenses in the first quarter of 2021 increased approximately 29% to 7.2 million compared with 5.6 million in the first quarter of 2020.

You'll launch we recorded increases in both SG&A as well as R&D expenses.

Operating expenses in the first quarter of 2021 increased approximately 29% to $7 2 million compared with $5 6 million in the first quarter of 2020.

R&D expense increased by approximately 7% to $2 6 million driven primarily by increases in personnel expenses and noncash charges for stock compensation offset by a decrease in manufacturing costs and clinical trial expenses due to the closing of the lock it 100 trial.

SG&A expense increased approximately 45% to $4 6 million compared with $3 2 million in the first quarter of 2020.

This increase was driven primarily by increases in non cash charges for stock compensation increased cost related to market research in preparation for the potential approval of deferred cash and higher staffing costs due to additional hires.

We recorded net cash used in operations during the first quarter of 2021 of $6 7 million compared with net cash used in operations of $8 million in the first quarter of 2020. The decrease was primarily driven by higher noncash compensation offset by an increase in net loss of larger deal.

Matt: R&D expense increased by approximately 7% to 2.6 million, driven primarily by increases in personnel expenses and non-cash charges for stock compensation, offset by a decrease in manufacturing costs and clinical trial expenses due to the closing of the Lockett 100 trials. SGNA expense increased by approximately 45% to 4.6 million compared with 3.2 million in the first quarter of 2020. This increase was driven primarily by increases in non-cash charges for stock compensation, increased costs related to market research in preparation for the potential approval of Defendcast, and higher staffing costs due to additional higher.

Greece in accrued expenses and a smaller increase in prepaid expenses versus the same period in 2020.

As we have discussed on our year end earnings call Chromatics is in a strong position from a balance sheet perspective, the company has cash and equivalents of $81 2 million as of March 31, 2021. We believe this gives the company flexibility to resolve the manufacturing efficiencies that have been identified.

Resubmit the defend Cath NDA continue to prepare for bringing defend catheter market and take chromatics at least into the second half of 2022.

While we are continuing to work through the identified manufacturing issues. We appreciate the support of our investors. We remain active participants in investor conferences, as we look to strengthen the shareholder base and raise awareness among the institutional investor community regarding <unk> and defend cash potential value proposition.

With that I would like to pass the floor back to costs.

Thank you Matt.

Matt: We recorded net cash used in operations during the first quarter of 2021 of 6.7 million, compared with net cash used in operations of 8 million in the first quarter of 2020. The decrease was primarily driven by higher non-cash compensation, offset by an increase in net loss, a larger decrease in accrued expenses, and a smaller increase in prepaid expenses versus the same period in 2020. As we discussed on our year-end earnings call, Cormetics is in a strong position from a balance sheet perspective. The company has cash in equivalence of 81.2 million as of March 31st, 2021.

Cosmetics is continuing to drive forward on our goal of bringing to send cash to the U S market for the hemodialysis segment, which represents a significant market with a very large unmet medical need.

Day, when patients urgently need an antimicrobial catheter lock solution from.

Prevention.

<unk> central venous catheter there is no pharmacological agent approved in the U S deferred cash would be the first antimicrobial catheter lock solution approved by FDA in the U S.

Jessica as many as 35% of hemodialysis patients experience.

<unk>.

To summarize we continue to focus our efforts on three fronts.

Expeditiously resolved in the third party manufacturing deficiency.

Matt: We believe this gives the company flexibility to resolve the manufacturing deficiencies that have been identified, resubmit the DefendCath NDA, continue to prepare for bringing DefendCath to market, and take Cormetics at least into the second half of 2022. While we are continuing to work through the identified manufacturing issues, we appreciate the support of our shareholders. We remain active participants in investor conferences as we look to strengthen the shareholder base and raise awareness among the institutional investor community regarding Cormetics and DefendCat's potential value properties. With that, I would like to pass the floor back to Coast. Thank you, Matt.

Do you need to expand our connections with the hemodialysis community and prepare cosmetics to successfully launch defend cash when approved by the FDA.

