Q1 2024 CorMedix Inc Earnings Call

Okay.

Operator: Good morning, and welcome to the CorMedix first quarter 2024 earnings conference call. Today's conference call is being recorded. There will be a question and answer session at the end of today's presentation, and instructions on how to ask questions will be given at that time. At this time, I would like to turn the call over to Dan Ferry from Lifesci Advisors. Please go ahead.

Speaker Change: Good morning, and welcome to the core medical first quarter 2024 earnings Conference call. Today's conference call is being recorded 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 at this time.

Daniel Ferry: Good morning, and welcome to the CorMedix first quarter 2024 earnings conference call. Leading the call today is Joe Todisco, Chief Executive Officer of CorMedix. And he is joined by Dr. Matt David, Executive Vice President and CFO; Beth Zeltnick-Coffin, EVP and Chief Legal Officer; Liz Verhulvert, EVP and Chief Clinical Strategy and Operations Officer; and Erin Mistry, EVP and Chief Commercial Officer.

Speaker Change: I would like to turn the call over to Dan theory from lifestyle Advisors. Please go ahead.

Speaker Change: Good morning, and welcome to the <unk> first quarter 2024 earnings conference call, leading the call today is Joseph <unk>, Chief Executive officer of cosmetics.

Matthew T. David: And by Dr. Matt, David Executive Vice President and CFO.

Speaker Change: Is that like coffee, EVP and chief legal officer.

Speaker Change: Let's hurlbert, EVP and chief clinical strategy and operations Officer and.

Speaker Change: Aaron Mystery, EVP and Chief commercial officer.

Unknown Executive: 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 meeting time limits set forth in the Private Securities Litigation Reform Act of 1995. These statements are statements other than statements of historical fact regarding management's expectations, beliefs, goals, and plans about the company's prospects and future financial position. Actual results may differ materially from the estimates and projections on which these statements are based due to a variety of important factors, including the risks and uncertainties described in greater detail in CorMedix's filings with the SEC, which are available free of charge at the SEC's website or upon request from CorMedix.

Speaker Change: 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.

Unknown Executive: CorMedix may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. CorMedix does not intend to update these forward-looking statements, except as required by law. At this time, it is now my pleasure to turn the call over to Jo Todisco, Chief Executive Officer of CorMedix. Jo, please go ahead.

Speaker Change: Statements are statements other than statements of historical fact.

Speaker Change: <unk> already managements expectations beliefs goals and plans about the company's prospects future financial position.

Speaker Change: Actual results may differ materially from the estimates and projections on which these statements are based due to a variety of important factors, including the risks and uncertainties described in greater detail on <unk> filings with the SEC.

Speaker Change: There are available free of charge at the Sec's website.

Speaker Change: Requests from quarter medics.

Speaker Change: <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.

Speaker Change: <unk> does not intend to update these forward looking statements, except as required by law.

Speaker Change: At this time it is now my pleasure to turn the call over to Joe to Disco Chief Executive Officer of Carmax. Joe. Please go ahead.

Joe: Thank you Dan.

Joseph Todisco: Good morning, everyone, and thank you for joining us on this call. Though it has only been two months since our full year earnings call back in March. The company has achieved a number of key milestones, most notably CMS approval of the DEFENDCATH HCPCS J code application and subsequent determination that DEFENDCATH is eligible for a transitional drug add-on payment adjustment to the ESRD bundle for outpatient reimbursement with a July 1st, 2024 effective date.

Joe: Everyone and thank you for joining us on this call.

Joe: Though it has only been two months since our full year earnings call back in March the company has achieved a number of key milestones.

Joe: Most notably CMS approval of the defend Cat H C. P. C. S. J code application and subsequent determination that defend cat is eligible for a transitional drug add on payment adjustment to the ESR D bundle for outpatient reimbursement with the July 2024 effective date.

Joseph Todisco: Most importantly, we have commenced the commercial launch of DefendCast in the inpatient setting, an important milestone for CorMedix and for patients undergoing chronic chemodialysis who are at risk for a catheter-related bloodstream infection. I would like to thank and congratulate the countless individuals, including CorMedix employees, contractors, and consultants, who have worked tirelessly over the last decade to bring this innovative drug product to patients in need.

Joe: Most importantly, we have commenced the commercial launch of defend cats in the inpatient setting an important milestone for cosmetics and for patients undergoing chronic hemodialysis, who are at risk for a catheter related bloodstream infection.

Speaker Change: I'd like to thank and congratulate the countless individuals including core medics employees contractors and consultants, who worked tirelessly over the last decade to bring this innovative drug product to patients in need.

