Q2 2024 CorMedix Inc Earnings Call

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Operator: Good day, and welcome to the Chord Medics Inc. 2nd quarter of 2024 financial results conference call. All participants will be in listening on the mode.

Operator: [inaudible] Elizabeth Masson, Cormedix Sulewski, Joseph Todisco, Elizabeth Masson, Cormedix Sulewski, Joseph Todisco, Elizabeth [inaudible] David, Daniel Ferry, Leszek Sulewski, Elizabeth Masson, Good day and welcome to the CorMedix, Inc. second quarter 2024 financial results. All participants will be enlisted on. If you need assistance, please signal a conference specialist by pressing the star key followed by After today's presentation, there will be an opportunity to ask questions. If you have a question, you may press star then 1 on your telephone. To try your question, please press the star.

Speaker Change: Good day and welcome to the Cormedix, Inc. 2nd Quarter 2024 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please do a conference special to repress into the STAR-T Follow-A-Zero. After today's presentation, there will be an opportunity to ask questions. If you ask a question, you may press STAR, then want it on your telephone keypad. To try your question, please press STAR then too.

Speaker Change: After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then 1 on your telephone keypad. To try your question please press star then 2. Please note this event is being recorded. I'd now like to turn the conference over to your host today Daniel Ferry. Please go ahead.

Operator: Please note, this event is being recorded.

Daniel Ferry: Please note, this event is, and now I'd like to turn the conference over to your host today, Daniel Ferry. Please go ahead. Good morning, and welcome to the CorMedix Second Quarter 2024 Earnings Conference Call. Leading the call today is Joseph Todisco, Chief Executive Officer of CorMedix, and he is joined by Dr. Matt David, Executive Vice President and CFL. Beth Zeldik-Kaufmann, EVP and Chief Legal Officer, Liz Robert, EVP and Chief Clinical Strategy and Operations Officer, and Erin Mistry, EVP and Chief Commercial Officer.

Daniel Ferry: I now would like to turn the conference over to your host today, Daniel Ferry. Please go ahead.

Daniel Ferry: Good morning, and welcome to the Chord Medics 2nd quarter of 2024 earnings conference call. Leading the call today is Joe Tudisco, Chief Executive Officer of Chord Medics. He is joined by Dr. Matt David, Executive Vice President and CFO. Beth Zeldak-Coffman, EVP and Chief Legal Officer, Liz Robert, EVP, and Chief Clinical Strategy and Operations Officer, and Aaron Mystery, EVP and Chief Commercial Officer.

Joe Tedisco: Good morning, and welcome to the CoreMedics Second Quarter 2024 Earnings Conference Call. Leading the call today is Joe Tedisco, Chief Executive Officer of CoreMedics.

Speaker Change: And he is joined by Dr. Matt David, Executive Vice President and CFO.

Speaker Change: Beth Zelbeck-Kaufman, EVP and Chief Legal Officer. Liz Robert, EVP and Chief Clinical Strategy and Operations Officer. And Aaron Mistry, EVP and Chief Commercial Officer.

Daniel Ferry: 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 set forth in the Private Securities Litigation Reform Act of 1995. These statements are statements but the statements of historical facts regarding management expectations, beliefs, goals, and plans about the company's prospects and future financial position. Action results made different 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 Core Medics filings with the SEC, which are available free of charge at the SEC's website or upon request from Chord Medics.

Daniel Ferry: 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 filings with the SEC, which are available free of charge at the SEC's website or upon request from CorMed. Crometics may not actually achieve the goals or plans described in these forward-looking statements.

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 meeting set forth in the Private Securities Litigation Reform Act of 1995.

Speaker Change: 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.

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.

core medics: including the risks and uncertainties described in greater detail in core medics filings with the SEC which are available free of charge at the SEC's website or upon request from core medics.

Daniel Ferry: Chord Medics may not actually achieve the goals or plans described in these forward-looking statements. Investors should not place undue reliance on these statements.

Joseph Todisco: Investors should not place undue reliance on these forward-looking statements, except as required by law. At this time, it's now my pleasure to turn the call over to Joe Todisco, Chief Executive Officer of CorMedix. Joe, please go ahead.

Speaker Change: ChroMedix may not actually achieve the goals or plans described in these four liquid statements.

Daniel Ferry: Chord Medics does not intend to update these forward-looking statements except as required by law.

Chromatics: Investors should not place undue reliance on these statements. Chromatics does not intend to update these forward-looking statements except as required by law.

Daniel Ferry: At this time, it's now my pleasure to turn the call over to Joe Tudisco, Chief Executive Officer of Chord Medics. Joe, please go ahead.

Chromatics: At this time, it's now my pleasure to turn the call over to Joe Tedisco, Chief Executive Officer of CoreMedix. Joe, please go ahead.

Joseph Todisco: Thanks, Dan. Good morning, everyone, and thank you for joining us on this call. As we reach the midpoint in the financial year, I'm incredibly pleased with the progress the company has made related to the launch of FENCAS, and I'm optimistic about the sales trajectory we have seen through only the first few weeks of the outpatient launch. CorMedix began the inpatient launch of Defend-Cap on April 15 and began the outpatient launch during the first week of July, just after the close of the second quarter.

Joe Tudisco: Thanks, Dan.

Joe Tudisco: Good morning, everyone, and thank you for joining us on this call. As we reach the midpoint in the financial year, I'm incredibly pleased with the progress the company has made related to the launch of the FENCATH, and I'm optimistic about the sales trajectory we have seen through only the first few weeks of the outpatient launch. CorMedix commenced the inpatient launch of DefendCat on April 15th and commenced the outpatient launch during the first week of July, just after the close of the second quarter. The commercial launch milestone marks the culmination of the efforts of countless individuals, including core medics employees, contractors, and consultants who are tirelessly over the last decade to bring this innovative drug product to patients in need.

Joe Tedisco: Thanks Dan. Good morning everyone and thank you for joining us on this call.

Speaker Change: As we reach the midpoint in the financial year, I'm incredibly pleased with the progress the company has made related to the launch of the FENCAS, and I'm optimistic about the sales trajectory we have seen through only the first few weeks of the outpatient launch.

Speaker Change: Cormetics commenced the inpatient launch of Defend-Cap on April 15th and commenced the outpatient launch during the first week of July, just after the close of the second quarter.

Joseph Todisco: The commercial launch milestone marks the culmination of the efforts of countless individuals, including CorMedix employees, contractors, and consultants who are tirelessly over the last decade to bring this innovative drug product to patients in need. I'm extremely proud of this achievement and I'm excited about the potential for DefendCath utilization and the resulting impact DefendCath can have on patient infection rates. Though the inpatient launch of DEFENDCAT commenced on April 15th, as we communicated earlier, the inpatient sales cycle is relatively long, and our initial efforts have been focused on engaging customers to champion DEFENDCAT for P&T formulary review at hospitals and health systems. In this regard, we have seen significant progress in terms of meetings scheduled over the upcoming months, and from the handful of meetings that have already occurred, we are pleased with the majority of outcomes.

Speaker Change: The commercial launch milestone marks the culmination of the efforts of countless individuals, including CoreMedix employees, contractors, and consultants, who have worked tirelessly over the last decade to bring this innovative drug product to patients in need.

Joe Tudisco: I'm extremely proud of this achievement, and I'm excited about the potential for DefendCat utilization and the resulting impact DefendCat can have on patient infection rates. Though the inpatient launch of DefendCat commenced on April 15th, as we communicated earlier, the inpatient sales cycle is relatively long, and our initial efforts have been focused on engaging customers to champion DefendCat for P&T Formula Area review at hospital and health system. In this regard, we have seen significant progress in terms of meeting scheduled over the upcoming months, and from the handful of meetings that have already occurred, we are pleased with the majority of outcomes.

Speaker Change: I'm extremely proud of this achievement and I'm excited about the potential for DefendCath utilization and the resulting impact DefendCath can have on patient infection rates.

Joseph Todisco: We do expect a lag between P&T formulary approval and facility ordering, and we have many more P&T meetings scheduled between now and the end of this calendar year. In light of this long sales cycle, second quarter sales were expectedly modest, consisting primarily of trade stocking for inpatient facilities.

Speaker Change: Though the inpatient launch of DefendCats commenced on April 15th, as we communicated earlier, the inpatient sales cycle is relatively long, and our initial efforts have been focused on engaging customers to champion DefendCats for P&T formulary review with hospitals and health systems.

Speaker Change: In this regard, we have seen significant progress in terms of meetings scheduled over the upcoming months, and from the handful of meetings that have already occurred, we are pleased with the majority of outcomes.

Joe Tudisco: We do expect a lag between P&T Formula Area approval and facility ordering, and we have many more P&T meetings scheduled between now and the end of this calendar year. In light of this long sale cycle, second quarter sales were expectedly modest, consisting primarily of trade stockings for inpatient facilities. We expected inpatient sales to begin to ramp in the fourth quarter as DefendCat is reviewed, edited to Formula Area, and adopted into hospital workflows for patient use. We have seen some inventory begin to flow to those inpatient institutions that have completed Formula Area reviews, and we are optimistic of increased order flow as more hospitals and systems hopefully approved DefendCat and added to their respective formulas throughout the year.

Speaker Change: We do expect a lag between P&T formulary approval and facility ordering.

Speaker Change: And we have many more P&T meetings scheduled between now and the end of this calendar year.

Speaker Change: In light of this long sales cycle, second quarter sales were expectedly modest, consisting primarily of trade stocking for inpatient facilities.

Joseph Todisco: We expect inpatient sales to begin to ramp up in the fourth quarter as FENCAP is reviewed, added to formulary, and adopted into hospital workflows for patient use. We have seen some inventory begin to flow to those inpatient institutions that have completed formulary reviews, and we are optimistic of increased order flow as more hospitals and systems hopefully approve DefendCath and add it to their respective formularies throughout the year. The outpatient launch of DefendCath officially commenced on July 1st, with initial orders placed in June and material product shipments beginning the week of July 8th.

Speaker Change: We expect inpatient sales to begin to ramp in the fourth quarter as the FENCAS is reviewed, added to formulary, and adopted into hospital workflows for patient use.

Speaker Change: We have seen some inventory begin to flow to those inpatient institutions that have completed formulary reviews, and we are optimistic of increased order flow as more hospitals and systems hopefully approve DefendCat and add it to their respective formularies throughout the year.

Joe Tudisco: The outpatient launch of DefendCat officially commenced on July 1st, with initial orders placed in June, and material product shipments beginning the week of July 8th. As we announced earlier this morning, we have recorded unordered sales of 5.2 million as of August 13th. Our third quarter sales have been exclusively to small and mid-size-to-house operators, and we have verified pull-through to the clinic level for more than 95% of those shipments. To that extent, there is very little, if any, trade stocking in these third quarter net sales figures. In terms of onboarding new outpatient dials providers, the company believes we are in late stages of negotiations with one of the top dials providers in the country for the implementation of DefendCat, as well as multiple smaller and mid-size providers, and we are optimistic we are really operationalizing new commercial supply agreements shortly.

Speaker Change: The outpatient launch of DEFENDCAS officially commenced on July 1st with initial orders placed in June and material product shipments beginning the week of July 8th.

Joseph Todisco: As we announced earlier this morning, we have recorded unaudited quarter-to-date sales of $5.2 million as of August 13. Our third quarter sales have been exclusively to small and mid-sized dialysis operators, and we have verified pull-through to the clinic level for more than 95% of those shipments. To that extent, there is very little, if any, trade stocking in these third quarter net sales figures.

Speaker Change: As we announced earlier this morning, we have recorded unaudited quarter-to-date sales of $5.2 million as of August 13th.

Speaker Change: Our third quarter sales have been exclusively to small and mid-sized dialysis operators, and we have verified pull-through to the clinic level for more than 95% of those shipments.

Speaker Change: To that extent, there is very little, if any, trade stocking in these third quarter net sales figures.

Joseph Todisco: In terms of onboarding new outpatient dialysis providers, the company believes it is in the late stages of negotiations with one of the top dialysis providers in the country for the implementation of DefendCath, as well as multiple smaller and midsize providers. And we are optimistic we'll be operationalizing new commercial supply agreements shortly. As I stated at the opening of these remarks, we have seen a positive sales trend throughout our first five weeks of outpatient shipments coming entirely from small and mid-sized dialysis operations.

Speaker Change: In terms of onboarding new outpatient dialysis providers, the company believes we're in late stages of negotiations with one of the top dialysis providers in the country for the implementation of Defend-Caf, as well as multiple smaller and mid-sized providers, and we are optimistic we'll be operationalizing new commercial supply agreements shortly.

Joe Tudisco: As I stated the opening of these remarks, we have seen a positive sales trend throughout our first five weeks of outpatient shipments coming entirely from small and mid-size-to-house operators, and we expect that growth trend to continue throughout the year as existing customers expand DefendCat to newly identified patients. In addition, we are hopeful to see the commencement of sales to new accounts before the end of the third quarter. So a market access standpoint, outpatient reimbursement under-adap a commenced under-life first, and applied for all Medicare fee-for-service patients, which comprises roughly 45% of all ESRD patients in the United States.

Speaker Change: As I stated at the opening of these remarks, we have seen a positive sales trend throughout our first five weeks of outpatient shipments coming entirely from small and mid-sized dialysis operators.

Joseph Todisco: And we expect that growth trend to continue throughout the year as existing customers expand to FEMCAS to newly identified patients. In addition, we are hopeful to see the commencement of sales to new accounts before the end of the third quarter.

Speaker Change: And we expect that growth trend to continue throughout the year as existing customers expand to FENCAS to newly identified patients.

Speaker Change: In addition, we are hopeful to see the commencement of sales to new accounts before the end of the third quarter.

Joseph Todisco: From a market access standpoint, outpatient reimbursement under the DAPA commenced on July 1st and applies to all Medicare fee-for-service patients, which comprises roughly 45% of all ESRD patients in the United States. Medicare Advantage, comprising an additional 45% of ESRD patients, remains an opportunity for growth and expansion for Defend-CAF reimbursement. We have been engaged with all major Medicare Advantage organizations across the country, and we're happy to report that UnitedHealthcare, the largest M.A.