And preparing the clinical study protocols for defense tap enable expansion beyond hemodialysis, so that in the post approval setting we would be able to start the study in a timely manner.

We remain confident that we have the right team and appropriate resources in place to resolve the third party manufacturing deficiencies that have been.

<unk> identified and bring different cash to the hemodialysis patients from the U S.

We expect to continue to provide updates throughout this process.

Thank you for your continued support of cosmetics.

Now, let me hand, the call back to all of the moderator operator.

At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Kozo Beloshe: CorpMedics is continuing to drive forward on our goal of bringing Defend Caps to the U.S. market for the hemodialysis segment, which represents a significant market with a very large unmet medical, Today, where patients urgently need an antimicrobial catholic solution for prevention of CRBSI in central venous catheter, there is no pharmacological agent approved in the U.S. DefendCath would be the first antimicrobial catalogue solution approved by FD in the U.S, where deaths occur in as many as 35% of hemodialysis patients experiencing a CRBSR. To summarize, we continue to focus our effort on three fronts, expeditiously resolving the third-party manufacturing deficiency, continue to expand our connections with the haemodialysis community and prepare core medics to successfully launch Defencath when approved by the FDA, and preparing the clinical study protocols for DevM-Cath label expansion beyond hemodialysis, so that in a post-approval setting, we will be able to start those studies in a timely manner.

Confirmation from will indicate your line is in the question queue. You may start to try another question from the queue.

Some teething speaker equipment, it may be necessary to pick up your handset before pressing the star key one moment, while we poll for questions.

Our first question comes from the line of Jason Butler with JMP Securities. You May proceed with your question.

Thanks for taking the questions and congrats on the progress.

In the quarter first one just on the manual extraction study could you just confirm that.

With the protocol you agreed with FDA do you agree a statistical analysis plan.

The results from the study.

Then what you agreed on that.

And within the typical guidelines that he has for for bile flow consistency.

Thank you Jason for your question Phebe.

Yes, we can.

Sure you that we were successful in completing the study is F. T H are required.

Okay great.

Great to hear and then in terms of the additional and process qualification work do you do you have you already agreed with your CMO. What the plan is there and what needs to be done and is there any granularity you can give us in terms of time lines to complete that work.

Kozo Beloshe: We remain confident that we have the right team and appropriate resources in place to resolve the third-party manufacturing defects that have been identified and bring different caps to hemodialysis patients in the U.S. We expect to continue to provide updates throughout this process. Thank you for your continued support of call medics. And now, let me hand the call back to Laura, the moderator, and operator.

Yes.

Yes, we have agreed with the CMO on the plan to go forward to resolve the deficiencies and generating the additional data.

Required by FDA.

Operator: At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation symbol will indicate that your line is in the question queue. You may press star 2 to remove your questions from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys.

As we've said FDA has focused on the in process control.

And has requested some additional data on the process qualification and as a result of that we will be required to manufacture the validation batches to fulfill the request from the agency.

Okay, Great and then just last one from me Tom.

Operator: One moment, please poll for questions. Our first question comes from the line of Jason Butler with JNP Securities. You may proceed with your questions.

Tom Congrats on your appointment could you maybe highlight some of the key activities youre going to be focusing on now ahead of the launch and what you think the key attribute of the Sun Cathar that'll drive your marketing message for the launch.

Jason Nicholas Butler: Thanks for taking the questions and congratulations on the progress in the quarter. First one, just on the manual extraction study, could you just confirm that with the protocol you agreed with FDA, you agreed a statistical analysis plan, and the results from the study fall within what you agreed on that SAP and within the typical guidelines that he has for vial fill consistency? Thank you, Jason, for your question, Peeve.

So Jason as you know today's tonnes per day.

We are beginning to dig on the work that we have done so far and so Tom is beginning to go through.

What we have got in place and what is still missing so.

Phoebe: Yes, we can assure you that we were successful in completing the study as FDA required. Okay, great. That's great to hear. And then, in terms

I would give a little bit more time before we get into the details of what the game plan.

Is from Tom side.