Joseph Todisco: Our field team has been actively engaged in discussions with numerous hospitals and health systems in the inpatient setting, and I'm pleased with the progress we've made in only a few weeks of field deployment. Our initial call focus is targeting approximately 900 hospital facilities where those facilities are responsible for roughly 65% of inpatient dialysis procedures in the U.S. As a frame of reference, this represents only about 12% of U.S. hospitals but accounts for the majority of the potential DefendCat inpatient market opportunities.

Joe: Our field team has been actively engaged in discussions with numerous hospitals and health systems in the inpatient setting and I'm pleased with the progress we've made in only a few weeks a field deployment.

Joe: Our initial call focus is targeting approximately 900 hospital facilities, where those facilities are responsible for roughly 65% of E&P staios procedures in the U S.

Joe: As a frame of reference this represents only about 12% of U S hospitals, but accounts for the majority of the potential defend cath inpatient market opportunity.

Joseph Todisco: Our field team has met with more than half of our target institutions, and as of today, roughly 50 key accounts representing more than 200 individual hospitals have recommended FENCAS for formulary review in the coming months at their respective institutions. In addition, a few hospitals have already added to FENCAPS on a non-formulary basis, while P&T formulary review remains pending. As we have communicated previously, the inpatient process to obtain formulary inclusion followed by facility adoption and product orders can span several months.

Joe: Our field team has met with more than half of our targeted institutions and as of today roughly 50 key accounts representing more than 200 individual hospitals have recommended defend cast for formulary review in the coming months at their respective institutions.

Joe: In addition, a few hospitals have already added defend Catherine a non formulary basis, while PNT formulary review remains pending.

Joe: As we've communicated previously the inpatient process to obtain formulary inclusion followed by facility adoption and product orders can span several months to.

Joseph Todisco: To that extent, we have guided that we do not expect material inpatient sales in the second quarter, and we'll look for inpatient uptake to increase as we move throughout the year. On the outpatient front, we remain on track to commence outpatient commercialization in July. We are pleased that CMS took timely action on our TODAP application, which ensures that Medicare fee-for-service reimbursement claims submitted by outpatient providers beginning July 1st will be reimbursed by CMS.

Joe: To that extent, we have guided that we do not expect material in patient sales in the second quarter and will look for in patient uptake to increase as we move throughout the year.

Joe: On the outpatient front, we remain on track to commence outpatient commercialization in July.

Joe: We were pleased that CMS took timely action on our to DAP application, which ensures that Medicare fee for service reimbursement claims submitted by outpatient providers beginning July 1st will be reimbursed by CMS.

Joseph Todisco: We're also very happy to announce our first outpatient procurement contract with ARC Dialysis, one of the largest regional dialysis providers in the Southeast U.S. We are currently engaged in commercial discussions with eight of the top ten U.S. dialysis providers, which will help us communicate new procurement contracts over the next few months. From a guidance standpoint, we reiterate our operating expense guidance disclosed previously of $15 million to $18 million per quarter for calendar year 2024 and continue to believe we can achieve breakeven profitability on a run rate basis by the end of 2024 if we achieve our base case assumptions for product utilization. Our base assumptions do include limited adoption by at least one of the large dialysis organizations, as well as some utilization by midsize and smaller facilities.

Joe: We're also very happy to announce our first outpatient procurement contract with the ERC dialysis one of the largest regional dialysis providers in the southeast U S.

Joe: We are currently engaged in commercial discussions with eight of the top 10 U S dialysis providers.

Joe: I hope to communicate new procurement contracts over the next few months.

Joe: From a guidance standpoint, we reiterate our operating expense guidance disclosed previously of 15 million to $18 million per quarter for calendar year 2024.

Joe: And continue to believe we can achieve break even profitability on a run rate basis by the end of 2024.

Joe: We achieve our base case assumptions for product utilization.

Joe: Our base assumptions do include limited adoption by at least one of the two large dialysis organizations as well as some utilization for midsize and smaller facilities.

Joseph Todisco: At present, we are in the advanced stages of negotiations with one of the two large operators for the implementation of DefendCats, as well as several midsize and smaller operators, and we are working through their respective operational dynamics as we structure our commercial offering to each of them. There's a significant amount of planning and logistics involved in DefendCats implementation, especially for larger organizations, and we're working with those organizations to understand how we can better support patient adoption within their facilities.

Joe: At present, we are in advanced stages of negotiations with one of the two large operators for the implementation of defend cap as well as several midsized and smaller operators and we are working through their respective operational dynamics as we structure, our commercial offering to each of them.

