Q4 2024 CorMedix Inc Earnings Call
A. J. D. M. W. M. P. W. M. M. M. M. M. M. M. M. M. M. [inaudible]
Speaker Change: Good day and welcome to the CorMedix Inc. fourth quarter in full year 2024 financial results conference call.
All participants will be in listen only mode.
Speaker Change: Please note today's event is being recorded. I would now like to turn the conference over to Dan Ferry with Life Side Visitors. Please go ahead.
Speaker Change: Good morning, and welcome to the Cormedix fourth quarter in full year 2024 earnings conference call.
Speaker Change: Leading the call today as Joe Todisco, Chief Executive Officer of Cormedics
Speaker Change: and he is joined by Dr. Matt David, Executive Vice-Resident and CFO , Beth Zellnet-Coffin, EVP and Chief Legal and Compliance Officer, Liz Horlberg, EVP and Chief Clinical Strategy and Operations Officer, and Erin Mistry.
EVP and Chief Commercial Officer.
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, which is within the meeting, set forth in the private security litigation reform act of 1995.
Speaker Change: These statements are statements other than statements of historical fact regarding management expectations, beliefs, goals, and plans about the company's prospects and future financial
Speaker Change: Actual results may differ materially from the estimates and projections of which these statements are based due to a variety of important factors.
Speaker Change: including the wrist and uncertainties described in greater detail in CorMedix filings with the FEC, which are available free of charge at the SEC's website or upon request from CorMedix.
Speaker Change: CorMedix may not actually achieve the goals or plans described in these forward-looking statements. Investors should not place undue reliance on these statements.
Speaker Change: CorMedix does not intend to update these four-ling statements except as required by law.
Speaker Change: During this call, the company will discuss certain non-GAAP measures of its performance. GAP to non-GAAP financial reconciliation and supplemental financial information are provided in Cormedix earnings release in the current report on form 8K
Speaker Change: At this time, it's now my pleasure to turn the call over to Joe Tisco, Chief Executive Officer of Cormedics. Joe, please go ahead.
Thank you, Dan.
Joe Todisco: Good morning everyone, and thank you for joining us on this call. Having completed our initial partial year of commercial launch at DefendCath, I'm incredibly proud of the team's efforts, and pleased with the commercial results thus far.
Joe Todisco: The fourth quarter saw continued growth with both existing as well as new customers in the outpatient segment, which was the primary driver of our strong revenue and profit results for both Q4 and full year 2024.
Joe Todisco: Net revenue for the fourth quarter and full year were 31.2 million and 43.5 million, respectively, both of which exceeded Wall Street consensus prior to our pre-announcement on January 7th.
Joe Todisco: The fourth quarter was also the first profitable commercial quarter in the company's history, with net income of $13.5 million and adjusted EBITDA of $15.3 million.
Joe Todisco: Fourth quarter results were driven by strong uptake amongst patients at U.S. Renalcare, ramping implementation at our mid-sized customers IRC and DCI, as well as utilization by other small outpatient dialysis customers.
Joe Todisco: While we are not going to provide full-year revenue guidance at this time, we currently estimate that net revenue from existing purchasing customers for the first six months of 2025 should be in the range of $50 million to $60 million, with more than $33 million expected in the first quarter.
Joe Todisco: DefendCath's net selling price has been fairly stable throughout the first three quarters of outpatient commercialization. However, we do expect to begin to see some net price erosion beginning in the second quarter of 2025.
Joe Todisco: With respect to patient growth opportunities there are still some potential for new patients with existing outpatient customers.
Joe Todisco: Never to a large extent our ability to grow patient volumes significantly in the back part of 2025 will be contingent upon the timing of purchasing and scale of implementation by our contracted large dialysis organization customer.
Joe Todisco: Prior to year end, we met with our contracted L. D O customer who communicated to core medics to think catheter limitation was pushed into 2025 due to operational resource constraints.
Joe Todisco: Over the course of February and early March we've had multiple meetings with this customer provided significant requested information around resources available at core medics to assist with training and the implementation of defend Caf and we remain hopeful the customer will begin ordering and commence utilization prior to mid year.
Joe Todisco: Turning to the inpatient segment, we have started to see utilization increase at a handful of larger hospitals and we are hopeful to increase penetration as we move throughout 2025.
