Q4 2023 CorMedix Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the <unk>, Inc, fourth quarter and full year 2023 earnings call. At this time all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session.
At any time during this call you quite immediate assistance. Please press star zero for the operator.
This call is being recorded on March 12, 2024.
Matthew T. David: We recorded net cash used in operations during 2023 of $38.4 million compared with net cash used in operations of $24.4 million in 2022. The increase is primarily driven by an increase in net loss, primarily attributable to an increase in operating expenses as compared with the same period in 2022. CorMedix remains in a good position from a balance sheet perspective as we prepare the company for a commercial launch of DefendCat in April. The company has cash and cash equivalents of $76 million as of December 31, 2023. As we've discussed previously, we expect our operating expenses, especially SG&A, to increase in 2024, given the growth of the company and the cost driven by the commercial launch of Defendcast. CorMedix anticipates 2024 quarterly operating expenses to range from around $15 to $18 million to support commercial infrastructure and the launch of DefendCast.
I would now like to turn the conference over to Danny theory from lifestyle Advisors. Please go ahead.
Good morning, and welcome to the <unk> full year 2023 earnings conference call.
Leading the call today is Joseph <unk>, Chief Executive Officer of core metrics. He is joined by Dr. Matt David Executive Vice President and CFO Beth It sounds like Kaufman, EVP and Chief Legal Officer, Liz Hurlbert E V P of chief clinical strategy and operations Officer.
And Aaron Mystery, EVP and Chief commercial officer.
Before we begin I would like to remind everyone that during the call management may make what are known as forward looking statements within the meaning set forth in the private Securities Litigation Reform Act of 1995.
These statements are 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.
Including its commercial launch prospects for defense, yes.
Its clinical development programs for expanded uses of defend gas.
Manufacturing activities and marketing approvals for other panic other product candidates future.
Future financial position.
Future revenues and projected costs and.
And reimbursement and potential market acceptance of defend cap or other product candidates.
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 chromatics filings with the SEC.
Matthew T. David: We believe our cash equivalents, short-term investments, and projected future operating cash flow give the company the ability to fund operations for at least 12 months and to fund the commercial launch of DefendCap through to anticipated profitability, which may occur on a run rate basis by the end of December 2024, assuming we are able to achieve our internal base case assumptions for DefendCap demand, uptake, net pricing, and reimbursement. I will now turn the call back over to Joe for his closing remarks. Joe?
Including our latest quarterly report on Form 10-Q and annual report.
And on Form 10-K copies of which are available free of charge at the Sec's website at Www Dot FCC 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 this time, it's now my pleasure to turn the call over to Joe to Disco Chief Executive Officer of Chromatics, Joe. Please go ahead.
Thanks, Dan.
Good morning, everyone and.
And thank you for joining us on this call.
Since we last presented earnings in November the company achieved a number of key milestones.
Most notably the final NDA approval of defend cast by the U S. FDA as well as confirmation from CMS that defend cast will be eligible to receive a transition drug add on payment or to dapper for outpatient reimbursement with CMS.
Joseph Todisco: CorMedix is laser focused on our upcoming launch date in April, actively engaged in customer discussions about both the inpatient and outpatient settings of care, and is optimistic about our launch potential for 2024 and beyond. With respect to any future potential indications for DefendCast, we are targeting the submission of a post-approval meeting request to FDA by the end of March, and we expect to have meaningful discussions with FDA around potential clinical pathways in mid-year 2024. As I mentioned earlier, we do not intend to provide revenue or earnings guidance at this time.
As classified defense calf renal dialysis service under the end stage renal disease prospective payment system.
As we previously announced we submitted our <unk> J code application to CMS in December and our <unk> application in January following receipt of that reimbursement guidance from CMS.
Those applications remain under review at CMS and CMS has confirmed in writing that they are actively reviewing our J code into DAP applications and are working toward a July one 2024 effective implementation for defend cast to depth of payment.
That said CMS reserves, the right to request additional information for any application, which may impact the review timing and or a probability of a J code or to dapper.
Both a J code and an approved and effective to DAP application are gating items for the outpatient commercial launch of defend Caf, which is currently slated for July 1st.
Operator: However, we may revisit this guidance if and when appropriate. I appreciate everyone's continued support of CorMedix, and I'm happy to take questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift your hands up before pressing any button.
The company remains on schedule to commence our commercial launch for the inpatient setting on April 15th.
We have staffed and trained our field sales and medical affairs organizations and how successful internal team launched meeting during the last week of February.