Joe: There is a significant amount of planning and logistics involved and defend kept implementation, especially for larger organizations and we're working with those organizations to understand how we can better support patient adoption within their facilities.

Joseph Todisco: As we roll out our launch and continually gauge progress against our base case assumptions, we intend to be prudent with our cash management. With this in mind, we are taking practical steps from a balance sheet management standpoint to provide ourselves with options in the event any additional capital is beneficial or needed down the road, be it to fund M&A and business development, organic growth, or additional working capital for accounts receivable and inventory.

Joe: As we rollout our launch and continually gauge progress against our base case assumptions, we intend to be prudent with our cash management.

Joe: With this in mind, we are taking practical steps from a balance sheet management standpoint to provide ourselves with options in the event any additional capital is beneficial or needed down the road.

Joe: Be it to fund M&A and business development organic growth or additional working capital for accounts receivable and inventory.

Joseph Todisco: To that extent, today we are announcing a letter of intent with a large U.S.-based lender for a revolving credit facility of up to $25 million, which allows CorMedix to access certain tranches of debt depending on our run rate of accounts receivable. The credit facility will not require us to draw any minimum amount and will be a helpful instrument for managing our balance sheet and working capital in a non-dilu

Joe: To that extent today, we are announcing a letter of intent with a large U S based lender for a revolving credit facility of up to $25 million, which allows cosmetics to access certain tranches of debt depending on our run rate of accounts receivable.

Joe: Our credit facility will not require us to draw any minimum amount and will be a helpful instrument for managing our balance sheet and working capital in a non dilutive manner.

Joseph Todisco: We expect to close the revolving credit facility over the next few weeks. Simultaneously with the credit facility letter of intent, we are today filing to renew our expiring shelf registration statement, as well as replace the expired ATM facility. My objective is to be able to make cost of capital-based decisions between equity and debt should any additional capital be required in the future, keeping the focus on minimizing shareholder dilution when possible. Matt will discuss the company's cash position in more detail momentarily.

Joe: We expect to close the revolving credit facility over the next few weeks.

Joe: Simultaneously with the credit facility letter of intent.

Joe: Today filing to renew our expiring shelf registration statement as well as replace the expired ATM facility.

Joe: My objective is to be able to make cost of capital based decisions between equity and debt should any additional capital will be required in the future.

Joe: Keeping focus on minimizing shareholder dilution when possible.

Joe: Matt will discuss the company's cash position in more detail momentarily.

Joseph Todisco: In terms of our plans for label expansion, as we communicated previously, we have submitted to FDA a type C meeting request to discuss a pathway to additional indication. FDA has accepted that meeting request, and we anticipate receiving feedback from you on our proposals by the end of June. We have also used this Type C meeting request as an opportunity to readdress the pediatric study requirement that is outlined in our approval letter. Based upon feedback from potential study investigators, we do not believe it will be feasible to run the pediatric study in hemodialysis in a manner previously discussed with FDA.

Joe: In terms of our plans for label expansion as we communicated previously we have submitted to FDA a type C meeting request to.

Joe: To discuss a pathway to additional indications.

Joe: FDA has accepted that meeting request and we anticipate receiving feedback from even gone all proposals by end of June.

Joe: We have also used this type C meeting request as an opportunity to readdress. The pediatric study requirement that is outlined at our approval letter.

Joe: Based upon feedback from potential study investigators, we do not believe it will be feasible to run the pediatric study in hemodialysis in a manner previously discussed with FDA.

Joseph Todisco: FDA has granted us an extension on our final study protocol, and we expect to have feedback on a revamped pediatric study or a potential waiver by the end of June as well. From a label expansion standpoint, we have elected to propose a clinical pathway for total parenteral nutrition, or TPN, as a first step before we put forward a proposal for any use in oncology. Once we have feedback from FDA and alignment on our proposal related to TPN, we can then craft a proposed study for use in oncology.

Joe: D. A has granted US an extension on our final study protocol and.

Joe: And we expect to have feedback on a revamped pediatric study or a potential waiver.

Joe: By the end of June as well.

Joe: From a label expansion standpoint, we've elected to propose a clinical pathway for total parenteral nutrition or TPN.

Joe: The first step before we put forward a proposal for any use in oncology.

Joe: Once we have feedback from FDA and alignment on our proposal related to T. P. M. We can then craft our proposed study for use in oncology.