Joe Todisco: Back in January we announced a change to our inpatient commercialization strategy, whereby we reorganized our field team covering outpatient and inpatient customers. This process is now complete as we are partnering with <unk> health to build a dedicated inpatient field team that is highly experienced in the hospital formulary process and a launch of first in class.
Joe Todisco: <unk> in the setting of care.
Joe Todisco: We also recently announced a partnership with WSI to provide marketing and promotional resources for defend cath specifically to facilities operated by the Veterans administration.
Joe Todisco: I am happy to announce that the new inpatient team is nearly fully staffed and is expected to be active in the field in the next four to five weeks.
Joe Todisco: The team contracted through WSI has already commenced promotional activities to VA facilities.
Joe Todisco: While we do not currently report inpatient sales as a separate segment, we do expect to see meaningful growth in this setting of care by the end of 2025 with an increased contribution to overall revenue and earnings in 2026 and beyond.
Joe Todisco: Focusing now on our clinical developments, we are in the process of beginning our phase III clinical study for the reduction of central line associated bloodstream infections or collapses in patients receiving total parenteral nutrition or TPN through with central venous catheter.
Joe Todisco: We began site selection in February and expect to begin patient enrollment for this study in the second quarter of this year.
Joe Todisco: As we communicated previously is the 12 month study in less than 150 patients and we are targeting completion of the study and submission of a new drug application to FDA by the end of 2026.
Joe Todisco: We recently submitted to F D. A an application for orphan drug status for this indication and are awaiting fda's determination of eligibility.
Joe Todisco: The company's goal for T. P. N is to obtain FDA approval for an expanded use of our corroding and heparin catheter lock solution in the late 'twenty twenty-seven to early twenties 28 timeframe and we estimate annual peak sales potential in this indication to be in the range of $150 million to $200 million.
Joe Todisco: We will provide investors with updates on progress in this important area of unmet need as we move forward.
Joe Todisco: During our previous earnings call. We also discussed three additional clinical initiatives all having either commenced in 2024 or expected to begin in 2025.
Joe Todisco: The most meaningful of the three from a data value standpoint is our real world evidence study, which we are running in cooperation with our study partner U S renal care.
Joe Todisco: Our hope with this study and which we expect to evaluate outcomes of more than 2000 patients over 24 months would be to generate real world evidence around the impact of defend cat utilization on cost of patient care infection rates hospitalizations mortality and multiple other metrics such as lost chair time and see our BSI related.
Joe Todisco: Antibiotic use.
Joe Todisco: Data collection for this study has already commenced.
Joe Todisco: In addition to our adult T P N and real World evidence studies, we will also be commencing a study in pediatric hemodialysis in 2025. This will be a relatively small study spread over several years.
Joe Todisco: As we expect patient enrollment to be a challenge given an extremely small patient population.
Joe Todisco: The need for very personalized protocols for these ultra vulnerable patients.
Joe Todisco: This pediatric study is a post marketing requirement under the pediatric research equity Act by the F D. A.
Joe Todisco: We have FDA concurrence on the final study protocol.
Joe Todisco: We currently expect patient enrollment to begin in the third quarter of 2025.
Joe Todisco: And we expect this study to span three to five years.
Joe Todisco: Yeah.
Joe Todisco: Lastly, in addition to our other clinical initiatives. We've commenced an expanded access program for high risk populations, including but not limited to pediatric T. P. M peritoneal dialysis patients with refractory peritonitis and neutropenia oncology patients utilizing a C V C.
Joe Todisco: These high risk patients are those that have exhausted other infection prevention methods and unfortunately remain at significant risk for Comorbidities and mortality.
Joe Todisco: We are fielding a high number of requests for participation in this expanded access program and currently expect.
Joe Todisco: Dosed under this program in the second quarter of this year.
Joe Todisco: I would now like turn the call over to Matt to Scott to discuss the company's fourth quarter and full year financial results and financial position Matt.
Matt: Thanks, Joe and good morning, everyone.
Matt: I am pleased to be here today to provide an overview of our fourth quarter and full year 'twenty 'twenty four financial results as well as an update on core metrics as cash position the.
Matt: The company has filed its annual report on Form 10-K for the year ended December 31st 2024, I urge you to read the information contained in the report for a more complete discussion of our financial results.
Matt: With respect to our fourth quarter of 2024 financial results.
Matt: Our net revenue for the fourth quarter of 'twenty 'twenty four amounted to $31 2 million.