Speaker Change: From a market access standpoint, outpatient reimbursement under DADAPA commenced on July 1st and applies to all Medicare fee-for-service patients, which comprises roughly 45 percent of all ESRD patients in the United States.

Joe Tudisco: Medicare Advantage, comprising an additional 45% of ESRD patients, remains an opportunity for growth and expansion for the DefendCat reimbursement. We have been engaged with all major Medicare Advantage organizations across the country, and we're happy to report that United Healthcare, the largest MA plan in the country in terms of covered lives, which accounts for roughly 30% of Medicare Advantage enrollment, has confirmed that they will provide comparable to DAPA reimbursement for defencad, beginning on September 1st. Humana, which comprises roughly 20% of the Medicare Advantage population, has also confirmed that they will provide to DAPA reimbursement, which may vary depending on provider contracts.

Speaker Change: Medicare Advantage, comprising an additional 45% of ESRD patients, remains an opportunity for growth and expansion for the Defend-CAF reimbursement.

Speaker Change: We have been engaged with all major Medicare Advantage organizations across the country.

Joseph Todisco: the country in terms of covered lives, which accounts for roughly 30% of Medicare Advantage enrollment, has confirmed that they will provide comparable to DAPA reimbursement for DefendCap beginning on September 1st. Humana, which comprises roughly 20% of the Medicare Advantage population, has also confirmed that they will provide DAPA reimbursement, which may vary depending on provider contract.

Speaker Change: And we're happy to report that UnitedHealthcare, the largest M.A. plan in the country in terms of covered lives, which accounts for roughly 30% of Medicare Advantage enrollment, has confirmed that they will provide comparable to DAPA reimbursement for the FENCAP beginning on September 1st.

Speaker Change: Umana, which comprises roughly 20% of Medicare Advantage population, has also confirmed that they will provide to DAPA reimbursement, which may vary depending on provider contracts.

Joe Tudisco: As we progress through our first year of launch, the company intends to remain engaged with Medicare Advantage plans to ensure adequate reimbursement to operators. From a long-term perspective, the company believes that ESRU Medicare patients in general will continue to migrate from Medicare fee-for-service into Medicare Advantage plans, and that the value-based care proposition for defencath will resonate with MA plans, and hopefully result in long-term, sustainable, separate reimbursement in this patient segment.

Joseph Todisco: As we progress through our first year of launch, the company intends to remain engaged with Medicare Advantage plans to ensure adequate reimbursement to operators. From a long-term perspective, the company believes that ESRD Medicare patients, in general, will continue to migrate from Medicare fee-for-service into Medicare Advantage plans, and that the value-based care proposition for Defend-Cath will resonate with MA plans and hopefully result in long-term, sustainable, separate reimbursement in this patient Shifting gears to our clinical development.

Speaker Change: As we progress through our first year of launch, the company intends to remain engaged with Medicare Advantage plans to ensure adequate reimbursement to operators.

Speaker Change: From a long-term perspective, the company believes that ESRD Medicare patients in general will continue to migrate from Medicare fee-for-service into Medicare Advantage plans.

Speaker Change: and that the value-based care proposition for DEFEND-CAF will resonate with MA plans and hopefully result in long-term sustainable, separate reimbursement in this patient segment.

Joe Tudisco: Chifting gears to our clinical developments. We announced in the second quarter that we received supportive feedback from the FDA related to our proposed clinical pathway for adult total parenteral nutrition, or TPN, subject to the agency's review of our final study protocol. I'm happy to announce that this past week we have submitted our final protocol to the FDA, and subject to the FDA's concurrence, we expect to begin patient enrollment in the first quarter of 2025. We have posted on the company's website an updated corporate presentation that now includes market resurface information related to TPN. There remains a significant unmanmedical need in this patient population, with up to 26% of TPN patients having a catheter-related infection, and those patients having increased mobility and mortality rates.

Joseph Todisco: We announced in the second quarter that we received supportive feedback from FDA related to our proposed clinical pathway for adult total parenteral nutrition, or TPN, subject to the agency's review of our final study protocol. I'm happy to announce that this past week, we have submitted our final protocol to FDA, and subject to FDA's concurrence, we expect to begin patient enrollment in the first quarter of 2025. We have posted on the company's website an updated corporate presentation that it now includes market research information related to TPM. There remains a significant unmedical need in this patient population, with up to 26% of TPM patients having a capital-related infection, and those patients having increased morbidity and mortality rates.

Speaker Change: Shifting gears to our clinical developments, we announced in the second quarter that we received supportive feedback from FDA related to our proposed clinical pathway for adult total parenteral nutrition, or TPN, subject to the agency's review of our final study protocol.

Speaker Change: I'm happy to announce that this past week, we have submitted our final protocol to FDA, and subject to FDA's concurrence, we expect to begin patient enrollment in the first quarter of 2025.

Speaker Change: We have posted on the company's website an updated corporate presentation that it now includes market research information related to TPM.

Speaker Change: There remains a significant unmedical need in this patient population, with up to 26% of TPM patients having a capital-related infection, and those patients having increased morbidity and mortality rates.

Joe Tudisco: Market research estimates that the addressable market opportunity in TPN is approximately 4.7 million TPN infusions per year. The company's goal is to obtain FDA approval for an expanded use of our trolling and offering catheter-lock solution in TPN in the 2027 to 2028 timeframe. As we estimate annual peak sales potential in this indication to be in the range of 150 to 200 million dollars, incrementally beyond hemodialysis, we'll provide investors with updates on progress as we move forward. From a clinical budget standpoint, we anticipate the study to cost between 10 million and 12 million dollars, with the majority of expense spanning the 2025 and 2026 calendar years.

Joseph Todisco: Market Research Estimates say that the addressable market opportunity for TPN is approximately 4.7 million TPN infusions per year. The company's goal is to obtain FDA approval for an expanded use of our tyrolidine and heparin catheter lock solution in TPN in the 2027 to 2028 timeframe, as we estimate annual peak sales potential for this indication to be in the range of $150 to $200 million, incrementally beyond Himodial. We will provide investors with updates on progress as we move forward.

Speaker Change: Market Research Estimates.

Speaker Change: that the addressable market opportunity in TPN is approximately 4.7 million TPN infusions per year.

Speaker Change: The company's goal is to obtain FDA approval for an expanded use of our tyrolidine and heparin catheter lock solution in TPN in the 2027 to 2028 timeframe.

Speaker Change: As we estimate, annual peak sales potential in this indication to be in the range of $150 to $200 million, incrementally beyond hemodialysis.

Joseph Todisco: From a clinical budget standpoint, we anticipate the study to cost between $10 million and $12 million, with the majority of expenses spanning the 2025 and 2026 calendar years. Simultaneously with our adult TPN study, we will also be commencing a few additional clinical initiatives. The first is a study in pediatric hemodialysis.

Speaker Change: We'll provide investors with updates on progress as we move forward.

Speaker Change: From a clinical budget standpoint, we anticipate the study to cost between $10 million and $12 million, with the majority of expense spanning the 2025 and 2026 calendar years.

Joe Tudisco: Phenotainiously, with our adult TPN study, we will also be commencing a few additional clinical initiatives. The first is a study in pediatric hemodialysis. This will be a relatively small study spread over several years as we expect patient enrollment to be a challenge given an extremely small patient population and the need for very personalized protocols for these ultra-volumable patients. This pediatric study is a post-marketing requirement under the Pediatric Research Equity Act by the FDA, and we've submitted to the FDA a final study protocol. Subject to FDA's concurrence, we have plans to begin patient enrollment in early 2025.

Speaker Change: Simultaneously with our adult TPN study, we will also be commencing a few additional clinical initiatives.

Joseph Todisco: This will be a relatively small study spread over several years as we expect patient enrollment to be a challenge given an extremely small patient population and the need for very personalized protocols for these ultra-vulnerable patients. Pediatric Study is a post-marketing requirement under the Pediatric Research Equity Act by the FDA, and we have submitted to the FDA a final study protocol. Subject to FDA's concurrence, we have plans to begin patient enrollment in early 2025. We expect this study to cost between $4 million and $6 million, spread over four to five years.

Speaker Change: The first is a study in pediatric hemodialysis.

Speaker Change: This will be a relatively small study spread over several years as we expect patient enrollment to be a challenge given an extremely small patient population.

Speaker Change: and the need for very personalized protocols for these ultra-vulnerable patients.

Speaker Change: This pediatric study is a post-marketing requirement under the Pediatric Research Equity Act by the FDA, and we've submitted to FDA a final study protocol.

Joe Tudisco: The expected study to cost between $4 million and $6 million, spread over four to five years.

Speaker Change: Subject to FDA's concurrence, we have plans to begin patient enrollment in early 2025.

Speaker Change: We expect this study to cost between $4 million and $6 million, spread over four to five years.

Joe Tudisco: In addition to our adult TPN and pediatric HD studies, we plan to commence two other clinical initiatives in 2025. The first is an expanded access program for high-risk populations, including but not limited to pediatric TPN, peritoneal dialysis patients with refractory peritonitis, and neutropenic oncology patients utilizing central vein as catheter. These high-risk patients are those that have exhausted other infection prevention methods and, unfortunately, remain at significant risk for comorbidities and mortality. The cost for expanded access is expected to be less than $750,000 a year, primarily in the form of free product and distribution costs, and we expect to generate data that supports further label expansion and complements our adult TPN program.

Joseph Todisco: In addition to our adult TPN and pediatric HD studies, we plan to commence two other clinical initiatives in 2025. FIRST is an expanded access program for high-risk populations, including, but not limited to, pediatric QPN, peritoneal dialysis patients with refractory peritonitis, and neutropenic oncology patients utilizing central venous catheters. These high-risk patients are those that have exhausted other infection prevention methods and unfortunately remain at significant risk for comorbidities and mortality, and the cost for expanded access is expected to be less than $750,000 a year, primarily in the form of free product and distribution costs. We expect to generate data that supports further label expansion and complements our adult TPN program.

Speaker Change: In addition to our adult TPN and pediatric HD studies, we plan to commence two other clinical initiatives in 2025.

Speaker Change: The first is an expanded access program for high-risk populations, including, but not limited to, pediatric TPN.

Speaker Change: peritoneal dialysis patients with refractory peritonitis and neutropenic oncology patients utilizing central venous catheter.

Speaker Change: These high-risk patients are those that have exhausted other infection prevention methods and unfortunately remain at significant risk for comorbidities and mortality.

Speaker Change: The cost for expanded access is expected to be less than $750,000 a year, primarily in the form of free product and distribution costs.

Speaker Change: And, we expect to generate data that supports further label expansion and complements our adult TPN program.

Joe Tudisco: The other clinical initiative, which is perhaps most meaningful from a potential data value standpoint, is a real world evidence study of the FENCAT and adult hemodialysis patients that will be running in cooperation with one of our existing commercial partners. Our hope with this study, which we expect to take approximately 24 months and cost less of $1 million per year, would be to generate real-world evidence around an impact at the FENCAT utilization on cost of patient care, infection rates, hospitalizations, mortality, and multiple other metrics such as loss of chair time and antibiotic use. Ultimately, we would look to utilize this data in our post-adapt period to negotiate future sustainable reimbursement from Medicare Advantage plans and other value-based care contracting entities.

Matthew David: The other clinical initiative, which is perhaps most meaningful from a potential data value standpoint, is a real world evidence study of DefendCat and adult female dialysis patients that we will run into operation with one of our existing commercial parts. Our hope with this study, which we expect to take approximately 24 months and cost less than $1 million per year, would be to generate real-world evidence around the impact of FENCAP utilization on cost of patient care, infection rates, hospitalizations, mortality, and multiple other metrics such as lost share time and antibiotic use.

Speaker Change: The other clinical initiative, which is perhaps most meaningful from a potential data value standpoint,

Speaker Change: This is a real-world evidence study of DefendCat in adult hemodialysis patients that we will run in cooperation with one of our existing commercial partners.

Speaker Change: Our hope with this study...

Speaker Change: which we expect to take approximately 24 months and cost less than $1 million per year.

Speaker Change: would be to generate real-world evidence around the impact of the FENCAF utilization on cost of patient care, infection rates, hospitalizations, mortality, and multiple other metrics such as lost share time and antibiotic use.

Matthew David: Ultimately, we would look to utilize this data in our post-ADAPA period to negotiate future sustainable reimbursement for Medicare Advantage plans and other value-based care contracting entities. I'd now like to turn the call over to Matt to discuss the company's second quarter financial results and financial position.

Speaker Change: Ultimately, we would look to utilize this data in our post-ADAPA period to negotiate future sustainable reimbursement for Medicare Advantage plans and other value-based care contracting entities.

Operator: [inaudible] David David David David David David David David David David David David David David David David David David David David CorMedix commenced the inpatient launch of DefendCat on April 15th and commenced the outpatient launch during the first week of July, just after the close of the second quarter.

Joe Tudisco: I now like to turn the call over to Matt to discuss the company's second quarter financial results and financial positions. Matt?

Speaker Change: I'd now like to turn the call over to Matt to discuss the company's second quarter financial results and financial position. Matt? Matt? Matt? Matt?

Matthew David: Thanks, Joe.

Matthew David: Thanks, Joe, and good morning, everyone. I'm pleased to be here today to provide an overview of our second quarter 2024 financial results, as well as an update on CorMedix's cash. The company filed its quarterly report on Form 10Q for the quarter ending on June 30, 2024. I urge you to read the information contained in the report for a more complete discussion of our financial results, with respect to our second quarter of 2024 financial results.

Matthew David: And good morning, everyone. I'm pleased to be here today to provide an overview of our second quarter 2024 financial results, as well as an update on Core Medics's cash position. The company has filed its quarterly report on Form 10-Q for the quarter-end at June 30, 2024. I urge you to read the information contained in the report for a more complete discussion of our financial results. With respect to our second quarter of 2024 financial results, our net revenue for the second quarter of 2024 amounted to $0.8 million. This marks the first time that Core Medics has reported revenue from the U.S.