Joseph Todisco: The decision to prioritize TPM for submission and FDA discussion was based upon the expected timing and cost of the clinical program being proposed relative to the expected market size. Though oncology is potentially a larger market opportunity, we have elected to prioritize the potentially faster program first. Assuming acceptable feedback from the agents in June, anticipate submission of an oncology proposal to FDA later this year. Lastly, from a supply chain perspective, in our efforts to de-risk our reliance on a single finished dose manufacturer, earlier this week, we submitted a supplement to our NDA, adding six breeds to the Hamelin site as an alternate manufacturer.

Joe: The decision to prioritize TPN for submission and FDA discussion was based upon the expected timing and cost of the clinical program being proposed relative to the expected market size.

Joe: The oncologist as potentially a larger market opportunity, we elected to prioritize the potentially faster program first.

Joseph Todisco: Assuming acceptable feedback from the agents June anticipate submission of an oncology both with the FDA later this year.

Joe: Lastly from a supply chain perspective, and our efforts to Derisk, our reliance on a single finished dosage manufacturer earlier. This week, we submitted a supplement to our NDA, adding six reads Hamlin site as an alternate manufacturing.

Joseph Todisco: Pending a successful FDA review of the supplement, we anticipate SIGFREED coming online as a manufacturer as early as the end of 2020. CorMedix has now grown to approximately 90 employees, and I'm proud of what we've accomplished over these recent months. I would now like to turn the call over to Matt to discuss the company's first quarter financial results and financial position.

Joseph Todisco: Pending a successful FDA review of the supplement we anticipate Siegfried coming online as a manufacturer as early as the end of 2000.

Matt: <unk> has now grown to approximately 90 employees and I am proud of what we've accomplished over these recent months.

Joseph Todisco: I would now like to turn the call over to Matt to discuss the company's first quarter financial results and financial position Matt.

Matthew T. David: Thanks, Joe. And good morning, everyone.

Matt: Thanks, Joe and good morning, everyone.

Matthew T. David: I am pleased to be here today to provide an overview of our first quarter 2024 financial results, as well as an update on CorMedix's cash. The company has filed its quarterly report on Form 10-Q for the quarter ended March 31, 2024. I urge you to read the information contained in the report for a more complete discussion of our financial results. With respect to our first quarter of 2024 financial results, our net loss was approximately $14.5 million, or $0.25 per share, compared with a loss of $10.6 million, or $0.24 per share, in the first quarter of 2023.

Matt: I am pleased to be here today to provide an overview of our first quarter of 2024 financial results as well as an update on cosmetics as cash position the.

Matthew T. David: The higher net loss recognized in 2024 compared with 2023 was driven by an increase in SG&A expenses versus the first quarter of 2023, partially offset by the sale of New Jersey NOLs for $1.4 million. Operating expenses in the first quarter of 2024 increased approximately 44% to $15.9 million compared with $11 million in the first quarter of 2023. R&D expense decreased by approximately 75% to $0.8 million, driven by the approval of

Matthew T. David: The company has filed its quarterly report on Form 10-Q for the quarter ended March 31 2024.

Matthew T. David: Heard you to read the information contained in the report for a more complete discussion of our financial results with.

Matthew T. David: As a result of the post-FDA approval commercial operations, costs related to medical affairs and certain personnel expenses that supported R&D efforts prior to the FDA approval of DEFENDCAP have been recognized in SG&A expenses. SG&A expenses increased approximately 98% to $15 million in the first quarter of 2024, compared with $7.6 million in the first quarter of 2023. This increase was primarily attributable to increases in personnel expenses due to the hiring of sales force, medical affairs, and marketing personnel.

Matthew T. David: With respect to our first quarter of 2024 financial results. Our net loss was approximately $14 5 million or <unk> 25 per share compared with a loss of $10 6 million or <unk> 24 per share in the first quarter of 2023, the higher net loss recognized in 2024 compared with <unk>.

Matthew T. David: <unk> 2023 was driven by an increase in SG&A expenses versus the first quarter of 2023, partially offset by the sale of New Jersey, Nols for $1 4 million.

Matthew T. David: Operating expenses in the first quarter of 2024 increased approximately 44% to $15 9 million compared with 11 million in the first quarter of 2023 R&D expense decreased by approximately 75% to point 8 million driven by the approval of defend cat as a.

Matthew T. David: <unk> of the post FDA approval commercial operations costs related to medical affairs, and certain personnel expenses that supported R&D efforts prior to the FDA approval of defend cap had been recognized in SG&A expense.

Matthew T. David: SG&A expense increased approximately 98% to $15 million in the first quarter of 2024, compared with $7 6 million in the first quarter of 2023.