Matt: <unk> achieved profitability in the fourth quarter as our net income was $13 5 million or 22 per share compared with a net loss of $14 8 million or <unk> 26 per share in the fourth quarter of 2023.
Matt: The net income recognized in 2024 was driven by the profits associated with net sales of defend cap following the product's launch in 2024.
Matt: Operating expenses in the fourth quarter of 2024 increased 9% to $17 1 million compared with $15 7 million in the fourth quarter of 2023, the increase was driven by higher selling and marketing and G&A expenses offset by a decrease in R&D.
Matt: R&D expense decreased by 26% to $1 7 million driven by the approval of the Venkat.
Matt: Cosmetics is now reporting selling and marketing expense and general and administrative expense as separate line items on an apples to apples basis <unk> expense increased 1% to $8 3 million in the fourth quarter of 'twenty 'twenty, four compared with $8 2 million in the fourth quarter of 'twenty three.
Matt: G&A expense increased 36% to $7 1 million in the fourth quarter of 2024 versus $5 2 million in the fourth quarter of 2023, the increase and that's what I'm expense was attributable primarily to increased marketing efforts and new personnel inclusive of our field sales organization.
Matt: And support for the commercial launch of defend Cat.
Matt: The increase in G&A expenses, primarily due to increases in personnel costs in preparation for support activities related to our commercial launch.
Matt: With respect to our full year 2024 financial results.
Matt: Total net revenue during 'twenty 'twenty four amounted to $43 $5 million. This marks the first full year core <unk> is reporting net revenue since launching defend cat in spring summer of 'twenty 'twenty four.
Matt: Total operating expenses during the full year 2024 amounted to $62 6 million compared with $49 million in 2023, an increase of 28%.
Matt: R&D expense decreased 70% to $3 9 million driven primarily by the approval of defense calf.
Selling and marketing expense increased 59% to $28 7 million compared with full year, 2023, and G&A expense increased 69% to $30 million compared with 2023.
Matt: The increases in S. N M and G&A were driven primarily by new personnel and cost to support the commercial launch of defend cap.
Matt: We recorded net cash used in operations during 'twenty, 'twenty, four or 56 million compared with net cash used in operations of $38 4 million in 2023.
Matt: The increase is premier primarily driven by an increase in trade receivables and inventories offset by a net increase in the change of accrued expenses and accounts payable and the decreased net loss.
Matt: The company has cash and cash equivalents of $51 7 million as of December 31.
Matt: Yeah.
Matt: 2024.
Matt: Based on accounts receivable collection throughout first quarter of 2025 and to a lesser extent proceeds from ATM issuance, we anticipate completing first quarter of 'twenty twenty-five with at least $75 million in cash and cash equivalents.
Matt: As described in our January 7th release, we are guiding to 2025 cash operating expenses of approximately $72 million to $78 million.
Joe Todisco: The increase over 'twenty 'twenty four spending levels is expected to be primarily driven by an increase in R&D spending on clinical initiatives I will now turn the call back over to Joe for closing remarks, Joe Thanks, Matt.
Joe Todisco: Chromatics working diligently on all fronts to increase our existing customer base as well as expand the use of defend cath to new therapeutic indications I. Appreciate everyone's continued support in <unk> and I'm happy to take questions.
Joe Todisco: Thank you we will now begin the question and answer session.
Joe Todisco: So that's a question you May press Star then one on your telephone keypad.
Joe Todisco: If you're using a speaker phone asks can you. Please pickup your handset before pressing the keys.
Joe Todisco: If at any time. Your question has been addressed you would like to withdraw your question. Please first started them too.
Joe Todisco: After the start we'll pause for just a moment to assemble our roster.
Speaker Change: And today's first question comes from Roanna Ruiz with Leerink partners. Please go ahead.
Roanna Ruiz: Hey, good morning, everybody.
Roanna Ruiz: So I just have a question about the cineaste health partnership in your build out of the in patient sales team.
Roanna Ruiz: Are your first steps for this team once they're fully launched and is it do you have any color on what the ramp might look like in the inpatient setting for defend catheter for a time.
Speaker Change: Well look let me I'll comment on the inpatient kind of ramp and then I'll, let Aaron and lives come in a little bit on the team and its deployment.
Speaker Change: So you know obviously, we were a little bit slower at the gate on the inpatient side last year, that's not unusual for the setting of care for these types of launches.
Speaker Change: It takes quite a while to work through P. N T processes.