The team we have built is deeply experienced and specialized with backgrounds in both infectious disease and nephrology spanning both the inpatient and outpatient settings of care.
We are also ramping up inventory production in accordance with our internal plan, which is heavily weighted toward the back part of the year.
As part of our supply chain strategy. The company is on track to submit a supplement to our NDA in April qualifying Siegfried site in Hamel, Germany as an alternative manufacturing site for defend cats.
Assuming a favorable FDA review of the supplement additional production from that site would come online by the end of 2024.
As we think about the inpatient launch trajectory in April we do expect a ramp for inpatient utilization to be fairly modest over the first two launch quarters as in pizza inpatient health systems and hospitals are working through their respective PNT formulary review processes.
Jason Nicholas Butler: We have our first question coming from the line of Jason Butler from Citizens JMP. Please go ahead. Hi, thanks for taking the questions and congrats on the progress. Just wondering if you could give us a little bit more detail on the progress you're making with the hospital PNT committees. Do you have meetings scheduled at this point? And when do you think you can get the first decisions out of those meetings?
On average the PNT process for a particular system or hospital can range from three to nine months.
That said, we have received significant interest over the last few months and are actively working through the P&C process with several large and mid size health systems.
We expect this activity to intensify in the coming months as our field base key account managers have just begun calling on hospitals and health systems to effectuate prelaunch contracting discussions.
Joseph Todisco: And then secondly, just walk us through how we should think about the early launch and utilization within the hospitals as you get these committee meetings and approvals. I mean, should we expect any use before you get the first committee approvals? Thanks.
Yeah.
On the outpatient side, we continue to have productive discussions with large and mid sized dialysis operators and we look forward to providing additional updates over the coming months as these discussions advance.
Based upon our current for our current base case forecast for 2024.
Joseph Todisco: Yeah, thanks, Jason. So from a P&T meeting process, we do have some meetings that are currently scheduled. We have a number that we expect to be scheduled, let's say, in the second quarter. I can't really comment on the timing of how quickly that will move and whether they will be adopted on formulary. But the way I would think about inpatient, and then I'll even touch on outpatient for a second.
We continue to believe that the company can achieve breakeven profitability on a run rate basis by the end of December 2024, assuming we are able to achieve our internal base case assumptions for defense calf demand uptake net pricing and reimbursement.
We believe we have sufficient cash resources on hand to achieve this objective however.
However, should the launch and uptake of defend cath be slower than our internal projections requiring more capital. We believe we have several financing alternatives available to the company, including non dilutive sources of financing.
<unk> has grown in size with the addition of new hires in field sales and medical affairs as well as the other additions across the organization.
Joseph Todisco: Yeah, we mentioned it'd be a slower ramp, right, due to the P&T process. So when we think about it in the short term and in the long term, we think about the inpatient side as kind of a more steady, gradual ramp, whereas on the outpatient side, given the potential size of certain large customers, as well as even the ability of a midsize customer to move volume, we would expect that ramp to be a little more lumpy, right? And on the outpatient side, you know, we see maybe new patient starts within those facilities, focusing initially on fee-for-service patients, right, as we then begin to onboard MA plans over time. It'd be a little bit kind of stepped, right, more of a lumpy upward ramp.
I'm thankful for all of those involved in the latest expansion our new team members and all the work that has gone into preparing the company for our anticipated commercial launch I.
I am proud of what we've accomplished over these recent months and excited to bring defend cast to patients.
I would now like to turn over the call to Matt to discuss the company's fourth quarter and year end financial results and financial position.
Matt.
Thanks, Joe and good morning, everyone I am pleased to be here today to provide an overview of our fourth quarter and full year 2023 financial results as well as an update on <unk> cash position.
The company has filed its annual report on Form 10-K for the year ended December 31, 2023, 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 of 2023 financial results.
Our net loss was approximately $14 8 million or <unk> 26 per share compared with a loss of $8 2 million or <unk> 20 per share in the fourth quarter of 2020 to the higher net loss recognized in 2023 compared with 2022 was primarily driven by increases in costs related to market Research studies.
Joseph Todisco: And then just one more for me in terms of the label expansion activities, other catheter use settings. Obviously, you mentioned waiting for FDA interactions and feedback, but just from an operational perspective, are you guys preparing to be in a position to launch those trials or start those trials quickly after you get FDA alignment? Obviously, that's going to depend on whether or not they accept the proposal that we intend to make, right? If they are accepting of the pathway that we're going to put forward for certain expanded indications, we can launch those fairly quickly. It's not immediate, right? You're not just flipping on a light switch.