Matthew T. David: This increase was primarily attributable to increases in personnel expenses due to the hiring of sales force Medical Affairs and marketing personnel. In addition, certain costs related to medical affairs and.

Matthew T. David: In addition, certain costs related to medical affairs and certain personnel expenses that had been previously recognized in R&D are now recognized in SG&A following the FDA approval of FENCAP. To a lesser extent, the increase was also driven by increases in non-cash charges for stock-based compensation and increases in consulting fees. We recorded net cash used in operations during the first quarter of 2024 of $17.3 million, compared with net cash used in operations of $10.4 million in the first quarter of 2023.

Matthew T. David: And certain personnel expenses that had been previously recognized in R&D are now recognized in SG&A. Following the FDA approval of defend cap to a lesser extent. The increase was also driven by increases in non cash charges for stock based compensation and increases in consulting fees.

Matthew T. David: We recorded net cash used in operations during the first quarter of 2024 of $17 3 million compared with net cash used in operations of $10 4 million in the first quarter of 2023. The increase is primarily driven by an increase in net loss and decreases in accrued expenses and accounts payable.

Matthew T. David: The increase is primarily driven by an increase in net loss and decreases in accrued expenses and accounts payable. The company had cash and cash equivalents of $58.6 million as of March 31st, 2024. As we have discussed previously, we expect our operating expenses, especially SG&A, to remain at increased levels given the growth of the company and the cost driven by the commercial launch of DefendCash. CorMedix anticipates 2024 quarterly operating expenses to range from around $15 to $18 million to support commercial infrastructure and the ongoing launch of FENCAP.

Matthew T. David: The company has cash and cash equivalents of $58 6 million as of March 31, 2024, as we have discussed previously we expect our operating expenses, especially SG&A to remain at increased levels given the growth of the company and the costs driven by the commercial launch of defend cap.

Matthew T. David: <unk> anticipates 2020 for quarterly operating expenses to range from around $15 million to $18 million to support commercial infrastructure on the ongoing launch of defend cap.

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 DefendCat through to anticipated profitability, which may occur on a run rate basis by the end of 2024, assuming we are able to achieve our internal base case assumptions for DefendCat demand, uptake, net pricing, and reimbursement.

Matthew T. David: 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 two anticipated profitability, which may occur on a run rate basis by the end of 2024, assuming we were able to achieve our internal.

Matthew T. David: Base case assumptions for defend kept demand uptake net pricing and reimbursement I will now turn the call back over to Joe for closing remarks, Joe Thanks, Matt.

Joseph Todisco: I will now turn the call back over to Joe for closing remarks. Joe? Thanks, Matt.

Joseph Todisco: CorMedix is executing well on our key objectives and is hopeful to provide more substantive updates on sales progress on our next quarterly call in August. I appreciate everyone's continued support of CorMedix, and I'm happy to now take questions.

Joe: <unk> is executing well on our key objectives is helpful to provide more substantive updates on sales progress on our next quarterly call in August I. Appreciate everyone's continued support in cosmetics and I'm happy to now take questions.

Operator: Thank you. Ladies and gentlemen, we'll now begin the question and answer session. If you'd like to ask a question, please press star, followed by one on your telephone keypad. If you'd like to withdraw your question, please press star, followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. Following the audio portion of the Q&A, we'll take written questions from the audience. The first question comes from Les Sulewski. From Truist Securities, Les, please go ahead.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad, if you'd like to withdraw. Your question. Please press star followed by two if you're using a speaker phone please lift the handset.

Leszek Sulewski: Before pressing any keys following the audio portion of the Q&A, we'll take questions from the audience as well. The first question comes from less.

Operator: Keith.

Leszek Sulewski: <unk> Securities less please go ahead.

Leszek Sulewski: Good morning. Thank you for taking the time to answer my questions. I have two on the outpatient side and then one follow-up. Can you give us a little bit more color around the economics of the ARC partnership? Since you will all of their dialysis centers convert to full use of defend cats Day one upon the switch to your outpatient launch, or is that an option left to the patient? And then second, I guess it's very interesting to hear that you're in discussions with one of the two leading national out Moving along, is this a pilot program that they could put in place, and ultimately, what kind of terms and impact on that pricing could we expect if a deal were to occur?

Leszek Sulewski: Good morning. Thank you for taking my questions I have two on the outpatient side and then one follow up so.

Leszek Sulewski: So can you give us a little bit more color around the economics of the AARC partnership since you will all of their dialysis centers convert to full use of deferred cash.

Leszek Sulewski: Day, one upon the switch into your outpatient launch.