Speaker Change: I am pleased with what we've seen in the first quarter I know, we as I said, we don't report anything from a from a separate segment standpoint on the on the inpatient side, but you know right now for the first quarter in.
Speaker Change: Inpatient is looking to be about 3% of unit volume and four to five per cent of dollars. So I feel pretty good about that trend inpatient as a as a total is 10% of the unit volume of the overall market opportunity. So if we can move toward there right as we get into 2026, I think that certainly it.
Speaker Change: Target that Oh, we we'd like to try to achieve you know where we're the process of just finally, completing the staffing of the last.
Speaker Change: Two to three roles right to fill out the the team completely training is near complete and we hope to have them out in the field and in the next four to five weeks, but Aaron do you want to comment anything beyond that.
Aaron: Sure I think that just like what we plan for them to do it right out of the gate is to focus on the large academic medical centers similar as before and they're not starting from scratch days.
Speaker Change: These hospitals either house I'm.
Speaker Change: Going through the P&C process now where they have already ordered at the Suncoast and so we're just making sure that they've got the support they need and they ramp take to order more and we're also aligning them closely with VA medical centers, they're typically in a scene.
Speaker Change: Territory or region.
Speaker Change: Got it thanks and second one for me I noticed on the call you talked about net price erosion starting into Q O Q.
Speaker Change: You just elaborate a bit on the degree of the erosion could it flow into some of the subsequent quarters as well.
Speaker Change: Yeah. Thanks, Ron I think it'd be good to comment on on the guidance, we gave first and kind of what it means right. So you know I know, it's unusual to to to guide for a partial part of the year, but the way we're kind of look at it here or the way I think investors should look at it is you know the $50 million to $60 million range is really I guess, what you would think of as our as our base.
Speaker Change: This right in terms of the customers that were there were really buying.
Speaker Change: By year end and then you know into the early part of the first quarter certainly to the extent, we bring in either new customers.
Speaker Change: Obviously, new customers, there's upside right from those numbers, if if certainly if our L. D O customer starts buying in the second quarter right that there's upside in those numbers now.
Speaker Change: Now when we talk about price erosion it.
Speaker Change: I'm not going to I don't know that I can give you an exact percentage, but the way in which we're thinking about it is our our agreements with customers in the way that we're currently priced there are let's say discounts and rebates off of government a S. P and government ISP has remained kind of stable right. It starts out at WAC during to damper in and then it adjusts for the firm.
Speaker Change: Quarter, I think it was down only 1% from from what it was the prior quarter next quarter is still a second quarter going to be fairly stable in the third quarter, you know it it should come down a little bit.
Speaker Change: But we're gonna have to or where we're expecting to take a a shelf stock adjustment at the end of the second quarter right as we move into third and what we don't really have a handle on right now is exactly how much inventory you know we will be in the channel by the end of the second quarter. So that's something that we're still working through in that kind of factors into.
Speaker Change: The range that we gave a four for revenue from existing base you know, what we'll call the existing base business over the over the first part of the year.
Speaker Change: Yeah.
Speaker Change: Got it helpful. Thanks.
Speaker Change: Thanks.
Speaker Change: Thank you and our next question today comes from Jason Butler Citizen JMP. Please go ahead.
Jason Butler: Hi, Thanks for taking the question and congrats on the progress in the quarter.
Can you maybe just give us some more color about the process that the contracted L. B O is going through and your interactions that kind of just reinforce your confidence that they will begin ordering and then a couple of months next few months.
Speaker Change: Yeah. Thanks, Jason look I think what I can say at this point of time is we're being as supportive as we can possibly be we've had a lot of information requests.
Speaker Change: <unk> come from them right, specifically around support services, we could provide for training for reimbursement.
Speaker Change: And where we're making our staff available to them radical kind of across the board. So I as I said, we're you know we're hopeful that we'll stick with the original kind of plan or communicated timeline of of implementation by by mid year, but that's really all I have to go on at this point in time.
Speaker Change: Okay helpful. And then just from a in terms of the magnitude of use within the L. B O has that number remained consistent throughout your dialogue with them.
Speaker Change: Yeah look they haven't they haven't given us any indication right now that that that number or theyre going to deviate from that number but we do know they're there they're looking at implementation I think theres a possibility that number could be higher there's possibility that number could be lower right. I think what we're trying to do right now as I said is is make all of the resources of <unk> available to them.
