Q2 2025 CorMedix Inc Earnings Call & Business Update
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Now I'll turn the conference over to Daniel Ferry managing director lifestyle Advisors. Please go ahead.
Good morning, and welcome to the <unk> second quarter, 2025 earnings and corporate update conference call leading.
Leading the call today is Joseph <unk>, Chief Executive Officer of <unk>.
He is joined by Dr. Matt Damon Executive Vice President and CFO and.
In addition, Beth.
Zelnick, Hoffman, EVP, and chief legal and compliance officer.
Hurlbert, EVP and chief clinical strategy and operations Officer and.
And Aaron the mystery, EVP and Chief commercial officer.
Our online and will be available during the Q&A session.
Before we begin I would like to remind everyone that during the call management may make what are known as forward looking statements within the meaning set forth in the private Securities Litigation Reform Act of 995.
These statements are statements other than statements of historical facts regarding managements 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.
The risks and uncertainties described in greater detail and chromatics filings with the SEC.
Which are available free of charge at the Sec's website or upon request from <unk>.
<unk> may not actually achieve the goals or plans described in these forward looking statements.
<unk> should not place undue reliance on these statements chromatics does not intend to update these forward looking statements except as required by law.
During this call the company will discuss certain non-GAAP measures of its performance GAAP to non-GAAP financial reconciliations and supplemental financial information provided in <unk> earnings release.
And the current report on form 8-K filed with the SEC.
This information is available on the Investor Relations section of Chromatics website.
At this time, it's now my pleasure to turn the call over to Joe to Disco Cheeky Chief Executive Officer of Chromatics, Joe. Please go ahead.
Bill. Please go ahead.
Thank you Dan.
Good morning, everyone and thank you for joining us on this call.
Today concurrent with our second quarter earnings announcement.
<unk> announced the acquisition of Melinda Therapeutics, and a combination of cash and stock transaction.
This deal is transformational for cosmetics, creating a fully diversified specialty pharmaceutical company with a broad portfolio of commercial and pipeline products concentrated in the acute care and anti infectives areas.
The more into product portfolio in existing operational infrastructure are highly synergistic with <unk> current commercial portfolio and sales deployment and also provides an exceptional complement to future potential expanded indications for our lead product defend Cas I.
I would like to congratulate Kristine Miller went to therapeutics, President and CEO and her team on buildings to high performing organization with deep deep expertise in hospital acute care and infectious disease Arena.
From a financial standpoint, Melinda adds to <unk>, a stable base of revenue for which we are currently guiding full year 2025, Melinda revenue between 125 and $135 million spread across multiple assets.
Including six commercial stage product in the acute care and infectious disease space.
We see opportunities for growth from both the existing commercial assets as well as their lead pipeline drug opportunity a potential expanded indication for resile for the prophylaxis of invasive fungal diseases in adult patients undergoing allogeneic blood and marrow transplantation.
In terms of key highlights of the transaction. The acquisition is expected to be near term accretive with double digit EPS accretion in 2026, and we are forecasting that will drive mid to long term revenue and cash flow growth.
The addition of the pipeline opportunity of resign expanded indication for prophylaxis provides a valuable growth driver of future revenue.
And we estimate that if approved peak annual sales potential in this indication could exceed $200 million.
In the combined company. We also expect to capture significant near term operating expense synergies estimated in the range of $35 million to $45 million.
Which will foster near term EBITDA growth and EPS accretion.
We have already submitted the necessary filings to the federal Trade Commission in order to comply with the Hart Scott Rodino Act, otherwise known as HSR and we expect to close this transaction as early as September 1st pending regulatory approval and other customary conditions of closing.
The deal was structured as a combination of cash and stock with Deerfield management company to receive $40 million of the upfront purchase price in the form of <unk> equity.
Do you feel Theres also subscribed to $35 million of the $150 million debt offering executed concurrently with the transaction, which was used to fund the cash portion of the purchase price.
We are excited to have Deerfield as a long term investor in the new combined company given their long history, as an investor and Melinda and in the health care space.
