Q4 2021 CorMedix Inc Earnings Call
Good afternoon, and welcome to the core medical fourth quarter earnings Conference call today's call is being recorded.
Operator: Good afternoon, and welcome to the CorMedix Fourth Quarter Earnings Competition. Today's call is being held, There will be a question and answer session at the end of today's presentation, and instructions on how to ask a question will be given at that time. I would now like to turn the conference over to Daniel Ferry from Lifesci Advisors. Please go ahead.
There will be a question and answer session at the end of today's presentation and instructions on how to ask a question will be given at that time.
I would now like to turn the conference over to Daniel Perry from lifestyle Advisors. Please go ahead.
Good afternoon, and welcome to the Corvette next fourth quarter and year end 2021 earnings conference call.
Daniel Ferry: Good afternoon, and welcome to the CorMedix fourth quarter and year-end 2021 earnings conference call. Leading the call today is Dr. Matt David, Interim Chief Executive Officer, and Executive Vice President and Chief Financial Officer of CorMedix. He is joined by Dr. Phoebe Mounts, Executive Vice President and General Counsel. 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 subject to certain risks and uncertainties and may include, but are not limited to, any of the following:
Leading the call today is Dr. Matt David interim Chief Executive Officer.
And executive Vice President and Chief Financial Officer of Carmax.
He is joined by Dr. Phoebe mounts executive Vice President and General Counsel.
Before we begin I would like to remind everyone.
Daniel Ferry: 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, manufacturing activities, and marketing approval for FENCAS in the U.S. and other product candidates, future financial position, future revenues and projected costs, and potential market acceptance of Defencast, Neutralin, and other product candidates. More specifically, forward-looking statements include any statements about our clinical development goals. Clinical Development Plan, excuse me, in the Cost, Progress, Results, Estimates, and interpretations thereof.
Daniel Ferry: 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 the manufacturing and product component costs. 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, regulatory approvals, and commercialization.
During the call management may make what are known as forward looking statements.
Daniel Ferry: These risks are described in greater detail in CorMedix filings with the SEC, copies of which are available free of charge on the SEC's website at www.sec.gov or upon request from Corvette. 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.
Within the meaning set forth in the private Securities Litigation Reform Act of 1995.
These statements are subject to certain risks and uncertainties include but are not limited to any of the following.
Daniel Ferry: Please note that 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 Dr. Matt David, Interim Chief Executive Officer and Chief Financial Officer of CorMed.
Any statements other than statements of historical fact regarding management's expectations beliefs goals and plans about the company's prospects.
Matthew David: Thank you, Dan. Good afternoon, everyone, and thank you for joining us on this call. While it has been an incredibly busy time, we are excited to be here this afternoon to discuss CorMedix updates, as well as reflect on our priorities as a company over the coming month. On today's earnings call, we will discuss the fourth quarter and full year 2021 financial information and the overall progress CorMedix is making in bringing DefendCath to the U.S. market for its first indication for use as a catheter lock solution for hem Let's begin with the topics for discussion today.
Matthew David: On February 28th, we announced that CorMedix had resubmitted the Defend-Cath NDA to the FDA in parallel with our third-party contract manufacturer, or CMO, submitting responses to the deficiencies identified at the manufacturing facility in the post-application action issued by the FDA concurrently with the CRL in 2021. The CorMedix team, led by Phoebe, worked tirelessly in conjunction with our CMO in order to reach that Yesterday, we were very pleased to share that the FDA has accepted the NDA resubmissions for filing and begun the review process.
Including its clinical development program manufacturing activities and marketing approval for <unk>.
Matthew David: Phoebe is here to provide details on our progress on the regulatory and manufacturing fronts since our last update. As we continue to chart... Of course, toward the potential DefendCAP approval and launch, CorMedix announced recently that the board has appointed Joe Todisco as Chief Executive Officer. Joe brings significant experience in commercial operations, leadership, and business strategy to our organization and has spent the last 10 years building and leading commercial organizations globally across multiple therapeutic areas. Most recently, Joe served as Chief Commercial Officer of a meal specialty business where he was responsible for managing and growing a $400 million run rate business with roughly 200 employees.
Some gas in the U S and other product candidates.
Future financial position future revenues and projected costs and potential market acceptance of the Fancast neutrolin and other product candidates.
More specifically forward looking statements include any statements about our clinical development goals clinic.
Clinical development plans excuse me.
On the cost progress results estimates.
And interpretations thereof.
Projections as to the company's future capital, raising and spending and cash position.
Matthew David: Everyone at CorMedix joins me in welcoming Joe, and we look forward to working with him when he joins on or before May 16th. We have continued to balance our preparations for launching DefendCat while limiting our cash burn so that financially we have the resources to efficiently bring DefendCat to patients in the U.S. following an anticipated FDA approval. With the NDA resubmission now being reviewed, we expect to see some increases in spend in the coming quarters as we ramp pre-commercial activities and manufacturing activities in planning for a potential launch. I will provide an update on our fourth quarter and full year 2021 financials and provide color regarding our cash position.
Matthew David: During our earnings call in November, we discussed some of the work that the CorMedix team had completed to highlight the magnitude of catheter-related bloodstream infections in the hemodialysis patient population via abstracts that were presented at industry conferences. The last topic today is to provide some color on the continued work by our commercial team and medical affairs team as we prepare to bring DefendCAT to patients following FDA approval. While we are a modest-sized team, this important work leverages consultants, market research firms, and thought leaders as we continue to expand our understanding of 1. the hemodialysis market opportunity across the spectrum of care, 2. reimbursement dynamics, and 3. pharmacoeconomic considerations that will each factor into our commercial strategy for defense. Now, let's move to the first topic. Phoebe will provide the regulatory and manufacturing update. Phoebe?