Matt David: Thanks, Joe. And good morning, everyone.

Matt David: I'm pleased to be here today to provide an overview of our second quarter 2024 financial results as well as an update on CoreMedix's cash position.

Speaker Change: The company has filed its quarterly report on Form 10-Q for the quarter ended June 30, 2024. I urge you to read the information contained in the report for a more complete discussion of our financial results.

Matthew David: Our net revenue for the second quarter of 2024 amounted to 0.8 million. This marks the first time that CorMedix has reported revenue from the US Distribution of Defense. Our net loss was approximately $14.2 million, or $0.25 per share, compared with a net loss of $11.3 million, or $0.25 per share, in the second quarter of 2023.

Speaker Change: With respect to our second quarter of 2024 financial results.

Speaker Change: Our net revenue for the second quarter of 2024 amounted to $0.8 million. This marks the first time that Cormedix has reported revenue from the U.S. distribution of the Venn cap.

Matthew David: distribution of the FENCAT. Our net loss was approximately 14.2 million, or 25 cents per share, compared with the net loss of 11.3 million, or 25 cents per share, in the second quarter of 2023. The higher net loss recognized in 2024, compared with 2023, was driven by an increase in SG&A expenses versus the second quarter of 2023 in anticipation of commercial launch. Operating expenses in the second quarter of 2024 increased approximately 32 percent to 15.6 million compared with 11.8 million in the second quarter of 2023. R&D expense decreased by approximately 86 percent to 0.7 million, driven by the approval of the FENCAT.

Speaker Change: Our net loss was approximately $14.2 million, or $0.25 per share, compared with a net loss of $11.3 million, or $0.25 per share, in the second quarter of 2023.

Matthew David: The higher net loss recognized in 2024 compared with 2023 was driven by an increase in SG&A expenses versus the second quarter of 2023 in anticipation of commercialization. Operating expenses in the second quarter of 2024 increased approximately 32% to $15.6 million compared with $11.8 million in the second quarter of 2023. R&D expense decreased by approximately 86% to $0.7 million, driven by the approval of the FEDC as a result of the post-FDA approval commercial operation.

Speaker Change: The higher net loss recognized in 2024 compared with 2023 was driven by an increase in SG&A expenses versus the second quarter of 2023 in anticipation of commercial launch.

Speaker Change: Operating expenses in the second quarter of 2024 increased approximately 32% to $15.6 million compared with $11.8 million in the second quarter of 2023.

Speaker Change: R&D expense decreased by approximately 86% to $0.7 million driven by the approval of the FDCAP.

Matthew David: As a result of the post-FDA approval commercial operations, costs related to medical affairs and certain personnel expenses that supported our D efforts prior to the FD approval of the FENCAT have been recognized in sales and marketing or GNA. Expense. S-GNA expense increased approximately 113% to 14.9 million in the second quarter of 2024 compared with 7 million in the second quarter of 2023. CorMedix is now reporting sales and marketing expense and general administrative or GNA expense as separate line items. On an apples-to-apples basis, sales and marketing expense increased 127% to 7.4 million in the second quarter of 2024.

Speaker Change: 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 the FDCAS have been recognized in sales and marketing or G&A expense.

Matthew David: Cost-related to medical affairs and certain personnel expenses that supported our efforts prior to the FDA approval of the FNCAP have been recognized in sales of Marketing or GeneAQ. SG&A expense increased approximately 113% to $14.9 million in the second quarter of 2024, compared with $7 million in the second quarter of 2023. CorMedix is now reporting sales and marketing expense and general and administrative, or G&A, expense as separate line items. On an apples-to-apples basis, sales and marketing expense increased 127 percent to $7.4 million in the second quarter of 2024, compared with $3.3 million in the second quarter of 2023. G&A expense increased 103% to $7.6 million in the second quarter of 2024 compared to $3.8 million in the second quarter of 2023.

Speaker Change: SG&A expense increased approximately 113% to $14.9 million in the second quarter of 2024 compared with $7 million in the second quarter of 2023.

Speaker Change: Chromatics is now reporting sales and marketing expense and general and administrative or G&A expense as separate line items.

Speaker Change: On an apples-to-apples basis, sales and marketing expense increased 127 percent to $7.4 million in the second quarter of 2024 compared with $3.3 million in the second quarter of 2023.

Matthew David: Compared with 3.3 million in the second quarter of 2023. GNA expense increased 103% to 7.6 million in the second quarter of 2024 versus 3.8 million in the second quarter of 2023. The increase in sales and marketing expense was attributable primarily to increased marketing efforts in new personnel, inclusive of our field sales organization, and support for the commercial launch of the FNCAP, as well as certain expenses previously part or component of the R&D prior to the approval. The increase in GNA expense was primarily due to increases in personnel costs in preparation for support activities related to the commercial launch, as well as certain expenses previously expense as a component of R&D prior to FDA approval.

Speaker Change: G&A expense increased 103% to $7.6 million in the second quarter of 2024 versus $3.8 million in the second quarter of 2023.

Matthew David: The increase in sales and marketing expense was attributable primarily to increased marketing efforts in new personnel, inclusive of our field sales organization, for the commercial launch of the FanCaf, as well as certain expenses previously at our component of R&D. Prior to FDA approval, the increase in GNA expense was primarily due to increases in personnel costs in preparation for support activities related to the commercial launch, as well as certain expenses previously expensed as a component of R&D prior to FDA approval.

Speaker Change: The increase in sales and marketing expense was attributable primarily to increased marketing efforts and new personnel inclusive of our field sales organization and support for the commercial launch of the FENCAP as well as certain expenses previously part or a component of the R&D

Speaker Change: Prior to FDA approval, the increase in G&A expense was primarily due to increases in personnel costs in preparation for support activities related to the commercial launch, as well as certain expenses previously expensed as a component of R&D prior to FDA approval.

Matthew David: In addition to other drivers, we saw an increase in legal and compliance costs compared to the prior year. We recorded net cash used in operations during the second quarter of 2024 of 14 million, compared with net cash used in operations of 8.6 million in the second quarter of 2023. The increase is primarily driven by an increase in net loss attributable to a net increase in operating expenses. The company has cash and cash equivalence of 45.6 million as of June 30, 2024. As we have discussed previously, we expect our operating expenses, especially sales and marketing in GNA, to remain at the current levels given the growth of the company and the cost driven by the commercial launch of the FNCAP.

Matthew David: In addition to other drivers, we saw an increase in legal and compliance costs compared to the prior year. We recorded net cash used in operations during the second quarter of 2024 of $14 million, compared with net cash used in operations of $8.6 million in the second quarter of 2023. The increase is primarily driven by an increase in net loss attributable to a net increase in operating costs.

Speaker Change: In addition to other drivers, we saw an increase in legal and compliance costs compared to the prior year.

Joseph Todisco: The commercial launch milestone marks the culmination of the efforts of countless individuals, including core medics employees, contractors, and consultants who are tirelessly over the last decade to bring this innovative drug product to patients in need. I'm extremely proud of this achievement and I'm excited about the potential for DefendCat utilization and the resulting impact DefendCat can have on patient infection rates. Though the inpatient launch of DefendCat commenced on April 15th, as we communicated earlier, the inpatient sales cycle is relatively long, and our initial efforts have been focused on engaging customers to champion DefendCat for P&T Formula Area review at hospital and health system.

Speaker Change: We recorded net cash used in operations during the second quarter of 2024 of $14 million compared with net cash used in operations of $8.6 million in the second quarter of 2023.

Speaker Change: The increase is primarily driven by an increase in net loss attributable to a net increase in operating expenses.

Matthew David: The company has cash and cash equivalents of 45.6 million as of June 30, 2020. As we have discussed previously, we expect our operating expenses, especially sales and marketing and G&A, to remain at the current levels given the growth of the company and the costs driven by the commercial launch of DefendCat. CorMedix continues to expect 2024 quarterly operating expenses to range from around $15 to $18 million to support commercial infrastructure and the ongoing launch of DefendCath. 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 DefendCath through Breakeven EBITDA, which may occur on a run rate basis by the end of

Speaker Change: The company has cash and cash equivalents of $45.6 million as of June 30, 2024. As we have discussed previously, we expect our operating expenses, especially sales and marketing and G&A, to remain at the current levels given the growth of the company and the costs driven by the commercial launch of DefendCat.

Matthew David: Chromatics continues to expect 2024 quarterly operating expenses to range from around 15 to 18 million to support commercial infrastructure and the ongoing launch of the FNCAP. We believe our cash, cash equivalence, 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 the FNCAP through to break-even EBITDA, which may occur on a run-rate basis by the end of 2024. Assuming we maintain our current growth trajectory of sales from existing key outpatient accounts, as well as achieve forecasted shipments to new accounts by the beginning of fourth quarter.

Joseph Todisco: In this regard, we have seen significant progress in terms of meeting scheduled over the upcoming months, and from the handful of meetings that have already occurred, we are pleased with the majority of outcomes. We do expect a lag between P&T Formula Area approval and facility ordering, and we have many more P&T meeting scheduled between now and the end of this calendar year. In light of this long sale cycle, second quarter sales were expectedly modest, consisting primarily of trade stockings for inpatient facilities.

Speaker Change: Cormedix continues to expect 2024 quarterly operating expenses to range from around $15 to $18 million to support commercial infrastructure and the ongoing launch of DefendCat.

Speaker Change: 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 DefendCath through to break-even EBITDA, which may occur on a run-rate basis by the end of 2024.

Matthew David: Assuming we maintain our current growth trajectory of sales from existing key outpatient accounts as well as achieve forecasted shipments to new accounts by the beginning of the fourth quarter. I will now turn the call back over to Joe for closing remarks. Thanks, Pat.

Joseph Todisco: We expected inpatient sales to begin to ramp in the fourth quarter as DefendCat is reviewed, edited to Formula Area and adopted into hospital workflows for patient use. We have seen some inventory begin to flow to those inpatient institutions that have completed Formula Area reviews, and we are optimistic of increased order flow as more hospitals and systems hopefully approved DefendCat and added to their respective formulas throughout the year.

Speaker Change: Assuming we maintain our current growth trajectory of sales from existing key outpatient accounts as well as achieve forecasted shipments to new accounts by the beginning of fourth quarter. I will now turn the call back over to Joe for closing remarks. Joe?

Joe Tudisco: I will now turn the call back over to Joe for closing remarks. Thanks, Matt. Chromatics is executing well on our key objectives and is hopeful to provide more substantive updates on sales progress and commercial uptake of FNCAP on our next quarterly call in November.

Joseph Todisco: CorMedix is executing well on our key objectives and is hopeful to provide more substantive updates on sales progress and commercial uptake at the FDCAP on our next quarterly call in November. I appreciate everyone's continued support of CorMedix, and I'm happy to open the line for questions. Yes. Thanks. I will now begin the question and answer so. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the button.

Joe Tedisco: Thanks, Pat.

Joe Tedisco: Cormedix is executing well on our key objectives and is hopeful to provide more substantive updates on sales progress and commercial uptake at DefendCath on our next quarterly call in November . I appreciate everyone's continued support in Cormedix and I'm happy to open the line for questions.

Operator: I appreciate everyone's continued support and Chromatics, and I'm happy to open the line for questions. Yes, thank you. We will now begin the question and answer session. To ask a question, you may press the star or the one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw it, please press star. and two. At this time, we'll pause momentarily to assemble the roster.

Joseph Todisco: The outpatient launch of DefendCat officially commenced on July 1st, with initial orders placed in June, and material product shipments beginning the week of July 8th. As we announced earlier this morning, we have recorded unordered sales of 5.2 million as of August 13th. Our third quarter sales have been exclusively to small and mid-size-to-house operators, and we have verified pull-through to the clinic level for more than 95% of those shipments. To that extent, there is very little if any trade stocking in these third quarter net sales figures.

Speaker Change: Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw it, please press star then 2.

Operator: If at any time your question has been addressed and you would like to withdraw it, please press star then. At this time, we will pause momentarily to assemble the first question comes from Gregory Renza with RBC Capital Markets. Hi Joe and team, it's Anishan from Greg. Congratulations on the progress this quarter and thanks for taking our questions. Just a couple from us.

Anishan: This point's first question concerned Gregory Renza with RBC Capital Markets. Hi, Joe, and team. It's Anishan for Greg. Congrats on the progress this quarter, and thanks for taking our questions. Just a couple from us.

Speaker Change: At this time, we will pause momentarily to assemble the roster.

Speaker Change: This morning's first question comes from Gregory Renza with RBC Capital Markets.

Joseph Todisco: First, just when you think about CLABSI, how do you, what are the readmission rates for CLABSI compared to CRBSI? And how would you think about gearing your education and marketing strategy for DefendCath accordingly? And second, on the granted pass-through status for DefendCath, how can this be leveraged to facilitate uptake? Thanks so much.

Joseph Todisco: In terms of onboarding new outpatient dials providers, the company believes we are in late stages of negotiations with one of the top dials providers in the country for the implementation of DefendCat as well as multiple smaller and mid-size providers, and we are optimistic we are really operationalizing new commercial supply agreements shortly. As I stated the opening of these remarks, we have seen a positive sales trend throughout our first five weeks of outpatient shipments coming entirely from small and mid-size-to-house operators, and we expect that growth trend to continue throughout the year as existing customers expand DefendCat to newly identified patients.

Speaker Change: Hi Joe and team, it's Anishan for Gregg. Congrats on the progress this quarter and thanks for taking our questions. Just a couple from us.

Anishan: First, just when you think about CLA BSI, how do you read mission rates for CLA BSI compared to CRBSI? And how would you think about gearing your education and marketing strategy for DefendCath accordingly?

Anishan: First, just when you think about CLA-BSI, how do readmission rates for CLA-BSI compare to CR-BSI? And how would you think about gearing your education and marketing strategy for Defend CAF accordingly?

Anishan: And second, on the granted pass-through status for DefendCath, how can this be leveraged to facilitate uptake? Thanks so much.