Prelaunch activities for defense costs and increases in personnel expenses due to new hires in 2023 compared to the same period in 2022.
Operating expenses in the fourth quarter of 2023 <unk>.
Approximately 86% to $15 7 million compared with $8 4 million in the fourth quarter of 2022.
R&D expense decreased by approximately 19% to $2 3 million driven primarily by decreases in manufacturing costs related to defend cap.
SG&A expense increased approximately 140% to $13 4 million in the fourth quarter of 2023, compared with $5 6 million in the fourth quarter of 2022.
This increase was primarily attributable to an increase in costs related to launch activities and higher personnel costs due to the additional hires in Q4.
With respect to our full year 2023 financial results.
Joseph Todisco: But if they desire more work to be done, then it could be a longer pathway. Okay, great. Thanks for taking the question. Thank you. Our next question comes from the line of Gregory Renza from RBC Capital Markets. Go ahead. Hi, Joe and team. It's Anish on for Greg.
Total operating expenses during the full year 2023 amounted to $49 million compared with $30 7 million in 2022, an increase of 60% R&D expense increased 23% to $13 2 million driven primarily by an increase in personnel expenses and increase in <unk>.
Related to medical affairs activities, and an increase in costs related to the technical and quality operations for the manufacturing of defend cat prior to its marketing approval.
SG&A expense increased approximately 79% to $35 8 million, primarily driven by an increase in costs related to market research studies and prelaunch activities in preparation for the commercial launch of deferred cost and an increase in personnel expenses as a result of the additional hires in 2023.
Anish: Congratulations on the progress this quarter. And thanks for taking my questions. Just first, maybe you could give us an update on the current composition of your commercial field for us and give us some granularity on the new ads in the inpatient and outpatient segments to date. And then, secondly, how are you thinking about current and upcoming shifts and political tides affecting CMS reimbursement policies as it relates to Defendcast? Thanks again.
These increases were partially offset among others of lesser significance by a decrease in legal fees for the period.
We recorded net cash used in operations during 2023 of $38 4 million compared with net cash used in operations of $24 4 million in 2022. The increase is primarily driven by an increase in net loss primarily attributable to an increase in operating expenses as compared with.
The same period in 2022.
<unk> remains in a good position from a balance sheet perspective, as we prepare the company for a commercial launch of defend cat in April the company has cash and cash equivalents of $76 million as of December 31, 2023.
Joseph Todisco: All right, thanks. Thanks, Anish. So from a field team standpoint, we've migrated a little bit from, I think, our thinking last year. And rather than have a bifurcation between the inpatient and outpatient teams, we've somewhat melded them into one, with geographic deployment being more important than, let's say, a split between those two settings of care. You know, given the nature of the role is more of a key account manager than a medical rep, it's essentially the same skill set on both sides of the care from a reimbursement knowledge and contracting standpoint.
As we've discussed previously we expect our operating expenses, especially SG&A to increase in 2024, given the growth of the company and the cost driven by the commercial launch of defend Cat <unk>.
<unk> anticipates 2020 for quarterly operating expenses to range from around $15 million to $18 million to support commercial infrastructure and the launch of defend cats.
We believe our cash cash equivalents short term investments and projected future operating cash flow gives the company the ability to fund operations for at least 12 months and to fund the commercial launch of defend cap through to anticipated profitability, which may occur on a run rate basis by the end of December 2024, assuming we are able to achieve our internal base.
Joseph Todisco: The hurdle on both sides really is getting the product adopted in the system, be it a large system or a small dialysis operator. So, right now, we're staffed with about 30 people in the field. We think that's sufficient for launch. We may look to grow over time into the 45-50 range, but right now, we're comfortable where we are, and we have the right team in place. You know, from a political standpoint, it's really hard to tell, right, what, you know, what may happen.
Case assumptions for defend cap demand uptake net pricing and reimbursement.
I will now turn the call back over to Joe for closing remarks, Joe Thanks, Matt.
<unk> is laser focused on our upcoming launch date in April is actively engaged in customer discussions on both the inpatient and outpatient settings of care and are optimistic about our launch potential for 2024 and beyond.
With respect to any future potential indications for defend Caf, we are targeting the submission of a post approval meeting request to FDA by the end of March and we expect to have a meaningful discussion with FDA around potential clinical pathways in mid year 2024.
As I mentioned earlier, we do not intend to provide revenue or earnings guidance. At this time. However, we may revisit guidance, if and when appropriate.