Expectations as to the timing and nature of anticipated regulatory actions.
Our product licensing business development or other transactions.
Any commercial plans and expectations market projections for our product candidates and expectations as to the manufacturing and product component costs.
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.
Regulatory approvals and commercialization.
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 FCC dot Gov or upon request from Quadratics.
<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.
Phoebe Mounts: Thank you, Matt, and good afternoon, everyone. I am very pleased to be able to report that FDA has accepted the Defend CAF NDA resubmission for filing. I would like to start by expressing my gratitude to the resubmission team of Reyes Barrios, Amaru Sanchez, Jessica Vaughn, and Sibu Varghese, and express my appreciation for being able to work with dedicated individuals whose hard work and expertise have enabled CorMedix to take a step closer to FDA approval and reduce life-threatening, catheter-related bloodstream infections in patients.
At this time it is now my pleasure to turn the call over to Dr. Matt David Interim Chief Executive Officer, and Chief Financial Officer Carmax, Matt. Please go ahead.
Thank you Dan.
Phoebe Mounts: As we had announced late last month, we believe the resubmitted NDA for DefendCast provided the data requested by FDA in the complete response letter, or CRL. In parallel, we worked collaboratively with the company's third-party contract manufacturer, and believe it addressed the deficiencies identified at the manufacturing facility in the post-application action letter issued by FDA to the manufacturer concurrently with the CRL. FDA reviewed the NDA resubmission for completeness and made a filing decision.
Good afternoon, everyone and thank you for joining us on this call well. It has been an incredibly busy time, we are excited to be here. This afternoon to discuss.
<unk> updates as well as reflect on our priorities as a company over the coming months.
On today's earnings call, we will discuss the fourth quarter and full year 2021 financial information and the overall progress chromatics is making in bringing defend cats to the U S market for its first indication for use as a catheter lock solution for the hemodialysis patients to reduce catheter related bloodstream.
Infections, let's begin with the topics for discussion today.
Phoebe Mounts: In accepting the resubmission for filing, FDA informed CorMedix that the resubmission is complete and considered a Class 2 response to the act. FDA's policies and procedures define a Class II resubmission essentially as a resubmission that includes any item not specified as a Class I item, which is an explicit list of nine items, such as minor reanalysis of data previously submitted.
Phoebe Mounts: The DEFENDCAST resubmission has new manufacturing data that has not been previously submitted to FDA and is therefore considered class two with a six-month review cycle, as we discussed previously. FDA has stated that resolution of the deficiencies may require a preapproval inspection of the manufacturing facility. We have learned from our manufacturing partner that FDA has already been notified that it will conduct an inspection. We believe that CorMedix and the manufacturer have adequately addressed the concerns identified by FDA, and we remain committed to working jointly to ensure a successful inspection.
On February 28, we announced that <unk> had resubmitted the defend cat the NDA to the FDA in parallel with our third party contract manufacturer or CMO submitting responses to the deficiencies identified at the manufacturing facility in the post application action letter issued by the FDA concurrently.
With the C O L in 2020 one.
The Comex team led by Phoebe worked tirelessly in conjunction with our CMO in order to reach that important milestone for cosmetics yesterday, we were very pleased to share that the FDA has accepted the NDA resubmission for filing and begun the review process. Phoebe is here to provide details on our progress.
Phoebe Mounts: We believe that FDA will complete the preapproval inspection within the six-month review period. FDA has begun its evaluation of the NDA, and we will continue to respond promptly to FDA's requests for additional information, which have already begun, to ensure a timely review of the NDA. As a reminder, CorMedix has not been asked to resubmit any information relating to clinical data from the Lockett 100 study.
Phoebe Mounts: I can assure you that we will continue working diligently to demonstrate to FDA that the manufacturing facility is ready to support commercial operation for DEFEND-CAS and to secure FDA approval of the DEFEND-CAS NDA. We are committed to providing updates to investors as appropriate over the coming months during the review process. I would now like to turn to our activities directed towards ensuring that CorMedix has secured adequate manufacturing capacity for Defend-CAS to meet the unmet medical needs of reducing catheter-related bloodstream infections.
On the regulatory and manufacturing fronts since our last update.
Phoebe Mounts: CorMedix is planning for clinical trials following an anticipated FDA approval to be in a position to expand the indications for the use of defense counts. We also believe it is important to anticipate potential supply chain challenges and ensure multiple sources are in place to provide adequate inventory.
As we continue to chart.
Phoebe Mounts: Accordingly, as CorMedix has previously discussed, we are engaged in identifying additional potential manufacturers of Defencaf in the United States while we work to obtain marketing authorization from FDA. We are actively engaged in discussions with potential manufacturers and in the process of conducting appropriate due diligence at the facilities to ensure a good track record of FDA compliance, appropriate technical expertise, and available capacity to meet our manufacturing goals. We anticipate being able to complete our diligence process in the coming weeks. Thank you, and I will now turn the call back to Matt to discuss financial results. CASH Guidance and Commercial Strategy Updates for DefendCAST. Thanks, Phoebe.
Of course towards the potential defend cap approval launch cosmetics announced recently that the board has appointed Joe to disco as Chief Executive Officer.
Joe brings significant experience in commercial operations leadership and business strategy to our organization and has spent the last 10 years building and leading commercial organizations globally across multiple therapeutic areas. Most recently, Joe served as chief commercial officer that Neil specialty business, where he was responsible.
We're managing and growing a $400 million run rate business with roughly 200 employees.
Everyone at former IDEXX joins me in welcoming Joe and we look forward to working with him when he joins on or before may 16th.