Phoebe: Okay, great. That's great to hear. And then in terms of the additional in-process qualification work, do you, have you already agreed with your CMO what the plan is and what needs to be done? And is there any, you know, granularity you can give us in terms of timelines to complete that work?

But I think he can share with you his experience, particularly in the hemodialysis space.

What he has been involved in over.

Over the years.

And maybe that would be a good introduction of talk to what he's doing.

Sure. Thank you.

Yes, Chris you had mentioned at Amgen I led the global launch and access from sensor Paul growing since acquired over $1 $5 billion in peak sales.

Phoebe: Yes, we have agreed with the CMO on the plan to go forward to resolve the deficiencies and generate the additional data required by FDA. As we've said, the FDA has focused on the in-process controls and has requested some additional data on the process qualification, and as a result of that, we will be required to manufacture the validation batches to fulfill the requests from the agency.

A key element of <unk> success was it strong global value communication strategy.

Which focused first on the high disease burden and unmet need in secondary hyperparathyroidism and then the superior outcomes that were achieved with sensor par versus the standard of care.

Then when CMS.

Tom Nus Pickle: Okay, great. And then, just last one from me, Tom, congrats on your appointment. Could you maybe highlight some of the key activities you're going to be focusing on now ahead of the launch and what you think the key attributes of the FNCath are that will drive your marketing message for the launch? So, Jason, as you know, today's Tom's first day. We are beginning to dig into the work that we have done so far, and so Tom is beginning to go through what we have got in place and what is still missing.

Medicare proposed adding <unk> to the dialysis bundle in 2011.

I worked closely with the dialysis community to develop strategies to protect ESR day patient access and to provide per physician choice for the best S. H P T therapies.

Currently the community was successful in changing CMS has proposed policy and oral S. HPT drags from that added to the <unk> bundle in 2011.

In addition to my work with sensible.

Also work closely with other renal therapeutics, including <unk>.

Alright nice price.

Tom Nus Pickle: So I would give a little bit more time before we get into the details of what the game plan is from Tom's side, but I think he can share with you his experience, particularly in the hemodalysis space, of what he's been involved in over the years. And maybe that would be a good introduction to Tom for what he's doing.

Price a bid rather kit and most recently reality.

Great Okay.

I appreciate it thanks for taking the questions and again congrats on the progress.

Thank you.

Our next question comes from the line of Joon Lee with true Securities. You May proceed with your question.

Tom Nus Pickle: Sure, thank you, Kozo. As Koso mentioned, at Amgen, I led the global launch and access for Sensipar, growing Sensipar to over 1.5 billion in peak sales. The key element of Sensor Par's success was its strong global value communication strategy, which focused first on the high disease burden and unmet need for secondary hyperparathoridism and then the superior outcomes that were achieved with Sensipar versus the standard of care. Then, when CMS and Medicare proposed adding Sensorpar to the dialysis bundle in 2011, I worked closely with the dialysis community to develop strategies to protect ESRD patient access and to provide for Ultimately, the community was successful in changing CMS's proposed policy, and oral SHPT drugs were not added to the ESRD bundle in 2011.

Yes. Good afternoon. This is less on for June thanks.

Thanks for taking my questions first off is on the assuming NDA resubmission in the fourth quarter.

When would you expect a response from the FDA and then would you expect the next week from cycle to take place.

Yeah.

That was clearly an issue that we discussed with FDA in mid April.

When we had the meeting with them FDA was very clear that the classification wouldn't be determined at the time of Resubmission of the NDA and Thats. The timeline for review well it'd also be determined at that time. So we have no information at this time.

The review timeline.

Okay I understand.

And then on the new guidance that FDA provided regarding the virtual inspections.

Have you had discussions with the FDA regarding this and perhaps handicapped that towards a.

Virtual visit if necessary at this stage.

Tom Nus Pickle: In addition to my work with Sensipar, I've also worked closely with other renal therapeutics, including epigen, R&S, parsiv, rhetoric, and most recently, Reality. Great. Okay, that's helpful. Appreciate it. Thanks for taking the questions. And again, congrats on the progress.

No that guidance document came out after Wayne with F D E and F D. A day not bring it up.