Leszek Sulewski: Or is that his option left to the patient and then second I guess, it's very interesting to hear that you're in discussions with one of the two leading national outpatient dialysis operators. How can we think about that conversation moving along is this a pilot run program that they could put in place and ultimately what kind of terms and.

Leszek Sulewski: Impact of net pricing could we expect if the deal were to occur.

Joseph Todisco: Thanks, Les. I appreciate the question. And I'm actually going to kind of, I think, blend these two questions together to some extent.

Speaker Change: Thanks, Les I appreciate the question.

Speaker Change: I'm actually kind of kind of I think blend. These two questions together to some extent so.

Joseph Todisco: So, you know, we're not going to disclose specific terms in any one specific outpatient or ultimately inpatient agreement. But, you know, I think the way we've guided you on price over the past year kind of remains consistent on the outpatient side. You know, I think there'll be a healthy gross net, right, that leaves room for discounts and rebates, volume incentive rebates, things like that that you'll have to a lesser extent on the inpatient side.

Joseph Todisco: We're.

Joseph Todisco: We're not going to disclose specific terms and in any one specific.

Joseph Todisco: Outpatient or ultimately inpatient agreement.

Joseph Todisco: I think the way we've guided guided you on price over the past year it kind of remains consistent.

Joseph Todisco: The outpatient side I think there'll be a.

Joseph Todisco: A healthy.

Joseph Todisco: To net right that leaves room for discounts and rebates volume incentive rebates things like that.

Joseph Todisco: That two youll have a too.

Joseph Todisco: Les you will have that to a lesser extent on the on the inpatient side.

Joseph Todisco: When we think about uptake in facilities, and as we've communicated previously, right, DAPA today applies to Medicare Fee-for-Service patients, which are probably about 40 to 45 percent of catheterized dialysis patients in any one site. So, you know.

Joseph Todisco: When we think about uptake in our facilities and as we've communicated previously rates a dapper today applies to Medicare.

Joseph Todisco: Medicare fee for service patients, which are probably about $40 to 45%.

Joseph Todisco: Catheterize dialysis patients.

Joseph Todisco: In any any one site.

Joseph Todisco: So.

Joseph Todisco: You know, some, I think, facilities will elect to roll out potentially on a kind of payer basis. You know, we're actively in discussions with the Medicare Advantage plans around additional reimbursement. I think they want to see uptake, right, and demand, so they'll be looking to see fee-for-service volumes, you know, to some extent. I do think, however, potential rollout for a larger operator could be, right, some combination of payer-based or patient-based focused on, you know, potentially high-risk patients. There's a large volume of patients, right, across, you know, many facilities, so, you know, the rollout will take time to implement, regardless of the cost.

Joseph Todisco: Some I think facilities will elect to rollout potentially on a kind of a payer basis, we're actively in discussions with the Medicare advantage plans.

Joseph Todisco: Around additional reimbursement I think they wanted to see uptake rate and demand.

Joseph Todisco: So they'll be looking to see fee for service volumes to some extent I do think.

Joseph Todisco: Potential rollout right for a larger operator could be alright, some combination of payer based or patient.

Joseph Todisco: Patient based focused on potentially high risk patients.

Joseph Todisco: There is theres, a large volume of patients right over many facilities. So.

Joseph Todisco: The rollout will take.

Joseph Todisco: Time to implement.

Joseph Todisco: Regardless of the customer.

Joseph Todisco: Okay.

Leszek Sulewski: Got it. I appreciate that. And as a follow-up, more on the kind of a general corporate strategy, you know, given the favorable price performance of CorMedix stock, and then you're factoring your cash burn, just to give you a little bit of a cushion as you head closer to profitability or breakeven, have you considered an equity raise or any other source of financing, such as a convertible note or warrant? Thank you. Well, thanks, Les.

Speaker Change: Got it appreciate that and as a follow up more on the kind of a general corporate strategy given the favorable price of <unk> stock performance and then Youre factoring your cash burn.

Leszek Sulewski: Just to give you a little bit of a cushion as you head into closer to profitability or breakeven. How do you consider that an equity raise or any other source of financing such as a convertible note our warrants.

Joseph Todisco: In the script today, we announced the letter of intent for the credit facility, which we do expect to close over the next couple of weeks. Certainly, that facility is based upon or would be contingent upon receivables. We've also announced the ATM facility, which will give us some flexibility to utilize it down the road. What I wouldn't want to do, and I think what you're asking is why I wouldn't do a large potentially dilutive raise today.

Joseph Todisco: Thank you. Well, thanks, Les.