Speaker Change: And hopefully accelerate the rollout both helped in terms of speed and scale.
Speaker Change: Great and then just a second one from me in terms of potential new customers, obviously theres. The other L. D. O could you give us an update there but beyond that are there other smaller providers that are you potentially could come online in the second half of the year. Thanks.
Okay.
Speaker Change: Yeah. Thanks look with respect to the other L. D O US obviously, we remain in communication with them. We've we've provided them additional information I think candidly, we haven't moved the needle there as much as we would've liked to over the past couple of months, we are still working there call it top down right through the senior level.
Speaker Change: Management. We've also started to work their bottom up right. These a lot of these.
Speaker Change: Lars.
Speaker Change: The large dialysis operators they have joint venture owned owned entities, where the JV partner has some decision making authority. So we've.
Speaker Change: Started to work through some of those joint venture organizations that.
Speaker Change: That have expressed interest in deferred Catherine we're hopeful to kind of make inroads there over the over the next two to three months.
Speaker Change: On the small side, yes, right there is there.
Speaker Change: There are a lot of I guess first I'd say, we are shipping to a number of small customers, where we don't talk about them specifically some may have 10.
Speaker Change: Yeah, 10, dialysis center and somebody May have 20.
Speaker Change: But you know in addition to you know some health systems that have for a 10% to 25 hospitals.
Speaker Change: But yes, that's absolutely part of our focus over the next year.
Speaker Change: Part of 2025 to build inroads with those those smaller customers and to increase ordering size and frequency.
Speaker Change: Okay, great. Thank you for taking my questions.
Gregory: Thank you and our next question today comes from Gregory <unk> with RBC capital markets. Please go ahead.
Speaker Change: Hi, guys its a niche on for Greg Congrats on all the progress and thanks for taking our questions. Just a couple from US first just answer that but how should we be thinking about patient applicability and what are your thoughts and trends in coverage such as Medicare advantage over the next two to three years and second what are the key levers you look to pull to maximize uptake of deferred cost.
Speaker Change: To ensure the best possible posted out but add on adjustment. Thanks, so much.
Speaker Change: Thanks finished look I think with respect to to dapper I'm not sure what you meant by applicability, but in terms of what we're seeing I'll start out with what we're seeing from Medicare advantage now right. So when we look at our payer claims.
Speaker Change: We launched the product in mid 2024 in the outpatient setting and initially a 100% of claims where fee for service right because the Medicare advantage there was a little bit of a lagging in picking up to that and as we move toward the back part of last year, we started to see the trend going.
Speaker Change: Toward toward Medicare advantage, I think we closed out last year with about 25 or 30% of our claims being Medicare advantage through this first part of the first quarter, 40% of our claims are our Medicare advantage and other payors and 60% are fee for service. So that's certainly the trend we want to see when you look at the broader.
Speaker Change: ESR D market 80, 85% of it is Medicare and within Medicare half of it is fee for service and half is is Medicare advantage, we do see the Medicare advantage market share of Medicare growing over time, we do think it ultimately will become 70% of of ESR D patients and we do see that as a good opportunity.
Speaker Change: Unity for <unk>, so what we're doing to sit to better prepare ourselves caught for the out years of the DAP and beyond is the real world evidence study that we're running in collaboration with U S. Renal care right a lot of that data and and you know it was specifically around the former co economic benefits.
Speaker Change: Of defend Caf is what we'd like to utilize as part of a direct contract negotiation with the MA plans right for four separate and more sustainable reimbursement.
Speaker Change:
Speaker Change: Did I address the second question as well in Asia.
Speaker Change: Yes, that's very helpful. Thank you.
Speaker Change: Alright.
Speaker Change: Yeah.
Speaker Change: Thank you and our next question comes from US So Lucy with tourists Securities. Please go ahead.
Speaker Change: And this is Julian on for last thanks for taking our questions.
Speaker Change: We recently saw the news on Fda's acknowledgment of bloodlines shortages that might impact hemodialysis procedures.
Speaker Change: Can you provide any commentary if this has any.
Speaker Change: Impact on utilization or uptake of jetson cap. Thank you.
Speaker Change: Yeah, Hi, Thanks, Steven.
Speaker Change: No it's not it's not likely to have any impact, but I'll, let Liz explained why.
Speaker Change: Yeah. So thanks for the question.