We've continued to balance our preparations for launching defend cat, while limiting our cash burn so that financially we have the resources to efficiently bring defend cat to patients in the U S. Following an anticipated FDA approval.
With the NDA Resubmission now being reviewed we expect to see some increases in spend in the coming quarters, as we ramp pre commercial activities and manufacturing activities and planning for a potential launch.
Matthew David: Next, I will provide an overview of our fourth quarter and full year 2021 financial results, as well as an update on CorMedix's cash. The company has filed its report on Form 10-K for the full year ended December 31st, 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 fourth quarter 2021 financial results. The company has cash and equivalents and short-term investments of $65.5 million as of December 31, 2021, including approximately $3 million in net proceeds from our ATM program in the first quarter of 2022.
I will provide an update on our fourth quarter and full year 2021 financials and provide color regarding our cash position.
Matthew David: CorMedix has December 31st pro forma cash in equivalence of $68.5 million. Our net loss was approximately $7.8 million, or $0.20 per share, compared with a net loss of $6.1 million, or $0.19 per share, in the fourth quarter of 2020. The higher net loss recognized in the fourth quarter of 2021 compared with the same period in 2020 was driven by increases in costs related to the manufacturing of DefenCast prior to its potential marketing approval and non-cash charges for stock-based compensation.
During our earnings call in November we discussed some of the work that <unk> team had completed to highlight the magnitude of catheter related bloodstream infections in the hemodialysis patient population. The abstracts that were presented at industry conferences. The last topic today is to provide some color on the continued work by our commercial.
Matthew David: We recorded an increase in SG&A expenses and an increase in R&D expenses. Operating expenses in the fourth quarter of 2021 increased approximately 28% to $7.8 million compared with $6.1 million in the fourth quarter of 2020. R&D expense increased by approximately 41% to $3.2 million, driven primarily by an increase in costs related to the manufacturing of DefendCast prior to its potential marketing approval and, to a lesser extent, by an increase in consulting fees and an increase in non-cash charges for stock-based compensation.
<unk> team and medical affairs team as we prepare to bring defend catheter patients following an FDA approval.
Matthew David: SG&A expense increased approximately 21% to $4.6 million, compared with $3.8 million in the fourth quarter of 2020. This increase was driven by an increase in non-cash charges for stock-based compensation and an increase in personnel expenses as a result of additional hires, partially offset by a decrease in costs related to market research studies in preparation for the potential marketing approval of DefendCast and a decrease in consulting.
Well, we are of modest size team. This important work Leverages consultants market research firms and thought leaders as we continue to expand our understanding of what the hemodialysis market opportunity across the spectrum of care to reimbursement dynamics and three farmer economic considerations that will each.
Factor into our commercial strategy for defend cap.
Matthew David: Our net loss for 2021 was approximately $28.2 million, or $0.75 per share, compared with a net loss of $22 million, or $0.77 per share, in 2020. The higher net loss recognized in 2021 compared with 2020 was due to higher G&A costs as well as a smaller tax benefit received in 2021.
Now, let's move to the first topic D V will provide the regulatory and manufacturing update Debbie.
Thank you, Matt and good afternoon, everyone.
Matthew David: Operating expenses in 2021 increased approximately 8% to $29.5 million, compared with $27.3 million in 2020. R&D expense decreased by approximately 2% to $13.1 million, driven by net decreases in costs related to the manufacturing of DefenCath prior to its potential marketing approval and a reduction in clinical trial expenses due to the closing of our LockIt 100 clinical trial. These decreases were offset by increases in non-cash charges for stock-based compensation and increases in consulting fees and staff.
Matthew David: SG&A expense increased approximately 18% to $16.3 million compared with $13.9 million in 2020. This increase was driven by an increase in non-cash charges for stock-based compensation, an increase in personnel expenses partially offset by decreases in consulting fees, and costs related to market research studies in preparation for the potential marketing approval of defense. We recorded net cash used in operations during 2021 of $21.2 million, compared with net cash used in operations of $22 million in 2020.
I am very pleased to be able to report that FDA has accepted.
Matthew David: The difference was primarily driven by an increase in accounts payable compared to the same period in 2020, partially offset by an increase in net loss, mainly attributable to lower cash received in 2021 from the NOL sale compared to the same period in 2020.
The 10 cap NDA Resubmission profiling.
Matthew David: CorMedix remains in a good position from a balance sheet perspective. We believe our pro forma cash-in equivalence of approximately $68.5 million gives the company flexibility to fund its operations through the first half of 2023 after taking into consideration costs related to commercial supply and costs related to the initial stages of the potential commercial launch for DefendCash. We remain optimistic about our progress toward an anticipated FDA approval for FENCAP in 2022.
I would like it starts with my gratitude to the Resubmission team.
Raised barrios, Amaru Sanchez, Jessica Vaughn and Cebu Borghese.
Matthew David: As highlighted previously, we believe that our current cash and equivalents, as well as the potential mechanisms available to us for capital raising, allow us to be prepared for the future, given we are facing what we hope and believe will be a pivotal time for CorMedix, as we seek to bring DefendCath to patients in the hemodialysis setting. As the last topic today, I would like to highlight the continued efforts by the CorMedix team to expand our understanding of one, the hemodialysis market opportunity across the spectrum of care, two, the reimbursement dynamics, and three, the pharmacoeconomic considerations that will each factor into our commercial strategy for bringing Defend-CAT to patients upon its approval.
Matthew David: CorMedix has continued to work with outside consultants and market research firms to further develop our views on the hemodialysis market across all settings of care. We are working to build our understanding of each of the key steps of a patient's journey, including the initiation of hemodialysis treatment, the placement and maintenance of a central venous catheter, and chronic hemodialysis treatment in an outpatient setting and, at times, in an inpatient setting. Changing the status quo rarely comes without cost, without compelling data, and without a coordinated effort around education.