Anishan: And second, on the granted pass-through status for a DEFEND CAF, how can this be leveraged to facilitate uptake? Thanks so much.

Joseph Todisco: All right, thanks, Amish. So I think what you're asking is the difference between a clavcy and a CRBSI, if I'm not mistaken, and kind of how that may show differently in the data. So I'm going to let Liz, just from a clinical definition standpoint, kind of chime in on the difference between these two. But I think why that's relevant is that, from a TPN standpoint, we are designing the study for CLABSI, right, versus CRBSI.

Joe Tudisco: All right, thanks Anishan. So I think what you're asking is the difference between a CLA BSI and a CRBSI, if I'm not mistaken, and kind of how that makes you differently in the data.

Speaker Change: All right. Thanks, Anish. So, I think what you're asking is the difference between a CLABSI and a CRBSI, if I'm not mistaken, and kind of how that...

Elizabeth Masson: So I'm going to let Liz, just from a clinical definition standpoint, kind of chime in on the difference between these two. But I think why that's relevant is from a TPN standpoint, we are designing the study for CLA BSI versus CRBSI. And I think the way to somewhat look at it before Liz gives the definition is that I guess all CRBSI's are CLA BSI's, but all CLA BSI's are not CRBSI's. CLA BSI's a little bit of a broader determination, but go ahead. Yeah, exactly. So, like Joe said, CRBSI is a subset of the larger CLA BSI.

Joseph Todisco: In addition, we are hopeful to see the commencement of sales to new accounts before the end of the third quarter. So a market access standpoint, outpatient reimbursement under-adap a commenced under-life first, and applied for all Medicare fee for service patients, which comprises roughly 45% of all ESRD patients in the United States. Medicare Advantage, comprising an additional 45% of ESRD patients, remains an opportunity for growth and expansion for the DefendCat reimbursement. We have been engaged with all major Medicare Advantage organizations across the country, and we're a happy report that United Healthcare, the largest MA plan in the country in terms of covered lives, which accounts for roughly 30% of Medicare Advantage enrollment, has confirmed that they will provide comparable to DAPA reimbursement for defencad, beginning on September 1st.

Speaker Change: may show differently in the data. So I'm going to let Liz, just from a clinical definition standpoint, kind of chime in on the difference between these two. But I think why that's relevant is, from a TPN standpoint, we are designing the study for CLABSI versus CRBSI. And, you know, I think the way to somewhat look at it before Liz gives the definition is,

Joseph Todisco: And, you know, I think the way to somewhat look at it before Liz gives the definition is that I guess all CRBSIs are CLABSIs, but all CLABSIs are not CRBSIs, right? CLABSI is a little bit of a broader determination. But go ahead, Liz.

Liz: I guess all CRBSIs are CLABSIs, but all CLABSIs are not CRBSIs. CLABSIs are a little bit of a broader determination, but go ahead, Liz. Yeah, exactly. So, like Joe said, CRBSI is a subset of the larger CLABSI.

Liz Robert: Yeah, exactly. So, like Joe said, CRBSI is a subset of the larger CLABSI. And CRBSIs need clinical correlations, so signs of sepsis or positive peripheral blood cultures in the absence of an obvious source other than the CVC. And CLABSIs, which is your more general term, is a primary bloodstream infection in a patient that has had a central line within the 48-hour period before these symptoms develop. So you can think of CLABSI as an umbrella.

Joseph Todisco: And then there's a subset of types of infections after that that require different blood cultures or other clinical correlation to confirm them. All right. Thanks, Liz. And to get to your question on pass-through status, so what pass-through status allows is for providers that install catheters and utilize FENCAS during that catheter installation to bill for the product on a buy-and-go basis, similar to any other kind of Medicare B product, right?

Elizabeth Masson: And CRBSI's need clinical correlation, so signs of steps that are positive peripheral blood cultures in the absence of an obvious source, others in the CVC. And CLA BSI's, which is your more general term, is a primary bloodstream infection in a patient that has had a central line within the 48-hour period before these symptoms develop. So you can think of the CLA BSI as an umbrella. And then there's a subset of types of infections after that that require different blood cultures or other clinical correlation to confirm them.

Liz: and CRB-SI's need clinical correlation, so signs of sexists or positive peripheral blood cultures in the absence.

Liz: of an obvious source other than the CVC. And CLABSI, which is your more general term, is a primary bloodstream infection in a patient that has had a central line within the 48-hour period before these symptoms develop. So you can think of CLABSI.

Joseph Todisco: Humana, which comprises roughly 20% of Medicare Advantage population, has also confirmed that they will provide to DAPA reimbursement, which may vary depending on provider contracts. As we progress through our first year of launch, the company intends to remain engaged with Medicare Advantage plans to ensure adequate reimbursement to operators. From a long-term perspective, the company believes that ESRU Medicare patients in general will continue to migrate from Medicare fee-for-service into Medicare Advantage plans, and that the value-based care proposition for defencath will resonate with MA plans, and hopefully result in long-term, sustainable, separate reimbursement in this patient segment.

Speaker Change: as an umbrella, and then there's a subset of types of infections after that that require different blood cultures or other clinical correlation to confirm them. All right. Thanks, Liz. And I think to get to your question on pastor status, so what pastor status allows is for

Joe Tudisco: Thank you, Liz. And I think to get your question on pass or status. So what pass or status allows is for the providers that install catheters and utilize the THENCAP during that catheter installation to build for the product on a buy and go basis, similar to any other kind of Medicare B product. So that's an ASP Plus. It's a small part of the segment, but I think that it's meaningful because it's the first time the patient is getting the catheter. So we want to protect the lines from the start. It's the opportunity to utilize THENCAP from the beginning with each patient, so that's essentially why we see it as meaningful, even though it's a small part of the population.

Speaker Change: The providers that install catheters and utilize DefendCath during that catheter installation

Joseph Todisco: So that's an ASP Plus. It's a small part of the segment, but I think that it's meaningful because it's the first time the patient is getting the catheter, right? So we want to protect the line from the start. It's the opportunity to utilize FENCAS from the beginning with each patient. So that's essentially why we see it as meaningful, even though it's a small part of the population. Great, thanks. I appreciate all the color.

Speaker Change: to bill for the product on a buy-and-go basis, similar to any other kind of Medicare B product, right? So that's an ASP Plus.

Joseph Todisco: Chifting gears to our clinical developments. We announced in the second quarter that we received supportive feedback from FDA related to our proposed clinical pathway for adult total parental nutrition, or TPN, subject to the agency's review of our final study protocol. I'm happy to announce that this past week we have submitted our final protocol to FDA, and subject to FDA's concurrence, we expect to begin patient enrollment in the first quarter of 2025.

Speaker Change: It's a small part of the segment, but I think that it's meaningful because it's the first time the patient is getting the catheter, right? So we want to protect the line from the start. It's the opportunity to utilize, right, to fend cath from the beginning with each patient. So that's essentially why we see it as meaningful, even though it's a small part of the population.

Anishan: Great. Thanks. Appreciate all the color. No problem. Thank you.

Speaker Change: I'm sorry.

Speaker Change: Great, thanks. I appreciate all the color.

Jason Butler: And then the next question comes in Jason Butler with a Citizens JMP. Hi. Thanks for taking the questions, and congrats on the progress. First one, just in terms of the run rate for 3Q, how should we think about the 5.2 million and growth beyond that? I guess what I'm asking is, do you expect there to be essentially time taken now for those initial centers to work through those initial orders, or should we see continued orders beyond the 5.2? And then can you give us a sense of how many centers in the outpatient setting you're actually seeing pull through from?

Operator: Thank you. And the next question comes from Jason Butler with Citizens JMS. Hi, thanks for taking the questions and congrats on the progress. First one just in terms of the run rate for 3Q.

Speaker Change: No problem.

Joseph Todisco: We have posted on the company's website an updated corporate presentation that it now includes market resurface information related to TPN. There remains a significant unmanmedical need in this patient population, with up to 26% of TPN patients having a catheter-related infection, and those patients having increased mobility and mortality rates. Market research estimates that the addressable market opportunity in TPN is approximately 4.7 million TPN infusions per year. The company's goal is to obtain FDA approval for an expanded use of our trolling and offering catheter-lock solution in TPN in the 2027 to 2028 timeframe.

Speaker Change: Thank you. And the next question comes from Jason Butler with Citizens JMP.

Joseph Todisco: How should we think about the 5.2 million and growth beyond that? I guess what I'm asking is, do you expect there to be essentially time taken now for those initial centers to put to work through those initial orders, or should we see continued orders beyond the 5.2 million? And then can you give us a sense of how many centers in the outpatient setting you're actually seeing pull through? Well, thanks. Thanks. Thanks, Jason. So, you know, that's a, yeah, from. I'm a 5.2.

Jason Boller: All right, thanks for taking the questions and congrats on the progress.

Jason Boller: First one, just in terms of the run rate for 3Q, how should we think about the $5.2 million and growth beyond that? I guess what I'm asking is, do you expect there to be...

Speaker Change: essentially time taken now for those initial centers to work through those initial orders or should we see continued orders beyond the 5.2? And then can you give us a sense of how many centers in the outpatient setting you're actually seeing pull through from? Thanks.

Jason Butler: Thanks.

Joe Tudisco: Thanks, Jason. So, you know, that's a, yeah, I'm a 5.2. I think what I'm comfortable saying is that we've seen consistent orders repeatedly over the last four weeks, and we're seeing those at the clinic level, right, with repeats and restocking of similar size orders. So that gives us the impression those clinics are pulling that through into the patients, which is why I'm comfortable saying that, you know, we don't believe there's much of any trade stocking in that, in that third quarter number. So I hate to guide you with the back part of the quarter is going to look like; I don't have a crystal ball, but I feel good about what we've seen from those first, you know, four weeks, four and a half weeks of shipment.

Joseph Todisco: I think what I'm comfortable saying is that we've seen consistent orders repeatedly over the last four weeks. And we're seeing those at the clinic level, right, with repeats and restocking of similar size orders. So that gives us the impression that those clinics are pulling that through to the patients, which is why I'm, I'm comfortable saying that, you know, we don't believe there's much, if any, trade stocking in that third quarter number.

Speaker Change: Thanks Jason. So you know that's a yeah from I'm a 5.2 I think what I what I'm comfortable saying is that we've seen consistent orders repeatedly over over the last four weeks.

Joseph Todisco: As we estimate annual peak sales potential in this indication to be in the range of 150 to 200 million dollars, incrementally beyond hemodialysis, we'll provide investors with update on progress as we move forward. From a clinical budget standpoint, we anticipate the study to cost between 10 million and 12 million dollars, with the majority of expense spanning the 2025 and 2026 calendar years.

Speaker Change: And we're seeing those at the clinic level, right, with repeats and restocking of similar size orders, so that gives us the impression those clinics are pulling that through into the patients, which is why I'm comfortable saying that, you know, we don't believe there's much of any trade stocking in that area.

Joseph Todisco: So I hate, I hate to guide you with what the back part of the quarter is going to look like. I don't have a crystal ball, but I feel good about what we've seen from those first, you know, four weeks, four and a half weeks of shipments. In terms of how many centers, again, I prefer not to give an exact number.

Speaker Change: in that third quarter number. So I hate to guide you with the back part of the quarter is going to look like. I don't have a crystal ball. But I feel good about what we've seen from those first four weeks, four and a half weeks of shipments.

Joseph Todisco: Phenotainiously, with our adult TPN study, we will also be commencing a few additional clinical initiatives. The first is a study in pediatric hemodialysis. This will be a relatively small study spread over several years as we expect patient enrollment to be a challenge given an extremely small patient population and the need for very personalized protocols for these ultra-volumable patients. This pediatric study is a post-marketing requirement under the Pediatric Research Equity Act by the FDA, and we've submitted to FDA a final study protocol. Subject to FDA's concurrence, we have plans to begin patient enrollment in early 2025. The expected study to cost between $4 million and $6 million spread over four to five years.

Joseph Todisco: It is several hundred that we are currently shipping to. Okay, great. And then, could you just walk us through the comments that Matt gave about hitting breakeven by the end of 24 again, and what assumptions we would need to consider to get to breakeven by the end of 24? You know, look, I think you've got a good sense for what our operating expenses are. We've guided at $15 to $18 million OPEX, and I think we came in at the low point of that for this quarter.

Joe Tudisco: In terms of how many centers, I, again, turn out to give an exact number; it is several hundred that we are currently shipping to.

Speaker Change: In terms of how many centers, again, I prefer not to give an exact number, it is several hundred that we are currently shipping to.

Joe Tudisco: Okay, great, and then could you just walk us through the comments that Matt gave about hitting break even by the end of 24 again, which what assumptions we would, we would need to consider to get to break even by the end of 24? Thanks. Yeah, look, I think you've got a good sense for what our operating expenses are. We guided at 15 to 18 million op X; I think we came in at the low point of that for this quarter. Maybe it takes up a little bit, you know, as we get to the back part of the year. I think we've guided you on future clinical costs, which really don't kick in till next year and the year after.

Speaker Change: Okay, great. And then could you just walk us through the comments that Matt gave about hitting breakeven by the end of 24 again, and what assumptions we would need to consider to get to breakeven by the end of 24?

Speaker Change: Yeah, look, I think you've got a good sense for what our operating expense is. We've guided at $15-18 million OPEX. I think we came in at the low point of that for this quarter.

Joseph Todisco: Maybe it ticks up a little bit, you know, as we get to the back part of the year. I think we've guided you on future clinical costs, which really don't kick in until next year and the year after. And even if you overlay those on top of each other, right, I think we're designing fairly modestly priced clinical programs that, you know, at peak, maybe $3 to $4 million in a quarter, right, probably in late 25 or 26.

Speaker Change: Maybe it kicks up a little bit, you know, as we get to the back part of the year. I think we've guided you on future clinical costs, which really don't kick in until next year and the year after.