Speaker Change: Thank you.

Speaker Change: Well thanks for that.

Joseph Todisco: In the script today, we announced the letter of intent.

Joseph Todisco: Intend for the credit facility, which we do expect to close over the next couple of weeks certainly that facility is based upon or would be contingent upon receivables.

Joseph Todisco: We've also announced the ATM facility, which will give us some flexibility to.

Joseph Todisco: To utilize it down the road.

Joseph Todisco: What I wouldn't want to do and I think what Youre asking is why wouldn't do a large.

Joseph Todisco: I just think it would be premature and potentially irresponsible to unnecessarily dilute the stock until we get better visibility on commercial execution in the back part of the year. But I feel pretty good about where we are in our discussions today with customers. I think we're still in line with our base case expectations and assumptions to get to that kind of break-even break rate by the end of the year. Now, that doesn't necessarily mean I'm going to allow minimum cash to fall below certain levels.

Joseph Todisco: Essentially dilutive raise today I, just think that would be premature.

Joseph Todisco: And potentially you're responsible to unnecessarily dilute the stock.

Joseph Todisco: You know until we get better visibility on commercial execution in the back part of the year I feel pretty good about where we are in our discussions today with customers I think we're still in line with with our base case expectation expectations and assumptions.

Joseph Todisco: Right to get to that kind of run rate breakeven by the end of the year now that doesn't necessarily mean I'm going to allow minimum cash to fall below certain levels.

Joseph Todisco: The tools that we put in place today give us that flexibility.

Joseph Todisco: I think the tools that we've put in place today give us that flexibility as we move through the year to reassess, to look at customer orders as they're coming in, to evaluate our payment terms, our working capital needs, and make that determination. I hope that's sufficient.

Joseph Todisco: As we move through the year to reassess to look at customer orders as they are coming in to.

Joseph Todisco: To evaluate our payment terms right, our working capital needs and make that determination.

Joseph Todisco: So I hope that's sufficient.

Speaker Change: Very helpful. Thank you.

Operator: Your next question comes from Gregory Renza from RBC Capital Markets. Gregory, please go ahead.

Joseph Todisco: Your next question comes from Gregory Renzo from RBC capital markets. Please go ahead.

Operator: Okay.

Unknown Caller: to Nishant on behalf of Greg, congrats on the progress this quarter, and thanks for taking my questions. Just on the call, you mentioned BD and M&A; just wanted to dig into that and see how you're thinking about opportunities and areas of interest that would sit well on your platform. And then secondly, maybe if you could just remind us of the commercial opportunities of TPN and PEDS, and if you could quantify Lumen Locks, etc.

Gregory James Renza: To niche on for Greg Congrats on the progress this quarter and thanks for taking my questions. Just first on the call you mentioned BD and M&A just wanted to dig into that and see how youre thinking about opportunities in areas of interest that would sit well on your platform and then secondly, maybe if you could just remind us on the commercial opportunity in TPN and PD.

Joseph Todisco: Thanks again. Thanks, John. I appreciate the question.

Joseph Todisco: If you could quantify on Bluebird box etcetera. Thanks again.

Joseph Todisco: Thanks, Sean. I appreciate the question. So, look, from an M&A standpoint, obviously, you know, we're going to continually be opportunistic and take a look as we're moving through our commercial launch this year and the next year. We've got a fixed infrastructure cost, and it makes a heck of a lot of sense to try to spread that cost across multiple products. So, I do think there are opportunities in the market today that could be actionable.

Nishant: Thanks, Sean I. Appreciate the question. So look from an M&A standpoint, obviously, we're going to continually be opportunistic and take a look as we're moving through.

Joseph Todisco: Our commercial launch this year into next year.

Joseph Todisco: We've got fixed infrastructure cost it makes a heck of a lot of sense to try to spread that cost across multiple products. So I do think there are opportunities in the market today that could be actionable.

Joseph Todisco: You know, we don't have anything that we are currently either negotiating or actively pursuing, but this is just something that, as we, you know, move past, let's say, commercial launch, could become a bigger focus, right, in our minds as we develop as a company. You know, we're doing a refresh right now on your second question. We're doing a refresh on our market research around TPN and oncology and hope to put something out in the second half of the year. John.

John: Don't have anything that we're currently either negotiating or or or actively pursuing but this is just something that I think you know as we move past lets say commercial launch could become a bigger focus right in our mind as we develop as a company.

Joseph Todisco: We're doing a refresh right now on your second question, we're doing a refresh on our market research around TPN oncology.

Joseph Todisco: And.

John: I hope to put something out in the second half of the year.