Matthew David: The CorMedix team is spending time and resources developing our understanding, our relationships, and our strategy around all the key constituents of the hemodialysis landscape in order to be prepared to bring Defend-Cath to patients following its approval. On the reimbursement side, we are working with consultants and engaging with decision makers to inform our strategies around Defend-Cath's reimbursement. This includes CorMedix interfacing with a broad consortium of groups, including various types of dialysis providers, the Centers for Medicare and Medicaid Services, or CMS, hospitals, and patient advocacy groups such as the National Kidney Foundation and Dialysis Patient Citizenship.
And express my appreciation for being able to work with dedicated individuals whose hard work and expertise has enabled core medics and defend cap a step closer.
Matthew David: On the medical affairs side, recall that CorMedix presented at a pair of conferences in the fall of 2021 and highlighted work that was done integrating multiple clinical and claims databases that CMS and dialysis providers use to track patient care and quality metrics in end-stage renal disease patients. The conclusions from those retrospective studies underscored the significant incidence of immortality related to CRBSIs and economic costs related to these infections.
Da approval, and reducing life threatening catheter related bloodstream infections in patients.
Matthew David: These findings are especially important since approximately 80% of patients undergoing hemodialysis start with the central venous catheter as their first vascular activity. We also noted that approximately 29% of the patients in the cohort had a CRBSI post-traumatic stress disorder. CVC insertion, and we discussed how CRBSIs lead to more hospital admissions, longer stays, and a more complex clinical course. The team at CorMedix is aiming to update and expand the breadth of this work based on available data and will look to have a presence at relevant conferences as we look ahead.
Matthew David: With Joe joining the company this spring, we will aim to leverage his significant experience in commercial strategy as we further the efforts I have described and continue to prepare to bring DefendCast to patients in the U.S. following its approval. The CorMedix team is enthusiastic about our recent announcements and is highly focused on our commitment to patients in need of alternatives that reduce CRBSIs that contribute to significant levels of morbidity and mortality. To summarize what D.D.
As we had announced late last month, we believe the resubmitted NDA forget 10 cats provided the data requested by FDA in the complete response letter or see or else.
In parallel we worked collaboratively with company's third party.
Contract manufacturer.
Believe it addressed the deficiencies identified that the manufacturing facility and the post application action letter issued by us to the manufacturer.
Currently with the C O R L.
FCA review, the NDA Resubmission for completeness and made a filing decision in.
Matthew David: and I have discussed today, we continue to focus our efforts on the following. First, we are pleased to be able to share the updates regarding the recent submission, the recent resummission of the DefendCath NDA, and its acceptance for filing by the FDA. With a six-month review period, we look forward to sharing updates as a prop- There is much to do in the interim to ensure that CorMedix has launched inventory and has secured sufficient manufacturing capacity for the longer term.
Matthew David: In addition, we are carefully balancing our cash burn while preparing for the commercial introduction of FENCAP once we have approval of the NDA by FDA. As the commercial strategy continues to take shape with our incoming CEO, we look forward to discussing it in greater detail in the future. Also, we are continuing to plan to broaden the opportunity for DefendCat following its approval and continuing to expand our understanding of opportunities to benefit patients with central venous catheters, such as hemodialysis across the spectrum of care, total parenteral nutrition, and oncology.
Accepting the Resubmission for filing F D. A informed core medics that the Resubmission is complete.
Operator: I would like to take a moment to recognize the broader CorMedix team, many of whom have been instrumental in our achievements over the past several months. We remain confident that we have a strong team and appropriate resources in place to continue to advance FENCAS toward potential regulatory approval later this year and bring FENCAS to hemodialysis patients in the U.S. Thank you for your continued support of and interest in CorMedix.
Consider it a class two response to the action.
Operator: Operator, please open the call for questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate that your line is active; you may press star 2 if you would like to remove your question. Please note that, for participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.
SBA policies and procedures define a class two resubmission essentially as a resubmission that includes any item not specified as the class one item, which is an explicit list of nine items such as minor reanalysis of data previously submitted.
Operator: One moment, please, will we pull for questions? Our first question comes from Jason Butler, with JMP Securities. Please... Hi, thanks for taking the questions and congrats on the progress. Great to see. First one, Matt, have you received a PDUFA date from your FDA yet? And can you share that with us?
Matthew David: And then on the reimbursement side of things, are you still planning to pursue reimbursement under the TDAPA program? And what would the timeline be based on your PDUFA date? Thanks. Thanks, Jason. First, on the PDUFA side, I'll pass things to Phoebe to start. Thanks. As I'm sure most folks know, the Prescription Drug User Fee Act, or PDUFA, sets performance goals for FDA for completion of agency review. And those are just goals, performance goals, and not statutory timelines imposed on FDA. So everyone is cognizant of issues that can develop during the review process that may impact the timeline.
The defend cats Resubmission has new manufacturing data.
That has not been previously submitted to FDA and are therefore considered class too with a six month review cycle.
Phoebe Mounts: And given the COVID-19 pandemic, everyone is acutely aware of unforeseen disruptions of travel and planned activities. So given the potential for changes, we are prepared to work within the six-month review cycle, and we're hoping for the best. We will provide updates to investors if there are significant delays that occur in the review timeline. But we're hopeful that the six-month review cycle will be successful. Six months of review will be sufficient.
As we had previously discussed.
Matthew David: Thanks, Phoebe. And I'll just jump in on the other part of your question, Jason, which was about TDAP, I think. Yeah, as you know, we're evaluating all the alternatives but continue to believe the TDAP route is an important one for products in the renal space. We've talked about the timing before, which is that you apply following an approval. And so, depending on the timing of the quarterly cycle, it takes one to two quarters.