I appreciate everyone's continued support of <unk> and I'm happy to take questions.
Thank you Les.
Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one touchstone fine you have here today, Tom prompt acknowledging your request. So do you a steady climb from the polling process. Please press star followed by the number killed it.
Joseph Todisco: Certainly, you know, we have four years of experience with the Biden White House and have just gone through, right, our experience with CMS. We also have four years of past experience with the Trump administration. So at this time, we're not really seeing anything drastically change at CMS, regardless of who ends up in the White House, but you know, it certainly could always change. Great, thank you. Thank you. Our next question comes from the line of Les Sulewski from Truba Securities. Please go ahead. Good morning.
If you're using a speaker phone please lift your handset before pressing on it.
We have our first question coming from the line of Jason Butler from citizens JMP. Please go ahead.
Hi, Thanks for taking the questions and congrats on the progress.
Just wondering if you could give us a little bit more detail on the progress you're making with the hospital PNC committees do you have meetings scheduled at this point and do you think you can get any when do you think you can get the first decisions out of.
Out of those meetings and then secondly, just walk us through how we should think about the early launch and utilization within the hospitals as you get these committee meetings and approvals I mean should we expect any use before you get the first committee approvals. Thanks.
Leszek Sulewski: Thank you for taking my questions. Can you, Joe, provide some color around the distribution channels and your commercial inventory levels ahead of launch? And how do you expect the inpatient centers to manage their stocking levels? And maybe your implied ratio on expected demand for the three mil vial versus the five mil vial? And also, a follow-up to that: which quarter would you expect the manufacturing costs to shift from R&D to Congress? Thanks, Les.
Yeah. Thanks, Thanks, Jason.
So from a from a PNT.
Meeting process, we do have.
Some meetings that are currently scheduled we have a we have a number that we expect to be scheduled let's say in the in the second quarter.
I can't really comment on the timing of them.
How quickly that will move and whether they will be adopted on formulary.
But the way I would think about.
Inpatient and then I'll I'll, even touch on outpatient for a second.
Yeah, we mentioned it would be a slower ramp rate due to the the PNT process. So when we think about it in the short term and long term, we think about the inpatient side is kind of a more steady gradual ramp whereas on the outpatient side given the potential size of certain large customers as well as even even the ability of a mid <unk>.
Joseph Todisco: Good questions. So, from a distribution channel standpoint, you know, essentially, inventory is going to flow through specialty distribution. On the inpatient side, or for inpatient facilities, it'll flow through a specialty distributor. On the outpatient side, it'll be a mix of going through a specialty distributor. For some customers and others, potentially, we'll go; we'll get shipped direct. On the 3-ML and 5-ML issues, the 5-ML is on our label because we did initial development work.
This customer to move volume, we would expect that that ramp to be a little more lumpy right and on.
On the outpatient side.
We see may be.
New patient starts within those facilities focusing initially on fee for service patients right. As then we.
We begin to onboard a MA plans over time.
It would be a little bit kind of in stepped right more of a lumpy.
Upward ramp.
Got it and then just one more for me in terms of the label expansion activities others other catheter use settings.
Obviously, you mentioned waiting for the FDA interactions and feedback, but just from an operational perspective are you guys preparing to be in a position to launch those trials are struggling as trials.
Joseph Todisco: Remember, the product was initially in a 5-ML vial, but it's not our intent to commercialize the 5-ML at this time. So, we're launching, the intent is to launch the product with a 3-ML. You know, the last question that you asked about when we when we cut over is the difficult one, right? Because it depends on uptake and demand.
Quickly after you get FDA alignment.
Obviously, that's going to depend on whether or not they adopt.
The the proposal that we that we intend to make rate I think if if they are accepting of the pathway that we're going to put forward for <unk>.
Certain expanded indications we can we can launch those fairly quickly it's not immediate right not just slipping on a light switch but if.
If they desire for more more work to be done then it could be a longer pathway.
Okay, great. Thanks for taking the questions.
Okay.
Thank you. Our next question comes from the line of Gregory Zhao from RBC Capital markets go ahead. Please.
Joseph Todisco: I think the faster demand goes, you can certainly see cutover earlier this year, right? If demand is a little bit slower, it may take some more time, right? So we've built a decent amount of inventory pre, right, that was expensed prior to prior to approval. Got it. Thanks for the follow-up. Yeah, I think it did.
Hi, Joe and team into niche on for Greg Congrats on the progress this quarter and thanks for taking my questions. Just first maybe if you could give us an update on the current composition of your commercial field force and for some granularity on the new adds in the inpatient and outpatient segments to date and then secondly, how are you thinking about current and upcoming shifts in political tides affecting.