On a pro forma basis, we are guiding to full year combined 2025 revenue of $305 million to $335 million.
With $180 million to $200 million of contribution from deferred Caf net sales.
In addition, we are guiding to pro forma fully synergize adjusted EBITDA for 2025 in the range of $150 million to $170 million.
Turning now to the core medical business and our second quarter updates. We were excited to announce a few weeks ago that our L. D O customer initiated purchases of defend cast.
And we can now confirm that they have initiated utilization in patients beginning in early July.
Based upon feedback from the L D O.
Their rollout plan involved a limited clinic rollout for the month of July to establish workflow practices and our system wide rollout that is taking place this week across all of their more than 2000 clinics.
We expect the system wide rollout to initially target approximately 6000 patients. However, we do not yet have visibility from the L. D O into the pace for that rollout as we get more information and better visibility from our L. D. O partner, we will update investors accordingly.
On the clinical front, we have made great progress on our phase III study for defend Caf in the reduction of Clap see in adult patients receiving parental nutrition through a CVC.
We now have multiple sites up and running and patients enrolled and we are on track to complete the study and submit the NDA in the late 2026 to early 2027 time frame.
We have also begun enrollment in our pediatric study for the reduction in CRB assai in pediatric patients undergoing hemodialysis through a CVC with the first patient expected to begin dosing in August.
Lastly, we have made the decision to perform an interim analysis of our real World evidence study with U S renal care and hope to be in a position to provide interim data by the end of 2025.
This is significant as we aim to evaluate patient outcomes and the impact of defend cap utilization on the cost of patient care infection rates hospitalizations and mortality.
All metrics that are critical to our goal of making defend cap the standard of care for the reduction of bloodstream infection in patients getting hemodialysis through a CVC.
I'd now like to turn the call over to Matt to discuss the company's second quarter financial results and financial position Matt.
Thanks, Joe and good morning, everyone.
I'm excited to be here today to provide an overview of our second quarter 2025 financial results as well as an update on <unk> cash position and recent financing activities.
The company will soon file its quarterly report on Form 10-Q for the quarter ended June 32025, 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 2025 financial results.
Our net revenue for the second quarter of 2025 amounted to $39 7 million.
Net income was approximately $19 8 million or <unk> 29 per share compared with a net loss of $14 2 million or <unk> 25 per share in the second quarter of 2024.
Positive net income recognized in 2025 was driven by commercial sales of defend cap.
Operating expenses in the second quarter of 2025 increased approximately 18% to $18 3 million compared with $15 6 million in the second quarter of 2020 for R&D.
R&D expense increased by approximately 275% to $2 4 million, primarily driven by increases in personnel and clinical trial services in support of the ongoing clinical studies.
Selling and marketing expense decreased 14% to $6 4 million in the second quarter of 2025, compared with $7 4 million in second quarter of 2020 for G&A.
G&A expense increased 25% to $9 5 million in the second quarter of 2025 versus $7 6 million in second quarter of 2024.
The decrease in selling and marketing expense was attributable primarily to marketing costs related to the commercial launch of defend count.
The increase in G&A expense was primarily driven by the noncash charges for stock based compensation and an increase in costs related to business development.
We recorded net cash provided by operating activities during the second quarter of 2025 of $30 million compared.
Compared with net cash used in operations of $14 million in the second quarter of 2024.
The increase is primarily driven by net income for the period versus a net loss in the prior comparison period and a decrease in trade receivables.
On June 27, <unk> announced the pricing of an underwritten public offering of common stock for which we received net proceeds of $82 4 million.
We noted in the press release at the time that the use of proceeds from the offering included general corporate purposes expenses related to R&D and potential strategic transactions that complement <unk> business.
In addition to strengthening our balance sheet. The transaction included a number of high quality, new and existing investors.
Concurrent with our announcement today of the acquisition of more into Therapeutics. We are also announcing the pricing of 150 million convertible debt offering with use of proceeds to fund the acquisition of Melinda.
The key terms of the convertible debt or five year tender with a 4% annual coupon and priced at a premium of 30%.