Matthew David: Got it. Great. And then just a second one for me.
Yeah. If it stayed at the resolution of the deficiencies may require a pre approval inspection of the manufacturing facility.
Phoebe Mounts: You said that you were, forgive me if I'm not quoting you exactly, but confident that the planned inspection, the manufacturing inspection, can happen within the six-month window. Is that inspection already scheduled? Or what gives you the confidence that FDA can get that done within the six-month period? We've learned from the manufacturer that FDA has reached out to them about scheduling the inspection. So, based on the discussions that are ongoing, I'm confident that we'll get it done in six months. Okay, great.
We have learned from our manufacturing partner that it has been notified by the FDA already that.
Matthew David: And then just last one for me, as you work through the commercial preparations, are you having any direct interactions with the, you know, the leading dialysis providers? Or can you just give us any more color there about how you're building awareness of the products and the data sets? Yeah, no, absolutely.
Matthew David: Thanks, Jason. Yeah, as we touched on, there's a number of things that the CorMedix team is doing to prepare for commercial launch. The team has been expanding our understanding of the defense cath opportunity through market research, payer research, and really continuing that work on the pharmaceutical economic side. We have broadened our understanding of the patient journey for a renal failure patient that includes all the components from placement of the essential Venus catheter to initiation of hemodalysis to inpatient visits and beyond.
That the SBA will conduct an infection.
Matthew David: And so we will begin to recruit, I think some of the key commercial roles as we prepare for potential launch, but we're just really continuing on that work and laying some of the groundwork at this point. I think once Joe gets up to speed and really begins on the CorMedix side, we'll talk a little bit more about the commercial strategy, so you'll get some of that detail in the future. Okay, great.
Matthew David: Thanks again for taking the questions and again, congrats on all the progress. Thanks Jason.
We believe that core metrics and the manufacturer has adequately addressed the concerns identified by us and we remain committed to working jointly to ensure a successful inspection.
Operator: Our next question is from June Lee with Truist. Hey, thanks for taking our questions as well. I believe the wording in the prior press release was that the onsite onsite inspection has been scheduled. If and when that happens, would you consider that to be a disclosable item given the deficiencies related to the CMO? Phoebe?
Phoebe Mounts: Those are conversations that occur between FDA and the manufacturer. That's not information that CorMedix is delivering to disclose. And when Mr. Todisco joins the company, what will be his first order of business, and, in fact, when is he actually going to be joining the company? I know that he has some obligations to his current employer, but just curious about what the timing will be.
We believe that SBA will complete the preapproval inspection within a six month review period.
Matthew David: Yeah, no problem. Thanks. Thanks for the question. Thanks for joining us today, June. Yeah, so as we've said before, I think in our press release today, Joe is expecting to join on or around May 16. And really, in terms of priorities, I'll certainly let him go through that with you. But I believe some of the very first orders of business is to kind of get in there and start setting the tone from a commercial strategy perspective. As Phoebe walked you through today, we have a timeline, right?
Matthew David: We've got some great news that we received this week that we were so excited to share as it relates to the acceptance of the submission and our six-month review cycle. So I think it really is going to be figuring out step one, two, three, four, and beyond, making sure that we are prepared upon that anticipated approval to bring DEFEND-CAT to patients. And then, last question, you know, what's assumed in your cash burn guidance for the first half of 2020? Sure. That was a great question. So, as we've said, the cash guidance includes items such as commercial supply for launch and the initial stages of the commercial launch. And so that factors in.
FDA has begun its valuation of the NDA and we will continue to respond promptly to fda's request for additional information, which have already begun to ensure timely review of the NDA.
As a reminder, core medics had not been asked to resubmit any information relating to clinical data from the lock It 100 study.
I can assure you that we will continue working diligently to demonstrate USDA that the manufacturing facility is ready to support commercial operation for defend cats, and just cure FDA approval loves it defend counts N D. A.
We are committed to providing updates to investors as appropriate over the coming months during the review process.
I would now like to turn to our activities directed towards ensuring that kinetics have secured adequate manufacturing capacity for defend cats.
Meet the unmet medical need of reducing catheter related bloodstream infections.
For medics is planning for clinical trials following anticipated FDA approval.
To be in a position to expand the indications for use of the same counts.
I also believe it is important to anticipate potential supply chain challenges and ensure multiple sources are in place to provide adequate inventory.
Accordingly, as cornetto as previously discussed we are engaged in identifying additional potential manufacturers of defend counts in the United States, while we work to obtain marketing authorization from the FDA.
We are actively engaged in discussions with potential manufacturers and then the process of conducting appropriate due diligence at the facilities.
To ensure a good track record of FDA compliance.
Proprium technical expertise.
And available capacity to meet our manufacturing goals.
We anticipate being able to complete our diligence process in the coming weeks.
Matthew David: I think what you'll see as you think about the rest of the year is that things will, less so in the beginning of the year but really as you get towards the second half of the year, begin to ramp up from a spend perspective as we need to ramp up each of those components to ready the company for a commercial launch. All right, thanks for the questions, and I'm looking forward to the update. Thanks, June. Our next question is from Rohit Basin with Needham & Company. Hi, this is Rohit on for Surge.
Thank you and I will now turn the call back to Matt.
Cover financial results.
Cash guidance and commercial strategy updates for depend count.
Matt.
Thanks Debbie.
Next I will provide an overview of our fourth quarter and full year 2021 financial results as well as an update on <unk> cash position.