CMS reimbursement policies as it pertains to defend Cas. Thanks again.
Alright. Thanks, Thanks, Nish, so from a from our field team standpoint, we've we've migrated a little bit from I think our thinking last year and rather than have a bifurcation between the inpatient and outpatient teams, we somewhat melded them into one.
Leszek Sulewski: Yes. Just one more follow-up, I guess, on the strategy around separate payment under Medicare Part B reimbursement. What are some potential timelines for filing and approval that you expect for this and the potential impact on your WAC price? Yeah, I'm not sure I understand that question, Les.
With geographic deployment being being more important than.
Let's say a split between those two settings of care you know given the nature of the role is more of a key account manager than a medical rep. It's essentially the same skill set on both sides of the care from a.
Reimbursement knowledge from a contracting standpoint.
Joseph Todisco: So we have our outpatient reimbursement determination. CMS has made a determination that we're eligible for TADAPA, right, that it's going to fall under the scope of the end stage of the ESRD prospective payment system. On the inpatient side, we do have our NTAP. So the JCode application is required for TADAPA, right?
The hurdle on on both sides really is getting the product adopted in the system beat a large system or a small dialysis operator.
So right now we're staffed with about 30 in the field.
We think thats sufficient for launch we may look to grow.
Over time into the into the $45 50 range, but right now we're comfortable where we're at that we have the right team in place.
From a political standpoint, it's really hard to tell right. What what may happen certainly we have four years of experience with the Biden White House and have just gone through radar experience with BMS. We also have four years of past.
Leszek Sulewski: So JCode, if that's what you might be thinking, is separate from a Part B determination. Does that clarify? The question at all, correct, and is there potential for any adjustments to the WAC price? So, look, we've launched the product with a WAC of $249. I don't, at this time, anticipate any adjustments to the WAC price during the DAPA period, but we'll always reevaluate as we move forward.
Parents with with the Trump administration. So at this time, we're not really seeing anything drastically change.
At CMS, regardless of who ends up in the White house, but it certainly could always change.
Great. Thank you.
Thank you.
Our next question comes from the line of Les for Lieske from true Katy. Please go ahead.
Hi, Good morning. Thank you for taking my questions can you provide some color around the distribution channels around the commercial inventory levels ahead of launch and how do you expect the inpatient centers to manage their stocking levels.
Serge D. Belanger: Thank you. Our next question comes from the line of Serge Belanger from Needham and Company. Please go ahead. Hi, good morning.
And maybe are you implied ratio unexpected demand for the three now versus the five ml vial and and also a follow up to that one when which quarter would you expect to manufacturing costs the shift from R&D to Cogs.
Joseph Todisco: Thanks for taking our questions. Joe, I think you mentioned that the... P&T review process would take three to nine months. Maybe just talk a little bit about that process and what it entails. And then in the outpatient setting, do you also expect kind of an adoption process or evaluation process before there is uptake, and maybe last? Walk us through your base case for breakeven by the end of the year. Okay, so I'm going to start with number three first, and then I'm going to allow Erin to comment on the P&T process for the facilities. And, you know, certainly outpatient, as I think that's what you asked your second question about. You know, they follow a similar evaluation process when making a determination to put a product on formulary and into utilization, right?
Yeah.
Thanks, a lot good questions. So from a distribution channel standpoint, yes.
Essentially the inventory is going to flow through specialty distribution.
On the inpatient side or for inpatient facilities it'll flow through a specialty distributor on the outpatient side it'll be a mix of going through a specialty distributor for for some customers than others potentially will go will get shipped direct.
On the on the three ml and five ml issue the five ml and our label because we had done on the initial development work for remember the product initially in a five ml vial.
It's not our intent to commercialize a five ml at this time. So we're launching the intent is to launch the product with a three ml.
The last question that you asked about when we when we cut over is.
Difficult one because it depends on uptake and end demand and I think the faster demand goes you could certainly see cutover earlier right. This year.
If it if demand is a little bit slower may.
It may take some more time right. We said, we've built a decent amount of inventory.
<unk>.
Joseph Todisco: They're looking at the clinical data for the product. They're looking at the medical need and certainly the reimbursement to the facility, as well as whatever the economic terms that we're able to provide that institution. So from that, you know, I think what you're asking at number three is... Can you clarify? Are you asking me to confirm that we get to, runway. runway preview, what is your question at number three?