In addition to Deerfield. The investors include a small group of high quality life Sciences, institutional and convertible debt investors.
As reported today <unk> has cash and cash equivalents of $190 7 million as of June 32025.
The company expects to use approximately $110 million of cash on hand. In addition to the convertible debt proceeds to fund the upfront portion of the purchase price in the acquisition.
While <unk> on a standalone basis continues to track towards the low end of previously guided cash Opex, we expect to issue updated guidance over the coming months for the combined entity.
I will now turn the call back over to Joe for closing remarks, Joe.
Thanks, Matt.
<unk> is now firing on all cylinders with the implementation by R. L. D O customer commencing in July and the acquisition of Melinda targeted for closing in September we intend to provide.
Ride additional updates on the integration with Melinda over the coming months. We're excited about the platform, we are creating for future growth and the opportunity to continue to create shareholder value.
I appreciate everyone's continued support in <unk> and I'm happy to take questions.
Yes. Thank you we will now begin the question and answer session.
I'll ask a question you May press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys anytime your questions.
To withdraw it please press Star then two.
At this time, we will pause momentarily to assemble the roster.
And the first question comes from leaded to Michelle's with RBC capital markets.
Hey, guys. Its an issue on for Leo Congrats on the progress this quarter and the deal with them all into just a couple of quick questions from us.
First if you could just talk to us about the guidance dynamics, how you're getting to the 180 to 200 range for deferred Caf and what the sensitivities are there and second just quickly on <unk>. How are you thinking about the potential risks to the ongoing BARDA collaborations given the current policy and regulatory environment. Thanks, So much.
Thanks, and I appreciate the question.
So in terms of putting the guidance together.
Which to reiterate for defend cath regarding revenue in the $180 million to $200 million range.
It's based on what we see today in terms of customer orders and our estimation for what we think is conservative.
Conservative ramp towards the back part of the year we have.
Some visibility, but not full visibility yet of what we think the LDL could convert into in the coming months.
But obviously, we want to give ourselves room right. We do think there's potential upside, but this is where we are we are comfortable today.
Establishing establishing guidance at this part at this point in the year.
Look in terms of risks from our BARDA standpoint, you know certainly you know as we look at at the value that that Melinda brings and I'm going to go through.
Couple of things, we view the collaboration with BARDA is as upside potential not really something that that underwrote the value of the deal.
So to that extent.
Not a tremendous amount of of concern on our part in terms of what's driving the value of this transaction for chromatics, let's let's first and foremost this diversifies our revenue base and gives us a stable base of revenue.
It's expected to be near term and possibly immediately accretive depending on how quickly. We can we can start to capture synergies.
Which we will we will get a sense for in the in the upcoming weeks.
It is highly synergistic and not just from a operational overlap standpoint, but from a strategic direction standpoint, and where we want to take defend cast in terms of future indications.
There are additional potential indications for resile expand our pipeline gives us multiple shots on goal gives as an asset with significant growth potential.
And from a from a valuation standpoint I think this is this is a very attractive post synergy.
The valuation deal multiple for us right given the growth potential of the platform and the other assets.
And not to be overlooked they have a very strong and established team and in the in the hospital and acute care arena right. So this when we were been talking over the last month about the types of transactions. We would consider this really checks all the boxes and then some right. So we're super thrilled.
With the transaction and this is absolutely transformational for us.
Great Thanks, and congrats again.
Thank you.
Thank you. The last question comes from Jason Butler with citizens.
Hi, Thanks for taking the questions and let me add my congrats on the quarter on the acquisition.
So could you talk to us a little bit about the growth potential of the current.
Approved portfolio of commercial profile of the Windsor asset.
Sure is that the all you can have any follow up Jason.
Sure, Okay, and then just alright.
Of your <unk>.
Personal infrastructure in the hospital setting how should we think about what Melinda looks like today and what the combined company will look like as a.
Foot print targeting the hospitals out of that.
That's fair Okay. That's good look in terms of the growth of the existing portfolio Theres Theres, absolutely no growth potential there certainly we see it with.
With reside in the treatment space for its current indication for medicine, a little bit for <unk> and for our <unk> and commercial so.