Matthew David: Thanks for taking my question. Is there anything you can tell us in terms of the pricing of DefendGas? And have you had any recent discussions with payers? Sure. No, thanks, Rohit, and thanks for joining us today. Yes, for pricing, I think I mentioned during the call, we have discussions with payers, including CMS, obviously a very significant payer for the renal space, often and all the time. So that's ongoing. In terms of specific pricing as it relates to FENCAP, you know, we continue to work through the pharmacoeconomic data that we've described before, and hopefully, we'll share more this year and continue the dialogue with payers in the space.
Matthew David: So we really would plan to discuss pricing around the time of a potential approval. Ladies and gentlemen, there are no further questions at this time. I will now hand the call back to Daniel Ferry for questions from the audience. Thank you. Thank you, operator. Matt, our first question is... Regarding Joe's joining in mid-May.
Matthew David: Matt, does that mean you will stay on at CorMedix and focus on CFO responsibilities? Thanks for the question. Yes, I am planning on continuing to serve as CorMedix's CFO, as I have since May 2020.
The company has filed its report on Form 10-K for the full year ended December 31st 2021, I urge you to read the information contained in the report for a more complete discussion of our financial results.
Matthew David: I'm proud of what we have accomplished as a team over these past six months and look forward to working with Joe as we guide the company strategy going forward. Thanks. Thanks, Matt. Okay, and another one on the commercial side of things. Can you comment on plans for additional indications like pediatrics, TPN, and oncology? Sure. You know, we have discussed in the past that CorMedix plans to pursue opportunities to broaden the use of DefendCats following approval, and we've continued to expand our understanding of the various patient groups that use central venous catheters.
Matthew David: We'll aim to discuss these in more detail during subsequent calls. Excellent. And on the balance sheet, Matt, will CorMedix need to raise money in order to launch DefendCath? And what options are available to the company?
With respect to our fourth quarter 2021 financial results.
Matthew David: Thanks, Dan. Thanks. And thanks for whoever submitted the question. It has always been a priority to make sure that CorMedix has adequate funding to accomplish our strategic goals. As we mentioned, our cash guidance through the first half of 2023 includes costs related to the initial stages of a commercial launch. Despite the turbulence in the markets, I think that we will have access to a similar range of alternatives as other commercial-stage companies, so equity, convertible debt, royalty, financing, etc.
Cash and equivalents and short term investments of $65 5 million as of December 31, 2021 <unk>.
Matthew David: Understood. Thanks, Matt. I'd like to turn the floor back over to you for closing remarks. Thanks, Dan, and thanks everyone for the questions and your continued support of CorMedix. We are pleased to be able to share these updates with you today. CorMedix remains committed to bringing DefendCast to the U.S. market to help patients in need of protection from life-threatening infections. The importance of reducing the incidence of infections and keeping patients out of the hospital has been even more apparent during the ongoing COVID-19 pandemic.
Matthew David: Thank you for your time and attention, and have a good evening. This concludes today's conference. Thank you very much for your participation. You may know this, Thank you.
Approximately 3 million in net proceeds from our ATM program in first quarter of 2022 cosmetics is December 31st pro forma cash and equivalents of $68 5 million.
Our net loss was approximately $7 8 million or <unk> 20 per share compared with a net loss of $6 1 million or <unk> 19 per share in the fourth quarter of 2020.
Higher net loss recognized in the fourth quarter of 2021 compared with the same period in 2020 was driven by increases in costs related to the manufacturing of defend cast prior to its potential marketing approval and noncash charges for stock based compensation.
We recorded an increase in SG&A and an increase in R&D expenses.
Operating expenses in the fourth quarter of 2021 increased approximately 28% to $7 8 million compared with $6 1 million in the fourth quarter of 2020, R&D expense increased by approximately 41% to $3 2 million driven primarily by an increase in costs related to the manufacturing.
Defend cats prior to its potential marketing approval and to a lesser extent by an increase in consulting fees and an increase in noncash charges for stock based compensation.
SG&A expense increased approximately 21% to $4 6 million compared with $3 8 million in the fourth quarter of 2020.
This increase was driven by an increase in noncash charges for stock based compensation and an increase in personnel expenses as a result of additional hires partially offset by a decrease in costs related to market research studies in preparation for the potential marketing approval, if the venkat and a decrease in consulting fees.
With respect to our full year 2021 financial results.
Our net loss for 2021 was approximately $28 2 million or <unk> 75 per share compared with a net loss of 22 million or <unk> 77 per share in 2020, the higher net loss recognized in 2021, compared with 2020 was due to higher G&A costs as well as a smaller tax benefit.
It received in 2021.
Operating expenses in 2020 , one increased approximately 8% to $29 5 million compared with $27 3 million in 2020.
R&D expense decreased by approximately 2% to $13 1 million driven by net decreases in costs related to the manufacturing of defense calf prior to its potential marketing approval and a reduction in clinical trial expenses due to the closing of our lock it 100 clinical trial.
These decreases were offset by increases in noncash charges for stock based compensation and increases in consulting fees and personnel expenses.
SG&A expense increased approximately 18% to $16 3 million compared with $13 9 million in.
In 2020.
This increase was driven by an increase in noncash charges for stock based compensation an increase in personnel expenses, partially offset by decreases in consulting fees and costs related to market research studies in preparation for the potential marketing approval of defend cats.
We recorded net cash used in operations during 2021 of $21 2 million compared with net cash used in operations of 22 million in 2020. The difference was primarily driven by an increase in accounts payable compared to the same period in 2020, partially offset by an increase in net loss mainly.
Attributable to lower cash received in 2020 , one from the NOL sale versus the same period in 2020.
<unk> remains in a good position from a balance sheet perspective, we believe our pro forma cash and equivalents of approximately $68 5 million. It gives the company flexibility to fund its operations through the first half of 2023 after taking into consideration costs related to commercial supply and costs related to the initial.