Joseph Todisco: In addition to our adult TPN and pediatric HD studies, we plan to commence two other clinical initiatives in 2025. The first is an expanded access program for high-risk populations, including but not limited to pediatric TPN, peritoneal dialysis patients with refractory peritonitis, and neutropenic oncology patients utilizing central vein as catheter. These high-risk patients are those that have exhausted other infection prevention methods and, unfortunately, remain at significant risk for comorbidities and mortality. The cost for expanded access is expected to be less than $750,000 a year, primarily in the form of free product and distribution costs, and we expect to generate data that supports further label expansion and compliments our adult TPN program.

Joe Tudisco: And even if you overlay those on top of each other, I think we're designing fairly modestly priced clinical programs that, you know, at peak, maybe three to four million in a quarter, probably in late 25 or 26. So, by the amount of revenue and or goes margin needed to cover the op X, I think gives you a sense of where we need to be running that. So you've seen our first kind of five weeks of shipments. I think it's conceivable that if we, and this is all with small and midside values operators, so if and if and when hopefully we do onboard some larger accounts and we see increased volume move in the back part of the year.

Speaker Change: And even if you overlay those on top of each other, right, I think we're...

Speaker Change: designing fairly modestly priced clinical programs that, you know, at peak may be three to four million and a quarter, right?

Joseph Todisco: So the amount of revenue or gross margin needed to cover the OPEX, I think, gives you a sense of where we need to be running at. So you've seen our first five weeks of shipments. I think it's conceivable that if we, and this is all with small and mid-sized Alice operators, so if and when, hopefully, we do onboard some larger accounts when we see increased volume move in the back part of the year, I think that breakeven EBITDA is certainly achievable before the end of the year.

Speaker Change: probably in late 25 or 26. So the amount of revenue or gross margin needed to cover the OPEX, I think gives you a sense of where we need to be running at. So you've seen our first kind of five weeks of shipments.

Speaker Change: I think it's conceivable that if we, and this is all with small and mid-sized ALIS operators, so if and when hopefully we do onboard some larger accounts and we see increased...

Joe Tudisco: Sorry, I think that break even either dies, certainly achievable before the end of the year.

Joseph Todisco: The other clinical initiative, which is perhaps most meaningful from a potential data value standpoint, is a real world evidence study of the FENCAT and adult hemodialysis patients that will be running cooperation with one of our existing commercial partners. Our hope with this study, which we expect to take approximately 24 months and cost less of $1 million per year, would be to generate real-world evidence around an impact at the FENCAT utilization on cost of patient care, infection rates, hospitalizations, mortality, and multiple other metrics such as loss of chair time and antibiotic use. Ultimately, we would look to utilize this data in our post-adapet period to negotiate future sustainable reimbursement from Medicare Advantage plans and other value-based care contracting entities.

Speaker Change: volume move in the back part of the year, I think that breakeven EBITDA is certainly achievable before the end of the year.

Jason Butler: Great.

Operator: Great. Thanks for taking the questions. And the next question comes from Leszek Sulewski. Good morning.

Jason Butler: Thanks for taking the questions.

Operator: Thank you.

Leszek Sulewski: And then next question, Council on less less key with our truest.

Speaker Change: Great, thanks for taking the questions.

Leszek Sulewski: Good morning. Thanks for taking my questions. Can you just talk about the progress on conversations on the dialysis operators, particularly the larger ones. And I guess separately, what percentage of the market has your sales team touched. And if there are any reasons you perhaps are hearing any sort of hesitation on adoption, can you speak to those? And then I have two follow-ups. All right. Thanks. So, you know, obviously we've, I think we've been pretty candid that we're in discussions with one of the top two. Certainly, I know we talked about that. You know, on the last call, I'd say that that remains the case.

Leszek Sulewski: Thanks for taking my questions. Can you just talk about the progress conversations with the dialysis operators, particularly the larger ones? And separately, what percentage of the market has your sales team touched? And if there are any reasons you perhaps are hearing any sort of hesitation on adoption, can you speak to those?

Speaker Change: Thank you. And the next question comes from Les Zalewski with Artruist.

Les Zalewski: Good morning. Thanks for taking my questions. Can you just talk about the progress on conversations on the dialysis operators, particularly the larger ones? And I guess separately, what percentage of the market has your sales team touched? And if there are any reasons you perhaps are fearing any sort of hesitation on adoption, can you speak to those? And then I have two follow-ups.

Joseph Todisco: And then I have two follow-ups. All right, thanks Les. So, you know, obviously, we've, I think we've been pretty candid that we're in discussions with, you know, one of the top two, right? Certainly, I know we talked about that on the last call.

Les Zalewski: All right, thanks a lot, Sue.

Speaker Change: Obviously, I think we've been pretty candid that we're in discussions with one of the top two. Certainly, I know we talked about that.

Joseph Todisco: I'd say that remains the case. I do feel like we're pretty close, and I think what I would comment on timing, which is kind of what I think you're asking, is that, you know, when you're dealing with larger organizations with multiple, right, functional areas that need to weigh in on a contract, that process is maybe taking a little longer than I expected. So I'm still optimistic about our ability to move forward, and the signals I've received have been very positive.

Matthew David: I now like to turn the call over to Matt to discuss the company's second quarter financial results and financial positions. Matt? Thanks, Joe. And good morning, everyone. I'm pleased to be here today to provide an overview of our second quarter 2024 financial results as well as an update on core medics's cash position. The company has filed its quarterly report on form 10Q for the quarter-end at June 30, 2024. I urge you to read the information contained in the report for a more complete discussion of our financial results.

Joe Tudisco: I do feel like we're pretty close. And I think what I would comment on timing, which is kind of what I think you're asking, is that, you know, when you're dealing with larger organizations with multiple functional areas that need to weigh in on a contract. In fact, that process is maybe taking a little longer than I expected. So I'm still optimistic about our ability to move forward, and the signals I've received have been very positive. I'm one of the other LDOs.

Speaker Change: You know, on the last call, I'd say that that remains the case. I do feel like we're pretty close.

Speaker Change: I think what I would comment on timing, which is kind of what I think you're asking, is that when you're dealing with larger organizations with multiple functional areas that need to weigh in on a contract, that process is maybe taking a little longer than I expected. So I'm still optimistic.

Speaker Change: about our ability to move forward and the signals I've received have been very positive.

Joseph Todisco: On one of the other LDOs, I do think they're taking a wait-and-see approach, and we'll be reengaging, you know, later in the year. In terms of percent of the market touched, right, a lot of the decision making, whether it's an SBO, you know, MDO, or LDO, that comes from the top down. Right?

Joe Tudisco: I do think they're taking a wait-and-see approach, and we'll be re-engaging later in the year in terms of percent of the market touched. And a lot of the decision making, whether it's an SBO, you know, MBO, or LDO, that comes from the top down, right? So I think we're touching of the top 20 accounts that represent 99% of dialysis. We're touching them all. So the field team right now is focused on probably smaller and mid-sized accounts and pull through, as well as the inpatient formulary process. And that's where we want them deployed.

Speaker Change: On one of the other LDOs, I do think they're taking a wait-and-see approach, and we'll be reengaging later in the year.

Matthew David: With respect to our second quarter of 2024 financial results, our net revenue for the second quarter of 2024 amounted to 0.8 million. This marks the first time that core medics has reported revenue from the U.S, distribution of the FENCAT. Our net loss was approximately 14.2 million or 25 cents per share compared with the net loss of 11.3 million or 25 cents per share in the second quarter of 2023. The higher net loss recognized in 2024, compared with 2023, was driven by an increase in SGNA expenses versus the second quarter of 2023 in anticipation of commercial launch.

Speaker Change: in terms of percent of the market touched and a lot of the decision making whether it's an FBO or LBO that comes from the top down, right? So I think we're touching of the

Joseph Todisco: So I'd say we're touching, of the top 20 accounts that represent 99% of dialysis, we're touching them all, right? So the field team right now is focused on probably smaller to midsize accounts and pulling through as well as the inpatient formulary process, and that's where we want them deployed. There was a third part of your question, Les, and I apologize. Just if you're hearing any sort of hesitation on adoption. Look, as I said, I think, you know, some are waiting to see what others are doing, right?

Speaker Change: top 20 accounts that represent 99% of dialysis, we're touching them all.

Speaker Change: So, the field team right now is focused on probably smaller to midsize accounts and pull through as well as the inpatient formulary process, and that's where we want them deployed. There was a third part of your question, Les, I apologize.

Joe Tudisco: There was a third part of your question; let's apologize them. Just if you're hearing any sort of hesitation on adoption. Look, as I said, I think some are waiting to see what others are doing. I think you have some small operators that may be less familiar with how to process to DAPA or reimbursement, and we're trying to educate on that so that it's a little bit more familiar. This is still a relatively new reimbursement platform that's only a couple of years, and does change, right, even to DAPA change last year, so that there's some education that we are doing with the smaller operators on how to process reimbursement.

Matthew David: Operating expenses in the second quarter of 2024 increased approximately 32 percent to 15.6 million compared with 11.8 million in the second quarter of 2023. R&D expense decreased by approximately 86 percent to 0.7 million driven by the approval of the FENCAT. As a result of the post-FDA approval commercial operations, costs related to medical affairs and certain personnel expenses that supported our D efforts prior to the FD approval of the FENCAT have been recognized in sales and marketing or GNA.

Les Zalewski: Just if you're hearing any sort of hesitation on adoption.

Joseph Todisco: I think you have some smaller operators that may be less familiar with how to process DAPA or reimbursement, and we're trying to educate them on that so that it's a little bit more familiar. It's still a relatively new reimbursement platform. It's only been a couple of years and will change, right?

Speaker Change: Look, as I said, I think, you know, some are waiting to see what others are doing, right? I think you have some smaller operators that may be less familiar with.

Speaker Change: had a process to DAPA or reimbursement and we're trying to educate on that so that it's a little bit more familiar. It's still a relatively new reimbursement platform, it's only a couple of years.

Joseph Todisco: Even to DAPA changed last year. So there's some education that we are doing with the smaller operators on how to process reimbursement, that's helpful. On the 5.2 mil, can you speak to perhaps the weekly progression of that and then the 95 pull-through rate to the clinics? Do you have an indication what percentage of that was utilization? I'll address the second question first. I think because we're shipping to a lot of these customers direct-to-clinic, which is why we're getting such good data on where it's going, I'd say we're not getting inventory on hand statements per se, but we are seeing repeat orders from similar clinics, so it gives us confidence that it's being utilized in the patient. I'm sorry, but what was the first part of the question, though? at the weekly progression, weekly progressions.

Speaker Change: and does change, right, even KADAPA changed last year. So there's some education that we are doing with the smaller, certainly with the smaller operators on how to process reimbursement.

Matthew David: Expense. S-GNA expense increased approximately 113% to 14.9 million in the second quarter of 2024 compared with 7 million in the second quarter of 2023. CorMedix is now reporting sales and marketing expense and general administrative or GNA expense as separate line items. On an apples to apples basis, sales and marketing expense increased 127% to 7.4 million in the second quarter of 2024. Compared with 3.3 million in the second quarter of 2023. GNA expense increased 103% to 7.6 million in the second quarter of 2024 versus 3.8 million in the second quarter of 2023.

Leszek Sulewski: That's helpful.

Leszek Sulewski: On the 5.2 mill, can you speak to perhaps the weekly progression of that, and then the 95 pull-through rate to the clinics? Do you have an indication what percentage of that was utilization?

Speaker Change: That's helpful. On the 5.2 mil, can you speak to perhaps the weekly progression of that and then the 95 pull-through rate to the clinics, do you have an indication what percentage of that was utilization? Yes. Okay.

Joe Tudisco: Looks, because we're just a second question first. I think because we're shipping to a lot of these customers direct to clinic, which is why we're getting such good data on where it's going. I'd say we're not getting inventory on hand statements per se, but we are seeing repeat orders from similar clinics, so it gives us confidence that it's being utilized in the patients. I'm sorry, what was the first part of the question? The weekly progression. Weekly progressions. It's slightly somewhat consistent, right, I'd say. It's been fairly consistent.

Speaker Change: I'll address the second question first. I think because we're shipping to a lot of these customers direct-to-clinic, which is why we're getting...

Speaker Change: such good data on where it's going, I'd say we're not getting inventory on hand statements per se, but we are seeing, you know, repeat orders from similar clinics, so it gives us confidence that it's being utilized in the patients.

Matthew David: The increase in sales and marketing expense was attributable primarily to increased marketing efforts in new personnel, inclusive of our field sales organization, and support for the commercial launch of the FNCAP, as well as certain expenses previously part or component of the R&D prior to the approval. The increase in GNA expense was primarily due to increases in personnel costs in preparation for support activities related to the commercial launch, as well as certain expenses previously expense as a component of R&D prior to FDA approval.

Speaker Change: I'm sorry, what was the first part of the question, Loss?

Loss: the weekly progression.

Joseph Todisco: Slightly, somewhat consistently, right? I'd say I'd say it's been fairly consistent. I think there was an initial, I'll say, patient sweep, right? Patient identification that customers did started moving patients on. So I'm hopeful that we'll see, you know, as we move through the end of this quarter and into next quarter, another, let's say, patient sweep where we adopt or they look to convert additional patients. So it sounds like it's probably a good proxy for how the rest of the quarter will line up. Yeah. I hate to guide you that way, Les.

Loss: weekly progressions

Joe Tudisco: I think there was an initial, I'll say, patient sweep, right, patient identification that customers did, started moving patients on, so I'm hopeful that we'll see how as we move through, and to this quarter, next quarter, another let's say, patient sweep, where we adopt, or they look to convert additional patients. Sounds like it's probably a good proxy for how the rest of the quarter will line up. Yeah, I hate to guide you that way less.

Loss: slightly, somewhat consistent, right, I'd say. I'd say it's been fairly consistent, I think.

Loss: There was initial, I'll say, patient sweep, right, patient identification that customers did, started moving patients on. So I'm hopeful that we'll see, you know, as we move through, at the end of this quarter, next quarter, another, let's say, patient sweep where we adopt or they look to convert additional patients.