When we met with them.

I think if you read the guidance document it's clear FDA will decide when it's appropriate to have their remote interactive devaluation.

Operator: Our next question comes from a line June Lee with Truist Securities. You may proceed with your questions.

Operator: Yes, good afternoon. This is Les on for June. Thanks for taking my questions. First off, assuming the NDA resubmission in the fourth quarter, when would you expect a response from the FDA, and when would you expect the next review cycle to take place?

The guidance states that manufacturing facility cannot request from the remote interaction. So it's part of the review process FDA will obviously decide one if it needs to do and onsite evaluation to assess and verify the completion of the work that's been.

Phoebe: That was clearly an issue that we discussed with FDA in mid-April, and we had a meeting with them. FDA was very clear that the classification would be determined at the time of resubmission of the NDA, and that the timeline for review would also be determined at that time. So we have no information at this time on the review timeline.

Got him to address the deficiencies and whether or not it can be addressed using the program for the remote interactive evaluation.

That is helpful. Thank you and then last one in regards to the study for pediatric patients and then.

Later on in hemodialysis patients.

Phoebe: Okay, I understand. And then on the new guidance that FDA provided regarding virtual inspections, have you had discussions with the FDA regarding this? And do you, you know, perhaps, perhaps restrict that towards a virtual visit if necessary at this stage?

Would there have to be re approval of the CMO.

Okay.

Good question PV.

Hey, I think you're asking to do the post approval pediatric hemodialysis and wanted to see them one needs to be reapproved.

Phoebe: No, that guidance document came out after we met with FDA, and FDA did not bring it up when we met with them. I think if you read the guidance document, it's clear FDA will decide when it's appropriate to have the remote interactive evaluation. And the guidance states that a manufacturing facility cannot request the remote interaction. So as part of the review process, FDA will obviously decide one if it needs to do an on-site evaluation to assess and verify the completion of the work that's been done to address the deficiencies and whether or not it can be addressed using the program for the remote interactive evaluation.

Yes, assuming assuming that's moved forward and it is approved in the near future.

Okay.

Yeah.

The label expansion will be filed as a supplement to the NDA. So at that point with a manufacturing facility. It would be on a routine inspection program by FDA.

Yeah.

Got it okay. Thank you.

Yeah.

Our next question comes from the line of Chad Messer with Needham <unk> Company. You May proceed with your question.

Great. Thanks, Thanks for taking my question and I do appreciate all the all the details from the company and especially Phebe on this but.

Phoebe: That is,

Phoebe: That is helpful. Thank you. And then last one, in regards to the study for pediatric patients and then later on in hemadialis patients, would there have to be a re-approval of the CMO?

Hi.

And probably most other people on this call and investors.

Necessarily regulatory experts for which.

I apologize for any deficiency in my own now and trying to interpret things, but I can't imagine I'm alone in not being able to follow some of the details you guys.

Phoebe: Good question, TV.

Phoebe: I think you're asking to do the post-approval pediatric hemodialysis study. Would the CMO need to be re-approved?

Phoebe: Yes, assuming that it moves forward and is approved in the future.

Phoebe: The label expansion would be filed as a supplement to the NDA. At that point, the manufacturing facility would be on a routine inspection program by FDA.

Kevin So I am just hoping.

Maybe with a little bit of extra raft and maybe walk me through it.

Phoebe: Got it. Okay. Thank you.

That's it from ignorant on these things so the way I got to tell you.

Operator: Our next question comes from the line of Chad Mazur with Needham and Company. May I proceed with your question?

I've sat through a bunch of these.

When you say you will get additional qualification processes that needed to address the SBA.

Chad Mazur: Great, thanks for taking my question, and I do appreciate it.

Chad Mazur: I and probably most other people on this call are not necessarily regulatory experts, for which I apologize for any deficiency in my own knowledge and trying to interpret things, but I can't imagine I'm alone in not being able to follow some of the details you guys have given. So I'm just hoping a baby with a little bit of an extra breath will maybe walk me through it as if I'm ignorant of these things, although I've got to tell you I've sat through a bunch of these.