Ages of the potential commercial launch for defense Cat.
We remain optimistic about our progress toward an anticipated FDA approval for defense calf in 2020 two as.
As highlighted previously we believe that our current cash and equivalents as well as the potential mechanisms available to us for capital raising allow us to be prepared for the future. Given we are facing what we hope and believe will be a pivotal time ahead for chromatics as we seek to bring defend cat to patients in the hemodialysis.
Got it.
And the last topic today.
Like to highlight the continued efforts by the <unk> team to expand our understanding of one the hemodialysis market opportunity across the spectrum of care to the reimbursement dynamics and three pharmacodynamic considerations that would each factor into our commercial strategy for bringing defend kept the patients upon its approval.
Cosmetics has continued to work with outside consultants and market research firms to further develop our views on the hemodialysis market across all settings of care.
We are working to build our understanding of each of the key steps of a patient's journey, including the initiation of hemodialysis treatment, the placement and maintenance of a central venous catheter and the chronic hemodialysis treatment in the outpatient setting and at times.
Patient setting.
Changing the status quo rarely comes without costs without compelling data and without a coordinated effort around education.
The <unk> team is spending time and resources on developing our understanding our relationships and our strategy around all the key constituents of the hemodialysis landscape in order to be prepared to bring defend catheter patients following its approval.
On the reimbursement side, we're working with consultants and engaging with decision makers to inform our strategies around defend cats reimbursement.
This includes <unk> interfacing with a broad consortium of groups, including various types of dialysis providers centers for Medicare and Medicaid services, or CMS hospitals, and patient advocacy groups, such as National kidney Foundation and dialysis patients citizens.
On the medical affairs side recall that <unk> presented at a pair of conferences in the fall of 2021 and highlighted work that was done integrating multiple clinical and claims databases that CMS and dialysis providers use to track patient care and quality metrics in end stage renal disease patients.
The conclusions from those retrospective studies underscored the significant incidents and mortality related to C. R. B S eyes, and economic costs related to these infections.
These findings are especially important since approximately 80% of patients undergoing hemodialysis start with a central venous catheter as their first vascular access.
We also noted that approximately 29% of the patients in the cohort had a CR BSI post C V C insertion and we discussed how C. R. B S is lead to more hospital admissions longer stays and more complex clinical course.
The team at <unk> is aiming to update and expand the breadth of this work based on available data and we'll look to have a presence at relevant conferences as we look ahead.
With Joe joined the company. This spring we will aim to leverage his significant experience in commercial strategy as we further the efforts I have described and continue to prepare to bring defend cat to patients in the U S. Following its approval.
The Comex team is enthusiastic about our recent announcements and is highly focused on our commitment to patients in need of alternatives that reduce C. R. B S eyes that contribute to significant levels of morbidity and mortality.
To summarize what D D and I have discussed today, we continue to focus our efforts on the following first we are pleased to be able to share the updates regarding the recent submission there.
The recent resubmission of the defend Cath N D E and its acceptance for filing by the FDA with a six month review period, we look forward to sharing updates as appropriate there.
There is much to do in the interim to ensure that robotics is launch inventory and has secured sufficient manufacturing capacity for the longer term.
In addition, we are carefully balancing our cash burn while preparing for the commercial introduction of defend cat. Once we have approval of the NDA by F. D. A.
As the commercial strategy continues to take shape with our incoming CEO , we look forward to discussing in greater detail in the future.
Also we are continuing to plan to broaden the opportunity for defense calf following its approval and continuing to expand our understanding of opportunities to benefit patients with central venous catheters, such as hemodialysis across the spectrum of care total parental nutrition and oncology.
I would like to take a moment to recognize the broader chromatics team many of whom have been instrumental in our achievements over the past several months, we remain confident that we have a strong team and appropriate resources in place to continue to advance defend cap towards potential regulatory approval later this year and brings.
Venkat to hemodialysis patients in the U S.
Thank you for your continued support of and interest in <unk>.
Operator, please open the call for questions.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the Q you.
You May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Please while we poll for questions.
Our first question comes from Jason Butler with JMP Securities. Please proceed.
Hi, Thanks for taking the questions and congrats on the progress during the first.
The first one that has have you received the Paducah date from U S. P. A yet and can you share that with US and then on the reimbursement side of things are you still planning to pursue reimbursement under the TDAP a program and what would the timeline be based on your Paducah date. Thanks.
Jason first first on the on the producer side I'll pass things to Phebe to start.
Yeah.
Thanks, Jason Thank Matt.
As I'm sure most folks know.
And drug user fee act or produce the performance goals for SBA for completion of agency review and those are goals performance goals are not statutory timelines imposed on them.
So everyone is cognizant of issues that can develop during the review process that may impact the time line.
And given the COVID-19 pandemic everyone's acutely aware of unforeseen disruptions travel unplanned activities. So given the potential for changes we are prepared to work within a six month review cycle.
We're hoping for the best so we will provide updates to investors if there are significant delays.
They occur in the review timeline, but we were hopeful that six months six months of review will be sufficient.
Thanks, Amy and I'll just jump in on.
On your other part of your question, Jason which was about to adopt I think yeah. As you know we're evaluating all the alternatives, but continue to believe T. That book Route is an important one for products in the renal space, we've talked about the timing before which is that you apply following an approval.
And so it takes depending on the timing of the quarterly cycle. It takes one to two quarters.
Got it great and then just a SEC.
Second one for me you said that you were I forgive me, if I'm not quoting exactly but confident that the the planned inspection manufacturing inspection can happen within the six month window is that inspection already scheduled or what gives you. The confidence that you can get that done within the six month period.
Maybe.
We've learned from the manufacturer that FDA has reached out to them about scheduling inspection so.