Pre right that was expense right prior to prior to approval.
Got it thanks.
Yeah.
I think it did yes.
Just one more follow up.
On the strategy around separate payment under Medicare part B reimbursement what are some potential timelines for filing and approval that you expect on this and the potential impact to your WAC price.
Yes, I'm not sure I follow that question last time, so we have our outpatient reimbursement termination CMS has made a determination that were eligible for its a dapper right that it's going to fall under the scope of the the end stage of the ESR D.
Joseph Todisco: Really just the pushes and pulls to get you to that breakeven status that you talked about as your base case. Okay. Yes, sure. So, I mean, look, we have certain assumptions that we've made for demand and uptake on both the inpatient and outpatient side, right? That produces a revenue forecast internally and a cash flow forecast that we're comfortable with, gets us to run rate, and break even profitability, as I mentioned. So, I don't think we're going to provide more granularity than that at this time. As I said, we're not going to give revenue guidance, but certainly, I think you can do the math. We've given guidance on what our run rate operating expenses are going to be, so you can somewhat back into where revenue really needs to be in order to hit that milestone.
Prospective payment system on the inpatient side, we do have our and tap.
So the J code application is required for to dapper right. So J code. If that's what you might be thinking of separate from from a part b determination.
Does that clarify.
The question at all level right and is there potential for any adjustments to the WAC price.
So look we've launched the product with a WAC of of $249 I don't at this time envision.
Any adjustments to the WAC price during the the dapper period, but we'll always reevaluate as we move forward.
Got it thank you.
Thank you our next.
Next question comes from the line of Stag Beringer found that.
<unk> company. Please go ahead.
Hi, good morning, Thanks for taking my questions.
Joe I think you mentioned that.
<unk> review process would take three to nine months, maybe just talk a little bit about that process and what it entails.
And then in the outpatient setting do you also expect a kind of the adoption process of evaluation process before there is uptick and maybe lastly, just you can walk us through your base case or breakeven by the end of the year.
Joseph Todisco: And so, Erin, you want to provide a... Sure. I can provide a little bit of color around the P&T process. The process itself is driven by the hospital internally, right? So, usually you have a physician champion that advocates for the product, and then the formulary meeting happens, and they adopt the product, and then it goes through the process of implementing it within the health system.
Okay. So I'm going to start with number three first and then get out.
I'll allow Eric to comment on the PNT process for the facilities.
Certainly outpatient I think thats, what youre asking your second question to outpatient yes, they follow a similar.
Evaluation process, we're making a determination.
To put our product on for my formulary and into utilization rate, they're looking at the clinical data for the product and looking at the medical need and certainly the reimbursement to the facility as well as whatever the economic terms that we're able to provide.
Erin Mistry: We've seen a lot of interest in the product both organically and inorganically, where we've done some reach-outs, and we've also had reach-outs from hospitals to us. I think the benefit here is that we have secured the NTAP prior to being approved. We have that opportunity to leverage a payment mechanism on the inpatient side, and we also have the opportunity to leverage health economics, right? The long-term complications of these patients; hospitals are the ones that see those patients and those expenses.
That institution.
The circle so from.
I think what you're asking and number three is.
Or can you clarify are you asking me to confirm that we get to.
Runway.
Alright, thanks, guys.
What is your question I'm sorry.
Really just the pushes and pulls to get you to that breakeven status that you talked about it as your base okay.
Yes sure.
I mean look we have we have certain assumptions we've made for.
Demand and uptake on both the inpatient and outpatient side right that produces a revenue forecast internally and our cash flow forecast.
Erin Mistry: So, we've had a lot of organic and inorganic interest from the hospital. Thanks, Sarah. I'll answer your questions.
That we're comfortable with it gets us to two run rate breakeven profitability is as I mentioned, so I don't think we're going to we're going to provide more granularity than that are at this time, where as I said, we're not going to give revenue guidance, but certainly I think you can you can do the math, we've given guidance on what our run rate operating <unk>.
Serge D. Belanger: Yep, thank you. Thank you. I'll now turn the call back over to Dan Ferry for written questions from the audience. Thank you, operator. Joe, we have a few written questions from the audience here. The first one is, how was your NTAP approved based on an estimated WAC price of $11.70 per vial?
<unk> is going to be so you can.
Somewhat back into where revenue really needs to be in order to hit that milestone.
And so Eric do you want to provide a.
Sure I can provide a little bit of color around the PNT process. The process itself is driven by the hospital internally right. Usually you have a physician champion that advocates for the product and then formulary meeting happens when they adopt the product and then it goes through the.