And you you think you can submit in the fourth quarter, an NDA and then later on you were talking about some manufacturing validation.

<unk> beforehand.

As much as you can.

I get it these are not easy questions.

There's a lot of uncertainties from dealers.

Can you maybe timeline need through or just you know slowly treat me like.

I'm not all that smart, which isn't isn't isn't maybe too far from the truth.

Chad Mazur: When you say you have additional qualification processes that need to address the SDA, and you think you can submit an NDA in the fourth quarter, and then later on, you were talking about some manufacturing validation that you need beforehand.

The steps are that you think you need to a cheap buy this for Q NDA submission.

Okay.

No need to apologize.

No one individual who is an expert in all of these areas. That's why we have a very experienced team working on this CMC side as well as the regulatory side.

Chad Mazur: As much as you can, and I get it. These are not easy questions, and there's a lot of uncertainties from dealing with you. Can you maybe timeline me through or just, you know, slowly? Treat me like I'm not all that smart, which isn't maybe too far from the truth. What are the steps are that you think you need to achieve by this 4Q NDA submission?

And it is a complicated process.

It's not simple.

And like all technical work.

It needs to be conducted.

With precision and is subject to.

Phoebe: Okay, no need to apologize. No one individual is an expert in all of these areas. That's why we have a very experienced team, and they're working on this, both the CMC side as well as the regulatory side. And it is a complicated process, and it's not simple. And like all technical work, it needs to be conducted with precision and is subject to issues when something can go wrong. It's highly sophisticated equipment, and so there are times when there may be unexpected results obtained.

Issues when something can go wrong, it's highly.

Sophisticated equipment.

And so there are times when there may be unexpected results obtained.

Fda's concern.

As day express to us during our meetings with them.

Focused on filling operations, which is the process by which to fund caf is during a sterile procedure loaded into the vials and then the vials are capped.

Hum.

I expect us to generate sufficient data.

Phoebe: FDA's concern, as expressed to us during our meeting with them, focused on the filling operation, which is the process by which fendcath is loaded into the vials during a sterile procedure, and then the vials are kept. They expect us to generate sufficient data to demonstrate that that process is a controlled process and is consistent with the agency's requirements for good manufacturing practices. So clearly, sterility is a very important part of that process, but also accuracy in making sure the right volume of DefenCath is loaded into the vials.

To demonstrate that that process is a controlled process.

And is consistent with the agencies requirements for good manufacturing practice.

So clearly sterility is a very important part of that process.

But also the accuracy and making sure the right volume to pin count is loaded into the vials and we're talking about thousands of vials from drawing manufacturing run.

So as I said, it's a complicated process and technically very involved and involves the generation of a lot of data.

Phoebe: And we're talking about thousands of vials during a manufacturing run. So, as I said, it's a complicated process that is technically very involved. It involves the generation of a lot of data to make sure that the process itself is using the jargon qualified, which means all the equipment has been qualified for the intended use, and every step in the manufacturing process has been qualified, and that everything works as it is intended to produce the product that has to meet its specifications.

To make sure that the process itself.

His using the jargon qualified which means all the equipment has been qualified for the intended use and every step in the manufacturing process has been qualified.

And that everything works because it is intended to produce a product that has to meet its specifications. So they're very detailed requirements and at chemical basis as well on a performance basis, that's required for the product and so that process needs to be very well.

Bust needs to be reproducible.

And the burden is on the manufacturer to demonstrate that the facility cash.

Phoebe: So there are very detailed requirements on a chemical basis as well as on a performance basis that's required for the product. And so that process needs to be very robust, needs to be reproducible, and the burden is on the manufacturer to demonstrate that the facility can do that process reproducibly and generate the required product for commercial distribution.

Can do that process reproducibility and generate the required product for commercial distribution.

Alright, well I appreciate.

I appreciate you taking back to that that was.

Clearer.

Hum.

Phoebe: All right, well, I appreciate taking back to that. That was clearer than it has been to me in the past. So thank you.

And then it has been to me in the past so thank you.

Certainly.

Operator: There are no further questions over the phone. I would like to turn this call back over to Mr. Dan Ferry for written questions.