Matthew David: In addition to other drivers, we saw an increase in legal and compliance costs compared to the prior year. We recorded net cash used in operations during the second quarter of 2024 of 14 million compared with net cash used in operations of 8.6 million in the second quarter of 2023. The increase is primarily driven by an increase in net loss attributable to a net increase in operating expenses. The company has cash and cash equivalence of 45.6 million as of June 30, 2024.

Loss: So, it sounds like you're, it's probably a good proxy for how the rest of the quarter.

Joseph Todisco: Obviously, I said I didn't have a crystal ball. I think Greg or Jason may have asked the same thing. I feel good with the revenue run rate that we're seeing. I think that's how I'd describe it.

Leszek Sulewski: Obviously, I said I don't have a crystal ball. I think that Greg or Jason may have had the same thing. I feel good with the revenue run rate that we're seeing. I think that's how I described it. That's fair, thanks, Joe.

Speaker Change: line up yeah I hate to guide you that way less obviously I said I don't have a crystal ball I think the Greg or Jason may have asked the same thing I feel good with it with the revenue run rate that we're seeing I think that's how I describe it

Joseph Todisco: That's fair. Thanks, Joe. And great detailed color on the pipeline.

Joe Tudisco: And great detailed color on the pipeline, very helpful. Maybe follow up with that. It appears there's some cost involved. How do you intend to fund these studies? Not much on terms of costs, but just maybe talk about the funding there. And then just quickly, expected timeline on the TPN enrollment. And could we expect interim pipeline prior to 27, 28?

Speaker Change: That's fair. Thanks, Joe. And great detailed color on the pipeline. Very helpful.

Joseph Todisco: Very helpful. Maybe a follow-up to that, you know? It appears, you know, there's some cost involved. How do you intend to fund these studies?

Speaker Change: How do you intend to fund these studies? Not much in terms of cost, but just maybe talk about the funding there. Just quickly, expect a timeline on the TPN enrollment. Could we expect interim top line prior to 2027-2028?

Joseph Todisco: Not much in terms of cost, but just maybe talk about the funding there. And then, you know, just quickly, expect a timeline for the TPN enrollment, and could we expect an interim top line prior to 27, 28? Thank you. Yeah, so I'll let Liz get into the kind of clinical timeline in a second, but I think you're asking me about his financing lesson. And I want to kind of comment on a couple of things and make sure that we're clear. So, you know, I continue to believe we don't need to do any type of, let's say, large dilutive financing at this time.

Matthew David: As we have discussed previously, we expect our operating expenses, especially sales and marketing in GNA, to remain at the current levels given the growth of the company and the cost driven by the commercial launch of the FNCAP. Chromatics continues to expect 2024 quarterly operating expenses to range from around 15 to 18 million to support commercial infrastructure and the ongoing launch of the FNCAP. We believe our cash, cash equivalence, 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 the FNCAP through to break even EBITDA, which may occur on a run rate basis by the end of 2024. Assuming we maintain our current growth trajectory of sales from existing key outpatient accounts, as well as achieve forecasted shipments to new accounts by the beginning of fourth quarter.

Joe Tudisco: Thank you. Yeah, so I'll let Liz get into the kind of the clinical timeline in a second. But I think you're asking me about his financing lesson. And I want to kind of comment on a couple of things and make sure that we're clear. So, you know, I continually, we don't need to do any type of, we'll take large diluted financing at this time, right? We've got a revenue run rate that I feel pretty good about. It's even like five weeks into starting shipments that's offsetting, or at a large amount of operating expenses. And, you know, I walked through with Jason kind of, you know, you've got these clinical budgets for the four programs relatively modest.

Speaker Change: Thank you.

Speaker Change: Yeah, so I'll let Liz get into the kind of the clinical timeline in a second, but I think you're asking about his financing, Wes, and I want to kind of comment on a couple of things and make sure that we're clear. So, you know, I

Speaker Change: I continue to believe we don't need to do any type of large dilutive financing at this time. We've got a revenue run rate that I feel pretty good about, just even five weeks into starting shipments, that's offsetting a large amount of operating expenses.

Joseph Todisco: We've got a revenue run rate that I feel pretty good about, just even five weeks into starting shipments that's offsetting a large amount of operating expenses. I walked through with Jason, you've got these clinical budgets for the four programs, relatively modest. Even if you overlay them right on top of each other at peak, I feel that with, you know, cash on hand, operating cash flow, we have the ability to fund these studies without any type of, call it, large financing.

Speaker Change: You know, I walked through with Jason, kind of, you know, you've got these, you know, clinical budgets for the four programs, relatively modest, and even if you overlay them right on top of each other at peak, I feel that, you know, with, you know, with, you know,

Joe Tudisco: And even if you overlay them right on top of each other at peak, I feel that, you know, with this. Cash on hand, operating cash flow. We have the ability to fund these studies without any type of large financing. But that said, we do have the ATM facility in place, which gives the ability to raise small amounts of money at the market price. We use a little bit of it last quarter when the stock price was up on some higher volume days. We could continue to utilize the ATM to supplement our cash flow from operations.

Joseph Todisco: I will now turn the call back over to Joe for closing remarks. Thanks Matt. Chromatics is executing well on our key objectives, and is hopeful to provide more substantive updates on sales progress and commercial uptake of FNCAP on our next quarterly call in November.

Speaker Change: Cash on hand, operating cash flow, we have the ability to fund these studies without any type of large financing. With that said, we do have the ATM facility in place, which gives us the ability to raise small amounts of money at the market price.

Joseph Todisco: With that said, we do have the ATM facility in place, which gives us the ability to raise small amounts of money at the market price. We used a little bit of it last quarter when the stock price was up on some higher volume days. We could continue to utilize the ATM to supplement our cash flow from operations, but that's currently how I'm thinking about the trajectory of the business and funding additional growth, and the timelines. Leszek Sulewski.

Operator: I appreciate everyone's continued support and Chromatics, and I'm happy to open the line for questions. Yes, thank you.

Operator: We will now begin the question and answer session. To ask a question, you may press the star or the one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw it, please press star, and two. At this time, we'll pause momentarily to assemble the roster. This point's first question concerned Gregory Renza with RBC Capital Markets.

Speaker Change: We used a little bit of it last quarter when the stock price was up on some higher volume days.

Joe Tudisco: But that's currently how I'm thinking about the trajectory of the business and funding additional growth.

Elizabeth Masson: And the timeline? Sorry, go ahead. Sure. Yes, thanks, Les. So the study is a base three study that has 12 months of intervention in it. We're looking forward to kicking it off as soon as we get feedback from the FDA or clear that 30-day statutory hold. We have a lot of enthusiasm from KPN docs, as this remains a very critical unmet need in this space. So I don't want to over-promise for enrollment, but we feel pretty positive that we'll have up to 25 sites in the U.S. that are actively engaged and interested to participate.

Joseph Todisco: Yes, thanks, Leszek Sulewski. So the study is a phase three study that has 12 months of intervention in it. We're looking forward to kicking it off as soon as we get feedback from FDA or clear that 30 days statutory cold. We have a lot of enthusiasm from KPN docs as this remains a very critical unmet need in this space. So I don't want to over promise for enrollment, but we feel pretty positive that we'll have up to 25 sites in the US that are actively engaged and interested in participating.

Speaker Change: and the timeline.

Speaker Change: Liz, sorry go ahead. Sure, yeah thanks Les.

Jason Butler: Hi, Joe, and team. It's Anishan for Greg. Congrats on the progress this quarter, and thanks for taking our questions. Just a couple from us. First, just when you think about CLA BSI, how do you read mission rates for CLA BSI compared to CRBSI? And how would you think about gearing your education and marketing strategy for DefendCath accordingly? And second, on the granted pass-through status for DefendCath, how can this be leveraged to facilitate uptake? Thanks so much. All right, thanks Anishan.

Liz: So, the study is a phase 3 study that has 12 months of intervention in it. We're looking forward to kicking it off as soon as we get feedback from FDA or clear that 30-day statutory hold.

Joseph Todisco: So I think what you're asking is the difference between a CLA BSI and a CRBSI if I'm not mistaken and kind of how that makes you differently in the data.

Speaker Change: We have a lot of enthusiasm from TPN docs as this remains a very critical unmet need in this space.

Speaker Change: So, I don't want to overpromise for enrollment, but we feel pretty positive that we'll have up to 25 sites in the U.S. that are actively engaged and interested to participate. We don't have a planned interim analysis in terms of a readout, but I certainly expect that we'll see something before 28.

Elizabeth Masson: We don't have a planned intern analysis in terms of a readout, but I certainly expect that we'll see something before 28. Great. Thank you. That. Thank you. Thanks for that. That's correct.

Liz Robert: We don't have a planned in-term analysis in terms of a readout, but I certainly expect that we'll see something before 20 days. Great, thank you. Thank you. And the next question comes from John Gionko with Anita McGowan. Hi, good morning.

Elizabeth Masson: So I'm going to let Liz just from a clinical definition standpoint kind of chime in on the difference between these two. But I think why that's relevant is from a TPN standpoint, we are designing the study for CLA BSI versus CRBSI. And I think the way to somewhat look at it before Liz gives the definition is that I guess all CRBSI's are CLA BSI's, but all CLA BSI's are not CRBSI's. CLA BSI's a little bit of a broader determination, but go ahead.

Speaker Change: Great, thank you.

John Gianco: And the next question comes on John Gianco with a need of a company. Hi, good morning. This is John on the research today, and congrats on the initial launch report, and thanks for taking our questions. And Grace, can you just touch on the process for the PENCAST trial and adoption across the patient and outpatient segments and any noticeable differences between those two processes? And then second, regarding the adaptive reimbursement process that's in place, is this kind of seamless and is really operating at this time, and is there something that most operators are familiar with?

Speaker Change: Bye.

Speaker Change: Thank you. Thanks a lot.

Speaker Change: And the next question comes from John Gionko with Needham & Company.

Operator: This is John on for Surge today, and congratulations on the initial launch report, and thanks for taking our questions. And first, can you just touch on the process for the PenCath trial and adoption across the inpatient and outpatient segments? Any noticeable differences between those two processes?

John Gionko: Hi. Good morning. This is John on for Surge today, and congrats on the initial launch report, and thanks for taking our questions. And first, can you just touch on the process for the PenCast trial and adoption across the inpatient and outpatient segments?

Elizabeth Masson: Yeah, exactly. So like Joe said, CRBSI is a subset of the larger CLA BSI. And CRBSI's need clinical correlation, so signs of steps that are positive peripheral blood cultures in the absence of an obvious source, others in the CVC. And CLA BSI's, which is your more general term, is a primary bloodstream infection in a patient that has had a central line within the 48-hour period before these symptoms develop. So you can think of the CLA BSI as a umbrella. And then there's a subset of types of infections after that that require different blood cultures or other clinical correlation to confirm them.

Joseph Todisco: And second, regarding the adaptive reimbursement process that's in place, is this kind of seamless and is really operating at this time? And is this something that most operators are familiar with? Yeah, I'm going to take the second question first, and I'm going to pass the first question over to Liz.

John Gionko: Any notable differences between those two processes? And then second, regarding the DAPA reimbursement process that's in place, is this kind of seamless and easily operating at this time, and is this something that most operators are familiar with?

John Gianco: Yeah, I'm going to take the second question first, and I'm going to pass the first question over the list. Look, in terms of the data, I think I kind of hit on it before. It is a relatively new reimbursement mechanism in the last couple of years. I'd say a lot of the operators are familiar with it, but for some it is still new and it's requiring some education. So all the systems are in place for the government to process these claims, and so that's not an issue. It's just whether or not a dial operator had ever processed the to DAPA reimbursement before and needs a little bit of assistance in understanding how to go about doing that.

Joseph Todisco: Look, in terms of the DAPA, I think I kind of hit on it before. It is a relatively new reimbursement mechanism in the last couple of years. I'd say a lot of the operators are familiar with it, but for some, it's still new, and it's requiring some education.

Speaker Change: Yeah, I'm going to take the second question first, and I'm going to pass the first question over to Liz. Look, in terms of the data, I think I kind of hit on it before. It is a relatively new...

Speaker Change: reimbursement mechanism in the last couple of years, I'd say a lot of the operators are familiar with it, but for some it's still new and it's requiring some education. So all the systems are in place, right, for the government to process these claims, and so that's...

Joseph Todisco: So all the systems are in place, right, for the government to process these claims, and so that's not an issue. It's just whether or not, you know, a DALS operator has ever processed a DAPA reimbursement before and needs a little bit of assistance and understanding how to go about doing that. Now, Liz, go ahead in terms of the inpatient versus outpatient kind of process. Sure, yeah, so they definitely are different processes,

Joseph Todisco: Thank you Liz. And I think to get your question on pass or status. So what pass or status allows is for the providers that install catheters and utilize the THENCAP during that catheter installation to build for the product on a buy and go basis, similar to any other kind of Medicare B product. So that's an ASP plus. It's a small part of the segment, but I think that it's meaningful because it's the first time the patient is getting the catheter.

Speaker Change: That's not an issue, it's just whether or not a dialysis operator has ever processed a DAPA reimbursement before and needs a little bit of assistance in understanding how to go about doing that. Now, Liz, go ahead in terms of...

Joe Tudisco: Now let's go ahead in terms of inpatient for dial patient kind of sure. Yeah, so they definitely are different processes, right? So, within an institution or a hospital setting, you've got a ton of varying factors here, right? Some of the operations infrastructure capacity to adapt, internal demand for the product, which is what the field team is very focused on. They're looking at safety data; they're engaging with us, and then you've got to get to PNT, right? And then after you get to PNT, if the product is approved, there's a process in terms of pulling it through to build it out in your EMR, build out your charge descriptions and master builds, get the pharmacy up to speed with dispensing and stocking, right?

Speaker Change: inpatient versus outpatient kind of process. Yeah, so they definitely are different processes, right? So within an institution or a hospital setting, you've got.

Liz Robert: So within an institution or a hospital setting, you've got a ton of varying factors here, right? System size, operations infrastructure, capacity to adopt, internal demand for the product, which is what the field team is very focused on. They're looking at safety data. They're engaging with us. And then you've got to get to P&T, right?