Joseph Todisco: Okay.

Joseph Todisco: Sean.

Joseph Todisco: Yeah.

Unknown Caller: Greg, did you have any follow-up questions?

John: Hi, Greg did you have any follow up questions.

Operator: No, we're all good here. Thank you so much.

Unknown Caller: Yeah.

Greg: No. We're all good here. Thank you so much.

Operator: Yeah.

Operator: Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press the star key one at a time. Okay, so there are no further questions at this time. So, this concludes the audio portion of our survey. I'll now turn it back to Dan for written questions from the audience.

Speaker Change: Ladies and gentlemen, as a reminder, if you'd like to ask a question. Please press star followed by one.

Dan: Okay, so low or no further questions at this time.

Operator: So this concludes the audio portion of our I will now turn it back to Dan for written questions from the audience.

Daniel Ferry: Thank you, operator. Joe, we have a couple of written questions from the audience here. The first one is, are there other post-market-type studies that the company is considering or that may help with uptake in the inpatient or outpatient setting?

Dan: Thank you operator.

Joseph Todisco: Post-market phase. Okay, thanks, Dan.

Joseph Todisco: Actually, that is, you know, something that we are actively pursuing right now. I think that when you talk about post-marketing studies, you know, we're looking at real world evidence, right? We want to be able to demonstrate the efficacy and health economic benefits of DefendCast in a real world setting, so we are currently in discussions with what I would characterize as value-based care entities to run this type of evaluation. It's not something that will happen overnight, but I do think it's something that, over the course of time, will help demonstrate the value of Defend-Cath and certainly be useful in increasing uptake.

Joseph Todisco: Course time will help demonstrate the value of defend Catherine and certainly be useful increasing uptake.

Daniel Ferry: All right, great. Thanks, Joe. Another one here. What are the formularies focused on when it comes to their decision making? In other words, how does DefendCast fit into those themes?

Speaker Change: Alright, great. Thanks, Joe.

Daniel Ferry: Another one here what are the formularies focused on.

Daniel Ferry: When it comes to their decision, making in other words habits descend cats fit into those themes.

Joseph Todisco: Okay, and I'm assuming from the formularies that the question is asking about the inpatient P&T process. So, I guess I'll address that.

Daniel Ferry: Okay.

Joseph Todisco: I'm assuming from formularies that.

Joseph Todisco: The questions is asking about impatient P. T T process. So.

Joseph Todisco: I guess like all address I'll dress that so you know I think a typical P and T process and in a hospital is gonna Gonna focus on first clinical efficacy.

Joseph Todisco: So, you know, I think a typical P&T process in a hospital is going to focus on first, you know, clinical efficacy, and then from there, they're going to look at price and the health economic impact of the product. I think with DEFENDCAST, there are a couple other unique things that might factor into the discussion that are certainly beneficial for us. You know, the first thing is that within these institutions, antibiotic stewardship has become an incredibly important issue for them, right?

Joseph Todisco: And then from there they are going to look at price and then the health economic impact of the product.

Joseph Todisco: I think with defend cast there's a couple other unique things that that might factor into the into the discussion that are certainly beneficial for us.

Joseph Todisco: They want to minimize the use of antibiotics, and right, to the extent that you can reduce or prevent any infections, you know, that lessens the need for antibiotics. You know, the second is, you know, as a preventative measure, you know, these hospitals get evaluated, right, based on their infection rates and their re-admission rates, and I think that, you know, DefendCats fits squarely within that need, so I'd say that's likely part of the discussion. I think that works well in DefendCats' favor as we go through these P&T processes.

Joseph Todisco: The first is within these institutions antibiotics stewardship has it become incredibly important.

Joseph Todisco: Issue for them right they want to minimize the use of antibiotics and right to the extent that you can reduce or prevent any infections lessens the need for for antibiotics.

Joseph Todisco: The second is you know as a preventative measure these.

Joseph Todisco: These hospitals they get evaluated based on their infection rates in every admission rates and I think that defend cats fit squarely within that need. So so I'd say, that's likely part of the discussion I think that works well and defend cats favor.

Joseph Todisco: As as we were going through these panty processes.

Speaker Change: Great great. Thanks.

Daniel Ferry: Okay, great. Thanks, Joe. Operator, that concludes the written portion of the Q&A session. You may now close the call.

Speaker Change: Thanks, Joe Operator that concludes the written portion of the Q&A assertion you may know close the call.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Speaker Change: Ladies and gentlemen, this concludes your cohorts call for today, we thank you for participating and ask that you. Please disconnect your lines.