The process of implementing it within the health systems we've.
We've seen a lot of interest in the product both organically and Inorganically right, where we've done some reach out can we have also had reach outs from hospitals to I think the benefit here is that we have secured the untapped prior to being approved we have that opportunity to to leverage.
Daniel Ferry: However, you have launched the product with an actual WAC of about $2.50 per vial. Can you explain what this is, and can you explain what impact this will have on the NTAP reimbursement? Do you expect this price point to have a positive or negative impact on inpatient utilization? And further, what color can you provide around why the lower WAC was decided?
Payment mechanism on the inpatient side and we also have the opportunity to leverage the health economics right. The long term complications of these patients. The hospitals are one are the ones that see those patients and those expenses. So we've had a lot of organic and inorganic interest from hospitals.
Thanks Sarah.
Sorry does that.
And to your questions.
Yep. Thank you.
Thank you.
I'll now turn the call back over to Dan <unk> for written questions from the audience.
Thank you operator, hi, Joe we have a few written questions from the audience here.
Joseph Todisco: Okay, thanks, Dan. There's a lot to unpack there. I'm going to start with taking a step back and the thought process around when we established the 1170 price points, all right? So when we filed the NTAP application two years ago, the market landscape looked very different, specifically on the outpatient side, right? Tadapo was two years old.
The first one is your and tap was approved based on an estimated WAC price of $11 70 per vial.
However, you have launched the product with a Nashville whack of about $2 50 per vial.
Can you explain what this can you explain what impact this will have on the tap reimbursement.
Do you expect this price point to have a positive or negative impact on inpatient utilization.
And further what color can you provide around why the lower whack was decided.
Okay. Thanks, Dan does a lot to unpack there.
I'm going to start with.
Taking a step back and the thought process around when we established the 11 70 price points alright, so when we when we file the <unk> application.
Two years ago.
Market landscape looks very different specifically on the outpatient side right to dapple was two years, we didn't necessarily have visibility to outpatient utilization and we did our market analysis and market research around where the product would need to be priced on the inpatient side alone for the size of the inpatient market.
Joseph Todisco: We didn't necessarily have visibility into outpatient utilization, and we did our market analysis and market research around where the product would need to be priced on the inpatient side alone for the size of the inpatient market, and ultimately, we settled on the 1170 price. You know, since that time, obviously, the landscape has shifted. Tadapo is now five years old.
And ultimately we settled on the 11 70 price.
Since that time, obviously the landscape has shifted to DAP is now five years, we've had a number of conversations with customers.
Joseph Todisco: We've had a number of conversations with customers in both settings of care over the last two years, and on the outpatient side specifically, we have gotten much more comfortable and confident around the ability to, first of all, secure reimbursement with Tadapo, and second, get sufficient uptake. So the WAC price that we established of $249.99 was really driven by the dynamics of Tadapo for the outpatient segment but is a reasonable price point for inpatient. So one of the other key pieces of feedback we took over the last two years from inpatient institutions as we messaged around the NTAP and the value of the NTAP was from many institutions that they perceived lower acquisition costs of products to be preferred to higher NTAP reimbursement.
In both settings of care over the last two years.
And on the outpatient side, specifically have gotten much more comfortable and confident around the ability to first of all secure reimbursement with with DARPA and second get get sufficient uptake. So the WAC price that we established a 249 99 really was driven by the dynamics of that before.
For the outpatient.
Segment.
But as a reasonable price point for inpatient so one of the other key piece of feedback we took over.
The last two years from MPC institutions, as we message around the end tap in and the value of the untapped.
Was.
From for many institutions that they perceive lower acquisition cost of product.
To be preferred to a higher end tap reimbursement so to that extent.
Joseph Todisco: So to that extent, the feedback we've gotten on the inpatient side is that the lower WAC price is more favorable. So I think to the question you asked about, do you expect this price point to have a positive or negative impact on utilization? The feedback we're getting is that the lower acquisition cost of the product should drive higher utilization on the inpatient side.
The feedback we've gotten on the inpatient side is that the lower WAC prices more favorable so I think to the question. You asked about you know do you expect this price point to have a positive or negative impact on utilization the.
The feedback we're getting is that the lower acquisition cost of products should should drive higher utilization on the inpatient side. So.