Speaker Change: The good news is that there are two equivalent alternative manufacturers for that so hemodialysis isn't going to stop I think that the dialysis providers feel pretty good about that.
Speaker Change: But I don't anticipate any impact to defend cap utilization with us it's simply a manufacturing challenge that can be addressed with alternatives.
Speaker Change: Okay, Great and then just a quick second one for me.
Speaker Change: Brian any updates on the status of defend cast manufacturing capacity, there been any readjustments needed or or challenges to filling the open purchase orders do Q1. Thank.
Speaker Change: Thank you.
Speaker Change: I'm sorry, what was that was that question around inventory availability.
Speaker Change: Yeah, Yeah, just your view.
Speaker Change: Are there any challenges in selling the 24 million and no no no. We we have.
Speaker Change: More than a year's worth of finished dosage on hand at our current run rate.
Speaker Change: We're well situated.
Speaker Change: Great. Thank you.
Speaker Change: Thank you and our next question comes from Serge belongs with Needham and company. Please go ahead.
Speaker Change: Hi, Good morning. This is John on for Serge today, Thanks for taking our questions first if you just quickly give us a you know the current business mix between the various ideas that you have on board, obviously U S renal care.
Speaker Change: Been here has been your anchor thus far.
Speaker Change: And secondly in terms of the expectations for the TTM program are these patients going to be similar to those that were enrolled in Milwaukee trial in terms of CRB outsized susceptibility.
Speaker Change: Alright.
Speaker Change: Thanks, John I'll in a minute I'll, let Liz comment on the study design for T. P. M from a business mix standpoint, I think we have exact percentages and in the in the 10-K for for where we closed out last year.
Speaker Change: Obviously U S renal care still remains more than more than 80%.
Speaker Change: Of order so that through that period.
Speaker Change: It is coming down a bit.
Speaker Change: And that I don't think we're gonna be providing specific customer specific guidance.
Speaker Change: But we will reevaluate as we go forward.
Speaker Change: To comment on the study design on T. P. M. Sure. So our mutual guard study, which is our phase three randomized double blind two arm study, which is looking at the efficacy and safety of deferred and cath for adult patients receiving TPN is really focused on those that have had a class C. In the last 12 months, we know that patients.
Speaker Change: That had had a class C are at higher risk to have another one and they have an average infection rate of 20% to 25%. So.
Similar queued dialysis patients in the sense that they are very vulnerable to infection and they may be immuno compromised for a multitude of reasons right. That's why they are probably on G. P M.
Speaker Change: But unlike dialysis these are folks that access their catheter on a daily basis, not three times a week like you would see sales.
Speaker Change: Does that answer your question.
Speaker Change: Yeah, that's great. Thank you very much.
Speaker Change: Yeah.
Speaker Change: Thank you and this concludes the army to a question and answer session I'd like to turn the conference back over to Dan Ferry from outside advisers written questions.
Speaker Change: Thank you operator.
Speaker Change: Oh, we do have some written questions from the audience.
The first one.
Speaker Change: Did the change in C. M M I, which is the center for Medicare and Medicaid innovation.
Speaker Change: Did did that policy impact patient uptake in the first quarter.
Speaker Change: Okay. Thanks, Dan I think I think what you're referring to is the policy change that took place back in November.
Speaker Change: That.
Speaker Change: Removed or are the patients who participate in a N a.
Kidney care entity are the benchmarks they excluded to data from the benchmark. So there. They were now allowed to accept a dapper payments and not be Penalised Ah I think at the time, we guided we did expect a patient lift of somewhere around 15% to 20%. We did see that throughout the first quarter certainly was with a U S renal care.
Speaker Change: We saw a lift in in in patient numbers.
Speaker Change: As a result of that I think overall I think it's important for innovative products in general right. It was it was somewhat of a headwind that that thankfully CMS eliminated.
Speaker Change: Okay great.
Speaker Change: I have another one here.
Speaker Change: Proposed changes from the New administration.
Speaker Change: Certainly cause volatility in the sector.
Speaker Change: Have you seen anything in these announcements.
Speaker Change: You see as a risk or possibly an opportunity.
Speaker Change: Yeah look I know, there's a lot of trepidation from investors right now certainly in the biotech segment right because the new administration and a potential tariffs on pharmaceuticals, I think the way we're looking at it specific to defend cat is definitely more more of an opportunity and I think I would.
Speaker Change: Divide it probably in a couple of buckets I think.