There are no further questions over the phone I would like to turn this call back over to Mr. Dan Ferry Forgotten question.

Thank you operator coast. So we have some written questions here first one is for you.

Daniel Ferry: Thank you, Operator. Costa, we have some written questions here. The first one's for you. Why have you decided to bring on a CCO at this point in time? Thanks, Dan. Our plan all along was to have a chief commercial officer in place prior to the launch of DefendCath. We are now at a point where we are confident in our path forward to a potential NBA approval. And therefore, when the right candidate comes along, we continued with our plans and hired Tom to join us and continue the preparation for the launch of DefendCath in the U.S. market.

Why have you decided to bring on a C. C O at this point in time.

Thanks, Dan.

Although our plan all along was to have a chief commercial officer in place prior to the launch of deferred cash.

We are now at a point, where we are confident in our path.

<unk>.

Forward to a potential NDA approval and therefore, when the right candidate comes across Oh, We continued with our plans and hide Tom joined US and continue the preparation for the launch of defend cast from the U S market.

Daniel Ferry: Okay, excellent. The next question here is for Matt David, as the resubmission activity continues with your CMO, how do we think about this affecting your cash burn and for how long? The longer we wait for regulatory progress, the burn must come down, no? How is this theme contemplated in your current cash guidance? Thanks for the question, Dan. We have factored in the current manufacturing work and resubmission process into our cash guidance.

Okay excellent and the next question here is for Matt David Matt.

As the Resubmission activity continues with your CMO.

How do we think about this affecting your cash burn and for how long.

The longer we wait for regulatory progress.

Byrne must come down now how is this theme contemplated in your current cash guidance.

Thanks for the question.

We have factored in the current manufacturing work and Resubmission process into our cash guidance. As we've described we are confident that we have the resources needed to take us at least into the second half of 2022.

Matt: As we've described, we are confident that we have the resources needed to take us at least into the second half of 2020. Okay, excellent. And the final question here is for Liz. Liz, what is the timing for beginning?

Okay excellent and then the final question here is for Les.

I was wondering what is the timing on beginning.

Liz: these additional studies that you have described in the prepared remarks. Sure, we are looking forward to starting them as soon as we can after we receive the NDA. Okay, very good. So that's all I have. We'd like to turn the floor back over to you for closing. Thank you, Dan. Court Medics has an experienced team of executives who have taken pharmaceuticals through various phases of clinical study, registration, and successfully launched products onto the U.S. market.

These additional studies that you have described in the prepared remarks.

Sure.

We are looking forward to starting them as soon as we can after we receive NDA approval.

Okay very good that's all I have.

I'd like to turn the floor back over to you for closing remarks.

Thank you Dan.

<unk> has an experienced team of executives, who have taken pharmaceuticals, who various phases of clinical study registration and successfully launch products.

Onto the U S market.

Liz: CoreMedics remains committed to bringing DefendCats to the US market, whether on our own or with a strategic or commercial partner to help patients in need of protection from life-threatening infections. The importance of reducing the incidence of infections and keeping patients out of hospitals is even more apparent during this ongoing coronavirus pandemic.

<unk> remained committed to bringing depend cats to the U S market, whether on our own or with a strategic or commercial partner to help patients in need of protection from life threatening infections.

The importance of reducing the incidence of infections and keeping patients out of hospital is even more apparent during this ongoing corona virus pandemic.

Kozo Beloshe: Despite the delay in the NDA approval, please keep in mind that the potential for more than 10 years of marketing exclusivity remains because it will not commence until the NDA for DefendCath is approved. Thank you for your time and attention, and have a good evening. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and enjoy the rest of your evening.

Despite the delay in the NDA approval. Please keep in mind that the potential for more than 10 years of marketing exclusivity remains because it will not commence until the NDA for different kinds of pool.

Thank you for your time and attention and have a good evening.

This concludes today's conference you may disconnect. Your lines at this time, thank you for ethical social enjoy the rest of your evening.

Yeah.

Okay.

Yeah.

[music].

Operator: Thank you. Thank you. Thank you.

Okay.