The biggest growth driver, obviously is the potential expanded indication.
For <unk>, we do think Baxter.
Nextel <unk> have upside as part of that BARDA collaboration that I mentioned, but it's not something that we've really.
Incorporated into into our evaluation to underwrite the deal.
Like from a commercial synergy and overlap standpoint on that side, that's something we're going to look at over the next couple of weeks and see what makes the most sense for them from a structure standpoint, obviously, we've got a strong team they've got a strong team we want to look at the best ways to put these.
These two together and.
And put them together in a way that makes the most sense for the organization.
Great. Thank you.
Thank you and the last tranche of Gazzola swaps with trust.
Good morning. Thank you for taking my questions. A couple for me just provide perhaps Joe a little bit of a background on the millennium transaction, specifically, if there was a competitive process.
And then second across their portfolio of products how competitive this space.
Either from branded another or a generic offerings.
And then.
On the integration and synergies.
Integration expenses can be assumed for this year.
And the progress within your sin.
Senior sales team and in patient side is this something that could be a multiple product offerings, including the sand cast with millenia onboard. Thank you.
Thanks Leslie.
Went through those quick and I think I wrote them down and got them.
Look in terms of the background on the process yes.
Yes. This was a competitive auction process of which we understand that there were multiple multiple bidders involved there were multiple rounds of bidding.
And.
We.
We participated in that process right I'm not sure how much more detail.
Youre looking for on on that front.
But from a portfolio and competitive standpoint, obviously, the anti infective space.
Certainly those that are used in the inpatient setting.
Yes. It is competitive there's typically a triage that infectious disease docs go through likely using less expensive generics first before getting too to newer newer branded products at a known dynamic.
Of that space right.
I think one of the things that makes the expanded indication for Resile. So attractive is that it's used in the outpatient setting right in the largely.
Infusion clinics oncology clinics, where right, it's not inpatient DRG reimbursement for outpatient <unk> reimbursement. So that is certainly an attractive opportunity from that standpoint.
In terms of integration expenses, we're not we're not guiding on that at this time and perhaps will provide more color.
Once once we are post closed.
And then I think in terms of the operational synergies with our existing team I somewhat touched on that with I think it was Jason's last question right, we're going to look at that over the over the coming weeks. We think we have a very strong team. We know that they have a very strong organization and we're going to look at the best ways to put these two together.
Got it. Thank you congrats on the transaction.
Thanks Les.
Thank you next question comes from Ron <unk> with Leerink.
Hey, Thanks for taking our question. This is amazing yonker water is so.
It's just building on the moment acquisitions, so what what key asset that you're acquiring are you. Most excited about and then secondly, I guess beyond the <unk> acquisition. How are you thinking about capital allocation are there other strategic opportunities, you're evaluating and just big picture, What's your philosophy on returning cash.
For shareholders versus reinvesting for future growth.
Thanks for the question. So I guess in terms of the asset I'm. Most excited about what kind of like being asked to pick your favorite Kid.
But certainly I think the expanded indication for Resile right is huge.
Potential upside right that that is attractive to us and that.
We are very excited about but certainly as I said before the full portfolio of assets largely diversifies our revenue base.
And ads right stability as well as growth in this highly attractive to us as an organization.
And I think the same question was kind of like a combination of capital allocation slash business development.
Question and yes, we certainly are.
Once we get a chance to catch our breath.
Willing to start looking at other opportunities.
That would be again highly synergistic with the organization near term accretive right. These are the criteria that we've kind of long established that.
What.
The deals we are looking at are willing to look at right now should be right in terms of generating near term value for shareholders that is that is a big focus.
And that's the primary focus right now as opposed to looking at.
Our future dividend policy.
That's where we stand today.
Very helpful. Thank you.
Thank you and our next question comes from Brandon Folkes with H C. Wainwright.
Hi, Thanks for taking my questions and congratulations on the deal in the quarter and maybe just following on from the prior question and.
As you take these steps to build a specialty.
One company.
How do you look at the post closed commercial infrastructure you will have you know.