Daniel Ferry: So certainly we're happy with that. Okay, great. Thanks, Joe. The second question here is, are there any expected studies or data to be presented over the coming months? And can you give investors a sense of at which conferences CorMedix may have a presence? Yeah, thanks. I'm going to turn that over to Liz in a moment. But, you know, we've got a pretty ambitious 2024 planned, with both field organizations being out there and active in a number of industry conferences. But Liz, why don't you go ahead?
Certainly where we're happy with that.
Yeah.
Okay, great. Thanks, Joe.
Second question here is are there any expected studies or data to be presented over the coming months.
But can you give investors a sense of which conferences <unk> may have a presence.
Yeah, Thanks, I'm going to I'm going to turn that over to live in a moment, but we've got a pretty ambitious 2024 planned.
With both field organizations.
Being out there and active in a number of industry conferences, but Liz why don't you go ahead sure. Thanks Joe.
Elizabeth Masson: Sure. Thanks, Joe. Yes, we're excited, actually.
We're excited actually we're going to be presenting two abstracts. This spring at the upcoming society for healthcare Epidemiology of America or <unk> annual meeting.
Elizabeth Masson: We're going to be presenting two abstracts this spring at the upcoming Society for Healthcare Epidemiology of America, or SHEA's annual meeting. And both field teams, both medical and commercial, are going to be present at over a dozen conferences this year and continuing to connect with key stakeholders. So, you know, those include SHEA, MAD-ID, the NKF Spring Conference, and the Renal Physicians Association.
And both failed payments, both medical and commercial are going to be present at over a dozen conferences this year.
And continuing to connect with key stakeholders. So those include Shay, Matt I D. N KF Spring conference renal Physicians Association. So I think we have a really good presence out there.
Elizabeth Masson: So I think we have a really good presence out there. Okay, great. Thanks, Joe. Yeah, okay. Yeah.
Okay.
Okay, great. Thanks, Joe Yeah Yep.
Daniel Ferry: Joe, the final question here is, can you give a sense of what investors may be missing? What is key to understanding CorMedix over the near term? Okay, thanks, Dan. Look, I assume you're thinking about it from a stock price trading standpoint. You know, I still think we're a story that's not completely widely understood, right?
Joe Final question here is can you give a sense of what investors may be missing.
What is key to understanding cosmetics over the near term.
Hum.
Okay. Thanks, Dan so.
Okay, I assume you're thinking about it from a from a stock price trading standpoint, I still think we're a story that's that's not completely widely understood right. We were in a very niche.
Joseph Todisco: We're in a very nichey therapeutic segment with an atypical reimbursement, and a lot of acronyms we talk about, NTAP to DAPA, that are not necessarily common vernacular for biotech investors. We're also a young biotech going through its first launch. So I think historically, a lot of investors have kind of sat on the sidelines waiting for, you know, new perhaps a new equity offering.
Therapeutic segment with an atypical reimbursement and a lot of acronyms, we talk about and tap to data that are not necessarily common vernacular for biotech investors.
We're also a.
A young biotech going through its first launch so I think historically a lot of investors have kind of sat on the sidelines waiting for.
Perhaps a new a new equity offering but as we've.
Joseph Todisco: But as we discussed today, we're focused on launch; we think that there's a lot of launch value to Vencast that is certainly not captured in the trading value of the stock. And we also think that there's potentially long-term value; we have 10 and a half years of exclusivity, and we're expecting to meet with FDA, you know, mid year around a label expansion for Defend Cast. But I think more importantly, over the next couple of years, you know, our expectation is to be developing real world evidence, demonstrating that the impact that Defenza cast can have on infection rates and on patients, and certainly would look to utilize that real world data as one we obviously establish broader utilization, but also more long-term reimbursement across the continuum of care.
Discuss today, where we're focused on launch we think that there's a lot of launch value defend catheters, certainly not captured in the trading value of the stock.
And we also think that there's potentially long term value, we have 10 and a half years of exclusivity, we're expecting to meet with F. D. A.
You know midyear around a label expansion for defend Caf.
But I think more importantly over the over the next couple of years, our expectation is to be developing real world evidence demonstrating that the impact of the impact that the <unk> can have a.
An infection rates and on and on and on patients and certainly would look to utilize that.
Real World data is as one we obviously established part of utilization, but also more long term reimbursement.
Across the continuum of care.
Yeah.
Joseph Todisco: Okay, great. Thanks, Joe. Operator, that concludes the written portion of the Q&A session. You may now close the call. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day, www.cormedix.com
Okay, great. Thanks, Joe.
Operator that concludes the written portion of the Q&A session. You may now close the call.
Thank you Lee.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines have a lovely day.
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Yes.
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