Based on the discussions that are ongoing.
I'm confident that we'll get it done.
Six months.
Okay, Great and then just last one for me as you work through the commercial.
Preparations are you having any direct interactions with the you know the leading dialysis providers or <unk> can you just give us any more color there about how you're building awareness and or of the products in the dataset.
Yeah, no absolutely. Thanks, Jason Yeah. He touched on there's a number of things that the <unk> team is doing to prepare for commercial launch yeah. The team has been expanding our understanding of the bank have opportunity through market research payer research and really continuing that work on the farmer economics side, we have broadened our.
Our understanding of the patient journey for a renal failure patient that includes all the components from placement of a central venous catheter to initiation of hemodialysis.
In patient visits and beyond.
And so we will begin to recruit I think some of the key commercial roles as we prepare for potential launch, but we're just really continuing on that work and in laying some of the groundwork at this point I think once Joe gets up to speed and really begins on the <unk> side, we'll talk a little bit more about the commercial.
So strategy, so you'll get some of that detail in the future.
Okay, great. Thanks.
Thanks, again for taking the questions and again congrats on all the progress.
Thanks, Jason Hey, Jason.
Our next question is from Joon Lee with Truth. Please proceed.
Hey, Thanks for taking my questions as well I believe the wording in the prior press release towards that the onsite onside inspection has been schedule.
Uh huh.
That happens would you consider that to be a disposable item given the deficiencies who is the CFO .
Phoebe.
Yeah, that'd be a conversation that occurred between FDA and the manufacturers that's not information that car.
Carmax is at Liberty to disclose.
Got it.
And when Mr to this good joins the company what would be his first order of business and in fact, what is the X. We are going to be joining the company I know that he has some obligations to his current employer, but just curious what the training.
Yeah, No no problem. Thanks for the question. Thanks for joining today at your yeah. So so as we used to have before they.
In our press release and today it Joe is expecting to join on or around.
May 16th.
And really in terms of priority as you know I'll I'll certainly let him go through that with you, but I believe some of the very first orders of business as it is.
Get in getting there.
Started setting the tone from our commercial strategy perspective as D. B walked you through today, we have a timeline right. We've got some great news that we received this week that we were so excited to share as it relates to the acceptance of the submission and our six month review cycle. So I think it really is going to be figuring out.
1234, and beyond I'm, making sure that we are prepared.
Upon that that anticipated approval to bring defend catheter patients.
Great and then last question you know what's assumed in your cash burn guidance to 'twenty first half of 'twenty three.
Sure no it is.
Great question.
As we've said the the cash guidance includes items such as commercial supply for launch in the initial stages of the commercial launch and so that that factors in that I think what you'll see.
As you think about the rest of the year is that these things will less so in the beginning of the year, but really as you get towards the second half of the year begin to dial up from a spend perspective as long as we need to ramp up each of those components are to ready the company for a commercial commercial launch.
Alright.
Lessons and are looking forward to the updates thanks.
Thanks, Jim.
Our next question is from Rob him, but basketball hoop Besson with Needham and company. Please proceed.
Hi, This is Robert on for Serge Thanks for taking my question.
Is there anything you can tell us in terms of pricing up defend cats and have you had any recent.
Discussions with Payors.
Sure no. Thanks, Thanks, Robert and thanks for joining us today.
Yes, I'm on for for pricing I think I mentioned during the call we have discussions with with payers, including CMS, obviously, a very significant payer for the renal space often and all the time.
So that's ongoing in terms of specific pricing as it relates to defend cap you know we continue to work through.
Through the pharmacokinetic data that we've described before and I hopefully will share more of this year and continue the dialogue with payers in the space. So we really would plan to discuss pricing around the time of a potential approval.
Great. Thank you.
Yeah.
Ladies and gentlemen, there are no further questions at this time I will now hand, the call back to Daniel ferry for questions from the audience.
Yeah.
Thank you thank.
Thank you operator.
Met our first question is.
Regarding Jos joining in mid May.
That does that mean, you will stay on at Chromatics and focus on CFO responsibilities.
Thanks for the question, Yeah, I'm planning on continuing to serve as <unk> CFO as I have since May 2020.
I am proud of what we have accomplished as a team over these past six months and look forward to working with Joe as we guide the company strategy going forward.
Thanks.
Thanks, Matt Okay and in another one here on the commercial side of things.
Can you comment on plans for additional indications like pediatrics TPN oncology.
Sure.
We have discussed in the past that <unk> plans to pursue opportunities to broaden the use of defend cat following an approval and we've continued to expand our understanding of the various patient groups that use a central venous catheter as well aimed to discuss these in more detail during subsequent calls.
Excellent and end on the balance sheet, Matt will core metrics need to raise money in order to launch defend caf and what options are available to the company.
Thanks, Dan and thanks for whoever somebody has a question.
It has always been a priority to make sure that core medics has adequate funding to accomplish our strategic goals as we mentioned our cash guidance through the first half of 2023 includes costs related to the initial stages of a commercial launch despite the turbulence in the markets I think that we will have access to.
Similar range of alternatives as other commercial stage companies, so equity convertible debt royalty financing et cetera.
Understood. Thanks, Matt I'd like to turn the floor back over to you for closing remarks.
Thanks, Dan and thanks, everyone for the questions and your continued support of Carmax, we're pleased to be able to share. These updates with you today.
<unk> remains committed to bringing defend cat to the U S market to help patients in need of protection from life threatening infections, the importance of reducing the incidence of infections and keeping patients out of the hospital has been even more apparent during the ongoing COVID-19 pandemic.
Thank you for your time and attention and have a good evening.
This concludes today's conference.
Thank you very much for your participation you may now disconnect.
Yeah.
Yeah.