Speaker Change: If youre looking at you know the situation through the lens of let's say does right in and kind of taken.
Speaker Change: Taking cost out of out of government spend I think defend cat, there's something that fits very well with with that agenda right. So the government spends over $3 billion a year.
Speaker Change: Between inpatient and outpatient derived CRB S is in the in the hemodialysis space if.
Speaker Change: If we can replicate our clinical result in a real world setting we have the opportunity to offset a large amount of that of that spend.
Speaker Change: You know if if you're in a second I think if you're looking at it through the lens of let's say make America healthy again right type thing. We I think we also fit pretty well right with it with that type of mindset, where.
Speaker Change: You know if we are able to have the again replicate our clinical results in a in a real world setting and have that type of impact on infections. You know a byproduct of that is is you know you're reducing hospitalizations from those infections you you'd ultimately be reducing antibiotic use that would result from those infections I think both of which fit.
Speaker Change: Pretty well with within that initiative I think more broadly for this administration, though I think we do get just because it's a change of administration not because of who the administration is I think there is the ability to look at it.
Speaker Change: Either past decisions through a new lens or new legislative initiatives in and certainly there's a lot of momentum right now on a on a bipartisan basis for hopefully to Dapple reform I think it's a depot was a really good start I think it's we've we've done okay, but I think everybody recognizes from a law.
Speaker Change: Term standpoint that it certainly could be better in terms of Incentivising innovation reimbursing providers for utilizing that innovation.
Speaker Change: And we do know that there's there's a bill that's that's hopefully making its way.
Speaker Change: You know through.
Speaker Change: Through Congress and hopefully will.
Speaker Change: He proposed before the end of this year and if not hopefully CMS through rulemaking can make some more positive adjustments, but I think you know for us in our situation specifically I think we see a lot of opportunity.
Speaker Change: Great. Thank you for that Joe.
Speaker Change: I have another one here that's a bit more on the commercial side of things.
Speaker Change: What resources, just core medics have available to help providers with.
Speaker Change: With processing reimbursement.
Speaker Change: Oh, that's a good question yeah. So we've set up a third party.
Aaron: You know hub, specifically to help the providers themselves are navigate claims and Aaron do you want do you want it it's through a third party or and do you want to comment on how that setup.
Aaron: Sure. It's a third party a prospectus and they work directly with both us and our customers across inpatient and outpatient settings.
Aaron: There's a couple of main focus area is one of those benefits verification for patients and then they have a very specific billing and coding expertise to make sure that claims are submitted correctly right. So for example on the outpatient side and cats on the inpatient side.
Aaron: This is off the J codes and then they also can navigate any payer policies are complex state Medicaid challenges that that we know about it too.
Aaron: Okay, great. Thanks.
Speaker Change: Thanks Sharon.
Aaron: It looks like we have one final one here.
Speaker Change: And I think you touched on this earlier Joe.
Speaker Change: But if signing an agreement.
Speaker Change: Or are currently contracted LBO requires greater capacity.
Speaker Change: What is your ramp time, and and how does core metrics.
Speaker Change: That was correct situated from a raw material standpoint.
Speaker Change: Okay. Thanks, So again, I guess that goes back to inventory.
Speaker Change: So I think we divide into a couple of buckets like I said before from a finished dosage standpoint, we're in pretty good shape.
Speaker Change: Based on the current run rate and the anticipated ramp that we kind of built into our L. E rate for four for the what we expected.
Speaker Change: The audio customer to do now if they wanted to ramp significantly beyond that.
Speaker Change: Our ability to pivot.
Speaker Change: It's pretty good right I don't think a ramp time is more than a handful of months, we have more than enough raw material on hand between let's say heparin enterolith in API.
Speaker Change: To cover that ramp over a year.
Speaker Change: Turnaround time on heparin API is is not significant.
Speaker Change: Turnaround time on.
Speaker Change: Roll it in API is a bit longer but we have several several lots on order.
Speaker Change: That would be delivered in the back part of the year So really.
Speaker Change: We've got two finished dosage contract manufacturers one of them is is definitely underutilized. So we we have finished dosage capacity, we can pivot to a minute I think it's a matter of a handful of months to be able to be able to ramp.
Joe Todisco: That's great. Thank you so much Joe.
Speaker Change: Operator.
Speaker Change: This concludes the written question portion of the call you May now close.
Speaker Change: Thank you ladies and gentlemen. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.