Speaker Change: a ton of varying factors here, right? System size, operations infrastructure, capacity to adopt, internal demand for the product, which is what the field team is very focused on. They're looking at safety data, they're engaging with us, and then you've got to get to P&T.

Joseph Todisco: So we want to protect the lines from the start. It's the opportunity to utilize THENCAP from the beginning with each patient, so that's essentially why we see it as meaningful, even though it's a small part of the population. Great. Thanks. Appreciate all the color. No problem.

Operator: Thank you.

Liz Robert: And then after you get to P&T, if the product is approved, there's a process in terms of pulling it through to build it out in your EMR, build out your charge descriptions and master build, get the pharmacy up to speed with dispensing and stocking, right? So it can be really efficient in certain institutions, and it can take many, many months depending on the bureaucracy you're dealing with in an institution. On the outpatient side, right, it is very much driven by the physicians, but there is an onerous and I would say rigorous operational out role for the clinics to do, right?

Speaker Change: Right? And then after you get to P&T, if the product is approved, there's a process in terms of pulling it through to build it out in your EMR, build out your charge descriptions and master build, get the pharmacy up to speed with dispensing and stocking, right? So it can be.

Jason Butler: And then next question comes in Jason Butler with a Citizens JMP. Hi. Thanks for taking the questions and congrats on the progress. First one, just in terms of the run rate for 3Q, how should we think about the 5.2 million and growth beyond that? I guess what I'm asking is, do you expect there to be essentially time taken now for those initial centers to work through those initial orders or should we see continued orders beyond the 5.2? And then can you give us a sense of how many centers in the outpatient setting you're actually seeing pull through from? Thanks. Thanks, Jason. So, you know, that's a, yeah, I'm a 5.2.

Elizabeth Masson: So it can be really efficient in certain institutions, and it can take many, many months depending on the bureaucracy you're dealing with in an institution.

Joseph Todisco: I think what I'm comfortable saying is that we've seen consistent orders repeatedly over the last four weeks, and we're seeing those at the clinic level, right, with repeats and restocking of similar size orders, so that gives us the impression those clinics are pulling that through into the patients, which is why I'm comfortable saying that, you know, we don't believe there's much of any trade stocking in that, in that third quarter number, so I hate to guide you with the back part of the quarter is going to look like I don't have a crystal ball, but I feel good about what we've seen from those first, you know, four weeks, four and a half weeks of shipment. In terms of how many centers, I, again, I turn out to give an exact number, it is, it is several hundred that we are currently shipping to.

Speaker Change: really efficient in certain institutions, and it can take many, many months depending on the bureaucracy you're dealing with in an institution.

Elizabeth Masson: On the outpatient side, right? It is very much driven by the physicians, but there is, it's an onerous, and I would say rigorous, operational outro for the clinics to do, right? These are already sometimes understaffed, working really hard, and you've got to do policies, procedures, protocols, order sets to get everything up to speed to roll this out nationwide in a clinic or even a small center, right? So there's a lot of work that goes into it. I think the uptake on an outpatient side can be a little bit faster, for sure, especially when you're looking at a smaller medium sized DO, but these are not overnight processes, and it takes a lot of time.

Speaker Change: On the outpatient side, right, it is very much driven by the physicians, but there is, it's an onerous and I would say rigorous operational out out out role for for the clinics to do right. These are already.

Liz Robert: These are already sometimes understaffed, working really hard, and you've got to make policies, procedures, protocols, and order sets to get everything up to speed to roll this out nationwide in a clinic or even a small center, right? So there's a lot of work that goes into it. I think the uptake on the outpatient side can be a little bit faster for sure, especially when you're looking at a small or medium-sized DO. But these are not overnight processes, and it takes a lot of time. They've got to train all of their staff, and we're a new innovative product, right? So there's a lot of training that goes into it as well.

Speaker Change: sometimes understaffed, working really hard, and you've got to do policies, procedures, protocols, order sets.

Speaker Change: to get everything up to speed to roll this out nationwide in a clinic or even a small center, right? So there's a lot of work that goes into it. I think the uptake on an outpatient side can be a little bit faster for sure, especially when you're looking at a smaller, medium-sized DO. But these are not overnight processes and it takes a lot of time. They've got to train all of their staff.

Operator: They've got to train all of their staff, and we're a new innovative product, right? So there's a lot of education that goes into it as well. So I would say from an expectation standpoint, I would set it that inpatient is going to take longer to adapt and pull through, and on the outpatient side, we're hoping for much faster adoption, and that's what the field team is focused on, on educating our clients and customers for. Great, thanks for the color. Thanks, Tom. Thank you.

Liz Robert: So I would say from an expectation standpoint, I would set it that inpatient is going to take longer to adopt and pull through. And on the outpatient side, we're hoping for much faster adoption, and that's what the field team is focused on educating our clients and customers for. Great, thanks for the color.

Speaker Change: and we're a new innovative product, right? So there's a lot of education that goes into it as well. So I would say from an expectation standpoint, I would set it that inpatient is gonna take longer to adopt and pull through. And on the outpatient side, we're hoping for much faster adoption and that's what the field team is focused on on educating our clients and customers for.

Speaker Change: Thank you.

Joseph Todisco: Thanks, John. Thank you. And now I'd like to turn the floor to Daniel Ferry, who will facilitate written questions. Thank you, operator, Joe. We have a few written questions from the audience.

Speaker Change: Great, thanks for the color.

Daniel Ferry: And now I'd like to turn to Daniel Ferry, who will facilitate written questions that have been submitted. Thank you, Operator, Joe. We have a few written questions from the audience.

Daniel Ferry: Thanks, John. Thank you. And now I'd like to turn the floor to Daniel Ferry who will facilitate written questions which have been submitted.

Jason Butler: Okay, great, and then could you just walk us through the comments that Matt gave about hitting break even by the end of 24 again, which what assumptions we would, we would need to consider to get to break even by the end of 24, thanks. Yeah, look, I think you've got a good sense for what are our operating expenses, we guided at 15 to 18 million op X, I think we came in at the low point of that for this quarter.

Daniel Ferry: Hi, first two. Go ahead. Yes. How was the contract going? How was the contract going with the previously announced top-tier mid-sized dialysis provider? Can you provide us any color on this contract's contribution to sales, and can you disclose who it is? Okay. Thanks, Dan.

Daniel Ferry: Thank you, Operator Joe, we have a few written questions from the audience.

Daniel Ferry: Thank you. Yes. How is the car truck going?

Daniel Ferry: Craig, first shoot. Go ahead.

Joseph Todisco: How is the contract going with the previously announced top-tier mid-sized dialysis provider? Can you provide us any color on this contract's contribution to sales? And Can You Disclose Who It Is?

Speaker Change: Yes, how is the contract going?

Daniel Ferry: How is the contract going with the previously announced top-tier mid-sized dialysis provider?

Jason Butler: Maybe it takes up a little bit, you know, as we get to the back part of the year, I think we've guided you on future clinical costs, which really don't kick in till next year and the year after. And even if you overlay those on top of each other, I think we're designing fairly modestly priced clinical programs that, you know, at peak, maybe three to four million in a quarter, probably in late 25 or 26.

Speaker Change: Can you provide us any color on this contract's contribution to sales?

Joseph Todisco: Okay. Thanks, Dan. So, I guess I'll start by saying I couldn't be happier with the relationship or what we're seeing from a kind of patient and product uptake standpoint. You know, we don't intend to provide any kind of customer-specific sales breakdowns at this time, but I will say that as the largest of our customers in terms of clinics, they're also currently the largest in terms of DefendCat utilization. So, they are a big driver behind our initial uptake, but we do certainly have material sales to other kinds of smaller to midsize customers as well. On the publicity front, I would say that they're a privately held organization that has asked us for the time being to not utilize their name in publications and focus on implementation and execution.

Speaker Change: And can you disclose who it is?

Joe Tudisco: So, I guess I'll start by saying I couldn't be happier with the relationship, or what we're seeing from a kind of patient and product uptake standpoint. We don't intend to provide any kind of customer-specific sales breakdowns at this time, but I'll say as the largest of our customers in terms of clinics, they're also currently the largest in terms of defend-cathed utilization. So, they are a big driver behind our initial uptake, but we do certainly have material sales to other kind of smaller to mid-sized customers as well. On the publicity front, I would say that there are a privately held organization that has asked us for the time being to not utilize their name and publications and focus on implementation and execution.

Speaker Change: Okay, thanks Dan.

Speaker Change: I guess I'll start by saying I couldn't be happier with the relationship or what we're seeing from a

Speaker Change: from a kind of patient and product uptake standpoint.

Speaker Change: We don't intend to provide any kind of customer specific sales breakdowns at this time.

Speaker Change: but I'll say as the largest of our customers in terms of clinics, they're also currently the largest in terms of defend cath utilization, so they are a big driver behind our initial uptake, but we do certainly have material sales to other kind of smaller to midsize customers as well.

Jason Butler: So, by the amount of revenue and or goes margin needed to cover the op X, I think gives you a sense of where we need to be running that. So you've seen our first kind of five weeks of shipments. I think it's conceivable that if we, and this is all with small and midside values operators, so if and if and when hopefully we do on board some larger accounts and we see increased volume move in the back part of the year. Sorry, I think that break even either dies, certainly achievable before the end of the year. Great. Thanks for taking the questions. Thank you.

Speaker Change: On the publicity front, I would say that

Speaker Change: But they're a privately held organization that has asked us for the time being to not utilize their name in publications and focus on implementation and execution.

Joseph Todisco: So, to that extent, you know, we're respecting the request of our, you know, currently largest customer and focused on building the business. As I mentioned, we do have a couple of other small-to-house organizations that are in the contract that we didn't separately announce for similar reasons. So, you know, we're happy with those relationships as well.

Joe Tudisco: So, to that extent, we're respecting the request of our currently largest customer and focus on building the business. As I mentioned, we do have a couple of other small dials organizations that are in the contract that we didn't separately announce for similar reasons. So, we're happy with those relationships as well.

Speaker Change: So, to that extent, you know, we're respecting the request of our, you know, currently largest customer and focused on building the business. As I mentioned, you know, we do have other, a couple of other small dialysis organizations that are under contract that we didn't separately announce.

Leszek Sulewski: And then next question, Council on less less key with our truest.

Joseph Todisco: Good morning. Thanks for taking my questions. Can you just talk about the progress on conversations on the dialysis operators, particularly the larger ones. And I guess separately what percentage of the market has your sales team touched. And if there are any reasons you perhaps are hearing any sort of hesitation on adoption, can you speak to those and then I have two follow ups. All right. Thanks. So, you know, obviously we've, I think we've been pretty candid that we're in discussions with one of the top two.

Speaker Change: for similar reasons, so we're happy with those relationships as well.

Daniel Ferry: Okay, great.

Daniel Ferry: Another one here. You commented today about Medicare Advantage being a sizable and growing group of Medicare patients.

Joseph Todisco: OK, great. Another one here. You commented today about Medicare Advantage being a sizable and growing group of Medicare patients. Can you explain how this is different from traditional Medicare for DefendCath? Also, how is it reimbursed?

Speaker Change: Bye.

Speaker Change: Okay, great. Another one here. You commented today about Medicare Advantage being a sizable and growing group of Medicare patients.

Daniel Ferry: Can you explain how this is different from traditional Medicare for defend-cath? Also, how is it reimbursed? How is it reimbursed and handled today?

Speaker Change: Can you explain how is this different from traditional Medicare for DEFENDCATS? Also how is it reimbursed? How is reimbursement handled today if a dialysis provider uses DEFENDCATS in a Medicare Advantage patient?

Joseph Todisco: How is reimbursement handled today if a dialysis provider uses DefendCath in a Medicare Advantage patient? And a follow-up here would, you know, what did you mean that... United expects to provide comparable to DAPA reimbursement, and will they always provide? Okay. Thanks, Dan. I'm sure that was a lot for you to consolidate. I'm going to try and break it down into pieces.

Daniel Ferry: If a dialysis provider uses defend-cath in a Medicare Advantage patient, and a follow-up here would, you know, what did you mean that United expects to provide comparable adaptive reimbursement, and will they always provide that? Okay, thanks, Dan. I'm sure that was a lot for you to consolidate. I'm going to try to break them down into pieces. So, I guess, first, Medicare Advantage in relation to traditional Medicare, it's essentially, right, it's a privatization of Medicare where managed care providers like United, Humana, they assume risk for all costs associated with it, with a Medicare patient in exchange for premiums and a fixed amount from the government.

Joseph Todisco: Certainly, I know we talked about that. You know, on the last call, I'd say that that remains the case. I do feel like we're pretty close. And I think what I would comment on timing, which is kind of what I think you're asking is that, you know, when you're dealing with larger organizations with multiple functional areas that need to weigh in on a contract. In fact, that process is maybe taking a little longer than I expected.

Speaker Change: And a follow-up here would, you know, what did you mean that United expects to provide comparable to DAPA reimbursement and will they always provide that?

Speaker Change: Okay, thanks Dan. I'm sure that was a lot for you to consolidate. I'm going to try and break them down into pieces.

Joseph Todisco: So I'm still optimistic about our ability to move forward and the signals I've received have been very positive. I'm one of the other LDOs. I do think they're taking a wait and see approach and we'll be re-engaging later in the year in terms of percent of the market touched. And a lot of the decision making, whether it's an SBO, you know, MBO or LDO that comes from the top down, right? So I think we're touching of the top 20 accounts that represent 99% of dialysis we're touching them all.

Joseph Todisco: I guess, first. Medicare Advantage, in relation to traditional Medicare, it's essentially, right, a privatization of Medicare where managed care providers like United Health Care and Humana assume risk for all costs associated with a Medicare patient in exchange for premiums and a fixed amount from the government. The M8 plan then essentially controls, you know, drug formulary and kind of manages treatment similar to private commercial insurance. So they're the ones that are on the hook for all the costs and the risk.