I guess two fold, one, especially in terms of adding TPN to the bag.
Do you think you can now potentially largely drops to the bottom line.
And then as you go forward and do add potential additional products and how do you feel about the number of products in the acute care expects today versus additional acquisitions coming with additional sales force versus just the.
Bringing in products to the combined commercial infrastructure. Thank you.
That's that's fair so I think again a lot of a lot of if I guess the first part of that question.
What.
You answered with Jason Butler.
I'll reiterate that.
As I said, we think both teams are incredibly strong we're going to look at how to how to put them together now I think in terms of of the <unk> team you hit the nail on the head the T P. The potential TPN indication for the very well.
Within their existing sales deployment as well as with our hospital sales deployment.
In terms of how many great products a typical account manager can carry in their bag I think it varies and at all points in time every product is not necessarily getting the same amount and level of attention and in a detailed write those products that are that will be fairly stable without significant promotion and others that require significant effort in <unk>.
Constant education so.
It's going to be a mix you know this is something that we're going to work on quite intensely in the upcoming months.
And put together an organization right that is that is strong and positioned for growth.
Thanks.
And then maybe just one follow up if I may just coming back to defend Kath.
Any additional color and I understand if you can't what you contemplate in terms of the ODI ordering and your updated guidance.
And then secondly in the outpatient setting for defend cast now.
Hum.
A little bit more hands off and you as a company can focus more on inpatient setting or.
Is there still sort of quite a high touch in that outpatient setting as well as your growth in patients I think that's all for me. Thank you.
Yeah look I'll take the second question first actually.
In terms of I think I think you're guiding you're asking about kind of sales and marketing effort and I think youre right in the outpatient setting is as I said I think on some prior calls it's a it's a smaller footprint that's needed. It is less of a touch point, it's more key account management at a very high level within these organizations.
But there still is there theres still effort and there's also smaller dialysis operators are out there and we have a we have a small targeted team that has that is working on on those accounts.
In terms of additional color on kind of L. D O ramp and you know as I said in and I think one of the earlier questions.
We've based our guidance on what we think is a convert.
<unk>.
With the information that we have we've left ourselves.
We think meaningful room for upside as we evaluate orders over the upcoming weeks.
But we're very comfortable with the range that has been set.
Based on based on the information we have today.
Alright, thanks very much.
Thank you and the next question comes from Serge Belanger with Needham <unk> Company.
Hi, good morning, and.
Congrats on the acquisition.
Our core metrics.
First question.
Regarding the millennial portfolio. Thank you highlighted six to seven products can you just maybe talk about what.
Sort of the key ones that are generating the growth for this portfolio.
Second question it sounds like the residual label expansion opportunities.
Significant potential upside for <unk>.
Hello.
Of this product can you just maybe talk about in this phase III trial, when you expect results and maybe what the outcome needs to be to be successful.
And then lastly on.
Any additional progress regarding the remaining LDL customer.
Yeah.
Thanks Serge.
Look as we as we get.
Through closing, we'll obviously give more.
Guidance directional guidance on each on each of the products right. So we've just now announced the transaction a big picture on the portfolio as I as I mentioned earlier.
Terms of the approved products, obviously, resile medicine that Amir right or back to commercial franchise all opportunities for growth.
<unk> alright as is a fairly small product I think you'll all have access to keep your data you can see it.
Right now a very small sales contributor, but something like that that is that is actively.
Part of that BARDA agreement has potential upside right down that down the road.
In terms of the label expansion the phase III study is expected to complete in the first.
Part of 126, I don't have a commitment date for when that data will be a.
Available the study is being run in collaboration with Melinda as partner Monday Farm.
And when we have more information, we'll certainly we'll certainly be able to share that.
And in terms of the other L D O customer.
I would say that as I mentioned on our last call right once we.
Once we operationalize our existing Eldorado, we would we would attempt to resume discussions and I'd say, that's the stage that we're at and.
As we make progress we'll provide updates.
Okay.
Thank you that concludes question and answer session as well as the event. Thank you. So much for attending today's presentation. You may now disconnect your phone lines.