Joseph Todisco: Now, with TADAPA, historically, whether or not the MA plan paid to TADAPA would depend on what agreement was in place between the provider and that MA plan and whether or not there were new innovations covered under that agreement, which is why we're happy that United has communicated a willingness to pay TADAPA for DefendCats beginning on September 1st. We think that's incredibly meaningful. Now, in terms of, I guess, how those payments may track or change over time, I think that's the primary reason why we want to run this real-world evidence study and our biggest opportunity, you know, from a reimbursement standpoint.

Speaker Change: I guess, first.

Speaker Change: Medicare Advantage in relation to traditional Medicare it's essentially right it's a privatization of Medicare where managed care providers like

Joseph Todisco: So, since the MA plans, as I said, are on the hook for all of these medical costs for the patients, they're the ones that are going to bear the brunt of the downstream costs associated with getting a CRBSI. So, you know, if you think about it as each CRBSI can cost upwards of $60,000 a year, and then you add other downstream costs, it can get over $100,000. You know, we really see an opportunity here to generate real-world data during the TADAPA period and hope to utilize it to negotiate, let's say, longer-term, more sustainable reimbursement with the MA plans. And from a macro level, we expect the majority of SRD patients to be shifting into these MA plans over the next five years.

Speaker Change: United, Humana, they assume risk for all costs associated with a Medicare patient in exchange for premiums and a fixed amount from the government.

Joe Tudisco: The MA plan then essentially controls, you know, drug formulary and kind of manages treatment similar to private commercial insurance. So, they're the ones that are on the hook for all the costs and the risk. Now, with it to DAPA, historically, whether or not the MA plan, you know, paid it to DAPA, would depend on what agreement was in place between the provider and that MA plan, and whether or not there were new innovations, you know, covered under that agreement, which is why we're happy that United has communicated its willingness to pay to DAPA for defend cats beginning on September 1st.

Speaker Change: The MH land, and essentially controls, you know, drug formulary and kind of manages treatment similar to private commercial insurance. So they're the ones that are on the hook for all the costs in the risk.

Joseph Todisco: So the field team right now is focused on probably smaller and mid-sized accounts and pull through as well as the inpatient formulary process. And that's where we want them deployed. There was a third part of your question, let's apologize them. Just if you're hearing any sort of hesitation on adoption. Look, as I said, I think some are waiting to see what others are doing. I think you have some small operators that may be less familiar with how to process to DAPA or reimbursement, and we're trying to educate on that so that it's a little bit more familiar.

Speaker Change: Now, with the TADAPA, historically, whether or not the MA plan paid the TADAPA would depend on what agreement was in place between the provider and that MA plan and whether or not there were new innovations.

Speaker Change: you know, covered under that agreement, which is why we're happy that United has communicated a willingness to pay to DAPA for DefendCats beginning on September 1st. We think that's incredibly meaningful.

Joe Tudisco: We think that's incredibly meaningful.

Joe Tudisco: Now, in terms of, I guess, how those payments may track or change over time, I think that's the primary reason why we want to run this real-world evidence study and our biggest opportunity, you know, from a reimbursement standpoint. So, since the MA plans are on the hook for all of these medical costs for the patients, they're the ones that are going to bear the brunt of the Downshroom costs associated with getting a CRBSI. So, you know, if you think about it as each CRBSI, you know, can cost upwards of $60,000 a year, and then you add, you know, other Downshroom costs that can get over 100,000.

Speaker Change: Now, in terms of

Speaker Change: I guess how those payments may track or change over time, I think that's the primary reason why we want to run this real-world evidence study and our biggest opportunity from a reimbursement standpoint. So since the MAA plans, as I said, are on the hook for…

Joseph Todisco: This is still a relatively new reimbursement platform that's only a couple of years, and does change, right, even to DAPA change last year, so that there's some education that we are doing with the smaller operators on how to process reimbursement.

Speaker Change: for all of these medical costs for the patients, they're the ones that are going to bear the brunt of the downstream costs associated with getting a CRBSI.

Speaker Change: So, you know, if you think about it as each CRBSI can cost upwards of $60,000 a year.

Leszek Sulewski: That's helpful. On the 5.2 mill, can you speak to perhaps the weekly progression of that, and then the 95 pull-through rate to the clinics? Do you have an indication what percentage of that was utilization? Looks, because we're just a second question first. I think because we're shipping to a lot of these customers direct to clinic, which is why we're getting such good data on where it's going, I'd say we're not getting inventory on hand statements per se, but we are seeing repeat orders from similar clinics, so it gives us confidence that it's being utilized in the patients.

Joe Tudisco: You know, we've really seen opportunity here to generate real real data during the DAPA period and hope to utilize it to negotiate, let's say, longer term or sustainable reimbursement with the MA plans.

Speaker Change: Then you add other downstream costs, it can get over $100,000.

Speaker Change: You know, we really see an opportunity here to generate real-world data during this ADAPTA period.

Joe Tudisco: And from a macro level, you know, we expect, you know, the majority of these CRD patients to be shifting into these MA plans over the next five years. Chris.

Joe Tudisco: Great, thanks, Jill.

Daniel Ferry: Great. Thanks, Joe. Operator, this concludes the question and answer session. You may now close the call. Thank you. The conference has now concluded. Thank you for attending today's presentation and may God bless you all.

Operator: Operator, this concludes the question-answer session; you may now close the call. Thank you.

Joe Tedisco: Great. Thanks, Joe.

Speaker Change: Operator, this concludes the question and answer session. You may now close the call. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Operator: The conference has now concluded. Thank you for attending today's presentation, and we now just connect your lines.

Leszek Sulewski: I'm sorry, what was the first part of the question? The weekly progression. Weekly progressions. It's slightly somewhat consistent, right, I'd say. It's been fairly consistent. I think there was an initial, I'll say, patient sweep, right, patient identification that customers did, started moving patients on, so I'm hopeful that we'll see how as we move through, and to this quarter, next quarter, another let's say, patient sweep, where we adopt, or they look to convert additional patients.

Leszek Sulewski: Sounds like it's probably a good proxy for how the rest of the quarter will line up. Yeah, I hate to guide you that way less. Obviously, I said I don't have a crystal ball. I think that Greg or Jason may have had the same thing. I feel good with the revenue run rate that we're seeing. I think that's how I described it. That's fair, thanks, Joe. And great detailed color on the pipeline, very helpful.

Leszek Sulewski: Maybe follow up with that. It appears there's some cost involved. How do you intend to fund these studies? Not much on terms of costs, but just maybe talk about the funding there. And then just quickly, expected timeline on the TPN enrollment. And could we expect interim pipeline prior to 27, 28? Thank you. Yeah, so I'll let Liz get into the kind of the clinical timeline in a second. But I think you're asking me about his financing lesson.

Leszek Sulewski: And I want to kind of comment on a couple of things and make sure that we're clear. So, you know, I continually, we don't need to do any type of, we'll take large diluted financing at this time, right? We've got a revenue run rate that I feel pretty good about. It's even like five weeks into starting shipments that's offsetting, or at a large amount of operating expenses. And, you know, I walked through with Jason kind of, you know, you've got these clinical budgets for the four programs relatively modest.

Leszek Sulewski: And even if you overlay them right on top of each other at peak, I feel that, you know, with this. Cash on hand, operating cash flow. We have the ability to fund these studies without any type of large financing. But that said, we do at the ATM facility in place, which gives the ability to raise small amounts of money at the market price. We use a little bit of it last quarter when the stock price was up on some higher volume days.

Leszek Sulewski: We could continue to utilize the ATM to supplement our cash flow from operations. But that's currently how I'm thinking about the trajectory of the business and funding additional growth. And the timeline? Sorry, go ahead. Sure. Yes, thanks, Les. So the study is a base three study that has 12 months of intervention in it. We're looking forward to kicking it off as soon as we get feedback from FDA or clear that 30-day statutory hold.

Leszek Sulewski: We have a lot of enthusiasm from KPN docs, as this remains a very critical unmet need in this space. So I don't want to over promise for enrollment, but we feel pretty positive that we'll have up to 25 sites in the U.S, that are actively engaged and interested to participate. We don't have a planned intern analysis in terms of a readout, but I certainly expect that we'll see something before 28.

Joseph Todisco: Great. Thank you. That. Thank you. Thanks for that. That's correct.

John Gianco: And the next question comes on John Gianco with a need of a company. Hi, good morning. This is John on the research today and congrats on the initial launch report and thanks for taking our questions. And Grace, can you just touch on the process for the PENCAST trial and adoption across the patient and outpatient segments and any noticeable differences between those two processes? And then second, regarding the adaptive reimbursement process that's in place, is this kind of a seamless and is really operating at this time and is there something that most operators are familiar with?

John Gianco: Yeah, I'm going to take the second question first and I'm going to pass the first question over the list. Look, in terms of the data, I think I kind of hit on it before. It is a relatively new reimbursement mechanism in the last couple of years. I'd say a lot of the operators are familiar with it, but some for some it is still new and it's requiring some education. So all the systems are in place for the government to process these claims and so that's that's not an issue.

John Gianco: It's just whether or not a dial operator had ever processed the to DAPA reimbursement before and needs a little bit of assistance in understanding how to go about doing that. Now let's go ahead in terms of inpatient for dial patient kind of sure. Yeah, so they definitely are different processes, right? So within an institution or or a hospital setting, you've got a ton of varying factors here, right? Some of the operations infrastructure capacity to adapt, internal demand for the product, which is what the field team is very focused on.

John Gianco: They're looking at safety data, they're engaging with us, and then you've got to get to PNT, right? And then after you get to PNT, if the product is approved, there's a process in terms of pulling it through to build it out in your EMR, build out your charge descriptions and master builds, get the pharmacy up to speed with dispensing and stocking, right? So it can be really efficient in certain institutions, and it can take many, many months depending on the bureaucracy you're dealing with in an institution.

John Gianco: On the outpatient side, right? It is very much driven by the physicians, but there is, it's an onerous, and I would say rigorous, operational outro for the clinics to do, right? These are already sometimes understaffed, working really hard, and you've got to do policies, procedures, protocols, order sets to get everything up to speed to roll this out nationwide in a clinic or even a small center, right? So there's a lot of work that goes into it.

John Gianco: I think the uptake on an outpatient side can be a little bit faster, for sure, especially when you're looking at a smaller medium sized DO, but these are not overnight processes, and it takes a lot of time. They've got to train all of their staff, and we're a new innovative product, right? So there's a lot of education that goes into it as well.

Elizabeth Masson: So I would say from an expectation standpoint, I would set it that inpatient is going to take longer to adapt and pull through, and on the outpatient side, we're hoping for much faster adoption, and that's what the field team is focused on, on educating our clients and customers for. Great, thanks for the color. Thanks, Tom. Thank you. And now I'd like to turn to for Daniel Ferry, who will facilitate written questions, which have been submitted.

Elizabeth Masson: Thank you, operator, Joe. We have a few written questions from the audience. Hi, first two. Go ahead. Yes. How was the contract going? How was the contract going with the previously announced top-tier mid-sized dialysis provider? Can you provide us any color on this contract's contribution to sales, and can you disclose who it is? Okay. Thanks, Dan. So, I guess I'll start by saying I couldn't be happier with the relationship, or what we're seeing from a kind of patient and product uptake standpoint.

Elizabeth Masson: We don't intend to provide any kind of customer specific sales breakdowns at this time, but I'll say as the largest of our customers in terms of clinics, they're also currently the largest in terms of defend-cathed utilization. So, they are a big driver behind our initial uptake, but we do certainly have material sales to other kind of smaller to mid-sized customers as well. On the publicity front, I would say that there are a privately held organization that has asked us for the time being to not utilize their name and publications and focus on implementation and execution.

Elizabeth Masson: So, to that extent, we're respecting the request of our currently largest customer and focus on building the business. As I mentioned, we do have a couple of other small dials organizations that are in the contract that we didn't separately announce for similar reasons. So, we're happy with those relationships as well. Okay, great. Another one here. You commented today about Medicare Advantage being a sizable and growing group of Medicare patients. Can you explain how is this different from traditional Medicare for defend-cath?

Elizabeth Masson: Also, how is it reimbursed? How is it reimbursed and handled today? If a dialysis provider uses defend-cath in a Medicare Advantage patient, and a follow-up here would, you know, what did you mean that United expects to provide comparable adaptive reimbursement, and will they always provide that? Okay, thanks, Dan. I'm sure that was a lot for you to consolidate. I'm going to try and break them down into pieces. So, I guess, first, Medicare Advantage in relation to traditional Medicare, it's essentially, right, it's a privatization of Medicare where managed care providers like United, Humana, they assume risk for all costs associated with it, with a Medicare patient in exchange for premiums and a fixed amount from the government.

Elizabeth Masson: The MA plan then essentially controls, you know, drug formulary and kind of manages treatment similar to private commercial insurance. So, they're the ones that are on the hook for all the costs and the risk. Now, with it to DAPA, historically, whether or not the MA plan, you know, paid it to DAPA, would depend on what agreement was in place between the provider and that MA plan, and whether or not there were new innovations, you know, covered under that agreement, which is why we're happy that United is communicated to willingness to pay to DAPA for defend cats beginning on September 1st.

Elizabeth Masson: We think that's incredibly meaningful. Now, in terms of, I guess, how those payments may track or change over time, I think that's the primary reason why we want to run this real world evidence study and our biggest opportunity, you know, from a reimbursement standpoint. So, since the MA plans, are on the hook for all of these medical costs for the patients, they're the ones that are going to bear the brunt of the Downshroom costs associated with getting a CRBSI.

Elizabeth Masson: So, you know, if you think about it as each CRBSI, you know, can cost upwards of $60,000 a year, and then you add, you know, other Downshroom costs that can get over 100,000. You know, we've really seen opportunity here to generate real real data during the DAPA period and hope to utilize it to negotiate, let's say, longer term or sustainable reimbursement with the MA plans. And from a macro level, you know, we expect, you know, the majority of these CRD patients to be shifting into these MA plans over the next five years. Chris. Great, thanks, Jill. Operator, this concludes the question answer session you may now close the call. Thank you. The conference has now concluded. Thank you for attending today's presentation and we now just connect your lines.